From the article: "If business owners could hire people in the US to clean up their messy databases for $3.00 they wouldn’t need to go on mechanical turk to hire the same person for $1.50 an hour."
That's completely against the very pure form of economic rationalisation Friedman epitomises. A self-interested, economically rational business would hire the worker for $1.50 an hour. They get the same result for half the cost - it's a no brainer. In the absence of a minimum wage, the income of folks in developed countries are depressed towards the levels of income of folks in developing countries - without a corresponding shift of the cost of living. Minimum wages protect the poorer members of society in a developed nation from falling even further behind economically.
As to the point that "minimum wages cause unemployment" - I think this article misrepresents the nature of Friedman's argument in this respect, and completely skips the depth of his position. It also begins to take on the view that low unemployment is the end itself rather than a means to improve underlying social conditions. 0% unemployment with an average low-income wage of $0.50 is not 'better' than 5% unemployment with an average low-income wage of $7.
A final note - the minimum wage in Australia is currently nearly double that of the United States. Our current unemployment rate is about half that of the United States. Unemployment is far more dependent on broader economic factors than just the minimum wage.
A self-interested, economically rational business would hire the worker for $1.50 an hour.
This assumes that MTurk is an exact substitute. It isn't even close.
I know of a person who made this exact choice - instead of going lean and using MTurk at $1.50/hour, he is paying close to $5/hour (loaded cost, wage is probably about $2.50) for live humans and suffering with monthly contracts and renting office space. (I'm helping him with the data analysis.)
Among other things, with a single turk at $1.5/hour, you need to hire 2 more turks each at $1.5/hour and get a majority vote on their work. You also need to hope you didn't hire two colluding spammers. You don't get to give them live, in-person training, and checking work is more difficult.
Then there are statistical issues. If you have 10,000 HITs produced by 100 turks, you need to check 100 x 15=1500 HITs and you have a low confidence that any individual turk did a good job. If you have 10,000 HITs produced by a single employee, you can check 200 HITs and get a much higher confidence rate. Do this for a few rounds, you now have a set of employees who you can trust. Additionally, you can control when the work is done. If something is important, it will be done in precisely #HITs / (employees x HIT rate) hours. On MTurk, you hope it will eventually be done one day.
0% unemployment with an average low-income wage of $0.50 is not 'better' than 5% unemployment with an average low-income wage of $7.
The average low income wage in the US is far lower than $7. Most poor adults (about 70%) have a wage of $0 due to having no job.
Even the central planners recognize that minimum wages are inappropriate in certain contexts, and are conditionally exempted for interns, family workers, wait staff, farm workers, soldiers (in the past anyway), etc.
You guys maybe don't know this, but there's a huge ongoing scam generally advertised as "work from home" or "make 4000/month working on your computer", etc, etc, which is basically aimed at housewives and old people and shut-ins who can't work shifts, but want to make money. Amazon is providing a non-fraudulent, though badly-paid, alternative to this scam. Feel free to outlaw it, though.
This seems like bogus reasoning. When a minimum wage was introduced in the UK unemployment went down, at least for a while. The article contains assertions, but no experimental results. An experimental economist would experiment with different minimum wage levels and observe the results.
I think the bottom line is that economies are complex systems, and simplistic "just so" narratives which don't take multiple interdependencies (themselves adaptive systems) into account are typically insufficient to describe the dynamics of these systems.
When a minimum wage was introduced in the UK unemployment went down, at least for a while.
This is because politicians are (usually) smart enough to introduce minimum wages only during growth periods and to keep the minimum wage well below market rates.
I won't speak about the UK, but in the US, less than 4.5% of the poor earned minimum wage [1].
[1] I'm dividing 1.7M min wage earners / 37.3M poor people to get an upper bound. The real number is less since many min wage earners are teenagers or spouses from non-poor households.
It's stupid.
Economy doesn't exists in a vacuum. It' very influenced by politic. And saying politic I mean the way a society decide to use its finite resources AND the rules a society define for his citizens. And an Economy simply lives there, in circle of rules.
So if minimum wage let some people out, the same happens not letting children work. And why taking care of people with physical problems (no hands? no legs? why the State, using public money should care? You are a problem just let you take care of yourself)?
You set the rules of your society. It doesn't exists something called free market. The market is defined by the rules of the society AND the society change in time AND space. So the market change in time AND space.
And these Friedman bullshit are the same you hear over and over and over.
I'm not sure what an optimal minimum wage would be, but surely there should be some minimum wage. Simple thought experiment: if one person or corporation controlled all the world's resources, should they be able to pay everyone some vanishingly small delta above zero? In that case a minimum wage would only increase everyone's wages and make the marketplace fairer.
Obviously on the other hand, minimum wage increases can certainly reduce jobs.
That's completely against the very pure form of economic rationalisation Friedman epitomises. A self-interested, economically rational business would hire the worker for $1.50 an hour. They get the same result for half the cost - it's a no brainer. In the absence of a minimum wage, the income of folks in developed countries are depressed towards the levels of income of folks in developing countries - without a corresponding shift of the cost of living. Minimum wages protect the poorer members of society in a developed nation from falling even further behind economically.
As to the point that "minimum wages cause unemployment" - I think this article misrepresents the nature of Friedman's argument in this respect, and completely skips the depth of his position. It also begins to take on the view that low unemployment is the end itself rather than a means to improve underlying social conditions. 0% unemployment with an average low-income wage of $0.50 is not 'better' than 5% unemployment with an average low-income wage of $7.
A final note - the minimum wage in Australia is currently nearly double that of the United States. Our current unemployment rate is about half that of the United States. Unemployment is far more dependent on broader economic factors than just the minimum wage.