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It's important to apply context to this. A minimum wage, among other things, forces businesses to prejudice against lower skilled workers. If the minimum wage

It's important to apply context to this. A minimum wage, among other things, forces businesses to prejudice against lower skilled workers. If the minimum wage is negotiated by the union to $18/hr but you only produce $10/hr due to lack of experience, disability, below average IQ, or you went to a failing public school then you're simply unemployed. If we remove this contractual minimum wage, you're right, it would likely have some minimal impact for the people on the margins of having productivity sufficient to justify hiring them on the union's minimum wage. However, everyone below that level of productivity now has the potential for new jobs, and with those jobs comes skills training and economic mobility. Unions do marginally help their members, but they harm everyone below them on the economic ladder.

pdeuchler 9y ago
The incorrect assumption here is that people earn what value they produce. People actually earn (value_produced - profit + bargaining power). The reason for upping the minimum wage is all minimum wage worker unions have disappeared and an increase in the low skill labor market supply (mostly due to the loss of manufacturing in the US) have decimated bargaining power across the board. Plus, due to automation, a single say, McDonalds worker, "produces" much more value than his counterpart 20 years ago without commiserate increase in salary even accounting for a loss in bargaining power (i.e. the profit variable has shot up, meaning an unequal share in the benefits of the labor). Of course, that's just the high level theory... using just common sense those same workers are going to be automated away entirely, if the wage is 20 cents or 20 dollars it doesn't matter. So we might as well force companies to compensate them in the short term for their impending unemployment.
- Consultant32452 9y ago
  Two key things occurred during the time period you're talking about where wages stagnated in spite of massive increases in productivity growth. The first is that we actually started letting women get jobs. We increased the labor supply by nearly 40%. It's amazing that wages are not even lower than they are. The second thing that happened is that millions upon millions of unskilled immigrants crossed the border. This also, obviously significantly increased the pool of labor at the bottom of the economic ladder further suppressing wages.

pdeuchler 9y ago

The incorrect assumption here is that people earn what value they produce. People actually earn (value_produced - profit + bargaining power). The reason for upping the minimum wage is all minimum wage worker unions have disappeared and an increase in the low skill labor market supply (mostly due to the loss of manufacturing in the US) have decimated bargaining power across the board. Plus, due to automation, a single say, McDonalds worker, "produces" much more value than his counterpart 20 years ago without commiserate increase in salary even accounting for a loss in bargaining power (i.e. the profit variable has shot up, meaning an unequal share in the benefits of the labor). Of course, that's just the high level theory... using just common sense those same workers are going to be automated away entirely, if the wage is 20 cents or 20 dollars it doesn't matter. So we might as well force companies to compensate them in the short term for their impending unemployment.

Consultant32452 9y ago
Two key things occurred during the time period you're talking about where wages stagnated in spite of massive increases in productivity growth. The first is that we actually started letting women get jobs. We increased the labor supply by nearly 40%. It's amazing that wages are not even lower than they are. The second thing that happened is that millions upon millions of unskilled immigrants crossed the border. This also, obviously significantly increased the pool of labor at the bottom of the economic ladder further suppressing wages.