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Comment by darawk | Hacker News Reader

> This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society

What does the minimum wage have to do with contribution to society?

> Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of improving operating efficiency.

Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though. The US minimum wage is a big part of why manufacturing jobs have moved out of the US, for instance.

That might be a trade we're willing to make. There may be good reasons to make it, but it is not without cost.

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If a business can only exist if you exploit your labor force, then maybe your business shouldn't exist.

The portion of people that work jobs for fun or a little extra income are a minority. There are more examples of people working several minimum wage jobs just trying to survive.

Maybe there is a compromise somewhere though. How about if you pay the minimum wage, then the owners/stake holders cannot make more than the lowest paid person.

The head(s) of a company making good money(so I'm lumping some small businesses in here too), while saying that they just can't afford to pay their workers a decent wage, leave a bad taste in my mouth.

Off topic, but I feel the same way about all the businesses saying we need cheap labor from Mexico or South America for the businesses to survive, since Americans won't do the job. It creates an underclass of people. If you can't find workers due to wage, and you cannot afford to pay more, the solution isn't to find a class of people that have it so bad, that living in poverty in America is a good option.

Businesses need cheap labor from outside of the US because everyone in x industry is using cheap labor that has an artificial ceiling due to years of unchecked illegal immigration. Competition in x industry is now centered around this new labor price point and in some cases is far below minimum wage. At that point, many drop out of the labor force instead of working a difficult and manual labor job that pays less than minimum wage. This is a failure of government to have a coherent and sensible immigration policy and an additional failure to deal with the spillover effects of not having one.

> If a business can only exist if you exploit your labor force, then maybe your business shouldn't exist.

Say bye-bye to your iPhone and all of your other beloved gadgets.

No reason to say goodbye to them. It would just mean that the price would have to increase, or the industries that produce them will have a smaller profit margin.

Apple has $245 billion in cash right now.

> If a business can only exist if you exploit your labor force, then maybe your business shouldn't exist.

In what sense is offering someone money to do something for you exploitation?

> Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though.

It's also worth noting that some businesses probably can't be profitable without chattel slavery, though it's hard to find examples since the practice has been illegal for so long.

> The US minimum wage is a big part of why manufacturing jobs have moved out of the US, for instance.

No. I'd say the bigger part of the reason was free trade agreements with countries with substantially lower wages, which encouraged job movement for little more than wage arbitrage reasons, minimum wage or no. The average income per capita in Bangladesh is apparently $600/year [1]. Americans would starve and die of exposure on those wages.

[1] https://www.ceicdata.com/en/indicator/bangladesh/annual-hous...

> Americans would starve and die of exposure on those wages.

No, they wouldn’t. Americans survived on wages lower than that in the past. They would simply have to adjust their lifestyle to look more like the one of Bangladeshi —- unless you assume that Americans are somehow extremely inept compared to Bangladeshi.

>> Americans would starve and die of exposure [in America] on [Bangladeshi] wages.

> No, they wouldn’t.... [Americans] would simply have to adjust their lifestyle to look more like the one of Bangladeshi

I appreciate your honesty, but listen to what you're saying. No one "simply" accepts massive regressions in living standards across large swaths of the economy, and that's exactly what you'd need for Bangladeshi wages to be livable in the US. That kind of thing leads to revolutions, and rightly so.

Are you implying that the people currently starving and dieing of exposure living in bangladeshi-style slums right on the streets of San Fransisco is an acceptable outcome? We should be paying more people a wage that forces them to live like that?

Or do we look at the growing inequality in this country and realize we can definitely afford to add a couple bucks to a poor guys hourly rate so he doesn't have to give 60% of his income to the parasite landlord every month.

What do you have against landlords? Every situation has an economic element to it. It shouldn't be assumed that every person who is a boss, landlord or business owner is assumed to be some sort of crook for having money. Maybe the landlord is upside down on his property and takes a loss every month. You just don't know.

You can’t be serious.

The only way to survive on $600/year is to live somewhere that’s a viable income. There’s nowhere in the US where you can do that, unless you count unofficial homeless encampments, and I’d wager anyone living there who only brought in $600/year in government benefits and other sources would quickly die.

> It's also worth noting that some businesses probably can't be profitable without chattel slavery, though it's hard to find examples since the practice has been illegal for so long.

The difference between slavery and wages is that one of them is enforced by violence. The other is an offer, that may be taken or left. That difference is supremely important, and makes those things completely incomparable.

> No. I'd say the bigger part of the reason was free trade agreements with countries with substantially lower wages, which encouraged job movement for little more than wage arbitrage reasons, minimum wage or no. The average income per capita in Bangladesh is apparently $600/year [1]. Americans would starve and die of exposure on those wages.

I mean, I think we're saying the same thing. Those free trade agreements are what enabled the labor to be off-shored, because the labor is cheaper. I don't think we disagree here.

> The average income per capita in Bangladesh is apparently $600/year [1]. Americans would starve and die of exposure on those wages.

No they wouldn't. Nobody takes a job at a wage that causes them to starve and die of exposure. Therefore such jobs do not exist. You take a job so as to avoid starving and dying of exposure. If you are going to starve and die anyway, you might as well not be working.

