There is of course still a black market
A minimum wage is a ban on certain baskets of compensation for work.
It doesn't prevent 'exploitation', whatever that means. Companies fiercely competing for labour is what you want here.
No, it's not.
Most restaurants you go to to eat would have to close if they needed to employ their workers legally. Same thing applies to bars and similar venues.
Source: worked in that industry 10+ years
And then there would be much more demand for restaurants, then there is supply, causing the prices to rise until they could afford to pay the workers legally.
stage 1 is it hammers profit margins <-- for 95% of businesses we are here.
Stage 2 is then it increases prices <-- only affects very low margin businesses which are a small minority.
Stage 3 is it triggers job losses <-- to my knowledge it's never been raised high enough to make this happen. maybe $50 / hour would be the threshold.
Businesses adapt, raise prices and do more automation to keep their margins, which have been remarkable stable if you look back. The losers are consumers and workers, because everything costs more and salaries don't rise as fast.
> Stage 2 is then it increases prices <-- only affects very low margin businesses which are a small minority.
Every mom and pop shop is a low margin business. Most business are low margin, only a few have a really high margins, the ones we all know and talk about.
>Stage 3 is it triggers job losses <-- to my knowledge it's never been raised high enough to make this happen. maybe $50 / hour would be the threshold.
I can only recommend you expanding your knowledge. It's like saying why do we need car seats for babies, because when we were younger we didn't have them and did just fine. Of course those that didn't make it aren't here to tell their story.
Why are people so focussed on employment? Employment is only one area that minimum wage affects, and as you say, with moderate minimum wages and an otherwise functioning economy, employment effects are relatively minor.
Not everyone has the time, energy or patience to do that though.
Point being if you were to make an assumption, "pop economist says that thing that is bad for profits is bad for you too is probably bullshit" is a fairly safe one.
I think the most common "mistake" is that most economists are used to thinking about money in absolute terms, but in real life it's a lot more useful to treat prices as a percentage of your income. That means the utility of money is not linear, so redistribution is good by itself unless it hurts growth so much that average incomes start going down in real terms.
The other one is way deeper and harder to fix but I don't think a lot of people actually believe it, they just use it implicitly in their research. It's that the goal of economics is to maximize efficiency (measured by ROI = profits), not to deliver the best outcomes for the greatest amount of people.
From this point of view a platform like Doordash is efficient because they underpay workers and overcharge customers, and so are surveillance data brokers. That's clearly not a perspective that gets us into a better society. But measuring quality of life is much harder than taking two numbers every company is legally required to count.
I always found the question “what is a good life?” to be one of the most interesting and consequential philosophical questions. People have found very different answers for this over the millennia.
But rent control? Really?
Really, can you at least provide some napkin calculations to see the cons and pros? Some countries have tried it, notably France. It backfired as expected and they had to revert.
What actually happens is that profit margins get hammered (notice how you forgot about those? they can go down too) and those businesses that rely upon minimum waged labor complain bitterly.
Very low margin businesses do raise prices but in the studies I saw the only two examples from a wide survey were, like, nail salons and catering.
The whinging manifests as money piled into lobbying and public outreach to prevent this type of thing from happening again and the result of that public outreach is where you formulated your opinion about what happens.
So I live in a country with no rent controls with very high rents and housing costs. The capital is disincentivized from creating more supply by the fact that creating more supply devalues existing supply.
Rent controls would 1. lower the rent (obviously), 2. lower the price of existing apartments since the profit you make on them is lower, 3. like a sibling comment points out, hammer the profits of capital.
> Taxing the rich lowers the velocity of money, disincentivizes capital to search for more profit seeking enterprises.
Wow... Taxing the rich means less taxes for the poor means more people with money/time to start their own companies.
That said, your 3 examples are very well studied, and rent controls are completely different from taxing the rich and hiking the minimum wage.
See also: hiking the minimum wage (possibly the most egregious example of academic corruption), rent controls, taxing the rich, etc.
There are a number of reasons for this, but the primary ones are 1) economists also respond to incentives and those think tank jobs pay better and 2) prestige in the industry is also a commodity - a commodity which can be bought and sold. The level to which money talks in this industry is reflected by the wages - always higher than all other humanities.
As an example the freakonomics guys popularity are to popular economics what k pop is to music: a slick, highly refined, marketed product from a superbly well oiled marketing machine.