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The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a home

The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? I would effectively be guaranteeing that she stays unemployed/homeless. Regardless of practical effects (which are ambiguous at best), it's wrong on moral grounds. On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. For them, the higher wage comes with fewer hours, according to this study. In the long run though, the more we raise the minimum wage, the sooner the local price inflation catches up. Getting a casual meal in Seattle is NOT cheap right now. EDIT: I'll throw in that I think a very basic income with no minimum wage/unemployment/other welfare is much smarter fiscally and economically, and is the only way to largely eliminate extreme poverty. And it's sad that HN readers flagged this article because it challenges a conventional liberal talking point.

taeric 9y ago
You aren't telling the homeless person that they are legally forbidden from working in cheap labor. You are telling businesses that they are not solvent if they rely on ultra cheap labor.
- Aron 9y ago
  both?
- lend000 9y ago
  Perhaps minimum wage proponents need to frame it like that to justify it, but in reality, it goes both ways. You ARE legally forbidding a homeless person from working at a price of their choosing, just as much as you are forbidding a business from purchasing labor below a certain price.
  - taeric 9y ago
    This line of thinking leads to allowing people to sell themselves into slavery. Do we need to solve homelessness? Absolutely. We do not do this by propping up businesses and properties that rely on below livable wages. I can buy some level of slippery slope at play here. But, by and large, this frames it in a way that allows sub-livable wages. So, you can think my "side" is framing this in a way to justify it. This does little more than convince me your "side" is just trying to justify keeping ill earned wealth.
    - lend000 9y ago
      > This line of thinking leads to allowing people to sell themselves into slavery. I think there is a fundamental difference between selling labor and selling legal rights. You might say that someone so financially desperate has de-facto given some rights to their employer, but coercion is always illegal (whether or not this kind of person is likely to seek legal help is another story). > So, you can think my "side" is framing this in a way to justify it. This does little more than convince me your "side" is just trying to justify keeping ill earned wealth. Sounds like you dislike exploitative businesses more than you care about the homeless. That isn't necessarily right or wrong, but I think it explains your inclination on the issue.
      - taeric 9y ago
        I think there is a fundamental difference between selling labor and selling legal rights. You might say that someone so financially desperate has de-facto given some rights to their employer, but coercion is always illegal (whether or not this kind of person is likely to seek legal help is another story). I question that difference. Selling labor is merely selling the legal rights to the product of your labor. Building a dependence into the system by allowing below living wages is something I just don't see ending well. I'm not convinced I'm correct on this. But at face value, I don't see how it works. Sounds like you dislike exploitative businesses more than you care about the homeless. That isn't necessarily right or wrong, but I think it explains your inclination on the issue. I view them as distinct things. And while I certainly encourage ways to get homeless people feeling productive, I don't think getting them below living wage jobs is doing them a favor. Reliable shelter where they are able to get food and necessities while possibly building skills is something I'm incredibly for. And I hate the NIMBY syndrome that is pervading a lot of the city. Unfortunately, I don't think there is an easy answer. :(
- koolba 9y ago
  If nobody is allowed to offer him work below a particular rate and nobody is willing to pay him at or above that rate, then he's effectively forbidden from working.
  - PatentTroll 9y ago
    Or, if no company is willing to pay a living wage to accomplish a task, does it need to be done?
    - koolba 9y ago