> The difference between slavery and wages is that one of them is enforced by violence. The other is an offer, that may be taken or left. That difference is supremely important, and makes those things completely incomparable.

Sorry, they're not "completely incomparable." You just selectively pulled out some context for slavery to make that claim, but left the wage-work situation in an idealized context-free zone. The context for wage-work can be starvation or death by exposure, if the offer isn't taken. The fact that there's some side that can be reckoned to have made some nominal choice is not sufficient to legitimize it, just as similar choice is not sufficient to legitimize someone voluntarily selling themselves into chattel slavery. Also, contracts and property rights are enforced by violence, and I highly doubt you think they're illegitimate, so being "enforced by violence" doesn't seem to be that significant of a differentiator here.

If we're supposed to wring our hands about the poor businesses that are unprofitable due to the minimum wage, I see no reason why we should not do so over ones that are unprofitable for other reasons, like slavery, child-labor restrictions, and worker safety laws.

> I mean, I think we're saying the same thing. Those free trade agreements are what enabled the labor to be off-shored, because the labor is cheaper. I don't think we disagree here.

No we're not. Minimum wage laws are minimally relevant to offshoring because the wages in countries were the work moved are simply unlivable in the US.

> No they wouldn't. Nobody takes a job at a wage that causes them to starve and die of exposure. Therefore such jobs do not exist. You take a job so as to avoid starving and dying of exposure. If you are going to starve and die anyway, you might as well not be working.

Exactly. There's no way Americans could compete for jobs on price with Bangladeshis. So in a free trade regime, jobs are going to move to Bangladesh regardless of any American minimum wage laws. By itself, free trade is necessary and sufficient for extensive offshoring of American jobs.

"Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though"

If they require lower wages in order to be sufficiently profitable, but those lower wages mean the employees have to rely on taxpayer funded safety nets to survive, maybe the business shouldn't exist?

Because otherwise this is essentially a demand for taxpayers to subsidize the profits of a private enterprise.

If Target and Walmart need employees on food stamps in order to make a profit, maybe we should just fully nationalize them instead of just subsidizing their profits.

The markup on most products is such that US businesses could easily manufacture their products in the US at current minimum wages and still handily profit.

They simply choose not to, because that means they have to pay their executives and owners less money and no executive wants to forego their country club membership, each of which is equal to the salary and benefits of 3 or more line workers, or their annual bonus, which is equal to the salary benefits of between 5 and 20 line workers. Or hell, the excess of what their salary is over the value they actually provide to the company (usually just a lit bit over an individual line workers' contribution).

> the excess of what their salary is over the value they actually provide to the company (usually just a lit bit over an individual line workers' contribution).

Is that for every CEO at every corporation? How are you measuring and making that determination? Does that hold true for other executive positions?

> The markup on most products is such that US businesses could easily manufacture their products in the US at current minimum wages and still handily profit.

What data are you basing this on?

You're also ignoring the most important part - consumer choice. People buy cheap shit because it's cheaper. It's the foundation of Walmart. So let's say the companies here did manufacture here, but then a foreign competitor offers a significantly cheaper product - how do you reconcile that without going out of business?

I think that's precisely the issue. Economists thought that driving an open market would push up wages as efficiencies come back around, thus both driving for cheaper goods and higher wages. But they didn't anticipate exactly the effect of globalism and the exodus to China happening so quick.

Foreign industries could be taxed to some level relative to what their workers are paid and their working conditions to even out the domestic companies disadvantages maybe. That's already happening to some extent.

I don't know if that or fixed minimum wage is the solution by the way. But I'm saying clearly that's the problem. Companies don't all start with an equal footing, and that can put out of balance the free economy.

https://foreignpolicy.com/2019/10/22/economists-globalizatio...

Edit: Eh, I forgot that you can't really have rational discussions on slightly political topics. If you think something I said isn't logical or true, please partake in the conversation.

> both driving for cheaper goods and higher wages

This actually works -- cheaper goods for developed countries and higher wages for China. On the balance this is a win economically. Environmentally it is the opposite -- better for developed countries and worse for manufacturing ones.

If you were a small business you should be spending your time lobbying for tariffs against exploitative international manufacturers or even local subsidies instead of lobbying to pay your employees less out of your bucket of gold every year.

Same with illegal immigration. Some businesses won't be profitable or exist without them.

> > This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society > What does the minimum wage have to do with contribution to society?

Seven years ago, the McDonalds corporation issued memos to employees instructing on how to file for SNAP (food stamps). Rather than paying employees what they need to survive, McDonalds was effectively shifting that cost onto taxpayers. https://www.theatlantic.com/business/archive/2013/10/instead...

A system where jobs provide money to consumers who participate in the economy, pay into social security, etc. is one that makes a "positive contribution" to societal balance sheet. One that hoards its income and doesn't pay into the system costs society money, hence "a net negative".

"Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though." Right, but some businesses can pay minimum-wage-or-higher and be profitable, but the CEOs figured out that they can just keep that money for themselves and shift it onto the welfare system.

This is why a lot of critics of modern capitalism claim that we already have socialism, we're just not doing it efficiently.

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