4 ms·

Then why does anyone get paid government-mandated minimum wage?

• regularfry 4y ago
  Because given the choice a minimum-wage-paying employer would pay even less. That's not inconsistent with state benefits making employees richer, it's just not making them rich enough to negotiate above that level. You saw this play out across the pandemic: business owners complained that the increased level of state aid was damaging their ability to employ at the minimum wage level. Also it's got to be said: some people aren't good at negotiating and/or don't know their value. In aggregate the effect you see is employee supply drying up as the total number willing to work at that level decreases, but in specific there will be individuals who haven't made that choice yet.
• astrange 4y ago
  You can get paid more or less on the minimum wage by e.g. having more or less working hours given to you. And some people don't use their negotiating power for increased wages, but rather for other preferences (like getting a formal job instead of an informal one, better working conditions, time with their children, etc.) Of course there's a lot more to it than that.