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Comment by moomin | Hacker News Reader

People seem to think that minimum wages are some left wing idea. They're not. People not earning enough to live cost the state money. They cost it in terms of benefits (believe it or not, the cheaper option) or in terms of law-enforcement and the corrosive effects it has on your society. Paying people below a certain level is tantamount to taking government subsidies.

Where exactly that level is is a matter for debate, but everyone should stop pretending like it's a choice between "tough" and "kind".

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Paying people below a certain level is tantamount to taking government subsidies.

And the flip side to that: A minimum wage higher than the market rate, is tantamount to employees taking company subsidies which inevitably is passed on to consumers via higher prices.

You won't find any argument from me that higher wages can translate into higher prices. They're separate decisions, but in the case that the principal value comes from the labour, highly linked. So changing the wage of Apple Store staff is unlikely to impact the price of an iPhone too much, whereas I agree a burger is much more likely to be materially affected.

My point is, it doesn't matter what the "market rate" is if the consumer is going to be paying the price anyway, either in terms of taxes or other effects, such as an increased probability of violent crime.

Basically, it's the difference between micro and macroeconomics.

Higher wages will translate into higher prices, until you tie wages to executive pay, make it so no executive can take home more than 80X what the average worker in the company makes - Not including salaries of excutives in the tally - then raising wages = raising their own salaries. When executive pay is tied to employees' -- you'll have surplus because they won't be able to give themselves bonuses or extra pay and will either have to grow the business and hire more employees are just keep it in the company bank vault for a rainy day.

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