3 ms·

Employing someone at the minimum wage rate is "evil"?

• danilocampos 15y ago
  "I'd pay you even less, but it'd be illegal!"
  • glenra 15y ago
    That perspective assumes pay is the only thing that matters in the bundle of benefits that counts as a job. Given that one can make a job better or worse in zillions of ways, mandating a minimum wage probably makes both the employer and the employee worse off compared to allowing them to reach a free mutual agreement on terms. It might make employees worse off by reducing their hours, by reducing the training budget, reducing flexibility of work hours, reducing job security...or by reducing perks such as free food. Here's an example: Suppose you're running a videogame company and you need to test your new videogame. If it were legal, one strategy might be to pay a small army of junior-high kids, say, $1/hour to test your videogame after school. The kids would go for it because they get the ability to play hot new video games in a relaxing, low-pressure environment, with free snacks and drinks and even a small amount of pay, where ordinarily it would cost them money to play videogames. As a side benefit, they'd get valuable exposure to the work environment, make business contacts, possibly discover a new career. Now pass laws demanding a minimum wage. The junior high kids are priced out of the market; if you have to pay a large wage you'll hire fewer but more qualified people rather than more, less qualified people. Now it's much harder to get started in the field. A $13/hour testing job is a different job than the $1/hour job. More stressful, harder to get, and quite possibly less effective. So change your quote to "You'd prefer to take less (in exchange for offsetting benefits that are more valuable to you than to me), but offering you that deal would be illegal!"