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Businesses that cannot turn a profit without paying their employees enough to cover basic expenses (leaving aside whether this is higher or lower than the current minimum wage) do not deserve to exist. Having those jobs automated away or passing the cost of living of the employees on to the customers are both reasonable alternatives.

By your logic startups (and pretty much any new business) should not exist, since they turn no profit for years.

And this is why Socialist economies are so crappy and need minimal wage laws: they kill their startups before they even exist and have no competition on the talent market.

And then they wonder why they can't produce an Apple, Microsoft, Amazon or Google...

See also: low paying internships and apprenticeships where the experience and networking is part of the compensation.

The problem with minimum wage laws is that they presume there are no other forms of compensation than wages.

The problem with this argument is that is presumes that other forms of compensation can be used to purchase food, healthcare, housing, etc.

Also, unpaid internships are legal in the US (at least federally) if they are primarily for the benefit/training of the worker and that information is made available upfront.

No, it presumes that the people taking these jobs have access to those things through other means. Like parental support, spousal support, scholarships, student loans, fellowships, government programs, side gigs, etc.

What about an artist selling his art for less than the hourly minimum wage it cost him to make it? Should he get arrested?

> passing the cost of living of the employees on to the customers

I see this trope a lot, but the point I think it misses is the customers of these businesses are often enough the ones making minimum wage. So raising the business’s prices to pay the higher wages just ends up in a self defeating loop for all involved.

If the solution to poverty was “just give the poor people money”, it would’ve been done already I believe. Sadly, societal problems are generally not easy to solve.

> do not deserve to exist

It's an easy position take take when you're a well paid developer and money problems aren't a concern.

I used to feel the same way, until I started my own business. I couldn't attract venture capital and I had to bootstrap the company. There was no way in hell I was using my house for a loan.

Early on I relied on people who wanted to stay relevant, but needed flexibility, and were happy to take a lower hourly wage. For example, a stay at home parent whose SO earned the majority of the household income.

My business contributes sincere value to a niche industry that otherwise doesn't get any attention or investment. It's been said by several in my industry that without my company, several hundred community news organizations would likely fail.

Today, I can afford to pay a living wage. But now I understand that growing a real revenue generating business (without artificially inflating a company via investment) is difficult, and often requires low cost labor in order to get to the place where you can afford higher cost labor. Try it and you may not be as idealistic.

Does that mean you _would_ agree with this position if the qualifier "that has existed for more than X months" or "makes more than $X/year" was added?

That's a good point, and a nice bottom-up view. The other side, the "do not deserve to exist" position however seems also true. It's a top-down view, coming from empirical observation: under competitive pressure, businesses will end up abusing everything and everyone that they can get away with abusing. Your bottom-up view relies on your own moral character - you were able to find people willing to work for below-market rates while making it a win-win and non-abusive situation. Top-down view correctly notes that ethics don't scale under economic pressure - and I have a whole collection of second-hand anecdotes demonstrating that - things people I personally know experienced.

My point being, I see both views as correct in principle. The hard challenge lies in reconciling them - letting good people craft better deals, while preventing malicious individuals from abusing their fellow human beings.

i totally have the same problem. i can't afford the wages that employees ask for. but that doesn't give me an excuse to hire people who are willing to work for less. yes, off-shoring is an option, and financially that would work, and is certainly a better option than underpaying locals who need more to pay their rent.

i do not believe that underpaying locals is a better option than off-shoring. even if the unemployment is high enough that people are willing to work for scraps, then i still believe that it is better for changes that allow me to actually pay local employees instead of taking the money out of employees pockets by paying them less.

the question should not be: how can we lower employment income so that you can hire more people. but how can we lower other costs so that small businesses can afford to pay people what they need for life.

so yes, i am trying for some years now, and i remain as idealistic as ever.

Couple of counterpoints:

- Let's say I'm a 16 year old adolescent who's doing well in school and wants to take a part-time/weekend job to gain experience in the job market. My basic expenses are covered (I live with my parents). Should a business get to pay me less just because of this fact?

- I'm a wife of a rich man and have never had to work, but decided to try it because I'm bored. I know nothing but the finer things of life and my basic expenses are 10x what the middle class is. If a business has to cover basic expenses why are we not going to cover this claim of full expenses, what determines in a corruption-free manner whether a claim for a basic expense is valid, and what is an acceptable burden to a business owner to determine this?

- Let's say I'm a jobless struggling adult, sharing a cramped living space with 4 others including 1 or 2 who are drug addicts. A job would really help me get out of this situation, but company X is only willing to pay minimum wage. It's better than what I have now which is nothing. How is having this job automated away a reasonable alternative for me - because you don't want this employer to give me a job in the first place because it doesn't cover my expenses.

- Let's say I'm a customer of your business, and you decide to pass on the full cost of living of all employees to me. Your product jumps from $10 to $50. I'm not shopping there, your business closes, and your employees are now jobless. How does this help anybody?

Are the first 2 points even made seriously? Obviously they aren't advocating for businesses to compensate people for exactly their specific 'basic expenses', they clearly intend to mean basic expenses for low to middle class in general, not based on the person.

Also, it always seems weird that whenever a minimum wage discussion comes up people jump in with these obviously contrived what if scenarios. How about we care about the real people that can barely/cannot afford food/housing/etc because businesses don't pay enough, rather than these situations with made up people.

