3 ms·
Another way to look at this is that the State is making it possible for the employer to pay less for labor than they otherwise would. As a thought experiment,
by scarmig 12y ago
Another way to look at this is that the State is making it possible for the employer to pay less for labor than they otherwise would.
As a thought experiment, imagine the State promising that so long as you work, it would top off hourly income such that you're guaranteed $12/hr. What is the likely result? Every employer drops their pay of people making less than that amount to the legal minimum wage, and the government is effectively subsidizing and encouraging companies to use low wage labor over high wage labor or capital.
Unless you think companies are driven by goodwill and not the profit motive, this is the more significant effect.
- lectrick 12y agoThis is exactly what I came here to say. When considering market forces at a high level, no effect occurs in a vacuum. If the government subsidizes farming, then food prices WILL go down (which is arguably a good). But subsidizing fast-food workers just means the fast food will now become cost-competitive with the healthy food because the fast-food employer can afford to pay less for the job and still have job applicants.
- mason240 12y ago>Another way to look at this is that the State is making it possible for the employer to pay less for labor than they otherwise would. Something that opponents of the welfare state have said from the begging.