It is just like the price of the meal. If it costs more than people are willing to pay, then it is too expensive; regardless of what you personally think it should cost.
I say human dignity is non-negotiable. So there should be a legal minimum wage which is automatically adjusted to the living prices of wherever the person you hire is expected to work.
If you are unable (or worse: unwilling) to pay people enough to survive of your work, you are irresponsible and a leech on society that should be out of business anyways.
I understand that some have been brain-washed into believing that leveraging your education, inherited wealth or position of power to exploit others is a sign of being smart or some sort other conclusion that coincidentally justifies the desirable outcome — but that doesn't change the self serving nature of anybody discussing for that kind of exploitation. And as markets have shown to suck at respecting any externalities, be it nature, culture, the rights of future generations or human dignity, they have to be regulated to do so.
If your business is unable to survive that, it wasn't for the benefit of society anyways.
If we want a society without exploitation the simple fix is to lift the minimum wage beyond any value that could be considered exploitation within the given context. Not being able to live off your full time job is certainly exploitation.
If you don't need that much e.g. because you have the luck of having your parents support, don't work the full job then. Easy. Less hours worked, more time to study.
Basically think of it as banning wasting people's time by offering them really bad jobs. (This is the "search theory" explanation, but there's also the "monopsony theory" explanation, which is that they can increase employment!)
Of course, wage boards and sectoral bargaining systems are probably better since they're more flexible.
And if people have a guaranteed level of support, then yes, there is a downside to saying "you're not allowed to exchange sub-self-supporting amounts of work for money". You don't need to ban wasting people's time; if people don't have to work to live, the uninteresting or unpleasant jobs will be having to raise pay to get people to work them, or figuring out how to automate them when previously it was cheaper to pay minimum wage.
Meanwhile, there are plenty of things people might want to do that aren't valued enough by society to pay even subsistence wages for. In a minimum wage world, those things either don't happen or they happen as side hobbies for people with other means of support. If you have UBI, you create the perverse situation of "I might do that for free because I don't have to work to live, but I can't take any money for it unless I can get someone to give me a lot of money for it".
They do /eventually/, but because working takes time, working a bad job reduces the time you have available to find a better one, which has the effect of giving everyone less than ideal work situations. That's why it's called search theory.
What if you are a lonely oldster who'd love to slowly sweep away dust and cigarette butts in front of the local store for 5$ an hour. It doesn't seem obvious that outlawing this is good for society.
But next time add sarcasm tags if you making that point.
It may. Buy are those issues worse than the current issues?
I don't think so — especially if you are inclined to look at countries where the minimum wage is close to (or above) the living wage.
That's what I consider the correct way to think about this. So do you have thought on what metrics you'd use to measure the net effect?
One of the nagging facts that bothers me is that, even as we see increases in minimum wage, there seems to be certain segments of society (particularly young men) who are disproportionately dropping out of the labor pool.
I'm thinking of a reddit post copied off facebook describing college or uni graduates in biology who could only get a job at Starbucks because there wasn't enough demand for their specialism.
So you want a dying wage. How can a dying wage exist? Two ways:
1 - someone else is subsidising the business, I.e. parents are paying the rent/mortgage, and food of the teenager
2 - the person is literally slowly dying, living in a caravan or a tent as ‘working homeless’ unable to afford healthcare or racking up debt, and it’s only a matter of time until they literally kick the buckets and cease to function. Or they will become birdedfor the taxpayer, with food stamps and other kinds of aid.
A business needs to pay for its inputs, labour is one of them. The cost of labour is whatever is costs to take care of basic needs of a human, the exact number is debatable but it does exist.
If we are going to provide subsidies, why don’t we subsidise healthy food, or planting trees or solar panels for example, for both businesses and individuals? Why should my tax money subsidise cheap labour, often for corporation that avoid paying tax themselves?
https://www.epa.gov/green-power-markets/summary-inflation-re...
If we raised the minimum wage to $20/hour, some businesses would raise their wages, and some will fire those workers.
