What harm do minimum wages do?

Re:What harm do minimum wages do? by avianlyric on Wednesday August 19, 2020 @02:48PM (#24214455)

Free markets are also free of monopolies, and generally expect the actors how have good “information” about the market.

This simply isn’t true for the labour market, ignoring the monopoly aspect for the moment, workers don’t have good market information.

Worker pay is usually heavily obfuscated by employers so it’s almost impossible for an individual worker to accurately gauge how much they can demand.

Addition workers have very limited time and resources to spend on gather information on the labour market. How are they supposed to discover better paying jobs, or better industries without constantly job hunting?

Compare this to companies who in comparison have a huge amount data. At a minimum they know the wages of all their employees, they also have the resources to be constantly surveying the labour market and adjusting to it.

All of this compounds to produce a heavily skewed labour market, that skews in the favour of employers.

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Re:What harm do minimum wages do? by javert on Wednesday August 19, 2020 @03:07PM (#24214752)

The free market is very good at solving information asymmetries of the kind you are talking about. If it isn't being solved, it's probably because of regulation (regulatory capture). Or maybe it isn't a real problem.

I'm going to guess in this case it's more the latter than the former.

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Re:What harm do minimum wages do? by Sohcahtoa82 on Wednesday August 19, 2020 @04:10PM (#24215650)

I've always considered this a very naive idea of how a free market works. It ignores how irrational and short-sighted humans can be, not to mention that many consumers are price sensitive.

A free market will not solve climate change as long as coal and fossil fuels are inexpensive.

A free market prioritizes one thing: Profit. That is all. A free market only solves problems when it is profitable to do so. Yeah, charities exist, but they typically aren't big enough to solve the big problems on a big scale.

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Re:What harm do minimum wages do? by machinelabo on Wednesday August 19, 2020 @04:58PM (#24216356)

This is an unbalanced opinion of free markets (but I generally agree with downsides of unregulated capitalism).

> Profit. That is all.

Free markets also have intense competition so "Profits" that you talk about don't just go out of control - Prices are set at the intersection of supply and demand curves. Companies would need to shave off profit margins to stay competitive.

I think it is fair to say that there are no ideal free markets. There are always asymmetries, downsides, side cashing and a whole bunch of complexities in any market - nothing is ideal.

So, we should have regulations that control those asymmetries.

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Re:What harm do minimum wages do? by javert on Wednesday August 19, 2020 @05:28PM (#24216798)

I think you're reading more into what I said, than what I actually said. But I also think part of what I said was dumb, so I partially agree with you.

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Re:What harm do minimum wages do? by CarbyAu on Wednesday August 19, 2020 @11:54PM (#24219716)

You just restored a little bit of my faith in humanity. Thank you.

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Re:What harm do minimum wages do? by dragonwriter on Wednesday August 19, 2020 @06:26PM (#24217506)

> The free market is very good at solving information asymmetries of the kind you are talking about.

No, it's not.

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Re:What harm do minimum wages do? by javert on Wednesday August 19, 2020 @07:49PM (#24218259)

This view was already expressed, except with some elaboration, hours before your comment. Why add to the noise with a post like this? Saying "no" is what the downvote button is for.

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Re:What harm do minimum wages do? by dragonwriter on Wednesday August 19, 2020 @06:25PM (#24217497)

> Free markets are also free of monopolies

Usually, that's covered by the adjective “perfectly competitive” rather than “free” modifying “markets”, but it is an aspect of textbook idealized markets.

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