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This is a very interesting discussion, one way to think about the issue is: "what should be the minimum wage" and "who defines it".
If you set a minimum wage too high, you are taking jobs from lot of people, and if its too low you risk people getting paid less. Whatever number you come up with is going to be arbitrary. A country wide minimum wage is stupid because the cost of living in New York is very different from Lousiana, a state wide makes more sense, but even so, it varies greatly from city to city within the same sate, so a city wide makes even more sense, if you keep adding granularity you'll reach the individual level, because the cost of living within cities changes fast, and there's a plethora of other factors to consider. I have worked for really low wages in the past, even the lowest of unskilled worker still provides a value. Senior programmers on NYC are worth at least $60/h, now, how much a really low skilled worker is worth? At the time I was an unskilled worker it was was around $10, and thats how much I got paid despite the minimum wage being $8, anyone could get a job for $10, so thats the value a worker with essentially no skills was able to provide.
The $8 minimum wage didn't make a difference on wages, because unskilled workers were already providing more value than the minimum wage, so policy makers were behind in raising it, which they did. Raising the minimum wage and matching it to the market price at $10 wouldn't make any difference either, however, raising it to $15 would wreak havoc, you are basically saying that any worker whose job isn't worth at least 15$ should not be working. A Minimum wage value written on a piece of paper can't magically increase the true value of a worker, wages won't drop to $1 if you set it as $1, and also won't raise to $50 if you set it to $50. |