Then let's raise it to $1000 an hour. We'll all be rich
Ridiculous arguments are ridiculous. The rest of your point is more than strong enough to stand on its own without that kind of nonsense.
Ridiculous arguments are ridiculous. The rest of your point is more than strong enough to stand on its own without that kind of nonsense.
Setting a $1000 minimum wage would destroy essentially all jobs. There's nothing I or most people could do that's worth that much. Nothing at all. With my job gone, my income is zero and the products and services I contributed to society don't exist. Such a law would make me permanently poor, and would make society incrementally poorer.
This is what I think happens to people whose natural output is below the minimum wage. Because their skills and education justify $6/hr but not $9, they aren't allowed to make that $6. They and society are $6/hr poorer for it.
I believe firmly that people should be allowed to work if they want to, on whatever terms they find agreeable and can get. If you want to help them beyond that, I'm sure they'll think that's swell. But it shouldn't come in the form of destroying their job.
1000/hr will make all jobs unfeasible - on the basis that a job is a way to earn money by offering greater value in labour than in wage.
But what if we lived in a society where solar powered robots did everything and one guy earnt all the money for just pressing the power switch at 8am each day?
How would we share out the bounties of wealth these robots made? Giving everyone a job at below cost might be one way. Not the best but it is a way.
So I suggest that the coming world will have vast wealth, and fewer jobs - and we need to find new ways to make society fair for all. Because an unfair society is a Bad Thing.
Edit: tried to be cleaerer
Remember: once upon a time it was a full time job for just about everyone in a society to get food, take care of children, and just generally do the bare minimum to survive. I'm sure they look at the world we live in today as "post-scarcity" the same way we imagine a world of tomorrow where robots do all of our duties. When agriculture introduced surplus into our society, it didn't cause a collapse. It instead allowed art and science to be born. Just as those early humans would have scoffed at Michelangelo getting a paycheck for putting colors on walls, so to does this possible future seem frivolous to us. But it is no more frivolous than all the current people employed in our current economy convincing each other to buy things we don't need.
If or when machines do everything we consider essential now, I assure you we will find new things to do with our time, some will be better than others at these new things, and thus we will pay each other to do them.
There are two ways to look at this - the pg style do something people want (such as play Starcraft well) and a more physicist viewpoint of decreasing amount of energy needed to achieve a given outcome. (Yeah that definition needs some work but it is intuitively measurable)
Anyway, if robots do all the stuff that is physicist-style Like farming or manufacture and humans then sit around doing arts and crafts, that's great for humans - as long as there is some means of distributing the wealth (energy transformed into goods?) - and preferably a fair means of doing so
We could just hand out food, or give everyone a "job" - but correcting the compensation when the job is not actually productive is hard. We are going to go into a world where economics will have to catch up.
A job is essentially an overloaded concept - it does two things, distributes wealth and is an actual means of wealth creation. Split the two and we are in uncharted waters, but splitting the two we are.
The guy playing StarCraft makes money. He then uses said money to buy food from guy who owns the crops, just like today. Its no different than how soccer players play for people for money. What is the complexity here? Why do you think we will need to figure out means of "distribution"?
So you are saying that the "wealth" of the changes in farming is produced by say 5% of the population, and they are the only ones who are really needed. The rest of us get to play a game where we guess the total wealth of the world (ie the food) and assign money to it. Then we split that money somehow (playing starcraft) and give some of it back to the farmers.
I suppose I am now taking econ 101.
I would however suggest that the automation revolution has not finished - the mechanisation revolution may be slowing but software is barely started.
The problem is that capitalism, which aligns your job/business with your income, breaks down at that point. If there is no job for you to do, then under this system you'll starve. Will we let 90% of the population starve just to preserve capitalism? That's not exactly sustainable.
The reality is that capitalism is not perfect, but it's the best we've come up with so far as a species. Once we hit the point where it stops working we'll have to re-imagine a whole lot of concepts.
There are many ways of sharing the wealth - for example I benefit from road building schemes even if I do not recieve direct payments.
