[taway_1212]

> The idea is that businesses should compete on efficiency, not lower wages. When a business that can't pay a living wage closes, another can take its place that hopefully can.

In this case, these shops are located in a sort-of marketplace, where there are dozens of shops selling very similar goods. They all effectively share the same customer base and they are all barely functioning, and are only doing that thanks to avoiding all sorts of laws. If they started paying minimum wage, some of them would close, which would increase profits for the rest, allowing them to stay in business. From the workers' perspective though, it would create a bimodal distribution where employees of surviving shops are better off, while the rest is fired. I'm not sure if that's a positive outcome.

[Broken_Hippo]

It would indeed suck for those folks that get laid off - temporarily, at least. But those same folks will likely find another job somewhere - and as a bonus, that job will pay the higher wage. They can work less hours and be in the same situation as before or work the same amount and be a bit better off.

If the US had an actual safety net, those laid off workers wouldn't be so bad off either.

[vosper]

If you agree that the minimum wage would likely mean that there would be fewer businesses, and therefore fewer jobs, then isn't it hard to also believe that the people who lost their jobs would likely find other work? Isn't it also likely that at least some of them will become permanently unemployed?

[Broken_Hippo]

Sure, but some of that is normal. Economic downturn? A few folks get permanent unemployment. Big enough place closes? Sure, a few get permanently unemployed. I don't think there is a way to stop that, nor do I really see that as an issue so long as it is a minority of folks. It definitely isn't something special to minimum wage hikes in any case.

In fact, I'd argue that even then we are better off. Say you have 20 low-paying jobs, the sort which means you are still eligible for food stamps and other tax-payer funded assistance. All 20 get laid off. 13 find full time work at the new minimum wage, so they no longer need assistence. Four find part-time work, making nearly what they did before with fewer hours. They still need assistance, but slightly less since they don't need as much child care. One makes less money. The other two are unemployed forever, requiring assistance. I'm gonna guess this is a win in the end.

[alkonaut]

> From the workers' perspective though, it would create a bimodal distribution where employees of surviving shops are better off, while the rest is fired. I'm not sure if that's a positive outcome

Actually ending up with a positive outcome requires more reform than just minimum wage - which may actually be negative (on its own, and short term).

There has to be good unemployment benefits for all, you have to have good employment security so hours can't be cut and so on and so forth. The idea is to have such a strong labor collective that driving bad employers out of business is a sustainable strategy. Organization level needs to be pretty high, say at least 50% for unions to have any real power here.

[dagw]

A minimum wage seems like an attempt to compensate for weak labor collectives and the lack of a safety net. Sweden, for example, has no minimum wage, but a combination of strong unions/labor collectives and decent unemployment benefits manage to keep wages up anyway.

[KekDemaga]

My concern minimum wage wise is simply that firms seem to use social programs to subsidise wages, rather than a minimum wage I'd like to see the tax write off removed for wages below the cost of living. Below the poverty line I'd like to see employers pick up the entire tax bill of their workers.