3 ms·

Yeah, but the principle is the same: what happens when the worker is not able to produce to the level of the minimum wage? be than 15$/h, or 7.25$/h. Would you

Yeah, but the principle is the same: what happens when the worker is not able to produce to the level of the minimum wage? be than 15$/h, or 7.25$/h. Would you pay somebody 7.25$/h if they're able to only produce 5$/h?

ryandamm 9y ago
The dynamics are considerably more complicated when you consider massive public policy decisions that affect the labor market, like changing the minimum wage. When you're pricing widgets, you can look at marginal value add and have it make sense. When you're talking about the floor of the labor market, you're really talking about economy-wide effects. The main knock-on effect of raising the minimum wage should be inflation; most labor costs (at least those that get built into consumer prices) are in some way linked to the minimum wage (either explicitly, or because of implicit pay scales). So yeah, there are considerations. But it's not that kind of mechanical, subtract-marginal-value-of-employee kind of considerations. Unfortunately, economies are big and complex and require sophisticated models (they can be simple -- but they should be sophisticated).
michaelmrose 9y ago
If the state provides benefits they have to put a floor on wages in to avoid subsidizing scumbags. People will work for less than it takes to live if the government pays the difference. Honestly if you can't make more than 15 dollars off one hour of someone's labor you might need to go out of business. Given how little 15 is anymore almost anyones labor is worth 15.
- ams6110 9y ago
  > Given how little 15 is anymore almost anyones labor is worth 15 Not in a competitive market when your competitor is paying $10.00. He then has $5 * total_employee_hours less overhead than you do.
  - michaelmrose 9y ago
    Well if we raise the federal minimum that wont be true will it. I mean that a business ought to be able to turn an average persons labour into significantly more than $15 even if they just use them to prepare non gourmet food.

ryandamm 9y ago

The dynamics are considerably more complicated when you consider massive public policy decisions that affect the labor market, like changing the minimum wage. When you're pricing widgets, you can look at marginal value add and have it make sense. When you're talking about the floor of the labor market, you're really talking about economy-wide effects. The main knock-on effect of raising the minimum wage should be inflation; most labor costs (at least those that get built into consumer prices) are in some way linked to the minimum wage (either explicitly, or because of implicit pay scales). So yeah, there are considerations. But it's not that kind of mechanical, subtract-marginal-value-of-employee kind of considerations. Unfortunately, economies are big and complex and require sophisticated models (they can be simple -- but they should be sophisticated).

michaelmrose 9y ago

If the state provides benefits they have to put a floor on wages in to avoid subsidizing scumbags. People will work for less than it takes to live if the government pays the difference. Honestly if you can't make more than 15 dollars off one hour of someone's labor you might need to go out of business. Given how little 15 is anymore almost anyones labor is worth 15.

ams6110 9y ago
> Given how little 15 is anymore almost anyones labor is worth 15 Not in a competitive market when your competitor is paying $10.00. He then has $5 * total_employee_hours less overhead than you do.
- michaelmrose 9y ago
  Well if we raise the federal minimum that wont be true will it. I mean that a business ought to be able to turn an average persons labour into significantly more than $15 even if they just use them to prepare non gourmet food.