Michalangelo as compared to a Neanderthal is an interesting idea - but reverse it - although michaleangelo presumably thought he had to work hard, if he had lived a life of same utility as a Neanderthal he could have done so on an hours work a week. It's just that he liked clothes and houses and wine. So I agree that in the robot future the effort needed to live like you or I will be small - but it won't pay for that holiday to MarsThis is highly unrealistic.
1) We are a very long way from having robots able to do most human jobs. 2) There will always be scarce resources. Even if you could 3D print houses for pennies, land, access to desirable events and people, etc will be scarce, coveted, and distributed to the highest bidder.
Let's talk about policies that work well in our actual, current world.
Inflation occurs when you add to the money supply more than you add to the economy. The California gold rush caused inflation. Countries with hyperinflation have governments that are printing money at incredible rates.
That's completely orthogonal to minimum wage. If you say I must have a $1000/hr job, it's in current dollars. Even if my employer wanted to pay me more, he can't -- he doesn't have the money to! Even if everyone wanted to switch over to doing that, they couldn't; there isn't enough money in the system! If everyone woke up tomorrow and agreed that a dollar was worth 1000x less, they'd all be 1000x poorer and nobody could afford anything.
No, the minimum wage doesn't change the value of a dollar. It just changes who's allowed to earn one.
You think a minimum wage increase will increase the velocity of money, which will cause inflation, which is a good thing.
That's the argument? Is that argument . . . original?
http://www.forbes.com/sites/timworstall/2013/02/25/overestim...
I did not say anything about the benefits of increasing minimum wage. In general it is known that the absence of minimum wage creates unsustainable imbalances of income society-wide. However, I don't know the US economy well enough for an informed opinion. Your current imbalance of income is huge, but that's only one data point.
You don't seem to consider elasticity. Basically, the main argument of the proponents of a higher minimum wage is that the hiring capacity is elastic enough that a raise in minimal wage's benefits far outweigh the resulting loss of jobs.
Saying that raising the minimal wage to 10$ show the same problems than raising it to 1000$ is wrong in that it considers that, at best, the elasticity of the hiring capacity equals 1. However, we can expect it to be false if we consider that the minimal wage has, in effect, went down in the recent years and that it did not result in a hiring frenzy.
For instance, the hamburger-making machine will replace teenagers who need a job at McDonald's. [1] Why wouldn't an employer just purchase a machine that will reduce costs, create a consistent product, and not call in sick if it can do so at an equivalent or lower cost than an unskilled teen who would be required to earn $10 or $12 an hour?
[1]: http://www.gizmag.com/hamburger-machine/25159/
EDIT: 5.2% of US workers earn at or below the minimum wage, 50% of those are under 25: http://www.bls.gov/cps/minwage2011.htm
If anything raising the minimum wage a bit should spur a lot of automation industries, and those same teenagers would be more likely to get an entry level job there, instead of at a menial job.
Besides, our automated solutions would still deliver higher-than-before prices, because if automation was cheaper, then low-skilled jobs would have been automated away without government's legal help.
It's a bad thing if you pay the bills by making hamburgers.
Just because corporations are making profits does not necessarily mean a significant number of people making minimum wage won't be fired when the minimum wage is raised. It's not like you have managers sitting around saying, "Well, we're making money... so we can afford to pay a worker $9/hour even though their output is only worth $8/hour." If it does not make economic sense to retain a worker, a company will fire that worker.
This means that the share of wealth going to wage earners and working stiffs is dropping - but is not being captured by company profits.
Where is it going? To self employed dividend earners - basically there are more one person bands now, freelancers etc. Some will be tax efficient schemes for bankers, but most are, well, us on HN.
I cannot find the link - will see in the morning.
I'd be interested to see your link. I was under the impression that most growth has been captured by larger corporations rather than free-lancers, and if they refer to 'self-employed dividend earners' that could easily be people collecting dividends and capital gains on stock. But that's all speculation -- hit me up with the link if you get a chance.
