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I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: th

by Pyxl101 11y ago

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages at current profitability levels. Seattle's minimum wage for example has caused a massive loss of jobs compared to the rest of the state: https://www.aei.org/publication/minimum-wage-effect-from-jan-to-sept-seattle-msa-restaurant-jobs-fell-700-vs-5800-food-jobs-in-rest-of-state/ https://www.aei.org/publication/minimum-wage-effect-from-jan... Minimum wage directly causes unemployment by making it illegal to employ people at their fair market wage. [Edit: I'd be glad to read an argument for minimum wage if someone would like to link one. The articles that I see in the news tend to engage in moralizing and lack real explanation and justification.]

Retra 11y ago
The "good argument" for having a minimum wage is that without it, wages will be pressured down, because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity. Besides, you're just assuming people should be employed at "fair market wage." The political process is part of the market, and the fair market wage is determined by what is politically determined to be fair (AKA, minimum wage) just as much as it is by employers' demands. As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare.
- fche 11y ago
  "As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare." That's funny, but true. You know what else is at least as true? No people are entitled to employment, especially at a loss to the business.
  - deleted 11y ago
    [deleted]
  - chillwaves 11y ago
    You think people are not entitled to employment? Are they entitled to survive? Are you going to be the one to break the bad news? Let's find out what happens when you tell large segments of the population they have no right to a livelihood. I am going to wager the cost to the wealthy will be much higher than an increase in the minimum wage.
    - jrmurad 11y ago
      In case this is not obvious to you... to be entitled to employment (or anything) means someone must provide it. If nobody is voluntarily hiring a man, you would force someone to hire him because this man is entitled to employment? How would you feel if I told you that there's someone I know in need of employment and YOU must hire him? Oh, and if you don't, I'll fine you or lock you up.
    - atemerev 11y ago
      People were never entitled to employment. The very notion of a job as the primary mode of earning one's living was born relatively recently, some 200 years ago (then, it meant mostly manual labor). It survived the transition to information economy, but current AI progress may finally put end to it. This is as inevitable as the appearance of middle class during the first industrial revolution. The progress cannot be stopped.
    - curiousgeorgio 11y ago
      Maybe you're confusing (as many do) entitled with having the freedom to do something. Entitled: believing oneself to be inherently deserving of privileges or special treatment If I don't qualify in any way for a job at your business, let's find out what you say when I force you to hire me because of an argument that I'm inherently deserving of that job. I'll just sit on my butt all day, and you pay me. Sound good?
    - brainfire 11y ago
      I assume everyone who argues that there's no right to employment is also arguing in favor of a guaranteed income - decoupling survival from employment.
- Pyxl101 11y ago
  You're using an inadequate notion of what a "good argument" is in this context. You have not made an argument for why a price floor is necessary or desirable. I could just as easily say, "The good argument for having a maximum 'price of bread' is that without it, bread prices will be pressured up, because every bakery on the planet wants prices as high as possible, and they generally have the means to achieve it." You can say that all you want, but you haven't provided a justification that it's actually true, or that the situation warrants legislation of one interest over the other. You haven't given a justification or any consideration to the tradeoffs involved. Do you know what happens when real countries try to impose a limit on the price of bread? Starvation. The Soviet Union tried to establish a limit on the price of bread. Since the actual cost to grow wheat, bake bread, and transport it to cities was high, the supply chain couldn't make a profit (or even break even) selling at the government-specified price. So they stopped, and mass food shortages resulted. That's what happens when you tamper with the economy. Gorbachev finally fixed the problem by transitioning away from a planned economy to a free market: http://www.nytimes.com/1990/05/23/world/evolution-in-europe-gorbachev-plans-to-double-prices-of-food-next-year.html http://www.nytimes.com/1990/05/23/world/evolution-in-europe-... By allowing the price of bread to rise significantly, bakers and bread suppliers could finally turn a profit (i.e., not take a loss) selling bread, and so they began to do so. This is how the market forces of supply and demand lead to efficiency and achieve the right outcome. For example, if a crisis happens, then food becomes scarce; when food is scarce, people are willing to pay a high price for it; and because people are willing to pay a high price, this creates an incentive for people to go to extraordinary lengths to provide food there and reap the benefit of that high price. If you establish a price floor, then you're tampering with the economy in a complex way. You had better be prepared to reason about the economic deadweight loss (e.g., unemployment, shortages) that will result, and you should be prepared to provide a thorough justification for why the benefit of that legislation justifies the cost you're imposing on the economy through deadweight loss. Equating jobs to slavery is an outrageous argument, and disingenuous. Slavery is the act of taking away someone's freedom and forcing them to work for you without choice. Jobs are a free market - anyone is free to work a job that's offered to them, or not. They can quit and look for a better alternative. That is the market pressure that forces wages up: if employees have a better option, they'll take it.