And once on welfare it is extremely hard to get off welfare because of claw-backs and because once you have a gap in your resume it's really hard to get a full time $20/hour job. There might be employers willing to take a chance on you for a lower salary part-time.
The solution isn't to raise minimum wage, it's to eliminate minimum wage and put in an equitable UBI/welfare system. It'll raise wages naturally, because if they have a decent safety net, most people will feel comfortable quitting / not accepting an unjustly low salary. OTOH, if companies make massive profits through paying low salaries then we should tax those profits to pay for the UBI/welfare.
Sure the US is always different (and solution working elsewhere can't possibly be applied to it), but granted: a UBI might be a better choice ultimately. But the question is if that is really within the set of realistic choices. A UBI is a hard sell even in comparably "socialist" countries in Europe. In the US it would be dead on arrival. Consider that maybe this is the idea.
You know, a bit like what the Hyperloop did for intercontinental trains, proposed by a guy who wanted to sell more cars.
It's not an either / or. If the US were to invest more in education and developing the economy everywhere, there would be more jobs beyond low paid "unskilled" labour. That is, at the moment there's too much demand in low paid jobs, too little in e.g. college or uni level positions, and too much supply of people desperate enough for a job to take something below the standards of living.
Compare with my country, which during the pandemic saw a large amount of people in the service industry change jobs, because during the pandemic a lot of restaurants and the like were closed. When those opened up again, they found themselves with a shortage of staff, leading to the ones that still worked in the industry to be in a strong negotiating position and have their wages increased significantly.
Take away the supply - by increasing supply of higher-paid and diverse jobs everywhere - and low wage jobs become higher paid jobs automatically. In theory.
I don't know how far this extends, though. I live in an area where nearly anyone who wants to can get an affordable college education (and, I'd venture to guess, very close to free in most cases). And yet the graduation rate is abysmal. The fact is the higher ed path is a round hole and many people are square pegs. We can't just turn everyone into a highly educated skilled worker. I agree with the other posters that a wealthy country should have a dignity threshold for the members of their society, but I'm come to realize education may not be the main pathway to get there.
The USA and many other countries already have a surplus of people with college degrees that have no real value from a job skills perspective (elite overproduction). Future job growth is likely to be concentrated in skilled labor fields as we re-industrialize. We should probably shift some funding away from universities, and towards community colleges and trade schools.
No need to compare, that happened in the US.
As for a "business plan", that's a total joke. In the real world most small businesses have no real plan. They just make it up as they go and try to survive another day.
If you think that unskilled workers should be paid more then how much exactly? Please be specific. And if paying that much would cause the business to go bankrupt and leave those workers with no jobs, is that a preferable outcome?
I worked in a restaurant for a while as a youth and made minimum wage. It sucked and I hated it, but that was good motivation to learn some actual job skills.
This is one of those pushbacks you see on social media that is used like a gotcha but it’s fairly useless because you and I know it can’t be encapsulated into a forum-sized answer any more than the question “what should a company charge for it’s product, and be specific.” The answer is it depends.
At the risk of sounding as glib as your question, I’ll refer back to earlier comments: an amount that allows employers to “afford life”. That means these two things should not be happening at the same time: 1) a relatively high percentage of the employees rely on the taxpayer to “afford life” in the form of welfare benefits and 2) the company is turning a relatively high profit. Now I know “relatively” needs to be defined, but that’s what crafted policy does, and a forum like HN probably isn’t the place to get into those kinds of weeds. It can probably be pegged to CPI in some way, or limiting executive pay as a multiple of median employee pay when they do rely on taxpayers, as a starting point for the discussion.
It’s odd to me that you want to give a business a free pass for incompetence for lacking a viable plan, and then holding the employees to a high level of responsibility/accountability to “motivate” themselves to “just do better”. What you’re advocating is a kind of semi-permanent underclass since your understanding ignores all kinds of social and psychological barriers that prevent some people from getting “actual job skills.”
To use your own turn of phrase, get some “actual skills” at creating a profitable business.