FTFY. I don't normally do this, but since you are relying on classic straw man for your argument, I thought I might as well make it obvious that your whole argument is suspect logically.
No, but I'm sure they like them better than not doing anything, since they have the choice to not do anything right now. If the minimum wage is raised above what they are capable of producing in value, they will no longer have the choice at all.
If someone would pay to have those things done, then that means they value it. They have value. The crappy thing is that the minimum wage prevents people from matching the value in those tasks with someone willing to tolerate that drudgery for the reward. Government knows best, as usual.
Therefore, the theory that raising the minimum wage is good for the economy is incomplete at best.
That is, what are the "known, obvious" downsides to raising the minimum wage, so that we can know when the costs start to exceed its benefits, and/or I can tell that that $1000 min wage might be stupid but not, say, a $12 one?
This is what bothers me about the debate: people confuse a strawman with a reductio ad absurdum. Sure, no one advocates a $1000/hour minimum wage, but the claims used to support a $12 would also apply to $1000. So if you find them insufficient in the latter case, so should you in the former.
For example, if you believe $12/hour min wage would "get more money in heavy-MPC[1] folks' pockets" in some helpful way, then you should also believe a $1000/hour min wage would "get more money in heavy-MPC-folks' pockets".
[1] MPC = marginal propensity to consume i.e. fraction of any new money you spend on consumption goods rather than saving
I disagree with this statement. It may be true that _some_ of the claims used to support a $12 wage would apply to a $1,000 wage. Surely you won't take the position that this is true of _all_ possible claims.
The following claims I post are examples of counter-claims. I haven't thought these positions through entirely, but they refute the reductio ad absurdum argument that $1,000/hour is as reasonable as $12/hour:
* I make a claim that most minimum wage jobs produce more than $9/hour of productivity to their employer. Assuming this is the case, we can raise the minimum wage to $9/hour without severely impacting the number of jobs currently available. This claim becomes less true the higher the minimum wage goes, and I certainly wouldn't support it at $1,000/hour.
* I make a claim that the job-losses caused by raising the minimum wage to $9/hour are offset by the job-gains caused by people scaling back from 2 jobs to 1 job). This is certainly not possible at $1,000/hour.
I think your reductio ad absurdum in this case is indeed absurd, unless you are using it to invalidate _specific_ claims (i.e. refuting the increase MPC claim)
The most typical one is, "Raising the minimum wage, because it is the law, will mean that employees who previously made $x will make the new wage $y [rather than just be laid off or new jobs not created in anticipation of having to pay $y in the future]." It's clear that this claim -- existing in the economic models in the minds of the typical proponent, is too strong, and thus false. It is thus very appropriate to point out it's too strong by picking an arbitrarily high value for $y and showing that the economy "just doesn't work like that" -- that no law can make someone worth hiring at $y, so the typical need-based ("living wage") argument is wholly irrelevant, much to the frustration of those of us trying to have a serious exchange on the issue.
The implicit model that you gave -- in which the typical min wage worker is underpaid relative to the (appropriately discounted) marginal revenue they produce would indeed imply that raising it will not (typically) mean job loss (or forgone job creation i.e. "outsourcing" work to a new hire).
It's also an extremely unrealistic model. If it were true, that would mean any firm can steal the profits of other firms by bidding up worker income. That they don't, would imply that competition for low-skill labor is weaker than for other labor, when all evidence indicates this is the opposite of the truth.
So yes, the arguments raised by responses to this reductio reveal the weakness of the case for raising the minimum wage. I'd call that a fruitful point, not a strawman.
Generalize further than that at your own risk.
The employer, unable to continue their advantageous position of paying $X/hour (it being illegal), but finding the job still worth retaining (it generating more than $(X+1)/hour) retains the employee.
The employee's salary goes from $X/hour to $(X+1)/hour.
Or did I totally misunderstand your question?
Besides, who is to say what that productivity to the employer is?
If I start a grocery business and hire you to work the cash register - it's pretty easy for you to see $5k/day come through the drawer and think, "I'm responsible for $5k/day."