  - 11y ago
- atemerev 11y ago
  True, every business on the planet wants wages as low as possible. This is, of course, correct. On the other hand, every employee on the planet wants her wage to be as high as possible. This is also obviously true. This creates law of supply and demand. Google can't hire a decent software engineer for, say, $30000/year, because other companies will immediately offer more, and supply of talented software engineers is quite limited, even globally. But unskilled labor can be hired for much cheaper, as supply is nearly limitless. I don't know, they don't teach this stuff anymore in high school / colleges, or what?
  - Al-Khwarizmi 11y ago
    How does this contradict the parent comment? Minimum wage obviously doesn't affect Google engineers, it affects the unskilled labor with near-limitless supply that you have mentioned. The idea is to prevent that kind of labor from becoming basically slavery.
    - atemerev 11y ago
      Slavery is forced labor. I don't see anything forced here. Salaries for unskilled labor are driven down by lack of demand for unskilled labor, and nothing can be done about that. What can be done is adjusting employees' skills to the areas where demand is still high. Coding bootcamps are one obvious possibility, but there are others. Everyone can learn new things. You, personally, can help these people, too. Hire an Uber (I am sure it helps many people survive; I had my share of tough times, and I'd sure could have use it as some source of income; unfortunately, it was before Uber was a thing where I live). Buy something on Etsy. Spend money locally. Etc, etc.
      - Al-Khwarizmi 11y ago
        If you have to accept a pitiful wage in order to barely subsist, that is effectively forced labor. In practice, the only alternative is to starve. Which is why a labor market without basic income or some other kind of safety net is not a free market at all. Not everyone can learn everything, but even if that were possible, if everyone in the world knew e.g. how to code decently, coding would be a minimum-wage job too. There is just not enough demand for jobs to make everyone valuable, and automation is just making this more pronounced.
- jackcosgrove 11y ago
  The way to stop downward wage pressure is for people to control how many offspring they have. I hear a lot of utopian talk here about leisure economies and basic incomes, but how about some utopian talk about a world where no child is ever born into a family without a plan for that child's future?
- marknutter 11y ago
  Then why do only 4% or so[1] of workers in the US make the minimum wage? Wouldn't, by your logic, far more employers pay people at minimum wage if their only goal was to pay people the lowest amount legally possible? [1] http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-minimum-wage/ http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi...
unclebucknasty 11y ago
It's not surprising that a conservative think tank released a study against the minimum wage. There are also arguments and studies concluding that the minimum wage ultimately creates jobs.
- fauigerzigerk 11y ago
  The conservative government here in the UK has put the minimum wage on a steep upward trajectory. This is not a conservative vs left-wing (or liberal as you like to call it) thing. The more important distinction is between those who keep holding on to paid work as the main or only moral basis for deserved income and the other camp that tries to move away from that principle. There are conservative, left-leaning and libertarian people on either side of the debate.
  - unclebucknasty 11y ago
    That may be true in the UK, but here in the States it is overwhelmingly a left-vs-right debate.
    - fauigerzigerk 11y ago
      What's interesting is that those who ascribe some sort of moral (or maybe just sentimental) value to being in work are currently a majority on the left and on the right. That goes for the US as well as for Britain.
      - unclebucknasty 11y ago
        True, which is why I find it morally bankrupt for people who subscribe to that belief to then feel no moral obligation to pay a living wage.
  - PhasmaFelis 11y ago
    You must be aware that "conservative" means something somewhat different in the US compared to the rest of the world. I agree that it's rather silly and exceptionalist of us, but the fact remains that Americans who identify as conservative are very likely to want to reduce public support.
MaysonL 11y ago
That AEI stuff is BS. Totally BS. Lying with statistics. See this fairly devastating takedown: http://ritholtz.com/category/wages-income/ http://ritholtz.com/category/wages-income/
- fche 11y ago
  confirmation bias
TheSpiceIsLife 11y ago
Well, I just don't know what to say to this. Sounds like the kind of thing someone who gets paid well above the minimum wage would say. Check out this Wikipedia article https://en.wikipedia.org/wiki/List_of_minimum_wages_by_country https://en.wikipedia.org/wiki/List_of_minimum_wages_by_count... and sort by Hourly Nominal in descending order. Australia, France, New Zealand, Ireland, Belgium, United Kingdom, Netherlands, Germany, and Canada all have minimum wages above the US. All of those countries have government funded health care systems that blow the US's out of the water. All of those countries do a better job at educating their citizens. > In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages while remaining profitable. The US really does seem like some strange experiment in how not to do economics and democracy.
