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But your labor demand curve has the wrong shape for low-wage labor in high-income Anglo Disease nations.
I'm having a hard time visualizing this, can draw a picture for me?
And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
The result when labor supply intersects within the zone of nil or negligible wage-elasticity of demand for labor is a bargaining range scenario, where there is no technical determinant of position within the wage and relative bargaining power is expected to determine position within the range.
Not all labor markets will be within the bargaining range for the same overall labor market conditions and same minimum wage ... and of course, this does not apply to a full employment economy (and hence does not apply within the standard economic modeling, which assumes from the outset a long-run tendency to full employment), but the empirical results tend to suggest that observed gross elasticity is nil or negligible, so if the partial elasticity is negative, it is offset by a positive income effect.
I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
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