In reality, though, your contribution is minor compared to the costs of rent, paying for business licenses, paying taxes, stocking inventory, paying for inventory, paying for advertising, and managing the other employees of the business.
Your "productivity" is actually what you negotiate for your salary. My productivity as the business owner is what's left after all my costs including your salary.
No one, ever. Maybe, on a technicality, the founders of 501(c)(3)s. I didn't use the word profit.
> Besides, who is to say what that productivity to the employer is?
The employer is to say the productivity of the employee. They won't do this explicitly, and it's very rarely a value that could be directly calculable.
This could be a case where I'm not using the best possible term. When I say the "productivity to an employer" of an employee, I'm actually talking about the value to the employer (http://en.wikipedia.org/wiki/Value_(economics)).
One way to answer the question of what the productivity of an employee is would be to ask this question:
"Were there only one laborer remaining unemployed, and they were free to name their salary, what is the maximum price that I would be willing to pay someone to perform this work?"
>If I start a grocery business and hire you to work the cash register - it's pretty easy for you to see $5k/day come through the drawer and think, "I'm responsible for $5k/day."
See above. All of this is from the employer's perspective. It doesn't matter what the employee thinks their "worth" is; what matters is what value the employer gains from the relationship.
> Your "productivity" is actually what you negotiate for your salary. My productivity as the business owner is what's left after all my costs including your salary.
This actually hits at my key point. Your "productivity" is actually your VALUE. What you negotiate for your salary is your PRICE (http://en.wikipedia.org/wiki/Price). I argue that these two are not necessarily coupled. Further, I suspect in the current U.S. economy at the low-income end of the job market these _are not_ coupled.
EDIT: Changed the final sentence from "I argue...that I suspect" to simply "I suspect...".
The government should set the price of my airline ticket, the price of milk at the grocery store, my salary, the salaries of professional basketball players, the prices that business use between each other, etc.?
Let me just truly get a full view of your philosophy and what kind of zero Liberty world you would have us all live in.
The world ain't black and white and I didn't say the government should be responsible for all negotiations.
At the lower end, the people who are stuck on minimum wage, the people who cannot improve themselves, these people need some protection. Yes, there are humans who are not good at looking out for their own long term interests or even their short term interests, lots of them. Looking out for them, protecting them from getting into (for instance) unfair contracts is one very useful government function. One could consider very low wages to be an unfair contract, pretty much by definition.
So what's the cutoff for the "weakest in society"? Do you have a percentage of the population that we're obligated to care for? Should these people too helpless/clueless to ask for a competitive wage be allowed to drive cars? Should they be allowed to vote when they can't really perform the most basic of tasks in society?
I didn't say the government should be responsible for all negotiations
So where is the cutoff and how do we prevent it from creeping up? Food stamp use continues to rise because apparently larger and larger segments of the population cannot earn enough money for food. When does the continued increase of helplessness level off?
the people who cannot improve themselves
Cannot or will not? What incentive is there for people to get an education, to work hard, to improve their lot in life, to learn better ways to live, to learn how to negotiate for their worth at a job, etc. if the government tries to take over care of so many aspects.
By seeking to protect people, government creates a dependency and victimhood mentality in society.
Look, I'm for helping the helpless in our society. What I'm not for are absolute statements like your next one that are guaranteed to lead to an increase in helplessness.
One could consider very low wages to be an unfair contract, pretty much by definition.
If the wage earner is free to go elsewhere to negotiate the fee for his time then it is not unfair by definition.
I was asking about example when employee's gain (from increasing minimum wage) would be more reliable and would not depend on chance so much.
Gambler has a chance to win, but gambling is not a good way to get wealthier.
The key assumption you've made that I disagree with is this: "why would the worker keep working for that employer for $X/hour in the first place?". It seems to me that this assumption boils down to an underlying assumption that the labor market is an efficient market.
