Removing the minimum wage is effectively a subsidy for companies and industry’s that would then pay below the old minimum wage. Considering how often people in the US make below minimum wage even when it’s illegal, it seems like a bad idea. Instead even higher minimum wages can be used to drive automation.
The arguments for minimum wage are always to insure it provides a livable wage, but economists generally rightly dislike it for limiting labor opportunities to ones above that wage threshold.
In the absence of a minimum standard of living you rightly should cling to minimum wage laws like the lifeboats they are for the working poor. Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law.
I think I'd rather see UBI / NIT and have progress towards the singularity slowed for lack of a high minimum wage to pressure automation than the status quo of extreme unhappiness and poverty (and the corresponding social unrest, drug abuse, crime, mental illness, physical ailment, etc). Of course if we can have our cake and eat it too that would be great... I'm just saying to leave the minimum wage on the bargaining table, insuring survival seems like the more important goal.
Arguably most competent endeavors are capable of paying minimum wage.
Cratering the truly incompent is a service to the market and reallocates resources to more capable players and retaining a minimum wage fosters automation and forces capital to give a larger share to labor. Either is desirable. I understand the concerns you have about automation. They are potential not fate.
> I don't think a minimum wage is ethically justified in a minimum standard of living society
The owner class does not make decisions based on what is ethical they act to secure their own benefits everyone might consider doing the same.
> Once participation is voluntary forfeiting minimum wages seems like a very promising bargaining chip against capital to get a negative income tax / UBI actually put into law.
In a democracy we ought to be able to vote our own interests as soon as enough people see the merit of the idea. Fuck negotiations. If democracy remains in truth eventually inequality will make selling this idea a trivial sale beforehand its unlikely to come to pass here in the US.
Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.)
(EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.)
> what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?
People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)
The transfer payment is taken from the entire economy through a tax. A slice off the top.
If a business has higher profits it would also pay larger portion of that transfer to low income persons.
A key feature is indexing the maximum amount i.e. what a person with 0 income would receive to typical cost of living at state or country level. This way it auto adjusts. Then it is in the interest of everyone paying taxes to figure out ways to reduce costs of living.
If you pick a value too low it does not actually keep someone alive, fed, and housed.
If you pay enough to live half the shitty jobs everyone hates become not worth doing.
The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT.
If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.
It’s like taking the worst part of “tipping in the US” and running with just that’s.
You take X% off the top of the economy and distribute it to everyone who needs it on a sliding scale basically below a certain income level Y.
You also get the benefit of not pricing low skilled workers out of the labor market. It is much better for the government to subsidize a person at 40% while they are obtaining skills and building their social network, than subsidizing them at 100% while they are on their couch.
Your point on mispricing labor is often overlooked. It is important that society knows the real value of a specific skill/labor. This is important information that will drive innovation/efficiency as well as giving young people or those going through transitions in employment more guidance in decision making.
What is more likely to play out is that assuming that when currently minimum pay for a hour is $10 and tax 0% then with negative tax X and no minimum the pay would become $10 / (1-X/100). The worker will get the same (hopefully) and the company will pay less.
It means the worker has voluntarily participated in selling their labor, even if its for a lower price than they would have made before, and they would always have the option to stop doing it and do something - anything - else.
If the NIT is insufficient to provide the necessities of life than its institution failed in its primary objective, albeit I would still argue any NIT is better than none because it raises the poverty floor some amount above zero.
We ALREADY have negative income taxes. 20% of the population are given more in refunds than they paid in. 40% pay zero taxes. When you add in government benefits and programs, 60% of households take in more from the government than they pay in.
https://taxfoundation.org/60-percent-households-now-receive-...
The point here being that hourly wages from these companies ALREADY account for theses factors. We could abolish these programs and raise wages, but that would be unpopular among a decent portion of the country.
A more interesting discussion is Consumption taxes -- taxes on spending your money. Consumption taxes account for 17-18% of all taxes. These taxes kinda slide under the radar for most people despite accounting for a huge portion of the taxes they pay. These are also the MOST IMPORTANT taxes because they affect goods and services directly (corporations pay attention even if most individuals do not).
A lot of states still charge sales taxes for things like food, diapers, and personal hygiene products (most at a reduced rate). These taxes definitely disproportionately affect the poor and should be abolished. Likewise, most states exempt prescription drugs, but still tax OTC drugs which also adversely affects the poor who are less likely to visit a doctor and/or have healthcare coverage.
Taxing services to "improve or repair personal property" exists in almost half of states and is also a bad idea. It disincentivizes maintaining things and all the important things like cars, property, buildings, etc are already taxed (and most are subject to tax increases based on improvements). Then they ALSO tax the person doing the improvement service effectively taxing one improvement THREE times. This is especially important when looking at small businesses or contractors who have to pay extra overhead to deal with the additional accounting. The most egregious part is that only two states tax white-collar jobs because the white-collar workers are rich enough to lobby while blue-collar service jobs like janitors or construction workers cannot afford such luxuries.
Finally, I'd love to see vehicles under $10,000 be tax-free (value as assessed by the state). Reducing vehicle costs for the poor would drastically increase their access jobs and offer an easier way to leave impoverished areas. In contrast, the electric vehicle incentives are almost entirely tax breaks for the well-off and disappear before the vehicles are cheap enough for the less well-off (if battery prices ever drop low enough for that to happen).
You take the benefit of efficiency and productivity from the entire economy and return it to the people at the bottom.
You don't have a right to a job, or a particular income. You have a right for society to not leave you dangling when in need. Your ability to get a job or have more income should be determined by market forces.
Put a negative income tax in place and ensure a minimum level of funds for every citizen and see how quickly Amazon's treatment of its warehouse workers improve. Far more than any union could provide.