- deleted 11y ago
  [deleted]
- icebraining 11y ago
  To play Devil's advocate, most of other countries have an higher unemployment rate than the US.
  - TheSpiceIsLife 11y ago
    That's definitely one metric of success. Now name three others.
- refurb 11y ago
  The US really does seem like some strange experiment in how not to do economics and democracy. This is the exact opposite of how most people view America. If it's so bad, why do so many people want to live in the US?
  - onion2k 11y ago
    If it's so bad, why do so many people want to live in the U.S.? Annually the USCIS gets about 6 million applications (that's in total, including permanent and temporary immigration claims). That's 0.08% of all the people on Earth (not including those already in the U.S.). Is it really fair to say a lot of people want to live there?
icebraining 11y ago
They only have so many dollars to spend on wages at current profitability levels. But as a business owner, when the cost of your inputs increases, the question you're faced with is not "how can I keep my current profitability levels" (which is often not possible anyway) but "how can I maximize profit given the new environment". For example, if you're the owner of a restaurant with one or two or even four servers, you often can't fire any without significantly affecting your level of service, which could lose you even more money than you would save in salaries. As far as I know, the literature on the subject is pretty much inconclusive, with studies pointing to a significant negative effect, while others indicate a negligible or even slightly positive effect.
- deleted 11y ago
  [deleted]
wfo 11y ago
If you really haven't ever heard a good argument in favor of an enormously popular economic policy that's been endorsed by hundreds of lauded and respected (even nobel-prize-winning) economists then you haven't been looking, or you're using it as a cheap rhetorical appeal to suggest you are correct without argument. I hope it's the first scenario since then you are simply ignorant and not malicious which is no crime, in which case a simple google of "minimum wage" should suffice. In the employment "negotiation" for low-skilled workers the businesses have all of the power and the workers have none. Businesses have run a successful propaganda campaign (and sometimes employed illegal thugs to wage a campaign of violence and intimidation) against the union movement whose goal was to give workers bargaining power through collective action and boycott so they are not completely abused and exploited. Some of their successes include, for example, the weekend, which without regulation or collective action would not exist. The union movement has mostly died and so the government forces an absolute minimum the worker can give the business in the "negotiation" which is as much of a negotiation as an offer at gunpoint is, because the government knows without it businesses would take everything and we would quickly devolve into sweatshops/de facto slavery. There are plenty of places in the world where there is no minimum. If you want a society that runs on sweatshops and slave labor just move. Unfortunately you can't have that in a healthy free democratic society, so most western democracies have chosen the latter. People don't have an inherent "fair market value" -- their "fair market wage" as you say is simply a measure of how much the wealthy owning class can exploit their wealth and power in an ultracapitalist system in which all of the rules favor them. If there are fewer people with your skills, you are harder to exploit, so your wages are higher -- until immigrants are imported to remedy the efficiency problem which is your living wage.
- deleted 11y ago
  [deleted]
chillwaves 11y ago
Are you saying that business employ an excess of labor? I do not believe this is the case. I understand that higher costs hurt business -- but higher costs come in many forms. Increases in rent, in commodities. But only when the workers ask for more is it unsustainable. I simply reject the notion that businesses employ excess labor and we will see mass lay offs as a result of the min. wage increase. If this were the case, you could point to Seattle and demonstrate but I do not think you will be able to.
thrownaway2424 11y ago
Here you go: the minimum wage exists to depress rents. Rents always rise until tenants are making whatever minimal profits will keep them in business. Enacting a minimum wage law takes money from the landlord and gives it to the workers, at the same level of minimally attractive profit margins.
larubbio 11y ago
Just to be clear, the article you link to, in the very first paragraph says "It’s too soon to tell for sure" which is much less certain than when you say "has caused a massive loss of jobs"
SilasX 11y ago
I hear what you're saying. As a means of "helping out the working class", it's stupid and simplistic: "workers aren't paid enough? Mandate they get paid more! Problem solved!" The problem, of course, is that there are many ways to save money by screwing workers (eg worsen the working conditions) and if the market price is below the min you set, employers will just shift into those other ways. A more robust solution -- as opposed to playing whack-a-mole over all dimensions of worker screwing -- would be to a) make their options more transparent and b) restrict supply somehow. That's why -- counterintuitive as it may seem -- I actually think it's a step forward, what LA is considering: a system of "minimum wage OR be represented by a union" (which helps with a/b above). It gives a "release valve" for excessive minimums that allows for some market pricing while also proving a check against the things advocates really care about: worker mistreatment. A minimum wage by itself is a clumsy fix for a more complex problem.

