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Food for thought: Raising the minimum wage does not help the bottom class. Raising it directly reduces the volume of wealth distributed to the bottom class and

Food for thought: Raising the minimum wage does not help the bottom class. Raising it directly reduces the volume of wealth distributed to the bottom class and solidifies monopolies by reducing the ability for small businesses to compete with them.

Pet_Ant 5y ago
Small businesses should not be depending on non-living wages to be competitive. If you can’t generate living-wages jobs you don’t really have anything to offer and should at best be a non-profit.
- GaryTang 5y ago
  Individuals should have the ability to choose where they work and increasing the number of small businesses allows that. Reducing the number of small businesses means individuals have fewer employers to choose from. Communites with a higher number of businesses have a larger slice of wealth allocated towards the bottom 99%.
  - h0l0cube 5y ago
    Your stance seems to be based more on conviction than reality > “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in the following year. If anything, the evidence leans the other way” https://www.epi.org/publication/webfeatures_viewpoints_raising_minimum_wage_2004/ https://www.epi.org/publication/webfeatures_viewpoints_raisi... Second-order effects of people have more money, is they can spend it on local businesses. Undeniably there will be some inflation but not enough to subsume the increase. As a counterpoint, large businesses like fast food and supermarket chains pay minimum wage, and many of their employees need to rely on welfare to get by - in general, business will pay the least they can get away with, no matter how many there are. Add to that, minimum wage disproportionately affects the bigger players who can't pay cash-in-hand (due to greater regulatory oversight) but can well afford to pay a higher wage, not the smaller businesses.
    - GaryTang 5y ago
      > “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in the following year. If anything, the evidence leans the other way” Yes but this actually supports my argument; An increase of the minimum wage solidifies incumbent businesses. This occurs because increasing the min wage is the same as increasing a barrier to entry. Sure, the incumbents won’t fail, but you are effectively making it more difficult for new participants to start. Business failures won’t increase and neither will the rate of new businesses. > “In general, businesses will pay the least they can get away with, no matter how many there are.” Yes this is true. But employees will compete for employers that pay higher and a community with more businesses will have a larger pie to eat from because there is more overall value created.
      - h0l0cube 5y ago
        > This occurs because increasing the min wage is the same as increasing a barrier to entry. Do you have some data to back this up, or are you just speculating? To posit my own speculation, could it be if people have more money for discretionary spending there could be more businesses to service them? > But employees will compete for employers that pay higher and a community with more businesses This seems a little naive. Low skilled and unskilled labor in smaller/poorer towns, with less/no transport available, less/no money to self-train/self-improve etc. etc. are just going to take whatever's available. There's no incentive for a fast food franchise or a supermarket to pay more, because the labor market is saturated for low income work.
        GaryTang 5y ago
        > “… could it be if people have more money for discretionary spending there could be more businesses to service them?” This would be true if people did have more money for discretionary spending, but increasing the minimum wage has shown to decrease their total compensation. I don’t know how reliable the following article is but the summary expands on a few reasons on how this happens. https://hbr.org/2021/06/research-when-a-higher-minimum-wage-leads-to-lower-compensation https://hbr.org/2021/06/research-when-a-higher-minimum-wage-... > “… (employees) are just going to take whatever's available” This is why it’s important to increase the opportunities available for them. More wealth creation means more wealth. I will get back to you on the citation for this.
