6 ms·

The direct effect of the minimum wage is to make certain low-productivity jobs illegal. Consider that for a moment: a person with limited skills and/or needs is

by _ah 6y ago

The direct effect of the minimum wage is to make certain low-productivity jobs illegal. Consider that for a moment: a person with limited skills and/or needs is simply prohibited from doing low-productivity work regardless of desire. The counter-argument is that many workers do not have a choice; they will always accept wages vs nothing, but have no power or ability to negotiate. With a minimum wage we've made the decision as a society that, in order to prevent worker exploitation, we will also eliminate certain classes of work. Some of this work does vanish entirely, while some of it reappears in the shadow economy through untracked cash payments or self-employment. As with all policy decisions there's a messy balance here and we're arguing mostly over where the line falls. I do wish there was a cleaner way to protect against monopsony (higher minimum wages) while also providing good opportunities for low-skill workers (those who are very young, very old, have physical or mental impairments, etc).

klmadfejno 6y ago
I don't think that's a reasonable point of view. Most minimum wage jobs are not productivity jobs, but jobs that need to get done by someone but require no special skills. That is, you can't easily define the value of the sanitation worker who keeps a restaurant clean enough to pass health standards. You just observe that there's enough people willing to do it that you can offer a low wage. What jobs are being made illegal?
- nickff 6y ago
  Many of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Factors such as lack of job history, attendance issues/unreliability, language issues, etc. mean that the employer will opt for a more 'attractive' candidate if there is a price floor. As an example, if you are looking for a bottle of wine to accompany your Tuesday night dinner, you might opt for a low-cost, low-quality option, as it is adequate for your needs; but if there is a price floor, you will opt for a different, higher quality option. Price floors mean that deals below the set price are illegal.
  - klmadfejno 6y ago
    > any of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Unless the job needs to be done, which is generally the case among minimum wage workers. That was my point. You need cleaning staff, and retail workers, and what not. You still hire them even if they cost more. People don't have intrinsic prices. It's not like an old person costs exactly $4.32 an hour and therefore is unable to find work if the minimum wage is $7.25.
    - nickff 6y ago
      The fact that the job needs to be done does not mean that the job needs to be done by the type of person currently doing it. One common response to price floors is to change the qualifications/requirements (as in my wine example). The employer will hire 'over-qualified' candidates to perform a job which does not require their skills or abilities. Wine is still being 'hired' with a price floor, but it is a different wine, and the price floor doesn't do the low-quality wine producer any good. This example is actually derived from a time when England imposed a flat tax on French wines.
      - klmadfejno 6y ago
        People aren't wine. They do not have intrinsic prices. What you're saying just isn't correct. We've got plenty of people with mental handicaps working at grocery stores and what not, many of them making more than minimum wage. What you're describing is not real.
        nickff 6y ago
        If you've ever worked at or hired for jobs between 1x and 2x the current minimum wage (in a given area), you know that the kind of people you can hire at 2x are totally different from the people you hire at 1x.
  - FabHK 6y ago
    > Many of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. The whole article was about how that doesn't seem to be the case, empirically. When the minimum wage rises, the effect on employment is minimal, and people on minimum wage get paid more (they're not fired).
- _ah 6y ago
  Sanitation workers may be low-skill but they are high-value. I don't think this is a good example. In contrast, a friend of mine recently hired the teenager next door with cash (for less than the local minimums) to do some manual yard labor. This job simply wasn't worth paying for at a higher cost; my friend would have left the work un-done. But in this case the value proposition at a lower price was acceptable and the neighbor was glad for the extra cash.
  - klmadfejno 6y ago
