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And at the other end? The popular opinion seems to be that we just need to force companies to pay higher wages, i.e., put up the minimum wage. Now those low pay

And at the other end? The popular opinion seems to be that we just need to force companies to pay higher wages, i.e., put up the minimum wage. Now those low paying jobs are illegal and people end up unemployed instead, especially when the economy is bad. I'd be willing to try abolishing minimum wages and letting the government pay a subsidy to anyone making a genuine effort to work, so that they have a reasonable standard of living. I'm just not sure how you measure genuine effort, so that you don't end up subsidising people who pay each other $1/week to go surfing.

Retric 11y ago
Guaranteed minimum income has a lot going for it. https://en.m.wikipedia.org/wiki/Guaranteed_minimum_income https://en.m.wikipedia.org/wiki/Guaranteed_minimum_income U.S. politics has gotten strange, people complained about welfare mothers not working when that's shat the system was designed to do. IMO, hand out a small fixed amount every month, then flat tax everything last that point and get the government out of micromanaging the economy. Upside, no tax breaks makes everyone's taxes easy, downside would never get implemented.
- incompatible 11y ago
  Yeah, but I expect that to be rather expensive, requiring high tax rates with limited chance for evasion with everybody who bothers to work. The fact that it never seems to have been implemented on any large scale also makes me think it's unpopular, perhaps due to people not wanting to subsidise people who choose not to work.
ptc 11y ago
There's no solid evidence that increasing the minimum wage will create fewer jobs. From Paul Krugman's review of Robert Reich's new book > Other evidence points indirectly to a strong role of market power. At this point, for example, there is an extensive empirical literature on the effects of changes in the minimum wage. Conventional supply-and-demand analysis says that raising the minimum wage should reduce employment, but as Reich notes, we now have a number of what amount to controlled experiments, in which employment in counties whose states have hiked the minimum wage can be compared with employment in neighboring counties across the state line. And there is no hint in the data of the supposed negative employment effect. > Why not? One leading hypothesis is that firms employing low-wage workers—such as fast-food chains—have significant monopsony power in the labor market; that is, they are the principal purchasers of low-wage labor in a particular job market. And a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more. http://www.nybooks.com/articles/2015/12/17/robert-reich-challenging-oligarchy/ http://www.nybooks.com/articles/2015/12/17/robert-reich-chal... There's also something similar to your subsidy idea today called the Earned Income Tax Credit [https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit]. Guaranteeing a minimum income does seem like a promising idea, but it will probably have to be tried elsewhere before the U.S. will adopt it (if ever).
- PantaloonFlames 11y ago
  > a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more. The theory is that the buyers of labor in these cases will simply buy alternatives - specifically low-labor alternatives, like automation. Think of automated checkout stands at retail stores, but applied to fast food. Time was, fuel filling stations all had attendants. Drivers didn't get out of their cars when they purchased gas. They drove up and were greeted by an attendant who operated the pump and took payment. We don't do that anymore - now that attendant job doesn't exist. There's nothing stopping that same kind of transition for many other service jobs.
  - thedufer 11y ago
    This doesn't really affect your point, but gas station attendants aren't completely gone - in New Jersey, it's illegal for a motorist to pump their own gas. The purpose, of course, is to keep those minimum-wage jobs around.
    - nommm-nommm 11y ago
      Its also illegal to pump your own gas in Oregon too. Both states are considering legislation allowing self serve pumps.
- prostoalex 11y ago
  With so many exemptions to minimum wage laws (self-employed are exempted, family-owned businesses are exempted, waiters are exempted unless their tipping income does not put them over minimum, anybody working under 1099 is exempted) the comparisons become a bit muddled - a minimum wage worker who lost his position and decided to get some moving gigs or drive a few hours for Uber/Lyft certainly has "a job" for survey purposes, someone whose hours were cut certainly still has "a job", but the definitions have changed in-between.
  - Pyxl101 11y ago
    Waiters and tipped employees are not exempt from minimum wage. They must be paid a wage greater than or equal to minimum wage for every hour they work. Tips can take that wage above minimum, but an absence of tips cannot drop their wage below. https://en.m.wikipedia.org/wiki/Tipped_wage_in_the_United_States https://en.m.wikipedia.org/wiki/Tipped_wage_in_the_United_St...