In another comment elsewhere in this thread sergiosgc makes a statement that I think is relevant here: "You wrongly assume the job market is a perfect market. It's not; there are barriers to entry, barriers to exit and lots of asymmetric negotiation positions."
My argument (and I Am Not An Economist) is that the COST of labor and the VALUE of labor (from the employer's perspective) are not necessarily equal.
A quick hyperbolic example of a labor-rich job market that demonstrates this difference: * Your labor market has 1,000,000 people * You are offering the only job in the labor market. For every hour the lone employee works the job will generate $500 of additional revenue for your company. * There is no minimum wage, and your goal is to minimize your costs while maximizing your revenue.
What is the price you pay your employees under these conditions? It's not $500/hour. It's probably only room and board. If we introduce a minimum-wage of $5/hour, what is the price you pay now? If we raise the minimum-wage to $10/hour, what is the price you pay now? If we raise the minimum-wage to $100/hour? $1,000/hour?
I admit that this was an extraordinarily hyperbolic example, but I think the current U.S. job market is a less-extreme example of this.
1) Based on anecdotal evidence (that I'm too lazy to look up current estimates of the number of people not participating in the U.S. workforce), the current job market around the country currently favors employers. Many people are fervently searching for jobs which drives down the PRICE of labor. This doesn't change the VALUE of any particular job for the employer.
2) The median U.S. income is down over the last several years (http://en.wikipedia.org/wiki/Household_income_in_the_United_...), while U.S. corporate profits are hitting record highs (https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease...). This is a pretty strong indicator that the PRICE of labor and the VALUE of labor are disconnected.
Finally, I refer you to Wikipedia where there is a rather good summary of current economic thinking on the impact of minimum wage laws on unemployment (http://en.wikipedia.org/wiki/Minimum_wage). As far as I can tell from a brief summary, currently thinking by economists is relatively mixed.
However, whenever productivity-per-hour is much higher than wages (as it has been, on the median, and increasingly so, since the 1970s), we can afford to raise wages without trouble.
So the question is: what's the productivity of minimum-wage jobs? Also: if their productivity really is that low, shouldn't anyone unable to obtain a living wage when already in full-time work just be taken out of that job and subsidized by the state wholesale? I mean, doing otherwise has given us massive effective subsidies to Wal-Mart and other low-wage, low-productivity employers who are essentially fleecing the public of its hard-won antipoverty dollars.
Or it could turn out Wal-Mart employees actually do produce $10/hour of value, and the company was just being exploitative all along...
If Walmart isn't paying people what they feel they are worth then they're free to go elsewhere to redefine what their labor is worth.
just be taken out of that job and subsidized by the state wholesale
That completely eliminates the ability of some to find part time work to supplement their income. Maybe a mom without any real skills in the job market would like to work a few extra hours at an entry level job to bring home some spending money for herself and her family. Maybe a teenager would like to get some experience and earn some gas money while in high school.
By eliminating jobs through manipulating the minimum wage so thoughtlessly, you would destroy vital segments of the job market that serve a purpose.
This is Walmart, not silicon valley.
You don't like what we're paying? Starve, see if we care, we'll find someone who will work for half what we offered you and let us throw paint on him to boot.
These jobs aren't taken by people whose needs are taken care of and are just looking for a little 'pocket money' or some gas so they can take the old car around and see their buddies on weekends.
Even if they like what Walmart is paying, their workers are still on food stamps.
The rest of us, through taxes, are already subsidising the big corps and their minimum wage employees. We do this because people shouldn't have to starve in the modern world, but where people are employed we shouldn't need to.
By forcing a raise in the minimum wage we stop the employer from taking from our collective pocket to support their broken business model.
Worker X may be producing value of $10X or $20X per hour, but corporation Y is pocketing the difference, and can do so because there is an oversupply of workers.
If I work twenty years and invest all my spare money to build a fabulous machine that produces intricate and expensive electronics but the one thing I don't do is create a way to turn it on and off automatically. I hire a person to just sit there and push the button. This person needs almost no skills whatsoever.