by Pyxl101 11y ago

Retra 11y ago

The "good argument" for having a minimum wage is that without it, wages will be pressured down, because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity. Besides, you're just assuming people should be employed at "fair market wage." The political process is part of the market, and the fair market wage is determined by what is politically determined to be fair (AKA, minimum wage) just as much as it is by employers' demands. As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare.

fche 11y ago
"As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare." That's funny, but true. You know what else is at least as true? No people are entitled to employment, especially at a loss to the business.
- deleted 11y ago
  [deleted]
- chillwaves 11y ago
  You think people are not entitled to employment? Are they entitled to survive? Are you going to be the one to break the bad news? Let's find out what happens when you tell large segments of the population they have no right to a livelihood. I am going to wager the cost to the wealthy will be much higher than an increase in the minimum wage.
  - jrmurad 11y ago
    In case this is not obvious to you... to be entitled to employment (or anything) means someone must provide it. If nobody is voluntarily hiring a man, you would force someone to hire him because this man is entitled to employment? How would you feel if I told you that there's someone I know in need of employment and YOU must hire him? Oh, and if you don't, I'll fine you or lock you up.
  - atemerev 11y ago
    People were never entitled to employment. The very notion of a job as the primary mode of earning one's living was born relatively recently, some 200 years ago (then, it meant mostly manual labor). It survived the transition to information economy, but current AI progress may finally put end to it. This is as inevitable as the appearance of middle class during the first industrial revolution. The progress cannot be stopped.
  - curiousgeorgio 11y ago
    Maybe you're confusing (as many do) entitled with having the freedom to do something. Entitled: believing oneself to be inherently deserving of privileges or special treatment If I don't qualify in any way for a job at your business, let's find out what you say when I force you to hire me because of an argument that I'm inherently deserving of that job. I'll just sit on my butt all day, and you pay me. Sound good?
  - brainfire 11y ago
    I assume everyone who argues that there's no right to employment is also arguing in favor of a guaranteed income - decoupling survival from employment.
Pyxl101 11y ago
You're using an inadequate notion of what a "good argument" is in this context. You have not made an argument for why a price floor is necessary or desirable. I could just as easily say, "The good argument for having a maximum 'price of bread' is that without it, bread prices will be pressured up, because every bakery on the planet wants prices as high as possible, and they generally have the means to achieve it." You can say that all you want, but you haven't provided a justification that it's actually true, or that the situation warrants legislation of one interest over the other. You haven't given a justification or any consideration to the tradeoffs involved. Do you know what happens when real countries try to impose a limit on the price of bread? Starvation. The Soviet Union tried to establish a limit on the price of bread. Since the actual cost to grow wheat, bake bread, and transport it to cities was high, the supply chain couldn't make a profit (or even break even) selling at the government-specified price. So they stopped, and mass food shortages resulted. That's what happens when you tamper with the economy. Gorbachev finally fixed the problem by transitioning away from a planned economy to a free market: http://www.nytimes.com/1990/05/23/world/evolution-in-europe-gorbachev-plans-to-double-prices-of-food-next-year.html http://www.nytimes.com/1990/05/23/world/evolution-in-europe-... By allowing the price of bread to rise significantly, bakers and bread suppliers could finally turn a profit (i.e., not take a loss) selling bread, and so they began to do so. This is how the market forces of supply and demand lead to efficiency and achieve the right outcome. For example, if a crisis happens, then food becomes scarce; when food is scarce, people are willing to pay a high price for it; and because people are willing to pay a high price, this creates an incentive for people to go to extraordinary lengths to provide food there and reap the benefit of that high price. If you establish a price floor, then you're tampering with the economy in a complex way. You had better be prepared to reason about the economic deadweight loss (e.g., unemployment, shortages) that will result, and you should be prepared to provide a thorough justification for why the benefit of that legislation justifies the cost you're imposing on the economy through deadweight loss. Equating jobs to slavery is an outrageous argument, and disingenuous. Slavery is the act of taking away someone's freedom and forcing them to work for you without choice. Jobs are a free market - anyone is free to work a job that's offered to them, or not. They can quit and look for a better alternative. That is the market pressure that forces wages up: if employees have a better option, they'll take it.
- 11y ago
atemerev 11y ago
True, every business on the planet wants wages as low as possible. This is, of course, correct. On the other hand, every employee on the planet wants her wage to be as high as possible. This is also obviously true. This creates law of supply and demand. Google can't hire a decent software engineer for, say, $30000/year, because other companies will immediately offer more, and supply of talented software engineers is quite limited, even globally. But unskilled labor can be hired for much cheaper, as supply is nearly limitless. I don't know, they don't teach this stuff anymore in high school / colleges, or what?
- Al-Khwarizmi 11y ago
  How does this contradict the parent comment? Minimum wage obviously doesn't affect Google engineers, it affects the unskilled labor with near-limitless supply that you have mentioned. The idea is to prevent that kind of labor from becoming basically slavery.
  - atemerev 11y ago
    Slavery is forced labor. I don't see anything forced here. Salaries for unskilled labor are driven down by lack of demand for unskilled labor, and nothing can be done about that. What can be done is adjusting employees' skills to the areas where demand is still high. Coding bootcamps are one obvious possibility, but there are others. Everyone can learn new things. You, personally, can help these people, too. Hire an Uber (I am sure it helps many people survive; I had my share of tough times, and I'd sure could have use it as some source of income; unfortunately, it was before Uber was a thing where I live). Buy something on Etsy. Spend money locally. Etc, etc.
    - Al-Khwarizmi 11y ago
      If you have to accept a pitiful wage in order to barely subsist, that is effectively forced labor. In practice, the only alternative is to starve. Which is why a labor market without basic income or some other kind of safety net is not a free market at all. Not everyone can learn everything, but even if that were possible, if everyone in the world knew e.g. how to code decently, coding would be a minimum-wage job too. There is just not enough demand for jobs to make everyone valuable, and automation is just making this more pronounced.
jackcosgrove 11y ago
The way to stop downward wage pressure is for people to control how many offspring they have. I hear a lot of utopian talk here about leisure economies and basic incomes, but how about some utopian talk about a world where no child is ever born into a family without a plan for that child's future?
marknutter 11y ago
Then why do only 4% or so[1] of workers in the US make the minimum wage? Wouldn't, by your logic, far more employers pay people at minimum wage if their only goal was to pay people the lowest amount legally possible? [1] http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-minimum-wage/ http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi...

