[Sohcahtoa82]

In white collar work, sure.

But the low-skill, minimum wage jobs? No. Those wages are effectively set by the government. Every time an employer hires someone at minimum wage, they're really saying "I would pay you less if I legally could." And that's where the rich are making sure minimum wage stays low.

[ancap]

Few things hurt the poor, in particular unskilled minorities, like minimum wage. Those people are effectively outlawed from the labor market because their marginal productivity doesn't make the cut. This is why there is often exceptions in minimum wage laws when it comes to hiring youth and the disabled. This is also why you've seen labor unions lobbying for a $15/hr minimum wage, with exemptions for those in the union.

[Sohcahtoa82]

> Few things hurt the poor, in particular unskilled minorities, like minimum wage. Those people are effectively outlawed from the labor market because their marginal productivity doesn't make the cut.

Hogwash. Are you sincerely arguing that an hour of work doesn't produce $9-15 (or whatever the minimum wage is, plus other overhead) of revenue for the company they work for?

[ancap]

I'm not sure what's so hard to believe about that. It's not even a controversial statement. Are you suggesting that if labor were cheaper the market would not consume more of it?

[Sohcahtoa82]

If there's a demand for X amount of product, and it will take Y people to provide the labor to supply that product, then businesses will hire Y people. They're not going to hire more than Y just because they can.

The only time the market will consume more labor because its cheaper is if the amount of labor they already had was already insufficient, in which case if they really needed more people, they would have already hired them.

[ancap]

That's just wrong and demonstrates a fundamental lack of understanding of basic economics.

If labor were much cheaper, I personally might be willing to hire a maid, a gardener, a masseuse, a cook, etc. Similarly a retail business might hire more cashiers, or have more staff on the floor to answer customers questions and help them find things. A gas station might provide a full service experience for their customers. You could do this analysis for virtually any type of business and given cheaper labor they would hire more people.

Why is this so? Because the demand for labor, like goods, is infinite.

[sokoloff]

The relevant hurdle for an hour of labor is not the marginal revenue but rather the contribution margin (marginal revenue minus [non-labor] variable costs) of that hour.

[malvosenior]

You’re correct that minimum wage breaks supply and demand but not in the way you think. When an employer pays someone minimum wage what is being said is “someone would do this job for less but the government won’t let me hire them”.

[Sohcahtoa82]

I'm going to disagree with the second part of your comment, because it implies that the employee being hired wouldn't be willing to do it for less themselves.

In any case, without a minimum wage, low-skill wages become a race to the bottom as people become more and more desperate for work. Someone might be willing to work for $1/hour because they're fine living in a cardboard box behind their workplace and eating scraps from the garbage.

But that only allows income inequality to worsen. The rich get even richer as they sit back and laugh as the employees essentially auction themselves to lower and lower wages. Upward mobility dies as the ability to seek extra education and training disappears because you gotta work 100 hours/week just to survive.

So yeah, I suppose minimum wage breaks supply and demand for wages, but I'd argue that's a damn good thing.

[malvosenior]

> it implies that the employee being hired wouldn't be willing to do it for less themselves.

I agree the person who would work for less might even be the person taking the minimum wage job.

I disagree that this decreases class mobility though. Lowered labor costs mean lower barrier of entry to starting your own business. There’s a floor to how much it costs to start a labor dependent business and it’s based on minimum wage. That means you need substantial capital to get started. Also, lower wages means lower prices which disproportionately benefits poor people.