  - theonlybutlet 5y ago
    Considering it an inhibitor of small business is assuming unquantified/unrecognised subsidisation either by the employee or government. If everyone were paid a minimum wage, theoretically a new employee could agree for this additional wage portion to be capitalised as a liability in the business for payment at a later stage when the businesses cashflow can support it (this is open to abuse and probably should be or is illegal for low wage employees). If the government is subsidising that employee's income, they are indirectly subsidising that business. It would be more transparent/in the public's interest for them to apply for a business grant to pay these costs. Increasing access to these grants is a political issue.
- closeparen 5y ago
  Meeting part of someone's needs is definitely "something to offer" the taxpayers who are currently charged with meeting all of them. I've never understood the appeal of this all-or-nothing approach. If someone is capable of earning 20% of a living, reduce their public assistance by 10%. They come out ahead, society comes out ahead.
  - jjk166 5y ago
    It is a waste of labor. Every minute spent doing labor that isn't worth minimum wage is a minute that could be spent doing labor that is worth at least minimum wage. If someone works for $5 an hour below minimum wage 40 hours a week for a year, that's $10k worth of labor that society no longer has access to. The exhaustion, the bodily wear and tear, the use of infrastructure, there are costs to working, and if the benefits do not justify those costs then people shouldn't be doing it - better to have people do nothing and conserve their strength than wear themselves out doing something net negative. There is certainly no shortage of valuable work that needs doing. Should we ever get to a point where there's nothing of value left to do, there is no need for any additional work to be done.
    - closeparen 5y ago
      Do you think most people who would seriously consider a very low wage job, also had access to more valuable work? Why did they pass on it? What causes them to undervalue their strength, such that society has to force them to conserve it?
      - jjk166 5y ago
        In the 1200s the vast majority of Europe's population was composed of subsistence farmers barely making ends meet due to not having enough productive land on which to farm. At the same time vast tracts of land were sitting unproductive. Wages were low, population growth stagnated and quality of life was growing steadily worse. Why didn't the landlords have peasants clear more land so that they could be more productive? Why did they pass on it? Because labor was cheap and the status quo was making them money. Employers don't care about productivity, they care about margin. Eventually though, the Black Death comes around. An immense fraction of the population is gone, practically overnight. With fewer workers around, wages naturally rise. Once these wages were higher, suddenly it mattered that land was being used efficiently. Despite the lower demand for agricultural products, there is extensive land clearance across Europe as Landlords make the investments necessary to get the most out of their resources. This productivity improvement leads to much higher quality of life, an increase in social mobility, and a substantial growth in the urban merchant classes which would all contribute to the transition to the modern period. When a resource is cheap and abundant, there is no incentive to use it efficiently. The ROI for developing tools and techniques that reduce your usage of that resource is low. There may be substantial opportunity costs, but no one sends you a bill in the mail for money you don't realize you're leaving on the table. Maybe not everyone on earth has what it takes to be a rocket scientist or a neurosurgeon, but the fact is the overwhelming majority of skilled labor can be done by any idiot who has been properly trained and has adequate equipment. The higher the base wage level, the easier it is to justify this investment in training and equipment.
- Proven 5y ago
  Who are you to tell how business owners and would-be workers should or shouldn't conduct their affairs? What should the workers who aren't able to earn the minimum age do? Relocate to state-run non-profit labor camps? Sit at home doing nothing while receiving UBI?

