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by anthony_james
3748 days ago
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Inflation has averaged about 2.5% annually since 2000. In 20 years, the spending power of a 100% bump in minimum wage (from ~$7.5 to $15) would be destroyed. This conservatively assumes that business owners just don't automatically increase the price point of their goods more rapidly than the average. His viewpoint isn't simple, it's realistic. Often times there are jobs that provide value at an hourly rate greater than $0.00 and less than whatever the minimum wage is at. The job could be done, and provide meaningful value, so just because it isn't worth paying a minimum wage doesn't mean the job shouldn't be done at all. It's a difficult situation because the employer wants to pay the worker a fair value for the job, but the government forces them to pay more than the fair value of their work. That's a poor moral and financial situation, and so businesses look for people in other countries, or technology to automate the job completely. The trouble with increasing a minimum wage is that it increases the reward for whichever entrepreneur is able to automate that job function, which would further income inequality in the long run by causing job loss of all those workers. One question I have is why do we care so much about protecting minimum wage jobs? If no one had the safety net of a minimum wage job, they would be forced to innovate and pursue groundbreaking research in other fields - such as medicine or technology. Imagine if the rate of innovate was exponentially increased - think of the thousands of lives we could save or the decrease in costs of healthcare if we said "no one can work at Starbucks - you have to be a doctor." source: http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_... |
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This is an idea I reject with enthusiasm! You need to take the emotion out of it; this has nothing to do with fairness. If a job isn't worth paying some minimum level, it simply is not efficiently creating wealth. It is the government's duty to discourage and eliminate this wasted productivity.
Continued off-shoring and automation are good things. Off-shoring in particular is just arbitrage of the labor market. Every dollar we ship out, the more we elevate the standard of living of those folks. This implies (demonstratively) that this will not last for ever. In the mean time it is a profitable manoeuvre for the economy as a whole.
Automation just goes to further eliminate jobs that shouldn't be done so those resources can be better spent in another areas. As always, the labor market determines quite efficiently the best distribution of this limited resource.
"One question I have is why do we care so much about protecting minimum wage jobs? If no one had the safety net of a minimum wage job, they would be forced to innovate and pursue groundbreaking research in other fields - such as medicine or technology. Imagine if the rate of innovate was exponentially increased - think of the thousands of lives we could save or the decrease in costs of healthcare if we said "no one can work at Starbucks - you have to be a doctor."
I think what you fail to grasp is the minimum wage is the exact knob the government has to destroy unproductive employment. As you say, these minds could be pushed into medicine or technology.