2 ms·

Setting a minimum wage makes some people's wages rise to it - AND, unavoidably, it also makes some people unemployed. Because not all employers extract the sam

Setting a minimum wage makes some people's wages rise to it - AND, unavoidably, it also makes some people unemployed. Because not all employers extract the same value from the same workforce, those more efficient will be able to afford the raise. But, by definition, the employers of some of that population will not be able to afford that raise (otherwise the market value would have been greater). This means some people will become unintentionally unemployed.

jacquesm 16y ago
This is absolutely true, but the net benefit is huge. It's a typical case of an ethical dilemma, no minimum wage is shitty wages for everybody, minimum wage is a living wage for many and no wage for some. Exceptions to minimum wage are a thing that's been tried in some places but on the whole it didn't work out well, I believe there are still some experiments running in Europe where long term unemployed can work for less than minimum wage in some jobs (but with a time limit) while keeping their welfare.
- ArturSoler 16y ago
  It is not a net benefit. It is a net loss for society, as less wealth is produced, so society in general gets poorer. It is also a net loss for those that become unintentionally unemployed. The overall salary mass is not raised, but reduced. I would also add it is completely illegitimate to prohibit a voluntary agreement based on some supposed "greater good". Your assertion that no minimum wage means "shitty wages for everybody" is unfounded. Wages are determined by productivity, and it's no possible to raise real wages (taking into account other goods prices) with a law. Only an increase in produced wealth can raise wages. Edit to add: If you imply that the "unintentionally unemployed" ones are a unlucky few, that's not the case. As you would probably know, official unemployment levels are around 20% in some EU countries, while real levels are probably way above that. That means a whole lot of people is not allowed to produce nothing because of minimum wage laws. The wealth prevented from being created is huge.
  - Daishiman 16y ago
    That is not true. Underemployment does not benefit anyone: it does not provide the employee with a living wage and results in an unproductive workforce. You can't change the fact that there is a minimum amount of money necessary for a reasonable existence, and going below it is just a means for temporary exploitation of workers, in some (although possibly farfetched) fashion similar to slavery. Subsistence work with no possibility of improvement does not provide society with a net benefit, but only creates a class of permanent poverty marred by undernutrition and an inability escape the tactical issues of living paycheck to paycheck, and it's an especially important issue in a country such as the US where health benefits are few and time off is minimal. If minimum wage is taken away, market force WILL drive down the wages, but there will be no social benefit, as it will only result in denying opportunities to a very large sector of society.
    - ArturSoler 16y ago
      A reasonable existence is a completely subjective value. Someone with a $5/hour wage today would live better than some kings some centuries ago. So it does not exist that "minimum amount of money". Society takes a loss. The less wealth is produced, the poorer the society is. It's as easy as that. What denies opportunities is denying someone the possibility of working because he's not productive enough.

jacquesm 16y ago

This is absolutely true, but the net benefit is huge. It's a typical case of an ethical dilemma, no minimum wage is shitty wages for everybody, minimum wage is a living wage for many and no wage for some. Exceptions to minimum wage are a thing that's been tried in some places but on the whole it didn't work out well, I believe there are still some experiments running in Europe where long term unemployed can work for less than minimum wage in some jobs (but with a time limit) while keeping their welfare.

ArturSoler 16y ago
It is not a net benefit. It is a net loss for society, as less wealth is produced, so society in general gets poorer. It is also a net loss for those that become unintentionally unemployed. The overall salary mass is not raised, but reduced. I would also add it is completely illegitimate to prohibit a voluntary agreement based on some supposed "greater good". Your assertion that no minimum wage means "shitty wages for everybody" is unfounded. Wages are determined by productivity, and it's no possible to raise real wages (taking into account other goods prices) with a law. Only an increase in produced wealth can raise wages. Edit to add: If you imply that the "unintentionally unemployed" ones are a unlucky few, that's not the case. As you would probably know, official unemployment levels are around 20% in some EU countries, while real levels are probably way above that. That means a whole lot of people is not allowed to produce nothing because of minimum wage laws. The wealth prevented from being created is huge.
- Daishiman 16y ago
  That is not true. Underemployment does not benefit anyone: it does not provide the employee with a living wage and results in an unproductive workforce. You can't change the fact that there is a minimum amount of money necessary for a reasonable existence, and going below it is just a means for temporary exploitation of workers, in some (although possibly farfetched) fashion similar to slavery. Subsistence work with no possibility of improvement does not provide society with a net benefit, but only creates a class of permanent poverty marred by undernutrition and an inability escape the tactical issues of living paycheck to paycheck, and it's an especially important issue in a country such as the US where health benefits are few and time off is minimal. If minimum wage is taken away, market force WILL drive down the wages, but there will be no social benefit, as it will only result in denying opportunities to a very large sector of society.
  - ArturSoler 16y ago
    A reasonable existence is a completely subjective value. Someone with a $5/hour wage today would live better than some kings some centuries ago. So it does not exist that "minimum amount of money". Society takes a loss. The less wealth is produced, the poorer the society is. It's as easy as that. What denies opportunities is denying someone the possibility of working because he's not productive enough.