[cjo]

Sounds like it's a choice between a short period of minimum wage pay and then getting replaced by "cost saving technologies", or a slightly longer period of subsistence wages and then still getting replaced. It's easy to argue that since the cost of technology goes down with time that any replacement of workers due to a minimum wage hike will happen anyways when the tech gets cheap enough.

Here's a question. Both market concentration (as in oligopoly) and unemployment have significant downward effects on wages especially in the low end of the labor market. I don't like minimum wage and I wish we didn't have it but it's the best solution I've seen to these problems. Do you have a solution to these problems?

[xixi77]

Actually, iirc one of the major criticisms of the Card & Krueger is that they only look at employment at national fast-food chains, and ignore local burger shacks -- and it is primarily the latter (and their workers) that are going to be put at risk with the minimal wage increase, due to their lower margins and cash reserves. So an increase in minimal wage is likely to also increase industry concentration.

[jswinghammer]

Ideally I would abolish fractional reserve lending and the inflation that goes along with it. That inflation of the money supply has a medium and long term effect of raising prices. In a free market prices would drop thus your bad wage gets better even if you can't ever find a better job.

[cjo]

Well I certainly agree that money in general and our relationship to it could use a good rethinking - which is a surprisingly unpopular opinion considering America's financial sector pretty much imploded just a few years ago.

But I don't follow how solving that problem addresses markets becoming concentrated and member firms using that advantage to push wages down towards subsistence levels. That I think requires some sort of collective bargaining, which minimum wage is a type of (although it's likely not the best.)

[jswinghammer]

Marx was concerned about wages being pushed down but even in his own lifetime it never really happened that way. It's something that seems desirable for the businessman if possible but something that they have no control over. The reason being that other companies will compete for workers and have an easy competitive advantage over firms who are trying to drive workers to poverty.

Markets work to coordinate prices for both consumers and producers. Those who resist the laws of markets pay eventually. Might not happen right away but it happens-always.

My point is that low wages are never good exactly but they can be better if those wages pay for more year over year. It's like getting a raise without having to negotiate or even do anything for it.

[cjo]

Ah, c'mon, don't pin it on The Bearded Guy! That stuff predated him (see Ricardo's Law of Rent: https://en.wikipedia.org/wiki/Law_of_rent). The Bearded Guy was after all the last of the Classical Economists :)

He also didn't think wages would make it to subsistence: https://en.wikipedia.org/wiki/Iron_law_of_wages#Socialist_cr...