[adjkant]

The irony of this comment is that it is exactly missing the morality in an economic situation, the claim being that if you are capable of work and are trying your best, you deserve to have enough pay to live off of.

Minimum wage does not price people out of jobs, it puts a cap on the profit that a corporation can squeeze out of its workers. Employers who would be paying under it are simply not viable moral businesses, they would be businesses based off the exploitation of its workforce.

Now we can have economic arguments about what is true here, but the purpose of minimum wage today is a moral one and that must be factored in.

[AnthonyMouse]

Here's a thought experiment for you. Think of college as a job. You go there, you do work, you get paid. The amount you get paid is negative because your productivity to the school is near zero and their cost of "employing" you requires them to have a lot of buildings and faculty etc. Yet people take on a lot of debt to be able to work as a student at a college, so they obviously perceive some value in it.

Should we prohibit colleges as "simply not viable moral businesses"?

Now suppose we have something which is halfway in between. The benefit to the institution is positive but small. You're doing productive work but it's only worth $4/hour. On the other hand, you're learning stuff and that's very valuable to you -- much more valuable than an $8/hour job where you're not learning anything. Should we prohibit this and not the school? Why?

[adjkant]

The argument you're making requires that you are making a significant personal investment in yourself at that $4 an hour job, which I have yet to find such an example of. I'd be happy to hear about some.

Internships for lucrative fields where knowledge experience/investment pay off have no issues existing in economies with minimum wages as very clearly demonstrated by the fields of software engineering, businesses, and many other fields. Not to mention that most minimum wage laws make exceptions or reductions for internships, and people do unpaid internships often for things like PolySci students for political campaigns.

So, yes, we should continue to support internships that invest in people and we already regularly make such considerations in minimum wage laws. $4 an hour jobs in a place where $8 an hour is the minimum wage is not an example of an internship where you are going to learn something valuable, though I am open to hearing about these jobs. The cost of an intern is often far less the pay and much more the hours of those senior to them who would be teaching. Minimum wage is not standing in the way there.

Even if these jobs exist, what percentage of $4 jobs will those be? In reality this will be exploited by large corporations every time, pricing as low as the market will let them, irregardless of livability.

[AnthonyMouse]

How would you expect to you hear of some when they're prohibited by law?

Try it like this. Federal minimum wage comes out to around $15,000/year. This is in the same ballpark as college tuition -- which is generally regarded as costing a lot of money. If you go to an institution where you're a novice and it takes half your hours to learn the trade and the other half is productive but effectively unskilled work for the employer, you would expect these two to net to approximately zero, right? So why is it at all unexpected that it would frequently net to a number which is slightly positive but less than minimum wage?

> Even if these jobs exist, what percentage of $4 job will be those?

Probably the large majority of them, because otherwise why would anybody take those jobs? They wouldn't be paying enough to attract employees unless they were offering something else of value that existing jobs with higher compensation don't have.

Corporations can't just offer to pay $0.25/hour and get a line of workers lining up at the door. They have to outbid other companies for labor. That's why most companies already pay more than minimum wage for most jobs. And it's why most of the jobs that would pay less than minimum wage are ones that offer the workers something else in its place -- education, more flexible hours, a shorter commute etc. Taking those options away makes peoples lives worse, not better.

[adjkant]

> Try it like this. Federal minimum wage comes out to around $15,000/year. This is in the same ballpark as college tuition -- which is generally regarded as costing a lot of money. If you go to an institution where you're a novice and it takes half your hours to learn the trade and the other half is productive work for the employer, you would expect these two to net to approximately zero, right? So why is it at all unexpected that it would frequently net to a number which is slightly positive but less than minimum wage?

Again, you are missing the point. Either that job is an internship (non-permanent and I already addressed it) or you will quickly become a fully productive worker (this is literally just training/ramp up and is not a significant cost to employers). These are not the jobs/pay structures minimum wage laws are affecting nor are people discussing, this is just a straw man.

---------------------------------

> How would you expect to you hear of some when they're prohibited by law?

Legality does not define what concepts exist in the world, so let's hear them! You have yet to even mention a single example.

Companies can and do regularly lobby for laws. They don't appear to be using this line of reasoning because if large minimum wage employers like McDonalds or Walmart tried this they would be laughed at even in political spheres.

