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> 1. Theoretically, a minimum wage will reduce unemployment, and the higher the minimum wage, the higher the impact. However, even in theory it has to be quite

by Sacho 9y ago

> 1. Theoretically, a minimum wage will reduce unemployment, and the higher the minimum wage, the higher the impact. However, even in theory it has to be quite high to get meaningful impacts, given how noisy employment data is. Er, wouldn't minimum wage have the opposite effect, theoretically? If there was a job that I would pay $1 for and someone was willing to do, but the minimum wage is $2, then that job is illegal and won't exist(well, it might, grey economy and all, but sticking to simple theory). This would increase unemployment.

orwin 9y ago
Not if poor people have to work double hours to be able to live decently. I won't go deep onto the working mother issues (single mother with two job or mother with 2 jobs and a father with one but doesn't do anything with the kids as it is a "woman job") or how people working more than 50 hours a week is a net loss in productivity and a costly public health issue, but these problems can be solved with high enough minimum wages or universal income.
- Sacho 9y ago
  I agree but those are issues orthogonal to the basic rate of unemployment, no? You can have very low unemployment and still have a very poor country if everyone's working for pennies, and that's a real problem. IIRC too low unemployment could be a sign of an unhealthy lack of economic mobility - everyone's stuck in their job and they make barely enough to scrape by, so they're terrified of dropping out of the workforce to pursue education/creative endeavors/a new career.
zaarn 9y ago
Correct. Minimum wage will increase unemployment but also increase the standard of living for the unemployed. In conjunction with a functioning welfare program to catch the newly unemployed and get them back into the economy or prevent them living on the street, it can be effective against people being out of the unemployment statistic while still not being able to afford living.

by Sacho 9y ago

orwin 9y ago

Not if poor people have to work double hours to be able to live decently. I won't go deep onto the working mother issues (single mother with two job or mother with 2 jobs and a father with one but doesn't do anything with the kids as it is a "woman job") or how people working more than 50 hours a week is a net loss in productivity and a costly public health issue, but these problems can be solved with high enough minimum wages or universal income.

Sacho 9y ago
I agree but those are issues orthogonal to the basic rate of unemployment, no? You can have very low unemployment and still have a very poor country if everyone's working for pennies, and that's a real problem. IIRC too low unemployment could be a sign of an unhealthy lack of economic mobility - everyone's stuck in their job and they make barely enough to scrape by, so they're terrified of dropping out of the workforce to pursue education/creative endeavors/a new career.

zaarn 9y ago

Correct. Minimum wage will increase unemployment but also increase the standard of living for the unemployed. In conjunction with a functioning welfare program to catch the newly unemployed and get them back into the economy or prevent them living on the street, it can be effective against people being out of the unemployment statistic while still not being able to afford living.