Briefly explain the economic impact of a minimum wage increase (moving from nonbinding to binding) in the labor market, and its extended effect on the automation market as well as the market for a good which may be produced using labor, automation or some combination of the two;
Identify one of the two proposed policies and construct an argument, based in the economics you’ve learned in class, for why you oppose the policy.
You, personally, may oppose both policy proposals, but your paper should focus on only one policy, given the word count limit.
Your argument of opposition should not be based in your support for the other proposed policy.
While your letter is a normative economic assessment, majority of the letter should consist of positive economic analysis. [While you may have strong opinions on this subject based in moral or ethical reasoning, the purpose of this assignment is to see your ability to use the economic tools you’ve learned to analyze the situation.]
Explain the economic impact of this policy proposal on these same markets, highlighting the economic reasoning for opposing the policy;
Start your analysis assuming the minimum wage increase already occurred.
Items to keep in mind:
The Board of Supervisors likely has some knowledge of economics. Your explanations may assume prior general knowledge consistent with our coverage of Supply, Demand, Consumer Surplus, Producer Surplus, and Efficiency (Chapters 3, and 4). The supervisors understand the definitions of these terms, but not necessarily how they interact specifically to this problem. For example, the Board of Supervisors do not immediately understand how a price change in the labor market affects related markets.
Saltsman, Michael. “San Francisco’s Problem Isn’t Robots; It’s the $15 Wage Floor.” The Wall Street Journal 24 Nov. 2017.