Is this person really vital to producing my $100X per hour? In a way, yes. But then again, since this person's skills are non-existent - this person can be replaced by anyone else who can push a button.
I invested in the invention and the creation of the machine. I took the risk to build the machine. I spent the twenty years of my life dedicated to it. I created the environment where any half sentient being could push the button to get the thing going. Everything I did created the $100X per hour.
The person pushing the button doesn't deserve $100X per hour. The person pushing the button deserves the wages for someone with the skills to push a button.
If you're not going to pay a living wage, what makes you think you DESERVE to have a worker there pushing the button?
"living wages" are crap. They completely ignore the fact that some workers are young or spousal dependents looking for that part-time job to earn a little money.
On top of that there is no such thing as a "living wage" that can be defined. If I'm living alone, young, healthy, and not real picky about my lifestyle -- a living wage can be $1000 per month. If I'm married with 5 kids and in need of constant medical care, a living wage is 6X higher.
Yet you're implying that I as an employer with my available job for someone to push a friggin' button has to worry about all that or at very least accept someone's opinion on the lowest common denominator living wage?
At that point, I say screw the high school kid or part-time mom looking to earn a little extra money pushing the button. I automate the whole damned thing and eliminate the job. That, my friend, is called the "unintended consequence" of your heavy handed approach of controlling every little perceived injustice.
So I'm right, you do consider this a moral issue, you think that the free market is the be-all and end-all of morality and that people only 'deserve' what you deign to hand to them.
"Yet you're implying that I as an employer with my available job for someone to push a friggin' button has to worry about all that or at very least accept someone's opinion on the lowest common denominator living wage?"
You're the one that came up with the dumb button example.
Sounds like you don't really need someone to press the button anyway. If it was vital to your operations you'd be prepared to pay decently as it's not you've made a saving. Good for you.
"At that point, I say screw the high school kid or part-time mom looking to earn a little extra money pushing the button. I automate the whole damned thing and eliminate the job. That, my friend, is called the "unintended consequence" of your heavy handed approach of controlling every little perceived injustice."
If that is the price paid to get hundreds of other people off the government teat and stop subsidising the labour needs of you and your company, awesome. That high school kid misses out but his dad, who does more than press a button and generates more than ten times his pay packet for the company he labours for, gets to put food on the table.
This is not an unintended consequence at all.
I didn't bring morals into this, you'll notice the no-minimum-wage guy is the one that started bringing 'deserves' into this. I was talking about getting people off government support by making employers pay enough for workers to live on.
"If you want to inject morals, price-fixing and wage-fixing are especially miserable ways to do it."
Seems to work OK in a bunch of places.
"The free market responds, often in ways you don't anticipate, and your social experiment goes weirdly sideways."
The free market is a myth.
Most economists disagree vehemently with you.
Also, what do economists know? Where were they in the buildup to the '08 crash? Nowhere to be seen, that's where.
http://nicedeb.wordpress.com/2008/09/21/the-white-house-warn...
http://www.youtube.com/watch?v=cMnSp4qEXNM
Economists were warning of the housing bubble from the beginning of the decade. Republicans were warning of the problems with fannie/freddie from as early as 2002.
How much do I value having clean water? A lot. I'd pay $100 a gallon if I had to do so to survive.
But I'm happily paying a tiny fraction of that and "pocketing the difference". That's because my demand is easily met by the supply.
Am I wronging the water company? Of course not. If they want to make more, they have to offer me something I can't get from someone else for cheaper.
Not to mention the fact that "pocketing the difference" in both cases actually means "spending the difference on something else."
EDIT:
I'm not allowed to reply to the next reply to me, but there is a difference between treating humans as a commodity and treating their labor as a commodity.
I have a right not to be enslaved. I do not have a right to be paid for my labor AT ALL, much less to be paid a certain amount. I have to compete to sell my labor to the highest bidder, just as though I were selling widgets.
You can usually hit 'link' and it'll let you reply in there, not sure if that's always the case.
