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The the whole point of having a minimum wage is to keep the wage level above that threshold, if market forces would otherwise drive it below the minimum.

AnthonyMouse 7y ago
"Market forces" are just people doing stuff. You don't need a minimum wage law to refuse a job that pays less than that. If there is another job that pays more then the minimum wage does nothing, you can take the other job instead regardless. If there isn't, i.e. you're one of the drivers who would become unemployed, are you really worse off with slightly less money than zero money whatsoever? How does that help you?
- asdfasgasdgasdg 7y ago
  Well, there is research suggesting that a minimum wage has unexpected effects. The economics 101 take is that raising the minimum wage will increase unemployment, but that theoretical view is not well supported empirically.
  - AnthonyMouse 7y ago
    This is the "everything is complicated" view where you can find weird effects to support whatever you want if you look at enough different examples. For example, when major employers are large inefficient bureaucracies with high margins, raising the minimum wage doesn't result in those entities laying off many if any workers, because they can just eat the cost and keep going as if nothing changed. But when the employers are lean and operate in markets with high elasticity of demand, as in this case, it does directly result in unemployment. Because there is no way to pay more without charging more, but charging more reduces demand. Notice that this is another way of saying that minimum wage has more negative impact on efficient companies than inefficient ones, which I take as another argument against it.
- CharlesColeman 7y ago
  Sweatshops and unsafe workplaces were also just people doing stuff, yet long ago they were considered such a problem that laws were passed to reign them in (against much resistance). I'm not really interested in returning to the status quo ante.
  - bhupy 7y ago
    The problem with sweatshops and unsafe workplaces is that the employees in question don't have the leverage to walk away from those jobs, since...they would just starve and die. Again, this sounds like a welfare problem, because if we instead redistribute money to these folks (expand EITC and even remove the employment requirement), then they have the leverage necessary to negotiate better pay and better conditions. Such workers can walk away from unsafe working conditions without worrying about being able to feed themselves. Higher paid workers do this all the time, and this feeds into the market price for certain labor.
  - AnthonyMouse 7y ago
    There is a long history of a business practice harming workers, the workers objecting and getting companies to change the practice, and then just as the practice is falling out of favor in the market, the government will pass a law against it and claim credit for eliminating it. Most of those laws are not very useful, because the practice was already on its way out, but also not very harmful, because the practice was already on its way out. (Notice that there is also a major distinction between "worker protections" which workers can generally negotiate for themselves, and laws pricing externalities like pollution, which really do need to be there to keep companies from doing that.) The problem in this case is that paying low wages isn't actually universally harmful. In many cases, prohibiting employees from working for lower wages only prohibits them from working at all, because no one will hire them for more than that. Moreover, the benefit is quite attenuated because the difference for the workers who did receive higher wages is still not dramatically more than they would be paid in the alternative, and even they are a very small percentage of overall workers, the large majority of which make more than minimum wage to begin with. It's not clear that giving a small raise to a small group of people is actually worth causing another group of people to lose their jobs, while raising the prices that everyone has to pay. Particularly when there are alternatives for subsidizing compensation that spread the cost more evenly instead of concentrating it on the exact people you don't really want to tax in general. Compare this to a law requiring saws to have blade guards on them, which costs hardly anything and has no apparent major negative consequences at all to anyone.

AnthonyMouse 7y ago

"Market forces" are just people doing stuff. You don't need a minimum wage law to refuse a job that pays less than that. If there is another job that pays more then the minimum wage does nothing, you can take the other job instead regardless. If there isn't, i.e. you're one of the drivers who would become unemployed, are you really worse off with slightly less money than zero money whatsoever? How does that help you?

asdfasgasdgasdg 7y ago
Well, there is research suggesting that a minimum wage has unexpected effects. The economics 101 take is that raising the minimum wage will increase unemployment, but that theoretical view is not well supported empirically.
- AnthonyMouse 7y ago
  This is the "everything is complicated" view where you can find weird effects to support whatever you want if you look at enough different examples. For example, when major employers are large inefficient bureaucracies with high margins, raising the minimum wage doesn't result in those entities laying off many if any workers, because they can just eat the cost and keep going as if nothing changed. But when the employers are lean and operate in markets with high elasticity of demand, as in this case, it does directly result in unemployment. Because there is no way to pay more without charging more, but charging more reduces demand. Notice that this is another way of saying that minimum wage has more negative impact on efficient companies than inefficient ones, which I take as another argument against it.
CharlesColeman 7y ago
Sweatshops and unsafe workplaces were also just people doing stuff, yet long ago they were considered such a problem that laws were passed to reign them in (against much resistance). I'm not really interested in returning to the status quo ante.
- bhupy 7y ago
  The problem with sweatshops and unsafe workplaces is that the employees in question don't have the leverage to walk away from those jobs, since...they would just starve and die. Again, this sounds like a welfare problem, because if we instead redistribute money to these folks (expand EITC and even remove the employment requirement), then they have the leverage necessary to negotiate better pay and better conditions. Such workers can walk away from unsafe working conditions without worrying about being able to feed themselves. Higher paid workers do this all the time, and this feeds into the market price for certain labor.
- AnthonyMouse 7y ago
  There is a long history of a business practice harming workers, the workers objecting and getting companies to change the practice, and then just as the practice is falling out of favor in the market, the government will pass a law against it and claim credit for eliminating it. Most of those laws are not very useful, because the practice was already on its way out, but also not very harmful, because the practice was already on its way out. (Notice that there is also a major distinction between "worker protections" which workers can generally negotiate for themselves, and laws pricing externalities like pollution, which really do need to be there to keep companies from doing that.) The problem in this case is that paying low wages isn't actually universally harmful. In many cases, prohibiting employees from working for lower wages only prohibits them from working at all, because no one will hire them for more than that. Moreover, the benefit is quite attenuated because the difference for the workers who did receive higher wages is still not dramatically more than they would be paid in the alternative, and even they are a very small percentage of overall workers, the large majority of which make more than minimum wage to begin with. It's not clear that giving a small raise to a small group of people is actually worth causing another group of people to lose their jobs, while raising the prices that everyone has to pay. Particularly when there are alternatives for subsidizing compensation that spread the cost more evenly instead of concentrating it on the exact people you don't really want to tax in general. Compare this to a law requiring saws to have blade guards on them, which costs hardly anything and has no apparent major negative consequences at all to anyone.