Wages and prices.

I am reading a chapter of Hayek about prices and how they work in a free market. There is no one with a complete and exact knowledge of the total of a market. If there is a change in supply and demand prices will also change whithout consumers and producers need to know exactly why. In a free market all interested will act and act in self interest. The result is always a balance.

I try to apply this to the Swedish employment market and all those who like the Swedish Model.
Recently the LO has got a strange agreement on minimum wages. The minimum wages are
increased and that can only result in that those who are emplyed today get more and those without emplymnet get nothing. I believe that the idea with reduced minimum wages was to make it easier for unemplyed to get a job.

To-day there is a great number of people with difficulties to get jobs mainly because of lack of competence. The background of these people does not matter – their problem is their lack of competence.

What should happen if the Government declared that the official minimum wages mean that anyone employed at a payment less than the official minimum wage will be free from income tax and the employer will be free from payroll tax. My guess is that a considerable number of jobless people will get jobs. Undoubtly the administration will get less subsidiaries to poor people and the LO will curse the government for betraying the working class.

The black market will also disappear. Is that good or bad?

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