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> "Should the minimum wage for workers be equal to the wage where the government doesn't need to provide benefits? If it's not, why does the government subsidiz

• xyzzy123 5y ago
  Consider pin factory A that has invested in new machines and pays a few workers well, alongside factory B that instead uses old machines and lots of cheap labour to achieve the same business outcome. Factory A is a high productivity (per employee) employer and factory B is a low productivity employer. Yes, B employs a lot of people but in a certain sense it is also wasting their productive lives. Re: subsidies, if you pay workers very little their income may be supplemented by government assistance such as food stamps. Some employers rely on this in the sense that many of their employees would not be able to afford to live without this assistance. Some people believe that the clearing price for labour would be higher without this assistance (because the pool of people willing and able to work without it would be smaller). This does seem a fairly logical matter of supply and demand. However since it seems inhumane to cut off that support they generally advocate raising the minimum wage to incorporate the subsidies that would be provided instead.