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by viraptor
2108 days ago
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> Fighting poverty is done by giving the impoverished more opportunities, not less. This is a nicely worded "let them fight for scraps" when contrasted with the idea of living wage. This is the hill I'm willing to die on. A job opportunity under living wage may help separate people survive today, but it's a terrible idea for everyone long term. |
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At any point Vietnam or Cambodia could mandate that all jobs must pay US or Europe level wages. But doing so would not be an instant shortcut to people actually making those wages and being a developed country. If it really was that simple at least one country in the world would have used that trick.
Certainly some economic arguments can be disingenuous (some of the promises around tax cuts come to mind). But some arguments around which policies are effective are reasonable and I think the minimum wage issue is one of them.
I think the idea behind high minimum wages actually is to create more good jobs, by squeezing business that employ minimum wage workers and hoping that they can cut profits and/or raise prices (and if they raise prices, that it doesn't reduce their customers too much and cause them to lay people off or go under).
An alternative is wage supports like the earned income tax credit, where instead of squeezing businesses that employ minimum wage workers specifically you just tax everybody, and use that to artificially boost up the income of low wage workers. This has less risk of forcing low-income people into unemployment than raising the minimum wage and can provide them the same income, at the expense of high-income people having to pay more taxes.
Another alternative is trying to drive down unemployment super low, so businesses have trouble finding people and actually need to start bidding up wages to get anyone. This will cause businesses that can't afford higher wages to close, but that doesn't cause unemployment because those employees have moved on already. A labor shortage also makes it easy to find a job and employers can't be too picky (helping people fresh out of college, etc). This seems like the most ideal scenario but also the least straightforward to get via policy.
IMO living wage is an important goal but there are reasonable criticisms about strategy (1) compared to the others (especially wage supports which provides the same immediate benefit without risking forcing people out of a job).