All it matters is people interacting voluntarily, that's the only argument against minimum wage.
But it is disingenuous to suggest that just because there
are people who would take such jobs, that our economy
should allow employers to get away with it
My point is that it is most certainly not voluntary. There are people in the world who are not as lucky or intelligent or resourceful as you, me, and most others on HN. Try to empathize and put yourself in the shoes of the disadvantaged, they do not know the world as we do, they cannot shop around for high paying jobs, and if they miss a paycheck, they may very well lose their housing.
Given this asymmetry, society absolutely needs to step in to enforce basic protections that the free market cannot solve.
Asymmetry and inequalities are everywhere. I don't know which perfect egalitarian symmetric insert here another utopic adjective society you live in, but it's not certainly not mine
The elimination of minimum wage would marginalize poor people even more.
It's easy to think that the demand for labor is nearly infinite but at a super low wage. I mean, I'd gladly pay someone $2/hour to clean my house, and there are probably people desperate enough for money to buy food that they would do it. But minimum wage laws generally forbid it.
But consider employees at McDonalds. Walmart cashiers. Any other minimum wage job. If you eliminate the minimum wage, you create a race to the bottom. Eventually, you end up with people willing to flip burgers or work a cash register for $2/hour. They'll be living in a cardboard box with all their belongings in a shopping cart, but at least that $2/hour will buy them some semi-decent meals to survive.
Without a minimum wage, sure we'll probably see 0% unemployment, or something very close to it. But you'd end up absolutely tanking the median wage and standards of living. The term "working homeless" would replace the term "working poor" until some extremely low-quality housing popped up that someone could live in for $200/month.
you create a race to the bottom
you end up with people willing to flip burgers or work a cash register for $2/hour
Do you think you can force business to hire at any rate ? Or does the rate needs to follow productivity and current standard of living indexes ? What if your increase this rate by 100x, what happens ?
But you'd end up absolutely tanking the median wage and standards of living
....yes? Considering that's what we have right now? You don't need to imagine this scenario. We're in it right now. In Oregon, the minimum wage is $10.75/hour.
> Do you think you can force business to hire at any rate ? [...] What if your increase this rate by 100x, what happens ?
Obviously not. I knew someone would try to make this argument, but I think its absurd.
> Or does the rate needs to follow productivity and current standard of living indexes ?
I'd make it follow a standard of living index. What the standard should be is up for debate, but I think at a minimum, someone working 40 hours a week should be able to live in a studio apartment on their own and buy food without government assistance. Two people working 40 hours a week each should be able to have a 2-bedroom apartment while raising a kid.
> If the scenario where people don't work for 2 USD/hour they have 0 of salary. So the second scenario where they work for 2 USD / hour makes everyone more rich, I would be more inclined to believe the median wage would increase
You're forgetting that the people formerly making minimum wage would either have their wage reduced to the hypothetical $2/hour or end up being replaced by a worker willing to work for $2/hour.
If you lower or remove minimum wage, every minimum wage job will have a reduction in the wage. When an employer pays minimum wage, they're implicitly saying "I'd pay you less, but the government won't let me."
> The most important is that people worked and sustained themselves.
Only by a technical definition of "sustained".
....yes? Considering that's what we have right now?
You're forgetting that the people
Societies make a decision to be as they are. If you're trying to say that you prefer an inequitable society, that's fine. If you're trying to say that nature is inequitable, and that society has some responsibility to coordinate with it to preserve that inequity, I'd say 1) that's a weird nature-religion, and 2) property rights protect the weak from the strong.
Unfortunately the chances of everyone are rigged because of each of our societies history and past injustices. That's something we need to deal with and it's a hard problem
I think they should be allowed to vote and agitate for whatever they think is best for them. And thus.... viola, minimum wage and subsequent increases.
Although I know majorities are a touchy subject with libertarians since there are like six of you total nowadays.
So, because the world used to terrible centuries ago, and still is in some undeveloped or wartorn nations, we should be OK with it continuing to be terrible here in one of the richest nations in the world, even though it doesn't have to be?
we should be OK with it continuing to be terrible
99% sure Venezuela's inflation problems come more from the fact that the president-dictator takes monetary policy advice from a ghost-parrot, and not as much from implementing occupational safety standards that have been normal in North America and Europe for a century.
The answer is at least in part that the state attempted to deliver benefits to the poor not directly and honestly through taxing and redistribution, but through wage & price controls, and outright nationalization. Direct massive manipulation of the market. Obviously implementing occupational safety standards, or collecting resource extraction royalties at a rate similar to Canada wouldn’t have had this effect, neither would have a modest increase in the minimum wage that reflected natural wage growth. However there is something to GPs point; the history of labor laws in developed countries haven’t only altered the conditions a competitive labor market must operate in, but also reflect changes that have already been achieved through the competitive market. The laws against child labor, for instance, were only possible once a critical mass of the population had already pulled their children out of the labor market as productivity and living standards increased and made this possible (and don’t forget that unpaid child labour was rampant in agricultural families, and to this day remains largely exempt from legal censure in developed nations).
