Adam Smith thought it was:

"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation."

http://www.reddit.com/r/dredmorbius/comments/2311mb/adam_smi...

http://www.reddit.com/r/dredmorbius/comments/1z5vfb/thoughts...

Adam Smith was a genius, and the foundation for much of the field of economics, but not an old-testament prophet or an oracle. His work has been built upon and surpassed by extensive research in the field today.

I mean, I'd be quite happy to trot out sources like Is there consensus among American labor economists? Survey results on forty propositions (Whaples, 1996) -- or another of the similarly titled papers in that series -- to illustrate there's a scientific consensus against the minimum wage, but worry that it's a mere two decades out of date. :P

I'm hesitant to say, this but...

Consensus amongst economists, is like saying consensus amongst weathermen. You need look no further than recent history. If the past 10 years (or longer if you please) have taught us anything, its that economists can be dangerously wrong. Especially if the issues are at all political.

Yeah, especially pop-economics and economists that the politicians trot out to promote their latest policies, or the guys trying to forecast the future of some part or another of the economy. And overall economic conditions change a bunch, all the time. Hence the aforementioned hesitance. Unfortunately good consensus surveys only come out every so often and then you have trouble looking them up if you aren't somewhere with JSTOR, so.

But, that said, economists in general have been pretty consistent on a few basic principles. Supply and demand, the impact of price controls thereupon, et cetera. And if you think through enough of that you might begin to think that the EITC is a better vehicle to help out the working poor than a minimum wage (since it doesn't cause unemployment or promote unnecessary investment in automation to further damage employment unnecessarily...) It's been known to happen, anyway.

My reasons for mentioning Smith:

1. He's almost always grossly misrepresented in modern discourse, and little of that gets beyond the virtually wholly fabricated "invisible hand" metaphor.[1] As this passage shows, and the entire section (from which I've both quoted from at length and greatly condensed in my previous links) makes abundantly clear, Smith isn't the cut-throat capitalist he's made out to be.

2. Yes, the field of economics has in fact "moved on" from Smith. Though I'd argue that in only some cases has it actually improved on him. Failing to understand Smith's own arguments is a principle failing of much of economics.

3. Smith argues his points at (great) length and with ample examples. There remain some errors (I find Graeber's argument for the origins of money as credit more persuasive, for example). But the whole chapter on wages of labour contains much of value even 239 years after its writing.

________________________________

Notes:

1. Gavin Kennedy's scholarship on this topic is excellent http://econjwatch.org/articles/adam-smith-and-the-invisible-...

It's also a frequent topic at his blog, "Adam Smith's Lost Legacy" http://adamsmithslostlegacy.blogspot.com/2015/06/adam-smiths...

Much of the modern revival can be specifically pinned on Paul Samuelson, in whose landmark textbook it's prominently featured:

http://adamsmithslostlegacy.blogspot.com/2010/04/paul-samuel...

http://adamsmithslostlegacy.blogspot.com/2012/01/pay-attenti...

And, as a comment at the latter notes, the IH metaphor is explicitly called out as a description of an unknown mechansism:

[I]n The History of Astronomy (written before 1758) Smith speaks of the invisible hand,"to which ignorants refer to explain natural phenomena otherwise unexplainable:

"Fire burns, and water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters"

Smith, A., 1980, The Glasgow edition of the Works and Correspondence of Adam Smith, 7 vol., Oxford University Press, vol. III, p. 49

2. For The How Damned Thing: https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...

Stripping that quote of all historical respect we have for Adam Smith, and answering head on: a guaranteed basic income seems like a much better way to reach these goals than to outlaw employment below a certain threshold of income.

I'm rather in favour if a government as employer of last resort. One option is to then resell that labour, at a loss in cases, to qualified businesses.

We're already subsidizing labour, but without consideration to net social benefit. That at least should change.

> One option is to then resell that labour, at a loss in cases, to qualified businesses.

Sounds like a recipe for corruption to me.

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

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.

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.

>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.

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.

Someone who doesn't like reality-based economics downvoted you. +1 to compensate.

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.

There are lots of countries without a minimum wage that still have lots of unemployment.

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.).

Because it is essentially a law that makes it illegal to hire unskilled labour:

https://www.youtube.com/watch?v=rQj1qlsjVoM