RE: Living Wage vs Minimum Wage

[Adam.Stokes@xxxxxxxxxxx]

After being rapped over the knuckles for my apparent use of parody by Alan
Issac recently, I relized that this was even a better (worse) example of the
question being lost in the context.  The point I meant to make was
comparative adavantage is the basis for justifying free trade and the
general globalization of markets.  However, the questioning of Australian
future economic performance by free trade advocates seems to contradict the
comparative advantage argument.

-----Original Message-----
From: Harry Veeder [mailto:eo200@xxxxxxxxxxxxxxxxxxx]
Sent: Wednesday, 20 September 2000 10:25
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: Living Wage vs Minimum Wage



----------
>From: Adam.Stokes@xxxxxxxxxxx
>To: hliu@xxxxxxxxxxxxxx, pkt@xxxxxxxxxxxxxxxx
>Subject: RE: Living Wage vs Minimum Wage
>Date: Tue, Sep 19, 2000, 11:38 pm
>

<snip>
>While on the issue of contradictions, I'm amused by the latest calls by
>globalisation advocates at last weeks WEF that the fall in the Australian
>dollar is merely a reflection of Australia's lack of an IT-producing
>industry.  So, can we assume from this that the theory of comparative
>advantage is dead?

Only if one believes comparative advantage can be accurately assessed
by measurements based on the exchange value of money. Comparative
advantage runs deeper than market value comparisons.

e.g. Consider two basket ball teams, A and B, with 10 players each.
The combined height of all the players on team A is 22m. On team B
it is 23m. Would it be sound to leap to the conclusion that team A
is at a comparitive disadvantage simply because they fall short
(in terms of height-value ) ?

Harry Veeder