As productivity reaches higher levels, labor has been able to demand a greater share of the surplus through competitive labor markets and eventually agitate to institute that in laws, but it’s always been an interplay between these two effects. The massive unprecedentedly rapid reduction in absolute poverty in China where millions have left the brutality of rural poverty to work in factories that many of us in more developed nations would consider inhumane has seen this played out in an incredibly compressed timeline, and I’m certain that there are very few people living in a Chinese special economic zone who would trade places with a resident of Caracas in 2018.
Anyway, if the cost of work becomes overnight at minimum 1 million USD per month, what do you think would happen ?
So: yes, the rising inequality is a problem, no matter how badly some want to sell that as just a part of life (at least the way we currently structure it).
And i don't want a communist utopia. But also not reducing taxes for top earners to zero.
Stop right there. What about people who don't need a basic living wage, like students who still live with their parents? Why should they be pushed out of the market?
I worked in high school, starting when I was 16. It was minimum wage. Without that job I wouldn't have been able to afford a car (necessary where I lived), travel to Greece and Italy, and have my own spending money. I also gained a lot of real world experience.
Employers should pay what the position is worth. Why should people like you have the right to tell people like me that we can't willingly work?
[1]https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm
Part time work. You can work 15-25 hours a week at the higher minimum wage while having time to study or deal with other things. A proper minimum wage should be the amount for a worker to live on after working 40 hours a week. If an employee can not make enough to live in that area (after working for 40 hours), the employer should not be there and is taking advantage of the employees.
The reality is, in modern America the percentage of people relying on these jobs as their sole source of income is much larger than the highschoolers looking to make some extra cash. We shouldn't sacrifice the masses to enable the few to maintain an optional job, in my opinion.
> Why should people like you have the right to tell people like me that we can't willingly work?
This isn't personal, I as a member of this society have a right to make my point that the powerful shouldn't exploit the powerless. Not that I'm calling you a trust fund kid, but this is the same argument you hear from people who are sitting on inherited wealth, and appeal to "natural rights" to keep the evil tax man from taking anything away from what is rightfully theirs. Rightfully theirs, by birth alone, mind you. Think for a minute about the opposite end of the spectrum, people born into abject poverty. They have a right to a dignified life, with a job that pays them enough to survive, rather than having to beg for whatever Johnny Moneybags decides to toss into the street from the window of his Rolls.
Okay, I worked part time from the end of high school through college. I didn't go backpacking, I just graduated with a smaller student loan balance. Is that a noble enough goal for it to matter if jobs are available?
My general feeling is that if people want jobs and can't find them, that's an economic problem worth considering, even if they'll have food without it.
Why not let the employees decide if the job is worth taking? If there exists people willing to voluntarily take a job given its wage/conditions, you have a job to offer.
* The switching cost for jobs is very high. You lose the social network of people you know at the old job, all of the knowledge and skill that's specific to that company goes out the window, you may have to uproot and move.
* Jobs are not transparent. It is fantastically hard to tell if a new job is going to be better than your current job. You know the base numbers like pay, but you have little way to accurately evaluate the culture, office politics, other people, management, company direction, etc.
* In many areas, there are few jobs to choose between. Amazon fulfillment centers are a good example because they hire many people in a areas with few other jobs to choose from. (This is also, I think, a big reason for the demographic changes towards cities in the US today: they give employees access to a more diverse job market.)
* Jobs are not homogeneous and interchangeable. One job might have better hours or a shorter commute but worse coworkers. One may pay more but have worse health insurance. There is so much variance that it's impossible to define an "optimal" job or even precisely compare two jobs.
That's not a deal any government, or any taxpayers, should want to be a part of. I don't want my taxes subsidizing profitable corporations because they can find people willing to work for sub-poverty wages who fill in the gaps using the welfare state.
A well functioning market drives down the cost of goods and services to the minimum possible price, provided there's adequate competition. Commoditization is a good thing. The fact that bread and milk only cost a few dollars is net-good for society. Commoditization of labor should, thus, also be similarly good for society.
At the end of the day, we as a society (rightly) demand a minimum standard of living for everyone, and we collectively pay for that one way or the other. Either we pay taxes to fund a welfare state, or we pay inflated prices for goods and services to maintain wage floors. I'd argue that paying taxes for welfare is more progressive, as the burden falls on richer people. Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor.
As long as we make sure that markets are competitive via regulation and that everything is commoditized, this sounds like a welfare problem and not a wage problem.
If you need welfare to cover the cost of living for full-time workers, then that is very much corporate welfare.
