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Comment by Veelox | Hacker News Reader

I feel like we are strong agreeing. If we change the how student loans worked we could reduce the rate of increase. If we changed out medicine worked we could bring down prices (currently there are way to many links in the chain all making a buck). Also, if we allowed more housing to be built, prices would go down.

>Also, forcing employers to pay more is actually a supply/demand conundrum. If you want to buy unskilled labor for $8/hr but the going rate is $15/hr you're not going to have much luck.

The issue I have is most people who want a living wage, want to be done by setting the minimum wage so that a 40 hr week job gets you their. The causes lots of problems because it eliminates everyone from the labor market that cannot produce that much value. So in the end, you negatively impact the young, the old, the disabled, those who want to work part time, even ex-cons by setting minimum wage at a living wage value.

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I cannot disagree more. It's a "minimum wage". What good is it if it's not a living wage? What's the point of having a minimum wage that one cannot survive on?

Because not everyone needs to survive on it. As pointed out above students and the elderly can easily be priced out of the labor market if the minimum wage is pegged to this standard.

I can't really agree. There are enough who do need to survive on it that it should be a living wage. And I can't agree that them being priced out is a problem, because back when it was a living wage, students were able to get part-time jobs at minimum wage just fine.

My father went to college in the early 80s, he was able to work as a ditch digger in the sunmers and pay for his school, books, and living off of that. Let's say he worked 80 hr/week 12 weeks a year. Say it now cost 25k a year (that's low) to go to college. To cover that now you would need to net ~$26 hr to do the same thing. The issue isn't that wages have grown to slow, it is that important costs have grown to quickly.

"My father went to college in the early 80s, he was able to work as a ditch digger in the sunmers and pay for his school, books, and living off of that."

Your example is completely invalid today.

"The issue isn't that wages have grown to slow, it is that important costs have grown to quickly."

And employers bear the responsibility for that.

>>"The issue isn't that wages have grown to slow, it is that important costs have grown to quickly."

>And employers bear the responsibility for that.

Per the article [0] after adjusting for inflation "That makes the current cost [of college] more than two-and-a-half times as much as it was in 1988 — a markup of 163 percent."

How are employers responsible for a 163% increase in the real cost of college?

[0] https://www.cnbc.com/2017/11/29/how-much-college-tuition-has...

Honestly I would be fine with no minimum wage. I also tend a little more libertarian than most. I am fine with the minimum wage setting a floor to how much people are paid because it cuts down on explotive practices.

That said, putting the minimum wage to an amount that is surviable at 40 hours a week removes people on the margins that would benefit from a job that paid these than a living wage. Note I am taking as a given that a business will only employe someone if they on average produce more benefit than they cost.

Two examples of people on the margin that would otherwise be priced out.

Frank is retired and draws social security he is old and doesn't move as fast any more. He gets a job with the park service cleaning/resetting campgrounds. He enjoys being outside, interacting with campers, and the extra money is nice. Since the service pays per spot cleaned, Frank will never make a living wage. I think Frank should be able to take this job.

James just got done serving 5 years for felony distribution of crack. Seeing his son only once a month has made James decide to go on the straight and narrow from now on. As an ex-con it is hard for him to find a job. In fact because ex-con tend to be bad employees most business don't bother. If there was no minimum wage a business could hire James at a rate of the average ex-con and he could prove himself a good worker and move to a better paying job. I think such a job should exist for James.

I think these are two examples of productive economic activity that would otherwise be impossible if the minimum wage was set to a living wage.

Frank should get a part time job.

One issue with the current model is that Frank has to retire in due time. He cannot be allowed to work for cheaper while receiving benefits, otherwise he's taking the spot of younger folks who are supposed to be working there at a normal wage and finance his benefits.

I guess you misread my example. Frank is not worth $15+ a hour. Thus a business will never hire him for a part time job because it is a net negative for the business at that price point but both Frank and the business would be willing to agree to a wage that is less than a living wage.