Welfare does not subsidize employers, it is a subsidy /against/ employers. Giving employees welfare increases their wages because it increases their negotiating power.
If we apply market logic to that this would just mean that employers have to offer better deals.
I'm not sure this follows. By this logic, do you think UBI would cause employers to increase wages?
I think (given sufficient UBI), you would see some industries increase wages but many businesses fold because they are only viable by suppressing wages (which are then subsidized by taxpayers). So, yes, on one hand the remaining employers would be paying more but the overall employer base would be smaller.
Another way to think about it is that as forms of welfare go up like disability, those workers tend to fall out of the labor market. They are using that as a tool for negotiating higher wages. (granted, there many complications in this point)
Example:
-Employee needs $15/hour to 'afford life'.
-Business is only profit-positive if it pays $12/hour or less
-Assuming the employee will only accept a job if it allows them to 'afford life', as long as the government subsidizes the equivalent of $3/hour, business is able to turn a profit. Anything less than that, the employee does not accept the position and the business is not viable.
This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.
But it doesn't do that, in fact it requires the employers to raise their wages.
Your model has a single employer (a monopsony) who doesn't need to negotiate. That's a case where minimum wages cause both wages and employment to rise.
> This was laughably on display a few years back when McDonald's received blowback by publishing their training that teach their employees how to apply for government assistance while they were posting outsized profits.
McDonald's (mainly) doesn't have employees, it has franchisers and those have employees. Different companies.
More importantly, if you're on the left then you should think welfare is good. It's good that they're telling people that! We should require it in fact!
If you're saying that telling someone to get welfare is bad, you're making an argument that welfare is bad. In your model signing up for welfare makes employees poorer. That doesn't make sense.
Is there evidence to this claim? Even the most recent UBI studies seem to run contrary to this point.
This otherwise borders on a bad-faith post. Yes, McDonalds corporation is different than a franchise, but the profits of the former are obviously tightly coupled to the operations of the latter.
And it’s not a left/right political argument on whether welfare is “bad”. That’s an overly simplistic perspective. It’s about how a particular system is structured and whether that leads to desirable outcomes for society as a whole.
This is not an accurate description of the empirical evidence for either minimum wage or UBI.
The evidence is that minimum wages do not reduce employment up to 60% of local median wage and can increase employment - so there's no reason to get rid of it. And UBI doesn't have much effect in either direction - so it's not really that important and the main reason to do it is that it's much simpler than welfare alternatives.
Anyway, UBI isn't an alternative to minimum wage because the point of UBI and other welfare systems is to support non-workers, namely children and the elderly.
The problem is the US economic system is so backwards it values the ad pixel pusher more than the trash collector. At least until there’s a communicable disease going around and suddenly the trash collector is recognized as an essential worker and forced to come to work while the ad pixel pusher “works” from home.
I heard rumours that trash collectors in the US earn pretty good money, in part due to being unionized. I've experienced what happens if binmen go on strike firsthand and / or seen it on the news, it's not pretty.
Whereas industries where there's plenty of supply, like the service industry, cannot get a union off the ground because for every unionized employee, there's plenty of un-unionized people waiting to get a job that doesn't pay them enough, but it's a job and that's good enough.
Works great for the upper classes - keeps the price down for those fancy Michelin dinners.
If the person doing it (and the role can make or break the business) quits on short notice, then the current wage is clearly not enough.
Enough for whom and for what?
For a society with slavery, absolutely. Also for a GULAG.
If that's the environment you want to live in, North Korea is the best country! Everyone is getting wages that are enough.
>It is just like the price of the meal. If it costs more than people are willing to pay, then it is too expensive; regardless of what you personally think it should cost
Yes, meals that people can't afford are too expensive regardless of what you personally think it should cost.
And wages that don't support living are too low regardless of what you personally think is enough.
Those people are lining up to take a job that doesn’t pay enough because it’s better than no job or whatever worse job they currently have.
We could restructure society so that $5/hour is “enough” for some people and then the rest of could enjoy even cheaper meals. /s