      Perhaps not, or more likely it doesn't need to be done in the jurisdiction of the forced minimum. For fully localized jobs that cannot move (ex: waiter) that means they probably won't exist at all and the business will close down.
      - PatentTroll 9y ago
        Or will the prices just increase to account for the higher wage? Isn't that easier?
    - RivieraKid 9y ago
      Companies will pay at most the value that a worker creates. It makes no sense to pay minimum wage, if the worker creates less value than that.
      - PatentTroll 9y ago
        And what is the value created by labor? Let's split the discussion into service jobs and non-service jobs, as we all know most of these minimum wage positions are service jobs. So, what is the value of one hour of service labor? Whatever someone will pay for it. Which is set by a market of service providers all decreasing their prices to the lowest they can tolerate. Because if you can undercut a competitor, the free market says you will win the business. Which, for the people who make minimum wage, is how little a wage they will accept. Ok, what sets the floor for what people will tolerate to be paid? When looking at the minimum wage sector of the population, what is their bargaining power? What is the bargaining power of the employers? Is it a free market? What other options do the workers have? Is it a voluntary transaction if the alternative is starvation and homelessness?
- PatentTroll 9y ago
  No, you're telling the customers that their food is subsidized by ultra cheap labor. Of course, higher prices will decrease the number of goods sold, which the free marketers regard as a deadly sin. Rather, when costs are fully internalized, the free market works better! Externalizing costs onto labor by perpetuating a below-living wage is a market distortion held up by government! They should hate it!
  - PatentTroll 9y ago
    And to the free marketers who point out that companies could voluntarily pay a living wage, you're not wrong! But it exposes the fault in the free market religion. The market, on a whole, will gladly enslave and abuse a small minority for the benefit of the majority.
Joe-Z 9y ago
>Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? Someone who hasn't unterstood minimun wage fully? Minimum wage covers exactly this situation: You will have to pay at least that amount, even if the person you're employing happens to be homeless at the moment. If an employer is not willing to pay that, than that's not an issue with having a minimum wage...
- Aron 9y ago
  If someone says 'my labor isn't worth 15$ and I know you won't hire me at that rate so I want to work for 10$' they are legally forbidden from this, right?
  - Joe-Z 9y ago
    >If someone says 'my labor isn't worth 15$ But that's what I think is good about it!: It sets a baseline for what human labour is worth. Nobody has to say how much (or rather how little) his or her labour is worth. If an employer thinks someone should earn less than that - fully knowing that this wage will never enable this other person to get on in life - than she'd rather not employ anyone.
- tim333 9y ago
  The trouble is for $15 per hour the business can probably hire someone more productive or less hassle than the homeless guy. Thus the homeless guy stays unemployed. I was always a put off minimum wage laws by reading Thomas Sowell on how blacks had lower unemployment than whites in 1948 before minimum wage laws had much effect. After people hired non blacks and the unemployment rate shot up giving problems that continue to this day. ( eg http://www.twincities.com/2012/02/07/thomas-sowell-the-minimum-wage-a-disaster-for-young-and-poor-black-people/ http://www.twincities.com/2012/02/07/thomas-sowell-the-minim...)
  - Joe-Z 9y ago
    Thank you for your example, that's interesting! I guess the story can also be interpreted the other way around: Employers were only willing to hire black people because they were worked for lower wages, because they exactly knew that their labour was being considered less worth that that of white people? So introducing the minimum wage just made the racism obivous and I'm sure problems would also have arisen if the minimum wage had never been introduced and the black minority would have been forced to slave away on minimal incomes their whole life.
clavalle 9y ago
