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> The minimum wage does not naturally rise The minimum amount of money you have to pay for someone to show up for any job rises (and falls) alongside demand fo

> The minimum wage does not naturally rise The minimum amount of money you have to pay for someone to show up for any job rises (and falls) alongside demand for labor in the broader economy. > Under our current system that heavily favors returning productivity gains to capital instead of labor... If you look at the profit margins of those companies that employ a lot of low-end labor, you will find that they're generally in the single digit percentages. I think that's a pretty fair deal for organizing all that labor and taking on the capital risk. Profits aren't guaranteed, after all. There just isn't that much money to redistribute here, you would have to raise prices, which can make you uncompetitive.

danans 6y ago
> The minimum amount of money you have to pay for someone to show up for any job rises (and falls) alongside demand for labor in the broader economy. Oh, what that it were so simple. There are far more factors governing "market wages", which you are describing, including labor supply at a given skill level, automation, political representation of laborers vs employers, and how that representation manifests as power in the local and global economic contexts. The "minimum wage" specifically is a policy designed to put a floor under the standard of living of people whose market wages in the economy would provide a standard of living below what the society considers humane. Some societies have no such humanity based floor.
- gridlockd 6y ago
  > The "minimum wage" specifically is a policy designed to put a floor under the standard of living of people whose market wages in the economy would provide a standard of living below what the society considers humane. Some societies have no such humanity based floor. Maybe that's the intention, but what a minimum wage actually does is remove the possibility for anyone to work below an arbitrary number of dollars. If that value is lower than the going market rate for low-skilled labor, minimum wage makes no difference. Above that, it removes more and more people from the "eligible to work" pool. There's nothing humane about preventing people from being able to work, especially when you don't have a welfare system to pick up those who are now doomed to unemployment.
  - danans 6y ago
    > what a minimum wage actually does is remove the possibility for anyone to work below an arbitrary number of dollars. It should be paired with a federal jobs guarantee and universal healthcare then.
    - andrewjl 6y ago
      I think to work right the jobs guarantee needs to be a temporary guarantee with the aim of upskilling and not purely a "make work" program. Something more like college, though not academic, with built-in accountability mechanisms. It shouldn't be normalized to be a "lifelong" thing, in the same way we think it's unusual for someone to be a lifelong college student. At least one without milestones such as degrees, etc.
      - danans 6y ago
        I agree. The goal shouldn't be ditch digging. There is a huge amount of work that needs to be done in areas that will require plenty of upskilling that can take place while working.
  - andrewjl 6y ago
    > There's nothing humane about preventing people from being able to work My reading of the argument (maybe different from OP) is the choice to work a low wage job isn't a choice made completely by one's own volition due to a huge stack of societal factors. Let's break your counterargument down a bit, preventing people from being able to work denies them sustenance yes, but also embedded (IMO) in your argument is the intrinsic value of a job as a part of someone's life. Here we agree and this is why I don't support cradle-to-grave welfare and think it would be a disaster if implemented. It is something welfare advocates tend to ignore, to the detriment of their credibility on other economic matters. A retraining program coupled with a large hike in minimum wages and temporary retraining assistance could sustainably raise the minimum standard of living with no government takeover of the economy. The program itself can be a private one if designed the right way. Prior retraining programs didn't work due to 1) lack of accountability and 2) lack of demand for upskilled labor. A very high minimum wage fixes that on the cost side and also on the aggregate demand side. (Something approaching the median US wage today or possibly 1.5x-2x higher, phased in over several decades to give business a measure of predictability and planning capacity.) Most low paying jobs can be automated, when they aren't it is because human labor is so cheap that the expense of capex to automate isn't worth it. By raising the floor cost of labor, government provides business an incentive to retool the economy around higher-wage paying activities. Any business that can't automate and relies on cheap human work to do drudgery isn't worth saving in my opinion. A bonus is that the resulting capex will generate second and third order effects that will catalyze economic growth and spare many otherwise impacted small businesses from failing. We want to idealize the person who starts out in a fast food restaurant, learns discipline and organizational skills, and moves on to higher paying work. Several decades of data have shown us this is a nice theory that fails in practice in most cases. Those people remain stuck and that is bad for economic growth in addition to causing needless suffering. Keeping the minimum wage low hasn't solved this problem and won't solve it in the future.
rbg246 6y ago
If everyone has to raise the minimum wage all, everyone has to raise prices accordingly and ROI remains the same.
- linspace 6y ago
  If that were true there would be no resistance to raising the minimum wage. The truth is that it redistributes wealth.
  - rbg246 6y ago
    What's wrong with redistribution? You make it sound like a sin. The last forty years has been redistributing profits from labour to capital. There is nothing at all wrong with reversing that.
- FranzFerdiNaN 6y ago
  This is not how it works, but it is one of many lies spread to help prevent raising minimum wage.
  - rbg246 6y ago
    Do you care to expand, your reply hasn't given me any insight into the exception you have made to my comment.
- gridlockd 6y ago
  You disregard the option of simply not doing business. If products and services become more expensive, demand tends to go down, so you end up at square one in terms of income. There is some wiggle room here and not all prices are elastic like that, but it's true in principle.
  - rbg246 6y ago
    Correct, so businesses that rely on exploiting minimum wage earners go out of business. Society needs to find a way to have people gainfully employed keeping the minimum wage at poverty levels is not a good choice.

