Abolishing the minimum wage will not reduce unemployment

" Removing the minimum wage in an economy is akin to cutting wages all across the economy as Capitalist firms will scramble over each other in their rush to reduce costs." Labor is neither homogenous nor passive. If it were, as your argument requires, there would be no such thing as a job above the minimum wage. Obviously, such jobs exist, thus, forces other than the minimum wage prevent cuts "all across the economy." " However to assume that reducing wages to their cost will reduce unemployment is to assume that the labour market can clear, like any other commodity. That is, the market will reach an equilibrium where supply of labour equals demand. However this is not the case. The labour market cannot not clear. Reducing wages in the economy means that people will not be able to afford the lifestyle the had until that point" No such reduction is relevant. The primary effect of eliminating the minimum wage is employing workers who would otherwise be completely unemployable, as their production level is lower than the cost of employing them under a minimum wage. Economics is not zero sum, this need not subtract from anyone else, it merely creates opportunities not there before. Those capable of producing more than the minimum wage will get more than it, except perhaps those at the very bleeding edge of where the specialization values bring them over the bleeding edge, in which case negotiation will bring them slightly less (A significantly smaller number than the number unemployable due to minimum wage). "This means that people may decide to start getting a second job, or work more hours, or more family members will start working, from a younger or older age as well." Which means, in any meaningful terms terms, unemployment lowers, because employment rises, people are more employed, if this were true (Which it partially is in the sense that without a minimum wage, teenagers have a much easier time getting a part time job to gain experience and money for minor luxuries). Traditional economic definitions of "unemployment" essentially serve to disguise the nature of what constitutes more employment (An economy in which everyone worked 1 hour of their optimal task would count as more employed than one in which 90 percent work 40 hours of their optimal task by such tradition, and thus such definition should be discarded in favor of one that better recognizes the conceptual root of the phenomenon "employment." Whittling away at unemployment numbers by making fewer people employable and spreading around the employment is fallacious, as it does not address that conceptual root, the basis for which we speak of "employment." " Looking empirically at this issue confirms it, as can be seen during the Great Depression where by 1933 wages and salaries in manufacturing were at less than half their 1929 level while unemployment was rising http://books.google.com....... Of course, the actually real wages of the workforce were rising, due to the faster falling prices of commodities, which incidentally leads me to the second point." You'll note that such wage drop had nothing to do with a lowering in the minimum wage, and in any case you are committing the fallacy of correlation equating to causation. "Of course, the actually real wages of the workforce were rising, due to the faster falling prices of commoditie" Real wages are the only ones that matter. You've contradicted your argument, since now you argue that rising real labor costs is correlated with higher unemployment. " Workers cannot control their own price" Workers control one half of a bargain, the employer controls the other half. The fact that no one holds total control does not prevent them from influencing matters. "Even if workers were to have no minimum wage and start taking pay cuts, this would not mean that profits would increase. This is because if worker wages drop while commodity prices remain the same, so does their real wage and thus their purchasing power. This means less spending and thus less profits for companies. This would mean a cut in production and further laying off of workers and *loss* of positions. Unemployment would rise." The demands of common laborers are not the primary engine of the economy. Common laborers have always wanted more, always been willing to trade for it-- it's only if there is incentive for those with ideas about how to more efficiently utilize that laborer to make more needs fulfillable that the economy grows. Declaring open season on all workers willing, instead of automatically disqualifying the lowest tier, can't help much when the minimum wage is already low, but it can only help. In order for an employer to get the new things he wants, he has to toss enough purchasing power the worker's way to convince them to come from wherever they are. He has to offer more, in other words. He can't offer less, overall. Since the effective supply of "labor" employed is increasing not primarily as a result of new people being added to the world but as a result of new people being added to the category people bother tracking as validly "seeking employment" (e.g., folks such as teenagers, who wouldn't be bothered to be counted in the employment statistics before), it does not matter, as you seem to imply, that the official statistics will go up-- fewer people will be unemployed than before. " In truth, minimum wages do not cause unemployment in the least. This is something supported by large number of empirical evidence such as the Reagan period where minimum wage declined while unemployment became chronic." Fallacious. Economics depends on the "other things equal" assumption. Statistics never have other things equal unless there is a controlled experiment, which is by definition impossible in economics. Only abstract thought can effectively reproduce the other-things-equal assumption. If more people are added to the category of those who I can employ at a profit rather than a loss, other things equal, I will employ more of them.