4 ms·

One thing I am curious about is what really would happen if we had no minimum wage. Anchoring bias is a pretty well known phenomenon. If you have a "cheap" item

One thing I am curious about is what really would happen if we had no minimum wage. Anchoring bias is a pretty well known phenomenon. If you have a "cheap" item priced at $10, an "economic" item priced at $15 and an "expensive" item at $20 and they are functionally the same. People will choose the middle item. I wonder if something similar is happening with wages. Because of the minimum wage, a business owner can hire someone to the minimum wage, or something slightly above, without too much thought other than knowing they can afford it generally. So the minimum may be artificially "sticking" wages lower than what they may otherwise be. Of course this is all conjecture and I have no kind of proof for this. Also, while minimum wage laws are almost universally praised, they (along with a lot of things in the US) have a pretty sad history. https://mises.org/blog/racist-history-minimum-wage-laws https://mises.org/blog/racist-history-minimum-wage-laws

Agustus 9y ago
Minimum wage laws are not universally praised, those from the Austrian economic side would disagree with that statement. The minimum wage is as bad as licensing for hair wraps, it is a program to drive undesirables out of a market.
- supreme_sublime 9y ago
  I said "almost" because I happen to be a person who pretty strongly agrees with Austrian economics. I'd think that linking a mises.org article might hint at that pretty strongly.
LyndsySimon 9y ago
> One thing I am curious about is what really would happen if we had no minimum wage. For what it's worth, Switzerland has no minimum wage.
natecavanaugh 9y ago
Another author who advocates for the removal of the minimum wage is Thomas Sowell, primarily because he views it as enforcing racism (similar reasoning as the link you referenced). But I'm not sure about this line of thinking. We already do have this in that we have a hidden economy of undocumented workers, and while the lack of a MW provides more work, it also creates different tiers of society, and there is quite a lot of lock-in that perpetuates the cycle. I could see us abandoning the minimum wage, but only if we make sure to foster the capitalist flexibility with incentives and protections to ensure that flexibility doesn't lead to a race to the bottom.

Agustus 9y ago

Minimum wage laws are not universally praised, those from the Austrian economic side would disagree with that statement. The minimum wage is as bad as licensing for hair wraps, it is a program to drive undesirables out of a market.

supreme_sublime 9y ago
I said "almost" because I happen to be a person who pretty strongly agrees with Austrian economics. I'd think that linking a mises.org article might hint at that pretty strongly.

LyndsySimon 9y ago

> One thing I am curious about is what really would happen if we had no minimum wage. For what it's worth, Switzerland has no minimum wage.

natecavanaugh 9y ago

Another author who advocates for the removal of the minimum wage is Thomas Sowell, primarily because he views it as enforcing racism (similar reasoning as the link you referenced). But I'm not sure about this line of thinking. We already do have this in that we have a hidden economy of undocumented workers, and while the lack of a MW provides more work, it also creates different tiers of society, and there is quite a lot of lock-in that perpetuates the cycle. I could see us abandoning the minimum wage, but only if we make sure to foster the capitalist flexibility with incentives and protections to ensure that flexibility doesn't lead to a race to the bottom.