"I do not have a right to be paid for my labor AT ALL, much less to be paid a certain amount. I have to compete to sell my labor to the highest bidder, just as though I were selling widgets."
You talk about these things as if they were written in stone somewhere. When you start to look at this in terms of absolute rights you lose sight of the point to some extent - what outcome do we want here? How can this best be achieved? What are the downsides?
The people who are stuck on minimum wage are the least able to compete. They have no skills and likely some difficulty acquiring them, they probably lack the ability to negotiate, they don't have the choice of not taking work because the alternative is starvation. The logical conclusion for them, were a truly free and unregulated market for labour ever to appear, would be contracting their lives away for a roof and some food, working insane hours in hazardous conditions for little to nothing.
Make no mistake here, a proportion of the population cannot better themselves.
Over the last hundred or so years we've added a huge framework of workers rights to our society to stop this very situation. A minimum wage is part of this, and raising it may well help large numbers of people.
However society is built by and for human beings, not machines or economic ideals. Where water is a commodity, treating humans as one must have limits, surely?
Do colleges have a "broken business model", too?
You could make the claim that it's in our collective interest to keep WalMart profitable, but it would be something of a harder sell. IMHO.
Your theory that by democratically choosing to subsidize something, the government is creating an obligation on the part of private business to make the subsidy unnecessary is bizarre.
Who said anything about evil? I merely think that the labour market does not resemble anything like a free market (nor can it or should it), and at the moment employers are profiting handsomely while depending on the public purse.
"Your theory that by democratically choosing to subsidize something, the government is creating an obligation on the part of private business to make the subsidy unnecessary is bizarre."
I'm not sure that's my theory at all. My 'theory' is that income top-ups via food stamps, tax credits, whatever, where someone is employed, form an unofficial subsidy to employers, and one that I think we should be trying to find ways to eliminate. If one of the ways we choose to do that is by pushing more responsibility onto the employer, then I'm not sure I see a problem.
Spell that out for me. When I hire Bob at $8/hour, what difference does it make to me whether the government is giving him a tax credit for being poor, or owning a home, or buying an electric car?
How am I being "subsidized"?
There is your subsidy.
What you're saying is perhaps rhetorically appealing, but it doesn't make sense.
Because I'm sick of doing it for you, when I have nothing to do with your business.
In the end, masterminds planning all our lives and trying to create utopia on earth have never done better than following simpler rules of law and letting people deal with each other in a free market capitalistic system.
The market is illiquid, for example, because of exit/entry costs associated with relocation, such as selling your home at underwater values. This is one example of the factors I mentioned. Others abound.
The utopia/mastermind argument falls flat when you consider whether the US model is ahead of social-democrat states such as Denmark or Sweden. A cursory look at stats such as infant mortality rates or % of population below the poverty line strongly suggests the "mastermind" model is better.
If we're doing a comparison, we need to compare across other utopian states. You need to throw in Greece, Italy, Portugal, the Soviet Union, North Korea, etc. You don't just get to cherry pick a couple of the few reasonable successes on your side of the ledger.
Furthermore, you have to realize that there's a memetic/genetic difference in Denmark vs the US. We can no more adopt the rules and policies of Denmark here than the US can impose its style of democracy on Afghanistan.
Finally, I would argue that countries like Denmark receive an amazing amount of benefit from other countries like the United States which provide most of the defense and technological advances that give them a cozy safe environment in which they get to spend most of their money on social programs.
Let's back our conversation with numbers, shall we? Infant mortality rates and percent of population below the poverty line.
Infant mortality rates (deaths by 1000 live births)[1,4]: United States 6.81, Greece 4.65, Italy 3.51, Portugal 4.45, EU 4.49
% of population below poverty line [2,3]: United States 15.1%, Greece 20%, Portugal 18%, Italy 18,2%
So, I think we can close the discussion on infant mortality rates. It'd be a stretch proving that the US is better than Greece with those numbers.
