[kephra]

I wonder, why he is ignoring the iron law of wages: Under free market conditions, wages tend to the minimum necessary to sustain the life of the worker.

When free market is interrupted by state, union power or lack of workers with a special skill, the nominal wages rise. But the situation for the workers will stay same, because of the Iron Law of Wages constrain. There will still be some days left end of the month, when he runs out of money. Because when wages rise at a local market, the housing cost will rise next at this market.

This can be seen best in Switzerland where wages, taxes, and housing costs differ in every canton. Similar if you compare housing costs and wages in upper state New York, and in NYC. Housing costs and taxes will rise, if wages rise. Pushing those with the lower wages out of the market of better housing.

So if a state wants that minimum wages or unconditional income grants have a positive effect on the people, then the same state must invest in social housing first, to lower the housing costs, before raising wages.

[federicobond]

Iron law of wages? I thought that debate was over a hundred years ago, together with all the Malthusian doomsday predictions. I guess I was wrong.