    Well sanitation workers make up a fairly large fraction of the minimum wage workers so that's a representative group of people for the matter at hand. You're not wrong that unnecessary private exchanges like that might be lost, but those are unnecessary, not that noteworthy in terms of economic scale, and generally aren't relevant to minimum wage laws anyway. My point is precisely that most of the labor that is priced at minimum wage is not like the example you describe.
- abstractbarista 6y ago
  All jobs are productivity jobs. It is the definition of a job. You are paid to accomplish some process. To be productive. Some non-zero skill is always needed. Cleaning surfaces in a restaurant happens to be fairly low-skill. There is a high supply of humans who can produce the result - a clean restaurant. Thus, the wage commonly paid for this job is (compared to higher-skilled jobs) quite low.
- temp_supply 6y ago
  As an example, textile and manufacturing jobs being used exported to Asian countries. It's not like companies want to pay for shipping of products from halfway across the world, but because of minimum wage it makes it more profitable to do so. Which results in jobs leaving to other countries. Without minimum, those workers wages would have simply gone down over time, allowing them some time to find other opportunities. Instead of just one day the plants up and decides to move to Asia and you're out of a job.
mdoms 6y ago
> The direct effect of the minimum wage is to make certain low-productivity jobs illegal. Consider that for a moment: a person with limited skills and/or needs is simply prohibited from doing low-productivity work regardless of desire. Has this ever been shown to be the case? Use real data or case studies.
- _ah 6y ago
  Walmart eliminated all greeters last year.
  - mdoms 6y ago
    Was there a corresponding increase in minimum wage?
    - fragsworth 6y ago
      No, but I don't think that makes the point any less relevant.
      - mdoms 6y ago
        Well either the greeters became more expensive or their utility dropped, if we're taking a simplistic market-based approach. So which is it?
  - pwinnski 6y ago
    And yet this year I see people standing outside the front door with a box of masks, ensuring everyone is masked before entering, and greeting people at the same time.
    - fragsworth 6y ago
      The fact that they were hired back during a pandemic isn't a good counter-argument, greeters obviously add very small value to the company under normal circumstances.
anigbrowl 6y ago
No they're not. Employers are prohibited from paying them below a certain amount. No employee can be or ever has been prosecuted/sued for accepting sub-minimum wage. I realize you're trying to say minimum wages limit economic opportunity for ad-hoc and casual labor that the poorest rely on. But you've fatally damaged your argument by presenting it in an untruthful way.
- saas_sam 6y ago
  Can you locate for the audience where the poster you are responding to said anything to the effect of "employees can be prosecuted/sued for accepting sub-minimum wage"? I read his/her post a few times and do not see where that was stated. On the contrary, I see where he or she said that certain _jobs_ were illegal. Your point about who gets prosecuted or sued comes across as a total non-sequitur, at least to this reader! A very anti-charitable one at that with an aftertaste of moral grandstanding.
  - anigbrowl 6y ago
    In the second sentence, specifically the word prohibited which was even emphasized for effect.
aidenn0 6y ago
You make low-productivity jobs illegal while also raising the wages for low-skill high-productivity jobs. Worker productivity in the US has gone through the roof while real wages have stagnated. Combined with the (at least pre-pandemic) low unemployment rates, it seems likely that most minimum wage workers are in jobs that would not be eliminated by raising the minimum wage.
chillacy 6y ago
I've only read a little about the idea but I heard that time banking has been used in some communities without work to keep an informal economy going. It turns out there are a lot of odd jobs which aren't high-value enough to be part of the formal economy, but are worth doing with basic time-tracking. https://en.wikipedia.org/wiki/Time-based_currency https://en.wikipedia.org/wiki/Time-based_currency And then there's maybe the more traditional form where a local currency comes into existence which maybe not regulated like the national one: https://en.wikipedia.org/wiki/Local_currency https://en.wikipedia.org/wiki/Local_currency
potatochup 6y ago
As an interesting aside, I recently discovered New Zealand has minimum wage exemptions where productivity is low due to disabilities or other circumstances. https://www.employment.govt.nz/hours-and-wages/pay/minimum-wage/minimum-wage-exemptions/ https://www.employment.govt.nz/hours-and-wages/pay/minimum-w...