> Probably the large majority of them

I suspect we're gonna have to agree to disagree here on what's going to happen without a minimum wage.

> because otherwise why would anybody take those jobs?

People take badly paying jobs because if you're faced with bad and really bad, you'll take bad. Companies are free to exploit this without minimum wage laws in place. This type of exploitation only works in a buyers (if we put employees here as "buyers" of jobs) market, and immediately pushes wages significantly lower in a sellers market, which we have seen for quite a good deal of the past few decades. We can't have economics that are only moral when things are going well.

> Taking those options away makes peoples lives worse, not better.

The flaw here is that you're looking at only one side of the equation. You are improving the lives of every job that has a raised salary as a result. Now the calculus on how many jobs that removes vs raises, what kind, and where is a valid debate, but again, this tradeoff is a moral one. Economists are doing studies to get numbers so that then we as a society can make the moral decision on the tradeoff. That moral question however is not one that economists can answer. They can only study and communicate the effects.

> And it's why most of the jobs that would pay less than minimum wage are ones that offer the workers something else in its place -- education, more flexible hours, a shorter commute etc. Taking those options away makes peoples lives worse, not better.

Big citation needed here.

----------------------------

I'm not looking to get into the weeds here frankly, that is not the point of my original comment. There are many studies on both sides of the minimum wage debate, and that's just going to turn into a linking war between people who are not economists and are also not likely to change their minds on the internet. I have my beliefs based on the data I have seen but again, this doesn't seem fruitful to go down this route.

The point I am making here which none of your points address is that minimum wage legislation is very much tied to moral considerations, and economics aids in giving numbers for those. At the end of the day, the viability rests on morality as interpreted based on data produced by economics.

[AnthonyMouse]

> Either that job is an internship (non-permanent and I already addressed it) or you will quickly become a fully productive worker (this is literally just training/ramp up and is not a significant cost to employers).

You're asking for examples and then pigeonholing any possibilities into one box or the other.

Some occupations take a long time to learn. Years. Particularly if it's effectively half training and half working, because then it takes twice as long to finish the training. If it's the equivalent of four years of undergrad and three years of grad school then it would take fourteen years -- hardly "temporary" but at the end you would be qualified for a six figure job and have no student loans. Is that a sufficient example?

> Companies can and do regularly lobby for laws. They don't appear to be using this line of reasoning because if large minimum wage employers like McDonalds or Walmart tried this they would be laughed at even in political spheres.

The institutions that would lobby for this legitimately don't exist because their structure is prohibited by existing law, so it's chicken and egg.

Existing large minimum wage employers generally don't want to eliminate the minimum wage because it would make it harder for them to retain talent because their prospective employees would have more options.

Suppose you work at McDonalds and have a 30 mile commute. That costs you thousands of dollars a year -- you have to buy, maintain, insure and fuel a vehicle -- and about eight hours a week of sitting in traffic. A job that paid $2/hour less but was close enough for you to walk to work would leave you healthier with more money in your pocket and more free time. McDonalds would have to pay you more in order to get you to not quit and take the other job. Why would they want that?

> People take badly paying jobs because if you're faced with bad and really bad, you'll take bad. Companies are free to exploit this without minimum wage laws in place. This type of exploitation only works in a buyers (if we put employees here as "buyers" of jobs) market, and immediately pushes wages significantly lower in a sellers market, which we have seen for quite a good deal of the past few decades. We can't have economics that are only moral when things are going well.

But that's the whole problem, isn't it? When things are going well it's a seller's market and you don't need a minimum wage. When things are going poorly, the option isn't minimum wage job vs. less than minimum wage job, it's less than minimum wage job vs. unemployment. So then you're prohibiting bad and leaving them with really bad.

> You are improving the lives of every job that has a raised salary as a result.

You're also worsening the lives of every customer who has to pay more for goods and services as a result, and for that matter everyone who makes less on their retirement account. That part of it is a zero sum game. The part that isn't is the part where where the minimum wage prohibits Pareto-optimal alternatives that generate actual surplus.

> Big citation needed here.

