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I think your understanding of why a minimum wage is important is inappropriately myopic. All workers benefit from minimum wages, especially those who make more

I think your understanding of why a minimum wage is important is inappropriately myopic. All workers benefit from minimum wages, especially those who make more than minimum wage. First because it shifts labor costs up, which is good for those who rely on wages. Second, it narrows the range of expected financial resources, which increases the efficiency of service delivery and allows the creation of "nicer" places (i.e. it's easier to build good transit when everyone makes more). It also generates larger markets, pushes out bad actors and enables greater societal participation on the margins. The minimum wage is vital to discussions around UBI because, of course, the minimum wage influences what jobs will be interesting under UBI. In general, I think it's inaccurate to think about the minimum wage only in terms of how it benefits the people who get it. Its role as "pinning" the bottom of the economic curve is overall much more important. Whatever the form of our economy - the debate around what labor we consider exploitative and what kinds of labor we would like to incentivize will continue.

theptip 8y ago
This is an interesting set of arguments, I hadn't considered the efficiency of service delivery before. Do you have any way of estimating the magnitude of these effects? I don't on my side, unfortunately, but I'd love to see some more detailed analysis either way. I could believe that the positive utility from the effects you describe is higher than the negative utility of some industries being automated away, but it seems equally plausible that it's the other way, too (indeed from my naive non-economist viewpoint it seems like those effects would be second-order effects to the job-destruction ones). > the minimum wage influences what jobs will be interesting under UBI. I think there's a pretty watertight argument for abolishing the minimum wage if you're in a UBI regime, right? I certainly haven't heard an argument against, but perhaps you have one. I would have thought that the UBI would provide the "pinning" effect that you refer to, and then we could simplify the wage regulation by dropping the minimum wage, to give people more options on what to work on.

theptip 8y ago

This is an interesting set of arguments, I hadn't considered the efficiency of service delivery before. Do you have any way of estimating the magnitude of these effects? I don't on my side, unfortunately, but I'd love to see some more detailed analysis either way. I could believe that the positive utility from the effects you describe is higher than the negative utility of some industries being automated away, but it seems equally plausible that it's the other way, too (indeed from my naive non-economist viewpoint it seems like those effects would be second-order effects to the job-destruction ones). > the minimum wage influences what jobs will be interesting under UBI. I think there's a pretty watertight argument for abolishing the minimum wage if you're in a UBI regime, right? I certainly haven't heard an argument against, but perhaps you have one. I would have thought that the UBI would provide the "pinning" effect that you refer to, and then we could simplify the wage regulation by dropping the minimum wage, to give people more options on what to work on.