The number of teenagers having jobs has plummeted over time as minimum wage has increased. Teenagers don't often have the skills / work ethic / experience needed to provide more value than they cost and so the job is eliminated. We are removing the bottom rung of the ladder. This is not a contrived example.

> How about we care about the real people that can barely/cannot afford food/housing/etc because businesses don't pay enough

Obviously depending on people to care out of the goodness of their hearts isn't working, if someone really cared about these people they wouldn't be in their situation. You can ask me or anyone else to care, you can even pressure them into appearing to care, but you can't really make them care, so this is a bad way to solve a problem.

If a good system that doesn't depend on emotions, media performances, or pathos can be put into place, it's probably going to be more reliable in the long run, and can mutually benefit both those in bad situations and those who would like to be able to walk in a city without getting asked for money constantly.

Hence it's very valid and good to ask what exactly entails things like "basic expenses" and use hypothetical situations.

> if someone really cared about these people they wouldn't be in their situation.

Do you really think that?

> Your product jumps from $10 to $50

Please show where this has happened.

1 and 2 are counterexamples to something nobody really argues for, even in case of UBI. 3 is a more general problem, and a social safety net is one example solution here.

WRT 4, regulatory intervention ideas like minimum wage only work and derive all their power from being universally. Even if, as in your example, my product jumps from $10 to $50 (which would be something unprecedented), all my competitors (within the country) face the same issue too! Their prices will have to jump by roughly $40 as well. The overall demand for the product category may go down, but my position relative to competitors remains unchanged.

This may not work well for goods that can be easily offshored, like manufacturing plastic widgets. But (with the caveat that I'm not an economist, and didn't study this in too much detail) it seems perfectly matched for physical-space services sector - something, which by very definition can't offshore, and also resists automation pretty well.

Just FYI, the argument for a minimum wage is that the market for workers is not a competitive market, allowing firms to pay low wages and putting the difference between the competitive wage and market wage into profit.

Kind of funny that you'd refer to Silicon Valley as an example. Aside from having no practical implications (you can't snap your fingers and make markets act the way you want) they had one of the most famous cases of employers colluding to drive down wages.

And even then they managed to get wages to a few times larger than in the rest of the country.

I rest my case...

Your case isn't rested at all given most businesses in the United States aren't in a position to do business globally without heavily escalated logistical or infrastructural cost expansion due to physical goods or services (body in seat) as their product. Whereas Silicon Valley companies often only have to ensure that their information processing infrastructure expand to meet the capability to track/handle transactional load in order to have global consumer bases to pull from, thus allowing that several times higher wage financially. The digital expansion scales far easier than the physical.

Those wages therefore aren't some quirk of the unregulated free market. That was physics. More income sources = more income extraction = higher geographic pool to fuel competitive salary while earning a profit. Yet you still have to answer for wage suppressive collusion. Despite having everything going right for them, they still colluded.

Those of us subject to the wage competition in silicon valley make wages many times higher than the minimum wage. We're talking an order of magnitude more money. Competition in silicon valley does shit all for the people on the lower end of the wage scale in the bay area.

You conveniently forgot the "use existing profits that would have gone to owner to instead cover costs", something that seems to actually happen in combination with the others instead of the usually doomsday prediction before introduction / increase of minimum wages.

I understand slower progress would mean less conflict. But I'm also fine with robots, since accelerated progress means I'll experience more of it in the time I have left.

OK, I'll add it here:

- decrease owner's profits to the point she will rather close the business and get a low-stress job as middle manager in some multinational corporation

As it happens, I am looking forward to robots too but I doubt they will help the least-productive members of our society too much...

Minimum wage laws are part of the larger system, not an isolated black/white switch. What if people out of employment also get some financial support to retrain / kick out their addictions / cure a sickness. A minimum wage law would push a number of people out of employment, but the additional support systems would increase their chances to come back at a higher wage level. We do this all the time at a personal level, by deferring employment and using the time [and hefty sums of money] to go to school.

The end result may well be diverting resources from the most productive centers of society to the most needing sections thereof. Worse, it will be afflicted by corruption, only a fraction of the diverted money will end up on the most needing people plate.

What level of wasteful spending we are comfortable with?

> Minimum wage hurts most the very people it pretends to help: the least productive of us, who become unemployable legally.

How do you explain that the countries with the highest minimum wages also seem to have plentiful jobs and high performing economies? It seems that with your logic the should have large unemployed underclasses, but that doesn't seem to be the case.

Probably because already rich countries can afford to have high minimum wages in the first place. But many European countries with high minimum wages either by government fiat or because of strong unions have unemployment rates 2 or 3 times higher than the U.S. (e.g. Spain, Italy, Portugal, Sweden, France).

I should have been clearer: I'm not taking a position on whether that argument for minimum wage is accurate. I don't know enough.

If it's not, then minimum wage also falls in the second category - of problems that should be solved by saying "Society will provide for the least profitable workers among us," not "You shouldn't be legally unemployable, but being legally underemployable is your own problem."

A fourth possibility: wage distribution flattens.

Few policies split economists as equally as the minimum wage, and I'm not necessarily advocating for it, but it's a little bit telling that you don't even consider that business might successfully adjust their compensation structures.