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Lets say you run a small movie theater. You hire a 5 people for $5 per hour to sell tickets. Many of these are teenagers and other people who have schedules tha

Lets say you run a small movie theater. You hire a 5 people for $5 per hour to sell tickets. Many of these are teenagers and other people who have schedules that can't work a normal job. The government comes in and says minimum wage needs to be $10 per hour. After doing the math, you decide that financially you can't afford to keep all those people on at $5 per hour. So you keep one to help run the front of the theater and put in a machine where people can swipe their credit cards to buy tickets. Who was harmed? The business or the people? The $5 per hour may not seem like much, but to the teenager it is $5 per hour, plus a chance to learn to manage their own money, a chance to learn people skills, a chance to learn work ethic, a chance to have a good reference from you for later jobs, etc.

krapp 14y ago
I understand your point, and I admit it's complex. But what happens when the government says I can pay whatever I want and I tell those people they're now making $2 an hour because nobody's buying the six dollar popcorn anymore? A minimum wage may have its downside but at least with it, people have an expectation of how little they can expect to make and plan accordingly. It provides a measure of stability at least.
- markshead 14y ago
  To me the ability to find a job is a more important measurement of stability than the government saying that no job worth less than X and hour can be had. But back to your question about what happens when employers lower their wages to $2 per hour, they would probably lose all of their employees and have to raise wages if they want workers. Believe it or not, wages do correspond in some way to the amount of benefit an employee brings to a company. Lets say you want to hire someone to clean your house. How much would you have to pay in order to attract someone with enough skill to do the job? You couldn't just say you'll pay $0.50 per hour and magically get people to clean your house at that rate. There might be some people you'd attract for $5 per hour. As the price goes up, so does the pool of people you could pull from. However, above a certain price, it isn't worth it for you to pay someone else to do it. You might do it yourself or just live with it being dirty. If having your house cleaned is worth only $5 per hour to you and someone is willing to do house cleaning for $5 per hour should you be allowed to hire them? They probably aren't going to be willing to work for $5 per hour if they can make $10 per hour somewhere else. Does it make sense for the government to say, "You can't hire this person unless the value they provide is greater than $7.25 per hour"? I don't feel that benefits you or the person who you want to pay. I don't feel it benefits society as a whole because I think we benefit by having money flowing through more hands not fewer. Minimum wage says that transactions below a certain hourly rate are not allowed, so it prevents money from flowing through some of the hands that might get it otherwise.
  - chii 14y ago
    the danger you run into tho, is that the whole neighbourhood conspires (whether deliberately or not) to fix the price at $2. Price fixing like this completely favours the employer, and they can do it if they have the knowledge that the employee can't possibly find employment elsewhere. The least worst situation, in my opinion, is the minimum wage, and the only cost is that it has an overhead on society (in the form of benefit pay outs for jobs that got destroyed by the minimum wage).

krapp 14y ago

I understand your point, and I admit it's complex. But what happens when the government says I can pay whatever I want and I tell those people they're now making $2 an hour because nobody's buying the six dollar popcorn anymore? A minimum wage may have its downside but at least with it, people have an expectation of how little they can expect to make and plan accordingly. It provides a measure of stability at least.

markshead 14y ago
To me the ability to find a job is a more important measurement of stability than the government saying that no job worth less than X and hour can be had. But back to your question about what happens when employers lower their wages to $2 per hour, they would probably lose all of their employees and have to raise wages if they want workers. Believe it or not, wages do correspond in some way to the amount of benefit an employee brings to a company. Lets say you want to hire someone to clean your house. How much would you have to pay in order to attract someone with enough skill to do the job? You couldn't just say you'll pay $0.50 per hour and magically get people to clean your house at that rate. There might be some people you'd attract for $5 per hour. As the price goes up, so does the pool of people you could pull from. However, above a certain price, it isn't worth it for you to pay someone else to do it. You might do it yourself or just live with it being dirty. If having your house cleaned is worth only $5 per hour to you and someone is willing to do house cleaning for $5 per hour should you be allowed to hire them? They probably aren't going to be willing to work for $5 per hour if they can make $10 per hour somewhere else. Does it make sense for the government to say, "You can't hire this person unless the value they provide is greater than $7.25 per hour"? I don't feel that benefits you or the person who you want to pay. I don't feel it benefits society as a whole because I think we benefit by having money flowing through more hands not fewer. Minimum wage says that transactions below a certain hourly rate are not allowed, so it prevents money from flowing through some of the hands that might get it otherwise.
- chii 14y ago
  the danger you run into tho, is that the whole neighbourhood conspires (whether deliberately or not) to fix the price at $2. Price fixing like this completely favours the employer, and they can do it if they have the knowledge that the employee can't possibly find employment elsewhere. The least worst situation, in my opinion, is the minimum wage, and the only cost is that it has an overhead on society (in the form of benefit pay outs for jobs that got destroyed by the minimum wage).