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Comment by nomilk | Hacker News Reader

Some things often overlooked in minimum wage discussions:

- Wages often go over or close to the minimum anyway, due to market forces, and do so without costly bureaucracy/enforcement/taxation/distortion

- Minimum wages make everyone whose marginal value is less than the minimum wage unemployable (since you would choose not to hire someone for $20/hour if their marginal value is $15). This is disastrous for someone who'd love to work at $x/hour, but who lives in a state which legislates a minimum wage > $x/hour, since they go from being employed at a low wage to unemployed.

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For fast food, the marginal value of an hour of work is a measure of how much a business can make from labor and the position, not some innate quality of the person. It’s flipping burgers not rocket science.

There is a huge difference in the quality of workers in fast food. Some people are slow. They are inefficient. They let things burn, they count change slowly, they are clumsy. They can't multi-task.

It is cognitively simple for you, because you aren't thick. But for people of well-below average intelligence, flipping burgers and doing something else at the time is just not possible.

That also goes for other fields as well. I've seen enough comments here on HN from people who thought their employer would offer them a Sillicon Valley wage if they moved to the middle of nowhere to live like royalty, often because they thought companies pay them based on how much value they add, especially when WFH became more widespread during COVID.

All companies pay people as little as they can to keep a certain amount of employees of certain quality around to do the work. The fewer options you have (or the more options your employer has), the worse the deal you'll have to accept becomes, and the lower your pay will be.

As for skills, I know plenty of people in IT who would go crazy working retail or interacting with customers within a month. Flipping burgers may be the easy part, but resilience against customer behaviour and monotonous/uninteresting work isn't something everyone has.

> Wages often go over or close to the minimum anyway, due to market forces, and do so without costly bureaucracy/enforcement/taxation/distortion

Yes, when there is an shortage or competitive number of low wage workers, not when unemployment rate is approaching 5% overall and close to 20% for low income earning bracket in most places.

That's the virtue of the pricing system! The invisible hand means if wages are low in particular profession, it encourages looking elsewhere, particularly in professions in short supply, whose wages will be high.

Yeah, nah, the idea that the problem with low income workers is that they're not pulling themselves by their shoestrings properly is well and thoroughly debunked.

People don't work in low income jobs because it is the easiest option, but because it is the only option often.

Source for that debunking? Because I sure as hell can walk into any Walmart and see it in action.

> it encourages looking elsewhere

Which is why the only rational position of a true believer in the free market is to abolish international borders.

I used to be a true believer in the free market and I did want to abolish international borders to enable free trade of labor. What I didn't realize though is that nobody wants to require immigrants to pull their own weight and exclude them from social welfare if they're unemployed, etc. If you had a very free market country with no social services that would be overused by unrestricted immigration, then yes, an open boarder might be a good idea. Perhaps this is similar to internal borders in China, which are reasonably open but immigrants from other provinces aren't eligible for social welfare and effectively have to go back home if they lose their job.

The 18,000 people who lost their jobs may disagree.

These 18,000 are most likely employed somewhere else at 20-25% wage increase. Note that a different study didn't see a rise in unemployment: https://www.nbcbayarea.com/investigations/california-minimum... which means that these people affected actually got a better living standard.

This group is well known for bias, over and over through the years. Nothing they report should be taken at face value.

"A considerable amount of financial support for the Center comes from labor unions: According to federal reports, over the last 15 years it has received nearly $1.2 million in labor funding."

"The IRLE’s highest-profile researcher is Michael Reich, who co-chairs its Center on Wage and Employment Dynamics. Reich made a name for himself at a young age co-founding the Union for Radical Political Economics, with the stated goal of supporting “public ownership of production and a government-planned economy.”"

https://us.fundsforngos.org/news/nonprofit-accuses-uc-berkel... https://epionline.org/release/biased-uc-berkeley-research-te... https://epionline.org/release/biased-uc-berkeley-research-te...

And the nation is currently ruled by somebody who orders rewriting past papers on climate science:

https://phys.org/news/2025-08-rewrite-national-climate.html

So why are we taking at face value that study from nber which is increasingly staffed by Trump loyalists?

California created nearly one in five of the nation’s new jobs - https://www.gov.ca.gov/2024/08/16/california-created-nearly-... - August 16th, 2024

> California’s job expansion has continued into its 51st month, with Governor Gavin Newsom announcing that the state created 21,100 new jobs in July. Fast food jobs also continued to rise, exceeding 750,000 jobs for the first time in California history.

> “Our steady, consistent job growth in recent months highlights the strength of California’s economy – still the 5th largest in the entire world. Just this year, the state has created 126,500 jobs – solid growth by any measure.”

This is slightly out of date; California is now the world’s fourth largest economy as of April 2025, passing Japan. I assert the data shows the state does not have a job creation issue.

https://www.gov.ca.gov/2025/04/23/california-is-now-the-4th-...

The marginal value being too low is just the company being bad at optimizing. Yes, contrary to fairy tales, companies are not so good at this because internal politics and/or poor management.

My country switched from 39 to 35 hours maximum working time per week, some years ago, in order to reduce unemployment (we are talking about around 25M workers). The net result was that companies did not hire more people (or less than expected), they figured out ways to make their working force more productive.

> This is disastrous for someone who'd love to work at $x/hour

This does not exist, period. If x is below the cost of housing and eating in the area, it's not worth working, or it is a last ditch job that delays dying on the streets - that's the reality we are talking about. I am pretty sure that the minimal wage they set is just above that, unless I missed the memo and California became socialist.

> The marginal value being too low is just the company being bad at optimizing.

not really.

If there's a job for cleaning the sidewalk of a joint, or for holding up a sign, but this marginal value is very low, then a minimum wage greater than this value will prevent this productive work from being done (or it'd be done by an existing worker, at the sacrifice of some other productive work they _could've_ done). There's no way to "optimize" this.

Personally i am not a fan of minimum wage. I rather have tax payer money spent on creating valuable workers through training. There's lots of models for such programs - for example, an apprenticeship model, where a firm pays for the cost of an apprenticeship (which includes wages as well as cost of training), in exchange for an agreed upon number of years of employment at an agreed upon fixed wage post-training (they cannot quit or will have to pay back the cost of training for example).

> Personally i am not a fan of minimum wage. I rather have tax payer

Tax payer?

> in exchange for an agreed upon number of years of employment at an agreed upon fixed wage post-training (they cannot quit or will have to pay back the cost of training for example)

Well I've heard of such model once, a scam school used it for what basically was forced labor. Thankfully the contract was nullified by a court. It's not surprising to me, as I have heard too many stories of harassment and abuse at work.

There's not even a need for that, normal programs such as part-time school, part-time work paid half the minimum wage already exist in my country and are generally appreciated. But they exist mainly for skilled work only, such as engineer positions.

The issue is that you don't need much training for sidewalk cleaning, so "innovative" programs won't solve anything. What is needed is to push back against abusive practices caused by the imbalances of the worker market. Companies are predatory by nature.

> Wages often go over or close to the minimum anyway, due to market forces, and do so without costly bureaucracy/enforcement/taxation/distortion

By "minimum", do you mean "statutory minimum"? I'm not sure what the policy implication of this argument would be otherwise – an argument against wage and hour enforcement?

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