the compensation required by the laborer at the same time, and the labor and the employer are mutually beneficial. However, if the government arbitrarily sets a minimum wage that is higher than the market wage, even if workers are willing to provide more labor services, because the minimum wage is higher than the labor value, employers cannot afford it, resulting in unemployment. Moreover, since the minimum wage usually affects only disadvantaged workers, neoclassical schools (such as the Chicago School represented by Milton Friedman) further infer that the minimum wage will cause disadvantaged workers to lose their jobs.
This inference based on the perfect competition model is widely circulated even in Taiwan today. For example, Guan Zhongmin, the current president of National Taiwan University, once declared in his appointment as the chairman of the National Development and Development Council, "(Increase the basic salary) Don't say a braised egg, a grain of rice can't be cooked." Gao City Labor Bureau provides subsidies for fall prevention measures sms services Photo Credit: WebMD Does the boss have bargaining power? David Card and Alan Krueger's research not only provides a model for empirical research, but also questions the original efficient market assumption: If minimum wage increases have no negative impact on employment, or even help, then the labor market Not a perfectly competitive market.
Why does the labor market become an imperfectly competitive market? One of the possible explanations is the “monopsony” problem that has been widely discussed in recent years. In traditional economic theory, the "sole-buying market" refers to the fact that there is only one employer in the entire market, and the employer can decide the salary, and clearly knows that as long as the salary is high enough, more workers can be found. But the goal of employers is not to find the most labor and to generate more output, but to maximize their own interests. In such a situation, employers will lower wages and hire fewer people. At this time, the value created by laborers far exceeds their acceptable compensation, and employers enjoy high labor value and low wage costs at the same time.