57 ms·

I think you could solve that by increasing minimum wage at the same time. That would also make min. wage increases more palatable.

runako 10y ago
I'm no economist, but I would imagine the effect of doing so would phase out quite rapidly for jobs above the currently-prevailing minimum wage. So while a $10/hr job might not be able to become a $7/hr job, I would expect that jobs at e.g. $20/hr would automatically become jobs at $17/hr in an environment of a $3/hr subsidy. But I admit I haven't spent a ton of time thinking about this and am probably missing something.
- simplify 10y ago
  I am also just thinking this through for the first time :) If what you say is true, then I think we will have just successfully upgraded minimum wage to a living wage, and have allowed companies to hire more people at higher wages due to the wage subsidy :)
  - runako 10y ago
    I think most of that effect in the example was achieved by the minimum wage increase. The wage subsidy then ends up as a gift to the employers. Big employers in the US already do this to some extent, by paying unsurvivable wages with the knowledge that their employees will make up the difference through state-sponsored transfer payments. It seems that an across-the-board wage subsidy would simply extend this practice further up the income spectrum and increase margins for employers across the board.
    - simplify 10y ago
      But isn't the argument against min wage increases that it would decrease jobs, since employers wouldn't be able to hire? Or, that robots will be cheaper than a higher minimum wage? That's why I suggest both of these ideas together might work. After all, you don't have to subsidize all jobs; perhaps only subsidize the lower-income jobs, while letting the market handle the higher-paying ones (like it is now).

57 ms·

I think you could solve that by increasing minimum wage at the same time. That would also make min. wage increases more palatable.

by simplify 10y ago

runako 10y ago
I'm no economist, but I would imagine the effect of doing so would phase out quite rapidly for jobs above the currently-prevailing minimum wage. So while a $10/hr job might not be able to become a $7/hr job, I would expect that jobs at e.g. $20/hr would automatically become jobs at $17/hr in an environment of a $3/hr subsidy. But I admit I haven't spent a ton of time thinking about this and am probably missing something.
- simplify 10y ago
  I am also just thinking this through for the first time :) If what you say is true, then I think we will have just successfully upgraded minimum wage to a living wage, and have allowed companies to hire more people at higher wages due to the wage subsidy :)
  - runako 10y ago
    I think most of that effect in the example was achieved by the minimum wage increase. The wage subsidy then ends up as a gift to the employers. Big employers in the US already do this to some extent, by paying unsurvivable wages with the knowledge that their employees will make up the difference through state-sponsored transfer payments. It seems that an across-the-board wage subsidy would simply extend this practice further up the income spectrum and increase margins for employers across the board.
    - simplify 10y ago
      But isn't the argument against min wage increases that it would decrease jobs, since employers wouldn't be able to hire? Or, that robots will be cheaper than a higher minimum wage? That's why I suggest both of these ideas together might work. After all, you don't have to subsidize all jobs; perhaps only subsidize the lower-income jobs, while letting the market handle the higher-paying ones (like it is now).