danans 6y ago

> The minimum amount of money you have to pay for someone to show up for any job rises (and falls) alongside demand for labor in the broader economy. Oh, what that it were so simple. There are far more factors governing "market wages", which you are describing, including labor supply at a given skill level, automation, political representation of laborers vs employers, and how that representation manifests as power in the local and global economic contexts. The "minimum wage" specifically is a policy designed to put a floor under the standard of living of people whose market wages in the economy would provide a standard of living below what the society considers humane. Some societies have no such humanity based floor.

gridlockd 6y ago
> The "minimum wage" specifically is a policy designed to put a floor under the standard of living of people whose market wages in the economy would provide a standard of living below what the society considers humane. Some societies have no such humanity based floor. Maybe that's the intention, but what a minimum wage actually does is remove the possibility for anyone to work below an arbitrary number of dollars. If that value is lower than the going market rate for low-skilled labor, minimum wage makes no difference. Above that, it removes more and more people from the "eligible to work" pool. There's nothing humane about preventing people from being able to work, especially when you don't have a welfare system to pick up those who are now doomed to unemployment.
- danans 6y ago
  > what a minimum wage actually does is remove the possibility for anyone to work below an arbitrary number of dollars. It should be paired with a federal jobs guarantee and universal healthcare then.
  - andrewjl 6y ago
    I think to work right the jobs guarantee needs to be a temporary guarantee with the aim of upskilling and not purely a "make work" program. Something more like college, though not academic, with built-in accountability mechanisms. It shouldn't be normalized to be a "lifelong" thing, in the same way we think it's unusual for someone to be a lifelong college student. At least one without milestones such as degrees, etc.
    - danans 6y ago
      I agree. The goal shouldn't be ditch digging. There is a huge amount of work that needs to be done in areas that will require plenty of upskilling that can take place while working.
- andrewjl 6y ago
  > There's nothing humane about preventing people from being able to work My reading of the argument (maybe different from OP) is the choice to work a low wage job isn't a choice made completely by one's own volition due to a huge stack of societal factors. Let's break your counterargument down a bit, preventing people from being able to work denies them sustenance yes, but also embedded (IMO) in your argument is the intrinsic value of a job as a part of someone's life. Here we agree and this is why I don't support cradle-to-grave welfare and think it would be a disaster if implemented. It is something welfare advocates tend to ignore, to the detriment of their credibility on other economic matters. A retraining program coupled with a large hike in minimum wages and temporary retraining assistance could sustainably raise the minimum standard of living with no government takeover of the economy. The program itself can be a private one if designed the right way. Prior retraining programs didn't work due to 1) lack of accountability and 2) lack of demand for upskilled labor. A very high minimum wage fixes that on the cost side and also on the aggregate demand side. (Something approaching the median US wage today or possibly 1.5x-2x higher, phased in over several decades to give business a measure of predictability and planning capacity.) Most low paying jobs can be automated, when they aren't it is because human labor is so cheap that the expense of capex to automate isn't worth it. By raising the floor cost of labor, government provides business an incentive to retool the economy around higher-wage paying activities. Any business that can't automate and relies on cheap human work to do drudgery isn't worth saving in my opinion. A bonus is that the resulting capex will generate second and third order effects that will catalyze economic growth and spare many otherwise impacted small businesses from failing. We want to idealize the person who starts out in a fast food restaurant, learns discipline and organizational skills, and moves on to higher paying work. Several decades of data have shown us this is a nice theory that fails in practice in most cases. Those people remain stuck and that is bad for economic growth in addition to causing needless suffering. Keeping the minimum wage low hasn't solved this problem and won't solve it in the future.

rbg246 6y ago

If everyone has to raise the minimum wage all, everyone has to raise prices accordingly and ROI remains the same.

linspace 6y ago
If that were true there would be no resistance to raising the minimum wage. The truth is that it redistributes wealth.
- rbg246 6y ago
  What's wrong with redistribution? You make it sound like a sin. The last forty years has been redistributing profits from labour to capital. There is nothing at all wrong with reversing that.
FranzFerdiNaN 6y ago
This is not how it works, but it is one of many lies spread to help prevent raising minimum wage.
- rbg246 6y ago
  Do you care to expand, your reply hasn't given me any insight into the exception you have made to my comment.
gridlockd 6y ago
You disregard the option of simply not doing business. If products and services become more expensive, demand tends to go down, so you end up at square one in terms of income. There is some wiggle room here and not all prices are elastic like that, but it's true in principle.
- rbg246 6y ago
  Correct, so businesses that rely on exploiting minimum wage earners go out of business. Society needs to find a way to have people gainfully employed keeping the minimum wage at poverty levels is not a good choice.