Forget about working in a park. It's a job that is too demanding physically.

You misread the conclusion. There is no need to bring down the minimum wage for everyone, just because he doesn't need a full wage. He can simply work part time and get half the money.

I think we are disagreeing on terms. People support a living wage normally mean legally mandating that the minimum amount of money that is exchanged for an hour of labor is set to $X where X is higher than today's rate.

I gave two examples where increasing the hourly rate would make it so that the business would not hire the worker because it would provide negative value to the company.

Working half the hours does change the fact that each hour loses money for the company.

You were arguing for lowering the minimum wages. It doesn't need to be lowered in your examples.

I was arguing against setting the minimum wage to a living wage. I like the status quo of cities and states raising their minimum wage while the federal minimum lags behind. It's federalism in work.

"Honestly I would be fine with no minimum wage"

With all due respect, that's probably because you're not someone who's having to survive on it.

"That said, putting the minimum wage to an amount that is surviable at 40 hours a week removes people on the margins that would benefit from a job that paid these than a living wage."

I don't believe that population is significant, or more significant than those that do need it to be a living wage.

"James just got done serving 5 years for felony distribution of crack. Seeing his son only once a month has made James decide to go on the straight and narrow from now on. As an ex-con it is hard for him to find a job. In fact because ex-con tend to be bad employees most business don't bother. If there was no minimum wage a business could hire James at a rate of the average ex-con and he could prove himself a good worker and move to a better paying job. I think such a job should exist for James."

I do not believe that having a non-living wage job would help, because James would still need to survive, and on a non-living wage, he's going to have to supplement that income somewhere. A better thing for James would be "Ban the Box" laws, which prevent potential employers from asking about criminal history if it's not relevant to the job.

"I think these are two examples of productive economic activity that would otherwise be impossible if the minimum wage was set to a living wage."

And I don't. Just about every example for why it shouldn't happen comes down to business wants cheap labor. And that's not an argument that I am sympathetic to.

You have quite a few objections and I will try to address them one at a time.

>With all due respect, that's probably because you're not someone who's having to survive on it.

I have a lot of respect and empathy for those working multiple minimum wage jobs to make sure their children have food to eat. With that said, whenever I consider a policy I start with how I think the world ought to be and then I make considerations for how the world really is. Hence why I say it is probably a good thing that we have the minimum wage.

>I don't believe that population is significant, or more significant than those that do need it to be a living wage.

Data would be nice, but I would guess that the long term gain in increased experience from more jobs happening would be better than the marginal increased income for those with the now higher minimum wage.

>I do not believe that having a non-living wage job would help, because James would still need to survive, and on a non-living wage, he's going to have to supplement that income somewhere.

James would need to live somehow, by keeping the min. wage low, we give James the chance to gain a work history at a low paying job (while he is provided supplemental support) so he can transition to a better paying job.

>A better thing for James would be "Ban the Box" laws, which prevent potential employers from asking about criminal history if it's not relevant to the job.

Ban the Box is a bad idea because it hurts young black men[0]. tl;dr when employers cannot know that a person does or doesn't have a criminal record, they don't hire from the populations with high rates of criminal records (young black men).

>And I don't. Just about every example for why it shouldn't happen comes down to business wants cheap labor. And that's not an argument that I am sympathetic to.

I feel like you missed an important assumption I made, business will never hire a person if the value that labor produces is less than the cost of the wage. The min. wage sets a floor on the value a person and this hurts people that cannot produce more value than the floor. This is different from the fact that a business seeks to minimize costs of which labor is a major one. That is capitalism, some business seek to pay people that absolute minimum they can to cut costs. Others (like QuikTrip and In-N-Out) pay a premium for better workers to get better value.

What is your suggested fix for businesses wanting cheap labor?

[0] https://www.huffingtonpost.com/entry/ban-the-box-laws-may-be...

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