unclebucknasty 11y ago

It's not surprising that a conservative think tank released a study against the minimum wage. There are also arguments and studies concluding that the minimum wage ultimately creates jobs.

fauigerzigerk 11y ago
The conservative government here in the UK has put the minimum wage on a steep upward trajectory. This is not a conservative vs left-wing (or liberal as you like to call it) thing. The more important distinction is between those who keep holding on to paid work as the main or only moral basis for deserved income and the other camp that tries to move away from that principle. There are conservative, left-leaning and libertarian people on either side of the debate.
- unclebucknasty 11y ago
  That may be true in the UK, but here in the States it is overwhelmingly a left-vs-right debate.
  - fauigerzigerk 11y ago
    What's interesting is that those who ascribe some sort of moral (or maybe just sentimental) value to being in work are currently a majority on the left and on the right. That goes for the US as well as for Britain.
    - unclebucknasty 11y ago
      True, which is why I find it morally bankrupt for people who subscribe to that belief to then feel no moral obligation to pay a living wage.
- PhasmaFelis 11y ago
  You must be aware that "conservative" means something somewhat different in the US compared to the rest of the world. I agree that it's rather silly and exceptionalist of us, but the fact remains that Americans who identify as conservative are very likely to want to reduce public support.

MaysonL 11y ago

That AEI stuff is BS. Totally BS. Lying with statistics. See this fairly devastating takedown: http://ritholtz.com/category/wages-income/ http://ritholtz.com/category/wages-income/

fche 11y ago
confirmation bias

TheSpiceIsLife 11y ago

Well, I just don't know what to say to this. Sounds like the kind of thing someone who gets paid well above the minimum wage would say. Check out this Wikipedia article https://en.wikipedia.org/wiki/List_of_minimum_wages_by_country https://en.wikipedia.org/wiki/List_of_minimum_wages_by_count... and sort by Hourly Nominal in descending order. Australia, France, New Zealand, Ireland, Belgium, United Kingdom, Netherlands, Germany, and Canada all have minimum wages above the US. All of those countries have government funded health care systems that blow the US's out of the water. All of those countries do a better job at educating their citizens. > In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages while remaining profitable. The US really does seem like some strange experiment in how not to do economics and democracy.

deleted 11y ago
[deleted]
icebraining 11y ago
To play Devil's advocate, most of other countries have an higher unemployment rate than the US.
- TheSpiceIsLife 11y ago
  That's definitely one metric of success. Now name three others.
refurb 11y ago
The US really does seem like some strange experiment in how not to do economics and democracy. This is the exact opposite of how most people view America. If it's so bad, why do so many people want to live in the US?
- onion2k 11y ago
  If it's so bad, why do so many people want to live in the U.S.? Annually the USCIS gets about 6 million applications (that's in total, including permanent and temporary immigration claims). That's 0.08% of all the people on Earth (not including those already in the U.S.). Is it really fair to say a lot of people want to live there?