When a person is desperate, 'voluntary' starts to lose all meaning. If you are dead broke and half starved and I offered you a take it or leave it offer to work carrying rocks for $2 an hour so you can get a sandwich and you agree, is that really voluntary? I do agree with you about teenagers and other people that don't need the money in order to live. For dependents and people that agree not to get public assistance (e.g. retirees), I don't think there should be any minimum wage at all.
- SamReidHughes 9y ago
  Yes, that is voluntary. It stops being voluntary when you make it a long term contract.
  - clavalle 9y ago
    A long-term contract isn't necessary; only a continued razor thin margin of financial error that can devolve, more or less immediately, into desperation again. /Tens of Millions/ of Americans live their lives there.
    - SamReidHughes 9y ago
      You have to remember that the guy's other option in this example is not working at all, and getting no money. He demonstrably prefers the working situation, by doing it. It's of no risk to him and he can back out at any time. Edit: I also think your expectations of relative difficulty in finding new work and doing it might be the result of minimum wage and other legally imposed on boarding costs. There would, for example, be a much more fluid market of sign spinning jobs with no minimum wage or employment regulations which for some reason want to designate people "employees" with "rights."
      - clavalle 9y ago
        Yes, but the 'why' of his preference is important here. Preferring something to avoid pain or death doesn't lead to net positive transactions, in general. If I ask you whether you want your leg or your left hand cut off (and I have the power to make either happen) you can have a preference and still lose.
coldpie 9y ago
> On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. This is the problem. Everyone working 40 hours per week deserves a living wage, whether they're fresh out of high school or 8 years into a humanities degree. There's this weird sense out there that working in food service isn't a "real job," or as you say they haven't started their "career." This is how you end up with people working 60 or 80 hour work weeks, or two or three jobs, to provide for themselves and their family. Every 40 hour job is a "real job" and deserves a living wage. Otherwise you're just making people depend on our social safety net, and no one wants that.
- lend000 9y ago
  > Otherwise you're just making people depend on our social safety net, and no one wants that. I suppose the homeless and chronically unemployed people you've condemned do not usually use public assistance? I disagree with this, and regardless, it doesn't sound like a good solution for them. There are a lot of cheap places out there (see: Midwest, South), but unfortunately, millennials do not want to live there. I would rather let economics sort it out instead of creating a vicious local inflation cycle that prices out local minorities and increases the homeless population via minimum wage.
  - googletazer 9y ago
    You moved goalposts from >Every 40 hour job is a "real job" and deserves a living wage. to >I would rather let economics sort it out instead of creating a vicious local inflation cycle that prices out local minorities and increases the homeless population via minimum wage.
- rhino369 9y ago
  Whether they deserve or it or not doesn't change whether the market will support it. Some people making 10 dollars an hour might get a raise to 13, but some might just get fired. So law decides that someone whose labor is only worth 10 dollars to the market is better off banned from working.
lordCarbonFiber 9y ago
The crux of the issue is at the end of the day, the true "market value" of most 0 or near 0 skill jobs is close to 0$. This is especially true in the case of your hypothetical homeless person for whom any employment represents a significant percentage marginal increase in income (hard not to beat 0). Given the power asymmetry between "people offering low skill jobs" and "people forced into taking low skill jobs" minimum wage is morally superior than forced feudalism. Now, the US (and most governments) miss out on the other side of the in that, we want to force people out of low skill effectively worthless jobs, and into higher skill positions that drive the economy. That means reeducation programs, community involvement, and a social safety net which all costs tax money.
- rsync 9y ago