by _ah 6y ago

klmadfejno 6y ago

I don't think that's a reasonable point of view. Most minimum wage jobs are not productivity jobs, but jobs that need to get done by someone but require no special skills. That is, you can't easily define the value of the sanitation worker who keeps a restaurant clean enough to pass health standards. You just observe that there's enough people willing to do it that you can offer a low wage. What jobs are being made illegal?

nickff 6y ago
Many of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Factors such as lack of job history, attendance issues/unreliability, language issues, etc. mean that the employer will opt for a more 'attractive' candidate if there is a price floor. As an example, if you are looking for a bottle of wine to accompany your Tuesday night dinner, you might opt for a low-cost, low-quality option, as it is adequate for your needs; but if there is a price floor, you will opt for a different, higher quality option. Price floors mean that deals below the set price are illegal.
- klmadfejno 6y ago
  > any of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Unless the job needs to be done, which is generally the case among minimum wage workers. That was my point. You need cleaning staff, and retail workers, and what not. You still hire them even if they cost more. People don't have intrinsic prices. It's not like an old person costs exactly $4.32 an hour and therefore is unable to find work if the minimum wage is $7.25.
  - nickff 6y ago
    The fact that the job needs to be done does not mean that the job needs to be done by the type of person currently doing it. One common response to price floors is to change the qualifications/requirements (as in my wine example). The employer will hire 'over-qualified' candidates to perform a job which does not require their skills or abilities. Wine is still being 'hired' with a price floor, but it is a different wine, and the price floor doesn't do the low-quality wine producer any good. This example is actually derived from a time when England imposed a flat tax on French wines.
    - klmadfejno 6y ago
      People aren't wine. They do not have intrinsic prices. What you're saying just isn't correct. We've got plenty of people with mental handicaps working at grocery stores and what not, many of them making more than minimum wage. What you're describing is not real.
      - nickff 6y ago
        If you've ever worked at or hired for jobs between 1x and 2x the current minimum wage (in a given area), you know that the kind of people you can hire at 2x are totally different from the people you hire at 1x.
- FabHK 6y ago
  > Many of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. The whole article was about how that doesn't seem to be the case, empirically. When the minimum wage rises, the effect on employment is minimal, and people on minimum wage get paid more (they're not fired).
_ah 6y ago
Sanitation workers may be low-skill but they are high-value. I don't think this is a good example. In contrast, a friend of mine recently hired the teenager next door with cash (for less than the local minimums) to do some manual yard labor. This job simply wasn't worth paying for at a higher cost; my friend would have left the work un-done. But in this case the value proposition at a lower price was acceptable and the neighbor was glad for the extra cash.
- klmadfejno 6y ago
  Well sanitation workers make up a fairly large fraction of the minimum wage workers so that's a representative group of people for the matter at hand. You're not wrong that unnecessary private exchanges like that might be lost, but those are unnecessary, not that noteworthy in terms of economic scale, and generally aren't relevant to minimum wage laws anyway. My point is precisely that most of the labor that is priced at minimum wage is not like the example you describe.
abstractbarista 6y ago
All jobs are productivity jobs. It is the definition of a job. You are paid to accomplish some process. To be productive. Some non-zero skill is always needed. Cleaning surfaces in a restaurant happens to be fairly low-skill. There is a high supply of humans who can produce the result - a clean restaurant. Thus, the wage commonly paid for this job is (compared to higher-skilled jobs) quite low.
temp_supply 6y ago
As an example, textile and manufacturing jobs being used exported to Asian countries. It's not like companies want to pay for shipping of products from halfway across the world, but because of minimum wage it makes it more profitable to do so. Which results in jobs leaving to other countries. Without minimum, those workers wages would have simply gone down over time, allowing them some time to find other opportunities. Instead of just one day the plants up and decides to move to Asia and you're out of a job.

mdoms 6y ago

> The direct effect of the minimum wage is to make certain low-productivity jobs illegal. Consider that for a moment: a person with limited skills and/or needs is simply prohibited from doing low-productivity work regardless of desire. Has this ever been shown to be the case? Use real data or case studies.

_ah 6y ago
Walmart eliminated all greeters last year.
- mdoms 6y ago
  Was there a corresponding increase in minimum wage?
  - fragsworth 6y ago
    No, but I don't think that makes the point any less relevant.
    - mdoms 6y ago
      Well either the greeters became more expensive or their utility dropped, if we're taking a simplistic market-based approach. So which is it?
- pwinnski 6y ago
  And yet this year I see people standing outside the front door with a box of masks, ensuring everyone is masked before entering, and greeting people at the same time.
  - fragsworth 6y ago
    The fact that they were hired back during a pandemic isn't a good counter-argument, greeters obviously add very small value to the company under normal circumstances.

anigbrowl 6y ago

No they're not. Employers are prohibited from paying them below a certain amount. No employee can be or ever has been prosecuted/sued for accepting sub-minimum wage. I realize you're trying to say minimum wages limit economic opportunity for ad-hoc and casual labor that the poorest rely on. But you've fatally damaged your argument by presenting it in an untruthful way.

saas_sam 6y ago
Can you locate for the audience where the poster you are responding to said anything to the effect of "employees can be prosecuted/sued for accepting sub-minimum wage"? I read his/her post a few times and do not see where that was stated. On the contrary, I see where he or she said that certain _jobs_ were illegal. Your point about who gets prosecuted or sued comes across as a total non-sequitur, at least to this reader! A very anti-charitable one at that with an aftertaste of moral grandstanding.
- anigbrowl 6y ago
  In the second sentence, specifically the word prohibited which was even emphasized for effect.

aidenn0 6y ago

You make low-productivity jobs illegal while also raising the wages for low-skill high-productivity jobs. Worker productivity in the US has gone through the roof while real wages have stagnated. Combined with the (at least pre-pandemic) low unemployment rates, it seems likely that most minimum wage workers are in jobs that would not be eliminated by raising the minimum wage.

chillacy 6y ago

I've only read a little about the idea but I heard that time banking has been used in some communities without work to keep an informal economy going. It turns out there are a lot of odd jobs which aren't high-value enough to be part of the formal economy, but are worth doing with basic time-tracking. https://en.wikipedia.org/wiki/Time-based_currency https://en.wikipedia.org/wiki/Time-based_currency And then there's maybe the more traditional form where a local currency comes into existence which maybe not regulated like the national one: https://en.wikipedia.org/wiki/Local_currency https://en.wikipedia.org/wiki/Local_currency

potatochup 6y ago

As an interesting aside, I recently discovered New Zealand has minimum wage exemptions where productivity is low due to disabilities or other circumstances. https://www.employment.govt.nz/hours-and-wages/pay/minimum-wage/minimum-wage-exemptions/ https://www.employment.govt.nz/hours-and-wages/pay/minimum-w...