Retric 11y ago

Guaranteed minimum income has a lot going for it. https://en.m.wikipedia.org/wiki/Guaranteed_minimum_income https://en.m.wikipedia.org/wiki/Guaranteed_minimum_income U.S. politics has gotten strange, people complained about welfare mothers not working when that's shat the system was designed to do. IMO, hand out a small fixed amount every month, then flat tax everything last that point and get the government out of micromanaging the economy. Upside, no tax breaks makes everyone's taxes easy, downside would never get implemented.

incompatible 11y ago
Yeah, but I expect that to be rather expensive, requiring high tax rates with limited chance for evasion with everybody who bothers to work. The fact that it never seems to have been implemented on any large scale also makes me think it's unpopular, perhaps due to people not wanting to subsidise people who choose not to work.

ptc 11y ago

There's no solid evidence that increasing the minimum wage will create fewer jobs. From Paul Krugman's review of Robert Reich's new book > Other evidence points indirectly to a strong role of market power. At this point, for example, there is an extensive empirical literature on the effects of changes in the minimum wage. Conventional supply-and-demand analysis says that raising the minimum wage should reduce employment, but as Reich notes, we now have a number of what amount to controlled experiments, in which employment in counties whose states have hiked the minimum wage can be compared with employment in neighboring counties across the state line. And there is no hint in the data of the supposed negative employment effect. > Why not? One leading hypothesis is that firms employing low-wage workers—such as fast-food chains—have significant monopsony power in the labor market; that is, they are the principal purchasers of low-wage labor in a particular job market. And a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more. http://www.nybooks.com/articles/2015/12/17/robert-reich-challenging-oligarchy/ http://www.nybooks.com/articles/2015/12/17/robert-reich-chal... There's also something similar to your subsidy idea today called the Earned Income Tax Credit [https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit]. Guaranteeing a minimum income does seem like a promising idea, but it will probably have to be tried elsewhere before the U.S. will adopt it (if ever).

PantaloonFlames 11y ago
> a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more. The theory is that the buyers of labor in these cases will simply buy alternatives - specifically low-labor alternatives, like automation. Think of automated checkout stands at retail stores, but applied to fast food. Time was, fuel filling stations all had attendants. Drivers didn't get out of their cars when they purchased gas. They drove up and were greeted by an attendant who operated the pump and took payment. We don't do that anymore - now that attendant job doesn't exist. There's nothing stopping that same kind of transition for many other service jobs.
- thedufer 11y ago
  This doesn't really affect your point, but gas station attendants aren't completely gone - in New Jersey, it's illegal for a motorist to pump their own gas. The purpose, of course, is to keep those minimum-wage jobs around.
  - nommm-nommm 11y ago
    Its also illegal to pump your own gas in Oregon too. Both states are considering legislation allowing self serve pumps.
prostoalex 11y ago
With so many exemptions to minimum wage laws (self-employed are exempted, family-owned businesses are exempted, waiters are exempted unless their tipping income does not put them over minimum, anybody working under 1099 is exempted) the comparisons become a bit muddled - a minimum wage worker who lost his position and decided to get some moving gigs or drive a few hours for Uber/Lyft certainly has "a job" for survey purposes, someone whose hours were cut certainly still has "a job", but the definitions have changed in-between.
- Pyxl101 11y ago
  Waiters and tipped employees are not exempt from minimum wage. They must be paid a wage greater than or equal to minimum wage for every hour they work. Tips can take that wage above minimum, but an absence of tips cannot drop their wage below. https://en.m.wikipedia.org/wiki/Tipped_wage_in_the_United_States https://en.m.wikipedia.org/wiki/Tipped_wage_in_the_United_St...