  "The crux of the issue is at the end of the day, the true "market value" of most 0 or near 0 skill jobs is close to 0$. This is especially true in the case of your hypothetical homeless person for whom any employment represents a significant percentage marginal increase in income (hard not to beat 0)." I don't think that's true at all ... as a Californian, I am surrounded by zero skill tasks related to agriculture that pay well more than zero. I pay workers in my vineyards and orchards for zero-skill tasks like weeding, mowing, digging, etc. over minimum wage. Granted, this is in a coastal area (Marin County) but even in the central valley the value of zero-skill labor is much more than zero. In fact, I will bet that anywhere in California a worker that can show up on time and work hard for a full shift will consistently be paid over minimum wage for this zero-skill labor (absent employer trickery). The real problem, in my opinion, is that there is a great social migration taking place towards high-priced cities with low housing stock and lots of wealth driving up prices of all goods and services in these areas. So it's not that zero-skill work has zero value, but rather: zero skill work cannot meet basic living standards in an expensive city - and these days, all of the cities are (relatively) expensive. We are talking about Seattle, after all ...
sideshowb 9y ago
This isn't the first such study, in fact there is a long history of them, with results so mixed that nothing can be concluded one way or the other on minimum wage (except perhaps for the conclusion that Economics 101 models don't match the real world). The following book contains a short review in an early chapter https://www.amazon.co.uk/Economics-Anti-Textbook-Critical-Thinkers-Microeconomics/dp/1842779397 https://www.amazon.co.uk/Economics-Anti-Textbook-Critical-Th... Still to my mind, a high level of Universal Basic Income combined with no minimum wage would be a more logical thing to do, and solves the above problems.
tdb7893 9y ago
A lot of my girlfriend's friends work at or near minimum wage because they just need any job and the fact that there is a minimum wage seems to save them from complete poverty (and it's not like they are trying to start a family or anything yet). I think that there is a optimal minumum wage (15$ seems too high for me) but it's hard for me to argue against it completely having seen the good it has done for people and how impossible it would be to live below it. I guess I would feel differently if I had met a lot of people who had not been able to get jobs because of the minimum wage but at least for me I've yet to meet someone in that situation.
- RussianCow 9y ago
  Since we're throwing out anecdotes, I've talked to a few local business owners who are looking at layoffs in the near future as a result of a series of upcoming jumps in minimum wage, because they simply can't afford to pay 50% more (over the next 5 years) and keep the same number of employees. I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other technologies as cheaper alternatives to human beings. Neither of our anecdotes is particularly useful in this discussion, but the economics and data (as in the article) tend to suggest that having a high minimum wage is unsustainable.
  - TYPE_FASTER 9y ago
    > I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other technologies as cheaper alternatives to human beings. Yes, my guess is increasing the minimum wage, along with the rising cost of healthcare benefits, will be very convenient excuses for automation.
    - RivieraKid 9y ago
      Excuses? That's assuming that automation is something bad, that you need an excuse to do. Of course that companies try to maximize their profit. It's a good and necessary thing. Otherwise they'll lose market to competitors who automate.
boona 9y ago
This. What's unfortunate is that depending on what narrative you subscribe to around minimum wage, it can sound like an obviously good thing, or an obviously bad thing. It sounds great that you want to increase the wages of workers by increasing the minimum wage. It sounds awful when you want to exclude certain individuals from the job market by increasing minimum wages and making it against the law for low skilled workers to get jobs. The cold hard fact is that is that no matter your intention, you can't get one without the unintended consequences of the other. So yes you'll get an increase in wage for certain individuals, but you'll also exclude out of the market those who cannot yet produce at that rate. It's sad but true.