If there exist two complex options and you take one away based on a simple factor, there will be some number of people for which the option you took away was the better one. Can you not imagine that some jobs might pay less money but be more flexible or closer to home or less emotionally taxing and thereby preferable despite the lower pay?

> There are many studies on both sides of the minimum wage debate, and that's just going to turn into a linking war between people who are not economists and are also not likely to change their minds on the internet.

All of the studies of this question are inherently politically compromised because it's trivial to design a study to find the outcome you want. If you want to see no increase in unemployment from a minimum wage increase, find one where hardly anyone was making the minimum wage even after the increase to minimize the economic effect. If you want to see a large effect, find a large minimum wage increase in a place with many small businesses that can't absorb the higher costs and few large institutions that can.

The ability to cherry pick data doesn't prove anything. But notice this: Even when a minimum wage does exactly what you want it to, the effect is to transfer money from the large institutions that can absorb the minimum wage increase to the minimum wage workers. But you can get exactly the same desired effect simply by changing their relative tax rates (using negative rates if necessary) without incurring any of the harm caused by constraining anyone's choice of employment.

[adjkant]

> Is that a sufficient example?

You say I'm pigeonholing you but you have yet to name a single occupation - what am I pigeonholing? Also, my "pigeonholing" is not arbitrary, it is the breadth of jobs that can exist with a minimum wage enacted...

No, it is not a sufficient example because you haven't said a word about what this person is doing. You can see how this feels like pulling teeth on my end, yes? I just want an actual concrete example of a job that could exist. If there are so many of these that there is a notable economic impact from this, it really isn't unreasonable to ask someone to name one, is it? I can't imagine what the job looks like that you described.

> But that's the whole problem, isn't it? When things are going well it's a seller's market and you don't need a minimum wage. When things are going poorly, the option isn't minimum wage job vs. less than minimum wage job, it's less than minimum wage job vs. unemployment. So then you're prohibiting bad and leaving them with really bad.

My argument is exactly that you need a minimum wage in a sellers market because the market is exceedingly inefficient for workers and allows companies to exploit workers and pass that profit off to already wealthy shareholders and upper management. For non-sellers markets the minimum should be adjusted to match economic times, I'm not saying we set a $25 minimum wage during a recession here. I'd be very happy to pin minimum wage to economic times.

> Can you not imagine that some jobs might pay less money but be more flexible or closer to home or less emotionally taxing and thereby preferable despite the lower pay?

If it is between a job that pays enough to survive vs one that does not? No I can't. Between two jobs that pay enough to survive? Absolutely.

> Even when a minimum wage does exactly what you want it to, the effect is to transfer money from the large institutions that can absorb the minimum wage increase to the minimum wage workers. But you can get exactly the same desired effect simply by changing their relative tax rates (using negative rates if necessary) without incurring any of the harm caused by constraining anyone's choice of employment.

I fully agree that would be a better policy. It has proved much harder to pass through the political system. I have said it in other threads here but I am 100% not saying a higher minimum wage is an ideal economic state, it is simply better than the current point we are at and the seemingly easiest to pass at the moment. In the end, the clear way to do this is through UBI IMO. And I think that is the root of a lot of these threads that I'm not going into responses on - this isn't a one and done policy change, you need others to match it like an increased social safety net to make that "really bad" unemployed scenario not as bad.

[dragonwriter]

> Minimum wage does not price people out of jobs,

Yes, it quite obviously does.

> it puts a cap on the profit that a corporation can squeeze out of its workers.

No, it doesn't. Competition does that. Minimum wage puts a floor on the economic value of labor that can get hired at all.

It might limit value extraction where there is a monopsony purchaser of labor who is not also a monopoly supplier of the good produced with that labor, but that's not actually all that common a situation.

> Employers who would be paying under it are simply not viable moral businesses

If there is work to be done that genuinely has value less than the minimum wage, is it truly better for society that the worker instead has no job prospects and the one who would have the work done instead has no work done? Who benefits from that.

> Now we can have economic arguments about what is true here, but the purpose of minimum wage today is a moral one and that must be factored in.

Any legitimate moral purpose of minimum wage is served better by taxing business income and high-end personal (including capital) income and providing a UBI as high as economic productivity can bear without out-of-control inflation.