Pet_Ant 5y ago

Small businesses should not be depending on non-living wages to be competitive. If you can’t generate living-wages jobs you don’t really have anything to offer and should at best be a non-profit.

GaryTang 5y ago
Individuals should have the ability to choose where they work and increasing the number of small businesses allows that. Reducing the number of small businesses means individuals have fewer employers to choose from. Communites with a higher number of businesses have a larger slice of wealth allocated towards the bottom 99%.
- h0l0cube 5y ago
  Your stance seems to be based more on conviction than reality > “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in the following year. If anything, the evidence leans the other way” https://www.epi.org/publication/webfeatures_viewpoints_raising_minimum_wage_2004/ https://www.epi.org/publication/webfeatures_viewpoints_raisi... Second-order effects of people have more money, is they can spend it on local businesses. Undeniably there will be some inflation but not enough to subsume the increase. As a counterpoint, large businesses like fast food and supermarket chains pay minimum wage, and many of their employees need to rely on welfare to get by - in general, business will pay the least they can get away with, no matter how many there are. Add to that, minimum wage disproportionately affects the bigger players who can't pay cash-in-hand (due to greater regulatory oversight) but can well afford to pay a higher wage, not the smaller businesses.
  - GaryTang 5y ago
    > “…there seems to be no discernible correlation between minimum wage increases and a rise in business failures, either in the year the increase occurred or in the following year. If anything, the evidence leans the other way” Yes but this actually supports my argument; An increase of the minimum wage solidifies incumbent businesses. This occurs because increasing the min wage is the same as increasing a barrier to entry. Sure, the incumbents won’t fail, but you are effectively making it more difficult for new participants to start. Business failures won’t increase and neither will the rate of new businesses. > “In general, businesses will pay the least they can get away with, no matter how many there are.” Yes this is true. But employees will compete for employers that pay higher and a community with more businesses will have a larger pie to eat from because there is more overall value created.
    - h0l0cube 5y ago
      > This occurs because increasing the min wage is the same as increasing a barrier to entry. Do you have some data to back this up, or are you just speculating? To posit my own speculation, could it be if people have more money for discretionary spending there could be more businesses to service them? > But employees will compete for employers that pay higher and a community with more businesses This seems a little naive. Low skilled and unskilled labor in smaller/poorer towns, with less/no transport available, less/no money to self-train/self-improve etc. etc. are just going to take whatever's available. There's no incentive for a fast food franchise or a supermarket to pay more, because the labor market is saturated for low income work.
      - GaryTang 5y ago
        > “… could it be if people have more money for discretionary spending there could be more businesses to service them?” This would be true if people did have more money for discretionary spending, but increasing the minimum wage has shown to decrease their total compensation. I don’t know how reliable the following article is but the summary expands on a few reasons on how this happens. https://hbr.org/2021/06/research-when-a-higher-minimum-wage-leads-to-lower-compensation https://hbr.org/2021/06/research-when-a-higher-minimum-wage-... > “… (employees) are just going to take whatever's available” This is why it’s important to increase the opportunities available for them. More wealth creation means more wealth. I will get back to you on the citation for this.
- theonlybutlet 5y ago
  Considering it an inhibitor of small business is assuming unquantified/unrecognised subsidisation either by the employee or government. If everyone were paid a minimum wage, theoretically a new employee could agree for this additional wage portion to be capitalised as a liability in the business for payment at a later stage when the businesses cashflow can support it (this is open to abuse and probably should be or is illegal for low wage employees). If the government is subsidising that employee's income, they are indirectly subsidising that business. It would be more transparent/in the public's interest for them to apply for a business grant to pay these costs. Increasing access to these grants is a political issue.
closeparen 5y ago
Meeting part of someone's needs is definitely "something to offer" the taxpayers who are currently charged with meeting all of them. I've never understood the appeal of this all-or-nothing approach. If someone is capable of earning 20% of a living, reduce their public assistance by 10%. They come out ahead, society comes out ahead.
- jjk166 5y ago
  It is a waste of labor. Every minute spent doing labor that isn't worth minimum wage is a minute that could be spent doing labor that is worth at least minimum wage. If someone works for $5 an hour below minimum wage 40 hours a week for a year, that's $10k worth of labor that society no longer has access to. The exhaustion, the bodily wear and tear, the use of infrastructure, there are costs to working, and if the benefits do not justify those costs then people shouldn't be doing it - better to have people do nothing and conserve their strength than wear themselves out doing something net negative. There is certainly no shortage of valuable work that needs doing. Should we ever get to a point where there's nothing of value left to do, there is no need for any additional work to be done.
  - closeparen 5y ago
    Do you think most people who would seriously consider a very low wage job, also had access to more valuable work? Why did they pass on it? What causes them to undervalue their strength, such that society has to force them to conserve it?
    - jjk166 5y ago
      In the 1200s the vast majority of Europe's population was composed of subsistence farmers barely making ends meet due to not having enough productive land on which to farm. At the same time vast tracts of land were sitting unproductive. Wages were low, population growth stagnated and quality of life was growing steadily worse. Why didn't the landlords have peasants clear more land so that they could be more productive? Why did they pass on it? Because labor was cheap and the status quo was making them money. Employers don't care about productivity, they care about margin. Eventually though, the Black Death comes around. An immense fraction of the population is gone, practically overnight. With fewer workers around, wages naturally rise. Once these wages were higher, suddenly it mattered that land was being used efficiently. Despite the lower demand for agricultural products, there is extensive land clearance across Europe as Landlords make the investments necessary to get the most out of their resources. This productivity improvement leads to much higher quality of life, an increase in social mobility, and a substantial growth in the urban merchant classes which would all contribute to the transition to the modern period. When a resource is cheap and abundant, there is no incentive to use it efficiently. The ROI for developing tools and techniques that reduce your usage of that resource is low. There may be substantial opportunity costs, but no one sends you a bill in the mail for money you don't realize you're leaving on the table. Maybe not everyone on earth has what it takes to be a rocket scientist or a neurosurgeon, but the fact is the overwhelming majority of skilled labor can be done by any idiot who has been properly trained and has adequate equipment. The higher the base wage level, the easier it is to justify this investment in training and equipment.
Proven 5y ago
Who are you to tell how business owners and would-be workers should or shouldn't conduct their affairs? What should the workers who aren't able to earn the minimum age do? Relocate to state-run non-profit labor camps? Sit at home doing nothing while receiving UBI?