taeric 9y ago

You aren't telling the homeless person that they are legally forbidden from working in cheap labor. You are telling businesses that they are not solvent if they rely on ultra cheap labor.

Aron 9y ago
both?
lend000 9y ago
Perhaps minimum wage proponents need to frame it like that to justify it, but in reality, it goes both ways. You ARE legally forbidding a homeless person from working at a price of their choosing, just as much as you are forbidding a business from purchasing labor below a certain price.
- taeric 9y ago
  This line of thinking leads to allowing people to sell themselves into slavery. Do we need to solve homelessness? Absolutely. We do not do this by propping up businesses and properties that rely on below livable wages. I can buy some level of slippery slope at play here. But, by and large, this frames it in a way that allows sub-livable wages. So, you can think my "side" is framing this in a way to justify it. This does little more than convince me your "side" is just trying to justify keeping ill earned wealth.
  - lend000 9y ago
    > This line of thinking leads to allowing people to sell themselves into slavery. I think there is a fundamental difference between selling labor and selling legal rights. You might say that someone so financially desperate has de-facto given some rights to their employer, but coercion is always illegal (whether or not this kind of person is likely to seek legal help is another story). > So, you can think my "side" is framing this in a way to justify it. This does little more than convince me your "side" is just trying to justify keeping ill earned wealth. Sounds like you dislike exploitative businesses more than you care about the homeless. That isn't necessarily right or wrong, but I think it explains your inclination on the issue.
    - taeric 9y ago
      I think there is a fundamental difference between selling labor and selling legal rights. You might say that someone so financially desperate has de-facto given some rights to their employer, but coercion is always illegal (whether or not this kind of person is likely to seek legal help is another story). I question that difference. Selling labor is merely selling the legal rights to the product of your labor. Building a dependence into the system by allowing below living wages is something I just don't see ending well. I'm not convinced I'm correct on this. But at face value, I don't see how it works. Sounds like you dislike exploitative businesses more than you care about the homeless. That isn't necessarily right or wrong, but I think it explains your inclination on the issue. I view them as distinct things. And while I certainly encourage ways to get homeless people feeling productive, I don't think getting them below living wage jobs is doing them a favor. Reliable shelter where they are able to get food and necessities while possibly building skills is something I'm incredibly for. And I hate the NIMBY syndrome that is pervading a lot of the city. Unfortunately, I don't think there is an easy answer. :(
koolba 9y ago
If nobody is allowed to offer him work below a particular rate and nobody is willing to pay him at or above that rate, then he's effectively forbidden from working.
- PatentTroll 9y ago
  Or, if no company is willing to pay a living wage to accomplish a task, does it need to be done?
  - koolba 9y ago
    Perhaps not, or more likely it doesn't need to be done in the jurisdiction of the forced minimum. For fully localized jobs that cannot move (ex: waiter) that means they probably won't exist at all and the business will close down.
    - PatentTroll 9y ago
      Or will the prices just increase to account for the higher wage? Isn't that easier?
  - RivieraKid 9y ago
    Companies will pay at most the value that a worker creates. It makes no sense to pay minimum wage, if the worker creates less value than that.
    - PatentTroll 9y ago
      And what is the value created by labor? Let's split the discussion into service jobs and non-service jobs, as we all know most of these minimum wage positions are service jobs. So, what is the value of one hour of service labor? Whatever someone will pay for it. Which is set by a market of service providers all decreasing their prices to the lowest they can tolerate. Because if you can undercut a competitor, the free market says you will win the business. Which, for the people who make minimum wage, is how little a wage they will accept. Ok, what sets the floor for what people will tolerate to be paid? When looking at the minimum wage sector of the population, what is their bargaining power? What is the bargaining power of the employers? Is it a free market? What other options do the workers have? Is it a voluntary transaction if the alternative is starvation and homelessness?
PatentTroll 9y ago
No, you're telling the customers that their food is subsidized by ultra cheap labor. Of course, higher prices will decrease the number of goods sold, which the free marketers regard as a deadly sin. Rather, when costs are fully internalized, the free market works better! Externalizing costs onto labor by perpetuating a below-living wage is a market distortion held up by government! They should hate it!
- PatentTroll 9y ago
  And to the free marketers who point out that companies could voluntarily pay a living wage, you're not wrong! But it exposes the fault in the free market religion. The market, on a whole, will gladly enslave and abuse a small minority for the benefit of the majority.

Joe-Z 9y ago

>Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? Someone who hasn't unterstood minimun wage fully? Minimum wage covers exactly this situation: You will have to pay at least that amount, even if the person you're employing happens to be homeless at the moment. If an employer is not willing to pay that, than that's not an issue with having a minimum wage...

Aron 9y ago
If someone says 'my labor isn't worth 15$ and I know you won't hire me at that rate so I want to work for 10$' they are legally forbidden from this, right?
- Joe-Z 9y ago
  >If someone says 'my labor isn't worth 15$ But that's what I think is good about it!: It sets a baseline for what human labour is worth. Nobody has to say how much (or rather how little) his or her labour is worth. If an employer thinks someone should earn less than that - fully knowing that this wage will never enable this other person to get on in life - than she'd rather not employ anyone.
tim333 9y ago
The trouble is for $15 per hour the business can probably hire someone more productive or less hassle than the homeless guy. Thus the homeless guy stays unemployed. I was always a put off minimum wage laws by reading Thomas Sowell on how blacks had lower unemployment than whites in 1948 before minimum wage laws had much effect. After people hired non blacks and the unemployment rate shot up giving problems that continue to this day. ( eg http://www.twincities.com/2012/02/07/thomas-sowell-the-minimum-wage-a-disaster-for-young-and-poor-black-people/ http://www.twincities.com/2012/02/07/thomas-sowell-the-minim...)
- Joe-Z 9y ago
  Thank you for your example, that's interesting! I guess the story can also be interpreted the other way around: Employers were only willing to hire black people because they were worked for lower wages, because they exactly knew that their labour was being considered less worth that that of white people? So introducing the minimum wage just made the racism obivous and I'm sure problems would also have arisen if the minimum wage had never been introduced and the black minority would have been forced to slave away on minimal incomes their whole life.