Which is not to say that in practice minimum wage isn't better than nothing, it's just far from the best means of achieving it's legitimate purposes, in large part due to the adverse consequences it has in limiting employability.

[adjkant]

> No, it doesn't.

Competition can also do it, but idk how that eliminates minimum wage from doing it. Neither raises revenue, both simply put pressure on profit margins. The only difference is one is regulation, the other is market force.

> It might limit value extraction where there is a monopsony purchaser of labor who is not also a monopoly supplier of the good produced with that labor, but that's not actually all that common a situation.

I think that's a very narrow view. If you look at Walmart and the like, these are still huge chunks of the market with low pay precisely because of economies of scale, so they are monopsony purchasers, even without being the only supplier or a product.

Also not covered is that with high unemployment, competition isn't there. People in minimum wage job searches are often picking between a job and no job, not two different jobs. You're assuming that employment markets are both efficient and equally balanced.

> If there is work to be done that genuinely has value less than the minimum wage

I think this is where the moral disagreement comes in. An economy that regularly squeezes people below living wage for work needs to be corrected. Minimum wage is an attempt at that by lowering corporate profit.

> Any legitimate moral purpose of minimum wage is served better by taxing business income and high-end personal (including capital) income and providing a UBI as high as economic productivity can bear without out-of-control inflation.

I would love to see this! But realistically that's not politically possible (though it is looking more so with the pandemic but still, generally speaking) and we can't be idealistically categorical in our policy. Minimum wage is fully pragmatic to me, not an ideal. It's a net positive compared to the current situation.

[dragonwriter]

> Competition can also do it, but idk how that eliminates minimum wage from doing it.

Minimum wage only potentially does it for a narrow range of work with actual economic value that is between the minimum wage and a small multiple of it, and only for jobs where there isn't effective competition for labor (because effective competition for labor already does it as much as is possible, leaving nothing for minimum wage to do), and always has the cost, whether or not the conditions exist to provide the benefits, of making impossible all wage labor with an actual economic value less than the minimum wage, which not only kills jobs, but prevents upward mobility from the experience people would gain in those lower-value jobs.

> Minimum wage is fully pragmatic to me, not an ideal. It's a net positive compared to the current situation.

Minimum wage + means- and behavior-tested public benefit programs is the current situation.

[adjkant]

Sorry, to clarify, I mean a minimum wage increase generally as a policy. Specifics needed for nuance of course taking into account COL by location and economic climate. Again, I agree UBI via corporate profit taxation would be much more efficient.

> but prevents upward mobility from the experience people would gain in those lower-value jobs

You can see my other threads here but I would love to hear about these jobs with valuable experience that need to pay under any reasonable minimum wage that would not be already existing internship programs. I just can't imagine what these are.

As to the rest, I just don't believe that area is as narrow as you describe.

> jobs where there isn't effective competition for labor

I really don't think you have experienced/have an idea of what it is like to be anywhere near unemployed and "unskilled". Nearly all of retail/warehouse/gig/delivery jobs experience little to no competition since they all go as low as possible and say "take it or leave it" because they know the alternative in unemployment. Competition only exists today really in skilled job markets.

[imtringued]

I think you misunderstand what a minimum wage does. A minimum wage doesn't increase the bargaining power of an employee. It means the employee has to have a minimum amount of bargaining power to get hired in the first place. It doesn't actually prevent any exploitation. Imagine you are an exploited worker. You hate your boss, your job and the pay sucks. Do you really need a minimum wage law to be allowed to leave the job? No, you can just quit at any time. If you already had enough bargaining power you didn't need the minimum wage in the first place.

A minimum wage does absolutely nothing. It's like the British Queen: a political symbol that you can talk about.

If it actually did something then you wouldn't choose a low limit. You'd increase it to $100/hour but then you realize something. Even your well paid software developer job is at risk of being stomped by the minimum wage.

[adjkant]

I never said it increased the bargaining power of an employee. A minimum wage ensures that employees are paid enough to survive at a human level.

I think you misunderstand my use of the word "exploit" here. The underpayment is the exploitation, not work conditions here. I'm not sure where someone wanting to quit their job factors into my argument.

[ric2b]

> A minimum wage ensures that employees are paid enough to survive at a human level.

If they remain employees, that is.