icebraining 11y ago

They only have so many dollars to spend on wages at current profitability levels. But as a business owner, when the cost of your inputs increases, the question you're faced with is not "how can I keep my current profitability levels" (which is often not possible anyway) but "how can I maximize profit given the new environment". For example, if you're the owner of a restaurant with one or two or even four servers, you often can't fire any without significantly affecting your level of service, which could lose you even more money than you would save in salaries. As far as I know, the literature on the subject is pretty much inconclusive, with studies pointing to a significant negative effect, while others indicate a negligible or even slightly positive effect.

deleted 11y ago
[deleted]

wfo 11y ago

If you really haven't ever heard a good argument in favor of an enormously popular economic policy that's been endorsed by hundreds of lauded and respected (even nobel-prize-winning) economists then you haven't been looking, or you're using it as a cheap rhetorical appeal to suggest you are correct without argument. I hope it's the first scenario since then you are simply ignorant and not malicious which is no crime, in which case a simple google of "minimum wage" should suffice. In the employment "negotiation" for low-skilled workers the businesses have all of the power and the workers have none. Businesses have run a successful propaganda campaign (and sometimes employed illegal thugs to wage a campaign of violence and intimidation) against the union movement whose goal was to give workers bargaining power through collective action and boycott so they are not completely abused and exploited. Some of their successes include, for example, the weekend, which without regulation or collective action would not exist. The union movement has mostly died and so the government forces an absolute minimum the worker can give the business in the "negotiation" which is as much of a negotiation as an offer at gunpoint is, because the government knows without it businesses would take everything and we would quickly devolve into sweatshops/de facto slavery. There are plenty of places in the world where there is no minimum. If you want a society that runs on sweatshops and slave labor just move. Unfortunately you can't have that in a healthy free democratic society, so most western democracies have chosen the latter. People don't have an inherent "fair market value" -- their "fair market wage" as you say is simply a measure of how much the wealthy owning class can exploit their wealth and power in an ultracapitalist system in which all of the rules favor them. If there are fewer people with your skills, you are harder to exploit, so your wages are higher -- until immigrants are imported to remedy the efficiency problem which is your living wage.

deleted 11y ago
[deleted]

chillwaves 11y ago

Are you saying that business employ an excess of labor? I do not believe this is the case. I understand that higher costs hurt business -- but higher costs come in many forms. Increases in rent, in commodities. But only when the workers ask for more is it unsustainable. I simply reject the notion that businesses employ excess labor and we will see mass lay offs as a result of the min. wage increase. If this were the case, you could point to Seattle and demonstrate but I do not think you will be able to.

thrownaway2424 11y ago

Here you go: the minimum wage exists to depress rents. Rents always rise until tenants are making whatever minimal profits will keep them in business. Enacting a minimum wage law takes money from the landlord and gives it to the workers, at the same level of minimally attractive profit margins.

larubbio 11y ago

Just to be clear, the article you link to, in the very first paragraph says "It’s too soon to tell for sure" which is much less certain than when you say "has caused a massive loss of jobs"

SilasX 11y ago

I hear what you're saying. As a means of "helping out the working class", it's stupid and simplistic: "workers aren't paid enough? Mandate they get paid more! Problem solved!" The problem, of course, is that there are many ways to save money by screwing workers (eg worsen the working conditions) and if the market price is below the min you set, employers will just shift into those other ways. A more robust solution -- as opposed to playing whack-a-mole over all dimensions of worker screwing -- would be to a) make their options more transparent and b) restrict supply somehow. That's why -- counterintuitive as it may seem -- I actually think it's a step forward, what LA is considering: a system of "minimum wage OR be represented by a union" (which helps with a/b above). It gives a "release valve" for excessive minimums that allows for some market pricing while also proving a check against the things advocates really care about: worker mistreatment. A minimum wage by itself is a clumsy fix for a more complex problem.