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Seems unlikely that everyone making minimum wage would suddenly be making $2 if there was no minimum wage. What’s your reasoning? If it was a pure race to the b

Seems unlikely that everyone making minimum wage would suddenly be making $2 if there was no minimum wage. What’s your reasoning? If it was a pure race to the bottom then why aren’t SWEs paid min wage?

jariel 6y ago
SWE's have bargaining power, $100K is their market rate. Those without any leverage whatsoever, unskilled workers rate will be the 'absolute minimum required to survive'. Somewhere around $2/hour over the long haul. Millions of people living in tiny, one room apartments, without basic amenities. We know people will accept this to survive because they do, all around the world.
- donaldo 6y ago
  Yeah that makes sense and I agree with the sentiment. But unemployment seems pretty low in the US so it doesn’t seem like there’s enough supply and lack of demand to warrant wages dropping that much. I agree it could drop but was wondering if $2 was just random guess or backed by anything.
  - jariel 6y ago
    Oh, $2 is a guess, I don't know the number, but it's low. Factors are non-market issue such as social welfare programs, incidental wealth (i.e. kids with upper middle class parents, living at home choosing not to work), general attitudes, the difficulty of the labour (outside vs. inside), the relative buying power of the $2 (i.e. in a remote area, it may be possible to have 'micro homes' and get by, and social acceptance. Wages for undocumented labour might be a hint at the number though that's probably more than $2, my bet is that's somewhere north of $6-8 right now. My $2 take is 'long view' i.e. we see favelas in Brazil, people will accept that quality of life unless there are institutional pressures otherwise. Also consider that the unemployment rate does not count those who have stopped looking for work.
  - Pfhreak 6y ago
    On the flip side, gig work, tipped minimum wages, and unpaid labor (e.g. unpaid internships) is extremely common and can definitely bring in pay less than minimum wage. I can only imagine what would happen in cases where the backstop of minimum wage was removed.

jariel 6y ago

SWE's have bargaining power, $100K is their market rate. Those without any leverage whatsoever, unskilled workers rate will be the 'absolute minimum required to survive'. Somewhere around $2/hour over the long haul. Millions of people living in tiny, one room apartments, without basic amenities. We know people will accept this to survive because they do, all around the world.

donaldo 6y ago
Yeah that makes sense and I agree with the sentiment. But unemployment seems pretty low in the US so it doesn’t seem like there’s enough supply and lack of demand to warrant wages dropping that much. I agree it could drop but was wondering if $2 was just random guess or backed by anything.
- jariel 6y ago
  Oh, $2 is a guess, I don't know the number, but it's low. Factors are non-market issue such as social welfare programs, incidental wealth (i.e. kids with upper middle class parents, living at home choosing not to work), general attitudes, the difficulty of the labour (outside vs. inside), the relative buying power of the $2 (i.e. in a remote area, it may be possible to have 'micro homes' and get by, and social acceptance. Wages for undocumented labour might be a hint at the number though that's probably more than $2, my bet is that's somewhere north of $6-8 right now. My $2 take is 'long view' i.e. we see favelas in Brazil, people will accept that quality of life unless there are institutional pressures otherwise. Also consider that the unemployment rate does not count those who have stopped looking for work.
- Pfhreak 6y ago
  On the flip side, gig work, tipped minimum wages, and unpaid labor (e.g. unpaid internships) is extremely common and can definitely bring in pay less than minimum wage. I can only imagine what would happen in cases where the backstop of minimum wage was removed.