5 ms·

When isn't it a good idea to have a minimum wage?

meric 11y ago
In an environment with little social welfare, a minimum wage will disproportionately negatively affect workers with disability because they can almost never get hired, and do not receive sufficient support from the government. They will be at the mercy of affection or pity from family and friends.
superuser2 11y ago
When you are optimizing for employment ratio. Zero minimum wage gives 0% unemployment and creates millions of jobs. Those are some great achievements to have if you're running for reelection. There is no reason to support a minimum wage if you don't care about quality of life.
- rogerbraun 11y ago
  There are lots of countries without a minimum wage that still have lots of unemployment.
  - peterfirefly 11y ago
    An official minimum wage is not the only way to create a de facto minimum wage. Welfare subsidies is another. Strong unions is yet another. High contributions to medical insurance and pensions paid by the employer is yet yet another. There are also others way to create high unemployment: making it very risky and expensive to get rid of mishires or to reduce headcount if the company isn't going so well. Making management more difficult once the headcount reaches a certain level (because of unions or the creation of employee boards mandated by law) -- that leads to companies trying to stay below such ceilings. Others would be salaries/pensions/benefits tied to how long one has worked for the same company -- which discourages moves to other companies (that might fit ones personality or talents better -- or that has better management). The housing market also has an influence: there might be opportunities in a different city but how easy is it to move? It is relatively easy if you rent your house or appartment. Not so easy if you own it, especially if selling it means you realize a loss. Lots of laws and regulations in a country influence the structure of the housing market (how liquid it is, what loan types are available, how many people rent instead of owning, etc.).
- thecopy 11y ago
  >Zero minimum wage gives 0% unemployment and creates millions of jobs. Sweden has a quite high unemloyment, especially for young people, and Sweden has no minimum wage.
  - dagw 11y ago
    Technically true, but the combination of a generous welfare system and powerful unions means that there is a de facto minimum wage. No one is going to work for much less than they'll get from unemployment, and just try starting a company paying less than the union collective bargaining rates and see how long it takes before a bunch of thugs harass you out of business.
    - peterfirefly 11y ago
      Someone who doesn't like reality-based economics downvoted you. +1 to compensate.
  - peterfirefly 11y ago
    The unemployment rate is a lot higher amongst MENA immigrants and their children than amongst the natives. This is a general finding and not in any way unique to Sweden. What is close to unique is the sheer number of low-skilled immigrants relative to the native population.
forgingahead 11y ago
Because it is essentially a law that makes it illegal to hire unskilled labour: https://www.youtube.com/watch?v=rQj1qlsjVoM https://www.youtube.com/watch?v=rQj1qlsjVoM
taki1 11y ago
You can have someone working for free (internships) or for $8/hour, but everything in between is illegal. So first of all this is stupid. Two, nobody stays forever at $8/hr job with exception of very few. If you are unskilled worker looking for your first job ever, why would anyone hire you, if they can get experienced unskilled worker for the same minimal wage? I.e. I can get you fresh from high school flipping burgers for $8/hr or I can get someone with 5 years experience flipping burgers for the same $8/hr. Guess what, I will get someone with 5 years of experience instead of you with zero years experience for exactly the same price. I could hire you for $3/hr with zero experience, so you could get some on the job and finally land $8/hr job after some time. Or learn on the job how to run a cash register, work with others and treat customers, but instead - thanks to the minimal wage - you will spend that time trying to compete for jobs having zero experience with people who for the same price have plenty of it. Thank minimal wage for high unemployment rates among young (no experience). Before minimal wage was enacted unemployment rate among young was the lowest from all age groups. Now it is the highest. Minimal wage killed the concept of the "first job". For your first job you must be worth the minimal wage. If you aren't, there are no jobs for you.

meric 11y ago

In an environment with little social welfare, a minimum wage will disproportionately negatively affect workers with disability because they can almost never get hired, and do not receive sufficient support from the government. They will be at the mercy of affection or pity from family and friends.

superuser2 11y ago

When you are optimizing for employment ratio. Zero minimum wage gives 0% unemployment and creates millions of jobs. Those are some great achievements to have if you're running for reelection. There is no reason to support a minimum wage if you don't care about quality of life.

rogerbraun 11y ago
There are lots of countries without a minimum wage that still have lots of unemployment.
- peterfirefly 11y ago
  An official minimum wage is not the only way to create a de facto minimum wage. Welfare subsidies is another. Strong unions is yet another. High contributions to medical insurance and pensions paid by the employer is yet yet another. There are also others way to create high unemployment: making it very risky and expensive to get rid of mishires or to reduce headcount if the company isn't going so well. Making management more difficult once the headcount reaches a certain level (because of unions or the creation of employee boards mandated by law) -- that leads to companies trying to stay below such ceilings. Others would be salaries/pensions/benefits tied to how long one has worked for the same company -- which discourages moves to other companies (that might fit ones personality or talents better -- or that has better management). The housing market also has an influence: there might be opportunities in a different city but how easy is it to move? It is relatively easy if you rent your house or appartment. Not so easy if you own it, especially if selling it means you realize a loss. Lots of laws and regulations in a country influence the structure of the housing market (how liquid it is, what loan types are available, how many people rent instead of owning, etc.).
thecopy 11y ago
>Zero minimum wage gives 0% unemployment and creates millions of jobs. Sweden has a quite high unemloyment, especially for young people, and Sweden has no minimum wage.
- dagw 11y ago
  Technically true, but the combination of a generous welfare system and powerful unions means that there is a de facto minimum wage. No one is going to work for much less than they'll get from unemployment, and just try starting a company paying less than the union collective bargaining rates and see how long it takes before a bunch of thugs harass you out of business.
  - peterfirefly 11y ago
    Someone who doesn't like reality-based economics downvoted you. +1 to compensate.
- peterfirefly 11y ago
  The unemployment rate is a lot higher amongst MENA immigrants and their children than amongst the natives. This is a general finding and not in any way unique to Sweden. What is close to unique is the sheer number of low-skilled immigrants relative to the native population.

forgingahead 11y ago

Because it is essentially a law that makes it illegal to hire unskilled labour: https://www.youtube.com/watch?v=rQj1qlsjVoM https://www.youtube.com/watch?v=rQj1qlsjVoM

taki1 11y ago

You can have someone working for free (internships) or for $8/hour, but everything in between is illegal. So first of all this is stupid. Two, nobody stays forever at $8/hr job with exception of very few. If you are unskilled worker looking for your first job ever, why would anyone hire you, if they can get experienced unskilled worker for the same minimal wage? I.e. I can get you fresh from high school flipping burgers for $8/hr or I can get someone with 5 years experience flipping burgers for the same $8/hr. Guess what, I will get someone with 5 years of experience instead of you with zero years experience for exactly the same price. I could hire you for $3/hr with zero experience, so you could get some on the job and finally land $8/hr job after some time. Or learn on the job how to run a cash register, work with others and treat customers, but instead - thanks to the minimal wage - you will spend that time trying to compete for jobs having zero experience with people who for the same price have plenty of it. Thank minimal wage for high unemployment rates among young (no experience). Before minimal wage was enacted unemployment rate among young was the lowest from all age groups. Now it is the highest. Minimal wage killed the concept of the "first job". For your first job you must be worth the minimal wage. If you aren't, there are no jobs for you.