For sure, that's one way to look at it, but the rest of my comment lays out why welfare is the least bad way to maintain standard of living.
An employer doesn't just have X jobs to fill a business. They have some number of tasks to do, and there's always more they could be doing. If they have the option of hiring some people at $5/hr and some at $10/hr, the boss can figure out how to get at least $5/hr in value out of the cheaper people he hires.
I think the person living with parents is a bad example too. $1/hr is nothing, and it'd probably just be better for that person to not have a job at all. Sometimes doing nothing is better than having a job that crappy.
In a market without minimun wage you'll have to compete against such people for a job.
Lot of those people are illegal immigrants as well. They cant job hop.
I am talking about illegal immigrants who work for shady temp agencies and then are contracted to work for big players.
Another issue is that the unemployment rate is no longer meaningful although that could be solved by having another statistic but unemployment is much easier to measure.
However why do the prices have to be inflated? Can't the company just accept lower profits? That would be progressive since most of the profits currently go to the rich at least for public companies no?
You could argue we could go back to the 1800's in terms of labour standards, but don't be suprised when workers simply decide to kill their bosses and companies retaliating[1].
Diminishing labour rights is just asking for another violent class struggle.
Workers need wages and money to survive in the economy
Not if they inherited it. The key idea here is asymmetry of power. When people are desperate enough that they would take a sub-minimum wage job, this doesn't necessarily imply a "voluntary exchange". If you're facing starvation or medical bankruptcy, you are essentially being coerced to take any job you can find.
On top of that, taxpayers will have to foot the bill by funding welfare to all these people whose labor is being exploited. Especially since they increasingly don't have the negotiating power of a union to make this idealistic vision you have of the job market fair to both sides.
Techies like to believe they're enlightened when they lean libertarian, when in reality all that amounts to is privatized gains, socialized losses.
If you don't go full libertarian and you think that the state should provide some level of protection then things change because if people are not paid enough to live a decent life they'll end up falling into one of society's safety net (cost of law enforcement if people start stealing, cost of welfare if they require handouts to eat decently, cost to social security if they become sick due to poor living or working conditions etc...).
In such a situation you basically end with society subsidizing these jobs indirectly by cleaning the mess. That's why it makes more sense to simply force decent working conditions instead of encouraging a destructive race to the bottom.
Now in practice, regardless of our opinions, the USA is not a libertarian state, there are security nets, there is a certain level of socialized assistance (too much for some, not enough for others). In this situation it makes complete sense to have things like minimum wages and laws making it mandatory to wear your seat belt for instance.
Part of this belief is based on the fact that your question is a fake question (and that when it was clear that I was suspicious of your motives, you simply repeated it without any amplifying remarks - you knew I didn't understand, but you didn't do anything to help me understand you). That the answer is apparent to everyone involved, but drawing our attention to that answer doesn't actually add anything to the conversation. If your fake question did actually add to the topic, it would be a useful rhetorical device, but it doesn't. In effect, you've stated "people want to move to the US" and... that's it. How's that relevant? I don't think it is. I think it's just a veiled attempt to derail.
As such, I choose not to engage. If I have mistaken your intentions, I do apologise, but that's what I believe. In that case, at least now you know why I think you're acting in bad faith.
That's the way it should work. And in a functioning market, employees don't make these decisions alone against large corporations, they make those decisoins in large groups like voters or in a union. Thinking that each employer is free to offer and each employee is free to value whether its worth it makes for some kind of "free market" balance for labor is pretty naïve when it comes to individuals vs large corporations.
We wouldn't allow employers to bargain on risk and "letting the employee decide whether the risk is worth taking", I don't see any difference with wages.
That is so incredibly incorrect.
A 12 year old running a paper delivery route on their bike doesn't need $15/hour and isn't creating $15/hour in wealth, yet the kid and the employer would be happy to agree on some lesser amount.
Which minimum? Today's minimum, or yesterday's?
> But it is disingenuous to suggest that just because there are people who would take such jobs, that our economy should allow employers to get away with it.
How is it disingenuous if someone says such a thing and honestly means every word of it?
If anyone's going to have their freedom restrained, let's let it be the folks running businesses, hiring and firing, etc. They already hold more cards.
By extension of this logic, employers could argue that they are losing jobs because they can only afford to pay someone who will work 12 hours a day, or can only afford to pay child workers, or can only afford to hire if they get a huge payroll tax cut. Granted, in the job market there are people who would take sub-minimum wage pay for a variety of reasons -- desperation, lack of education, lack of options near their home, felony record, undocumented status, etc. But it is disingenuous to suggest that just because there are people who would take such jobs, that our economy should allow employers to get away with it.
If you can't pay a basic living wage, for fair hours, in safe conditions, with necessary medical benefits, then you don't have a job to offer.