As for the poverty threshold, I could argue that the numbers are within the same order of magnitude, but I don't really have to. Some statistics gimmicks are occurring here: The US poverty line is defined at an annual income of around $11k, for a median national income of around $50k. The EU defines the poverty line at percentile 40% of national income. Easily any of the European countries has one order of magnitude less poor people than the US.
You brought up indicators on innovation and defence spending. As for defence, it's an endless discussion, where I guarantee you, many people in the world would wave away US military intervention outside of its own borders in a heartbeat. Innovation is a more interesting topic, since it's often touted as a bastion of the US. Here, the sheer scale of the US is misleading. Try to compare with aggregates of the same dimension, like the EU: http://ec.europa.eu/enterprise/policies/innovation/files/ius... You'll find that the US/Japan do lead, but nowhere can they be defined as the world providers of R&D, from where other countries benefit.
[1] http://en.wikipedia.org/wiki/List_of_countries_by_infant_mor... [2] http://en.wikipedia.org/wiki/List_of_countries_by_percentage... [3] http://www.inequalitywatch.eu/spip.php?article99 [4] http://www.indexmundi.com/european_union/infant_mortality_ra...
http://www.cdc.gov/nchs/data/databriefs/db09.htm#arethere
http://www.census.gov/compendia/statab/2012/tables/12s0080.p...
Had America not been founded on slavery and a history of inequality afterwards our numbers would be much closer to the EU stats.
That is ludicrously utopian thinking. Reality does not conform to theory, there is always some gap between productivity and wages. Oh hell, it's been a growing gap, for the past 40 years.
By eliminating jobs through manipulating the minimum wage so thoughtlessly, you would destroy vital segments of the job market that serve a purpose.
No, I ensure that jobs go to people who actually need them. Besides, teenagers earning spending money can shovel snow off the books, or any number of other small jobs that they already do without recourse to an official employment contract.
And if this gap, as you call it, is too high for the American workforce in general, for millions and millions of people, it would mean there is tremendous money to be made by companies willing to pay higher and so capture a portion of this surplus.
The real reason that Americans are so exploited economically is because they lack the ability to reason about economics and are easily fooled by fallacious claims that benefit the most powerful at their own expense. The minimum wage is just a minor example among countless schemes designed to make the poor, working, middle, and even upper middle classes feel they are being aided by government policies while they are actually being copiously robbed in broad daylight.
Your assumption is that it's immoral for an employer to make a high margin on labor. My assumption is that it's foolish for an employer not to make a high margin.
My employer had better be getting tens of thousands more out of my efforts than what they pay me, or they shouldn't have hired me. That margin will be in flux month to month while my salary is constant, so there had better be some wiggle room or I'll be fired.
It's not immoral to sell a Star Wars action figure for 10x what you bought it for, is it? Why is labor different?
http://en.wikipedia.org/wiki/List_of_minimum_wages_in_Canada
You're not much more (in real terms) productive than a bored teenager in 2013 than you were in 1993, but the most productive people in 2013 may be an order of magnitude more productive than the most productive people in 1993.
(Which is why unionization of a lot of low-level white-collar workers would really help, and would probably save us a lot of stupid talk on the subject of "My oh my, whatever should the government do!" Strong organized labor is how you keep government out of the labor market, at least if you don't want the working class to starve.)
What will get us somewhere is allowing people to realize that each of us is responsible for his or her own advancement in life. Sitting on the couch watching sports and reality TV every afternoon and evening has consequences. Majoring in bullshit ethnic and cultural studies in college has consequences.
Measures like the minimum wage, welfare, the Community Reinvestment Act, and food stamps mask the relationship between real world actions and their economic consequences. This misalignment causes markets to warp more and more over time. To compensate, new mastermind policies are created to mask those effects. Eventually the economic dislocation becomes so bad that the system fails. This is what happened to Greece. This is what's happening in the US wrt the Debt.
So where is the line where it is no longer ridiculous, then? $999? $500? $10?
Labour is an input cost of production; when the input prices rise, so do output prices to compensate.
I'd vote for no minimum wage but with a minimum income subsidized by the government.