clavalle 9y ago

When a person is desperate, 'voluntary' starts to lose all meaning. If you are dead broke and half starved and I offered you a take it or leave it offer to work carrying rocks for $2 an hour so you can get a sandwich and you agree, is that really voluntary? I do agree with you about teenagers and other people that don't need the money in order to live. For dependents and people that agree not to get public assistance (e.g. retirees), I don't think there should be any minimum wage at all.

SamReidHughes 9y ago
Yes, that is voluntary. It stops being voluntary when you make it a long term contract.
- clavalle 9y ago
  A long-term contract isn't necessary; only a continued razor thin margin of financial error that can devolve, more or less immediately, into desperation again. /Tens of Millions/ of Americans live their lives there.
  - SamReidHughes 9y ago
    You have to remember that the guy's other option in this example is not working at all, and getting no money. He demonstrably prefers the working situation, by doing it. It's of no risk to him and he can back out at any time. Edit: I also think your expectations of relative difficulty in finding new work and doing it might be the result of minimum wage and other legally imposed on boarding costs. There would, for example, be a much more fluid market of sign spinning jobs with no minimum wage or employment regulations which for some reason want to designate people "employees" with "rights."
    - clavalle 9y ago
      Yes, but the 'why' of his preference is important here. Preferring something to avoid pain or death doesn't lead to net positive transactions, in general. If I ask you whether you want your leg or your left hand cut off (and I have the power to make either happen) you can have a preference and still lose.

coldpie 9y ago

> On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. This is the problem. Everyone working 40 hours per week deserves a living wage, whether they're fresh out of high school or 8 years into a humanities degree. There's this weird sense out there that working in food service isn't a "real job," or as you say they haven't started their "career." This is how you end up with people working 60 or 80 hour work weeks, or two or three jobs, to provide for themselves and their family. Every 40 hour job is a "real job" and deserves a living wage. Otherwise you're just making people depend on our social safety net, and no one wants that.

lend000 9y ago
> Otherwise you're just making people depend on our social safety net, and no one wants that. I suppose the homeless and chronically unemployed people you've condemned do not usually use public assistance? I disagree with this, and regardless, it doesn't sound like a good solution for them. There are a lot of cheap places out there (see: Midwest, South), but unfortunately, millennials do not want to live there. I would rather let economics sort it out instead of creating a vicious local inflation cycle that prices out local minorities and increases the homeless population via minimum wage.
- googletazer 9y ago
  You moved goalposts from >Every 40 hour job is a "real job" and deserves a living wage. to >I would rather let economics sort it out instead of creating a vicious local inflation cycle that prices out local minorities and increases the homeless population via minimum wage.
rhino369 9y ago
Whether they deserve or it or not doesn't change whether the market will support it. Some people making 10 dollars an hour might get a raise to 13, but some might just get fired. So law decides that someone whose labor is only worth 10 dollars to the market is better off banned from working.

lordCarbonFiber 9y ago

The crux of the issue is at the end of the day, the true "market value" of most 0 or near 0 skill jobs is close to 0$. This is especially true in the case of your hypothetical homeless person for whom any employment represents a significant percentage marginal increase in income (hard not to beat 0). Given the power asymmetry between "people offering low skill jobs" and "people forced into taking low skill jobs" minimum wage is morally superior than forced feudalism. Now, the US (and most governments) miss out on the other side of the in that, we want to force people out of low skill effectively worthless jobs, and into higher skill positions that drive the economy. That means reeducation programs, community involvement, and a social safety net which all costs tax money.

