> The combination of working this front-line service industry job and my last gig running a state labor department has led to some interesting observations.
It's always funny when I'm acutely reminded how disconnected well-to-do people can be.
It's always funny when I'm acutely reminded how disconnected well-to-do people can be.
Blue collar work deserves a living wage. Austin, at least in the area he works in, has an average of 110,000 USD/y, yet the workers can barely survive living with roommates 40 minutes away. That's 80 minutes of your life just driving in addition to menial income - average that out and it's even worse.
Texas is embarrassingly low in its minimum wage laws. Why is it acceptable for a base wage of 2.13 USD/h for waiters when considering the cost of living has increased across the board in every way? Where does the disconnect lie here? Why is it acceptable that minimum wage is stil 7.35 USD/h, which decides how much the "higher" paying blue collar jobs pay in comparison?
You are exhibiting what I would consider an elitist mentality.
It has been a long time since the minimum wage decided anything, even in Texas. And in states that have not updated their minimum wage, it is because the voters are not voting for leaders that will raise the minimum wage. And those same voters are sending Senators and Representatives to the federal Congress, where again, they do not raise the minimum wage.
You are eggregiously conflating thw two.
Employers’ or employees’ arguments are irrelevant, the only thing that matters is how many buyers there are relative to sellers (or a higher minimum wage).
I claimed that the federal minimum wage is too low to have an effect on wages, since the supply and demand curves for labor require employers to pay more than minimum wage to find anyone.
If the market judges a particular level of software engineering to be worth say, $300/hour, and flipping a burger to be worth $20/hour, then that ratio will persist no matter what you do to the minimum wage.
You could pay the burger flipper $1m/hour, and then inflation will kick in mightily, and the engineer ends up at $15m/hour, and the burger flipper is back to feeling poor again.
The best thing is real economic growth - fiddling with the numbers does nothing
This analysis is missing huge path dependence and varying time lags (i.e. the Cantillon effect). If the minimum wage doubles over night, sure engineer salaries will rise, but with a large lag, since wages tend to be sticky. So the ratio would fall from 15:1 to 7.5:1 overnight, and then slowly recover (over the course of years, likely).
And that's assuming that the previous [lower] wage was not artificially suppressed via monopoly / monopsony power or something (which is definitely possible within a single industry)
What I'm trying to get at though is that minimum wages won't help poor people - it only helps them feel supported. The only real help is to improve their power in the market.
“Wages will catch up eventually” isn’t a good argument that it doesn’t help people in the meantime.
The best things that have happened to poor people throughout history have been things that increased their power in the market, and the general improvements brought on by technology.
It sadly a reality that those making 2.13/h have to deal with, whether from s** pay by employers, by s** tippers, or those a**holes who defend the latter.
I desperately want every last poor person on the planet to have access to the virtuous cycle of wealth creation and increasing resources. But the only way to help the poor is to engineer a situation where their market power rises. This takes many forms - encouraging more entrepreneurship (entrepreneurs hire people), better capitalization for companies (more money for hiring), steady & reliable market regulations (hiring is less risky), finding ways to increase output per worker (worker is more valuable), and many other hard things.
More market power for poor people means when there's a shit employer, you go to the next one, or when you need a raise, you can demand one, and so on. Supply and demand always wins. Everything else is a distraction. Minimum wage is the rent control of the labor market.
What's funny is he is reflecting on this _after_ his prior gig was running a state labor department.
This is the kind of thing that you should have _already reflected on_ if you are running a state labor department.
The fact that you can _run a state labor department_, and not yet reflected on the low wages v. amount of worked involved to make those wages shows exactly "how disconnected well-to-do people can be".
It's good that he learned the lesson, but it's a damn shame that he learned it after he was in a position to actually do something useful with that knowledge.
Maybe a $300 wage theft complaint doesn't sound like that big a deal to a labor secretary making $196,000. But it could be an absolutely ruinous for some workers, and represent a huge amount of work to make up.