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They were able to raise wages due to the increased market price of their goods. Government imposed minimum wages increase regardless of the market price of a co

They were able to raise wages due to the increased market price of their goods. Government imposed minimum wages increase regardless of the market price of a company's goods or services. Mandatory minimum wages are most detrimental to those who the proponents are claiming to help. Low skilled workers are less likely to be hired because they have to be paid at a rate above what the market value of their labor is. This is not the case right now because the market rate of low skill labor has increased beyond the federal and state minimums. During periods of high labor availability and low job availability, minimum wages can establish a significant barrier to employment for low skilled workers. During times like the present when labor supply is short, minimum wage mandates are not keeping up with the market and have very little effect on hiring.

atonse 5y ago
What you’re saying totally makes sense from an intuitive sense. But how do we reconcile that with the ability for someone to be able to live on a certain wage, given there are only so many hours they can work? Yes the market value might be lower but their bills don’t get lower. I’m genuinely asking how we square those two.
- wheels 5y ago
  Squaring those things mostly involves deciding if there's moral value in work. If there is, you effectively create a subsidy for low-paid work by supplementing it via welfare or tax credits. If you don't believe that there's moral value in work, you accept that those jobs will of necessity be moved to lower-waged places on the planet, replaced by automation, or deemed to be not be viable (and probably end up providing living costs via the social safety net).
- unpolloloco 5y ago
  In one word: move. The living wage for a single adult in SF with no kids is $28/hour(1). That's not a realistic wage for someone in most unskilled jobs (which is why there's basically no manufacturing there and only the bare minimum of service jobs!). We should subsidize moving. The other point to make here is that labor constraints are largely a good thing right now. We went 50 years where the power balance was on the corporate side. Now that it's shifting, labor is finally seeing the benefits of increased productivity over that time. All it took was a global pandemic to push a few million boomers into finally retiring... (1) https://livingwage.mit.edu/counties/06075 https://livingwage.mit.edu/counties/06075
- ghastmaster 5y ago
  Define "live" Assuming it means plenty of food, shelter, healthcare, affordable children, and care for them. There is no reconciliation when it comes to minimum wage. Additionally, how do we define the expectations of a minimum wage salary when establishing it? What should the person be able to afford with the earnings? Everyone has a different answer to this question. Minimum wage will never be set high enough because human nature has us desire more. "Give a mouse a cookie..." Unskilled labor is typically for people who are first entering the market in their teenage years and have subsidized expenses by their parents. Everyone I've met in my life aside from some disabled people are capable of developing skills. Once The skill is developed and marketed they no longer need to depend on "minimum wage" earnings. For the sake of this conversation let us ignore disabilities. For a healthy person, working 80 hours in a week is completely feasible. 80x7.25=$2,320 a month(decent where I live). Many people choose to work this many hours and more for financial gain. Once they have done this for a short period of time, they can use their savings to pay for education that will give them skills. Savings is the key to success. Wages x hours worked - expenses = savings. Too much energy is focused on one part of that equation, considering the importantance of choices made by individuals regarding how many hours to work and what to spend savings on.
MrBuddyCasino 5y ago
This is mostly correct, but not the whole picture. They experimented with minimum wage levels in East Germany after re-unification, and found that they have barely any effect on unemployment levels if they are not too high. Turns out lot of demand is not that elastic. But agree its a very dangerous tool in the hands of politicians, and better not to have it than have it be abused.
- sagarm 5y ago
  I was interested in reading more about this, but the articles I found on the topic suggested the minimum wage in Germany was only instituted in 2015. Is this the natural experiment you're talking about? https://socialeurope.eu/the-minimum-wage-in-germany-five-years-on https://socialeurope.eu/the-minimum-wage-in-germany-five-yea...
  - MrBuddyCasino 5y ago
    Yes this was it - I had misremembered the time frame.

atonse 5y ago

What you’re saying totally makes sense from an intuitive sense. But how do we reconcile that with the ability for someone to be able to live on a certain wage, given there are only so many hours they can work? Yes the market value might be lower but their bills don’t get lower. I’m genuinely asking how we square those two.

wheels 5y ago
Squaring those things mostly involves deciding if there's moral value in work. If there is, you effectively create a subsidy for low-paid work by supplementing it via welfare or tax credits. If you don't believe that there's moral value in work, you accept that those jobs will of necessity be moved to lower-waged places on the planet, replaced by automation, or deemed to be not be viable (and probably end up providing living costs via the social safety net).
unpolloloco 5y ago
In one word: move. The living wage for a single adult in SF with no kids is $28/hour(1). That's not a realistic wage for someone in most unskilled jobs (which is why there's basically no manufacturing there and only the bare minimum of service jobs!). We should subsidize moving. The other point to make here is that labor constraints are largely a good thing right now. We went 50 years where the power balance was on the corporate side. Now that it's shifting, labor is finally seeing the benefits of increased productivity over that time. All it took was a global pandemic to push a few million boomers into finally retiring... (1) https://livingwage.mit.edu/counties/06075 https://livingwage.mit.edu/counties/06075
ghastmaster 5y ago
Define "live" Assuming it means plenty of food, shelter, healthcare, affordable children, and care for them. There is no reconciliation when it comes to minimum wage. Additionally, how do we define the expectations of a minimum wage salary when establishing it? What should the person be able to afford with the earnings? Everyone has a different answer to this question. Minimum wage will never be set high enough because human nature has us desire more. "Give a mouse a cookie..." Unskilled labor is typically for people who are first entering the market in their teenage years and have subsidized expenses by their parents. Everyone I've met in my life aside from some disabled people are capable of developing skills. Once The skill is developed and marketed they no longer need to depend on "minimum wage" earnings. For the sake of this conversation let us ignore disabilities. For a healthy person, working 80 hours in a week is completely feasible. 80x7.25=$2,320 a month(decent where I live). Many people choose to work this many hours and more for financial gain. Once they have done this for a short period of time, they can use their savings to pay for education that will give them skills. Savings is the key to success. Wages x hours worked - expenses = savings. Too much energy is focused on one part of that equation, considering the importantance of choices made by individuals regarding how many hours to work and what to spend savings on.

MrBuddyCasino 5y ago

This is mostly correct, but not the whole picture. They experimented with minimum wage levels in East Germany after re-unification, and found that they have barely any effect on unemployment levels if they are not too high. Turns out lot of demand is not that elastic. But agree its a very dangerous tool in the hands of politicians, and better not to have it than have it be abused.

sagarm 5y ago
I was interested in reading more about this, but the articles I found on the topic suggested the minimum wage in Germany was only instituted in 2015. Is this the natural experiment you're talking about? https://socialeurope.eu/the-minimum-wage-in-germany-five-years-on https://socialeurope.eu/the-minimum-wage-in-germany-five-yea...
- MrBuddyCasino 5y ago
  Yes this was it - I had misremembered the time frame.