rsync 9y ago
"The crux of the issue is at the end of the day, the true "market value" of most 0 or near 0 skill jobs is close to 0$. This is especially true in the case of your hypothetical homeless person for whom any employment represents a significant percentage marginal increase in income (hard not to beat 0)." I don't think that's true at all ... as a Californian, I am surrounded by zero skill tasks related to agriculture that pay well more than zero. I pay workers in my vineyards and orchards for zero-skill tasks like weeding, mowing, digging, etc. over minimum wage. Granted, this is in a coastal area (Marin County) but even in the central valley the value of zero-skill labor is much more than zero. In fact, I will bet that anywhere in California a worker that can show up on time and work hard for a full shift will consistently be paid over minimum wage for this zero-skill labor (absent employer trickery). The real problem, in my opinion, is that there is a great social migration taking place towards high-priced cities with low housing stock and lots of wealth driving up prices of all goods and services in these areas. So it's not that zero-skill work has zero value, but rather: zero skill work cannot meet basic living standards in an expensive city - and these days, all of the cities are (relatively) expensive. We are talking about Seattle, after all ...

sideshowb 9y ago

This isn't the first such study, in fact there is a long history of them, with results so mixed that nothing can be concluded one way or the other on minimum wage (except perhaps for the conclusion that Economics 101 models don't match the real world). The following book contains a short review in an early chapter https://www.amazon.co.uk/Economics-Anti-Textbook-Critical-Thinkers-Microeconomics/dp/1842779397 https://www.amazon.co.uk/Economics-Anti-Textbook-Critical-Th... Still to my mind, a high level of Universal Basic Income combined with no minimum wage would be a more logical thing to do, and solves the above problems.

tdb7893 9y ago

A lot of my girlfriend's friends work at or near minimum wage because they just need any job and the fact that there is a minimum wage seems to save them from complete poverty (and it's not like they are trying to start a family or anything yet). I think that there is a optimal minumum wage (15$ seems too high for me) but it's hard for me to argue against it completely having seen the good it has done for people and how impossible it would be to live below it. I guess I would feel differently if I had met a lot of people who had not been able to get jobs because of the minimum wage but at least for me I've yet to meet someone in that situation.

RussianCow 9y ago
Since we're throwing out anecdotes, I've talked to a few local business owners who are looking at layoffs in the near future as a result of a series of upcoming jumps in minimum wage, because they simply can't afford to pay 50% more (over the next 5 years) and keep the same number of employees. I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other technologies as cheaper alternatives to human beings. Neither of our anecdotes is particularly useful in this discussion, but the economics and data (as in the article) tend to suggest that having a high minimum wage is unsustainable.
- TYPE_FASTER 9y ago
  > I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other technologies as cheaper alternatives to human beings. Yes, my guess is increasing the minimum wage, along with the rising cost of healthcare benefits, will be very convenient excuses for automation.
  - RivieraKid 9y ago
    Excuses? That's assuming that automation is something bad, that you need an excuse to do. Of course that companies try to maximize their profit. It's a good and necessary thing. Otherwise they'll lose market to competitors who automate.

boona 9y ago

This. What's unfortunate is that depending on what narrative you subscribe to around minimum wage, it can sound like an obviously good thing, or an obviously bad thing. It sounds great that you want to increase the wages of workers by increasing the minimum wage. It sounds awful when you want to exclude certain individuals from the job market by increasing minimum wages and making it against the law for low skilled workers to get jobs. The cold hard fact is that is that no matter your intention, you can't get one without the unintended consequences of the other. So yes you'll get an increase in wage for certain individuals, but you'll also exclude out of the market those who cannot yet produce at that rate. It's sad but true.