Let’s say we’re debating a $10 Min wage and there’s a group of people who need the equivalent of $15 to make ends meet, and there’s a gov’t program to help them.
So, those without jobs get $15 from society and those with MW jobs get $5. Your thought is to get those without jobs, some jobs, then society will pay less for them. Am I getting it right so far?
So, you drop the Min Wage to $5, a nice number of the previously unemployed get jobs and society pays only $10 for them, big savings. Unfortunately, a bunch of people who were being paid $10, are now being paid $5, and a bunch who were paid $12 (Min +2) are now being paid $7, and a bunch who were paid $15 are now paid $10 or $12, and need society to help them out.
Like any pricing decision, it isn’t just a one way street. Demand fluctuates based on your price, and that has a non-linear effect on the total. At certain points raising price raises revenues, and at other points lowering price raises revenues.
Labor is not like other goods and services. Just ask a labor economist.
Please cite that increasing the minimum wage from $5.35 to $7.25 has caused more unemployment and few entry level jobs?
If the market clearing price of labor is $0.25/hour but you could achieve a $9 minimum wage with a 5% unemployment rate, why would you go for the market clearing price. Isn’t human welfare worth exercising some monopolistic power for?
You say things like your way hasn’t been tried before. What you advocate for was tried, it was HORRIBLE and should NEVER come back again. How can you advocate for something you know lead horrendous abuse?
Raising the minimum wage merely increases the amount of money you have when you are too poor to survive. The only solution that I can think of is to tie the compensation of the lowest paid worker at a company to the compensation of the Chief Executive Officer, or owner, or whoever the highest paid person in the company is. Which is completely unconstitutional, and impossible to implement.
As long as management views labor as a resource to be exploited, instead of a partner to help out, wages will be stagnant, benefits will be minimal or non-existent, and economic activity will wane. People cannot buy goods and services when they have no money. The biggest problem with capitalism is that all the money ends up in the hands of a few, and economic activity comes to a standstill. This is in part why governments try to redistribute wealth, so that they can keep the economy running.
Right now, the wealthy do not believe that they are part of the community. They feel no affiliation with the workers, and only care about getting the maximum productivity out of them. To me, this seems like running an assembly line into the ground by refusing to maintain it. American workers made astounding increases in productivity in the 1990’s, yet they saw practically nothing to show for it.
We could raise the minimum wage to 20 dollars and hour, and people would still be living in poverty, because rents, food, gas, and everything else would simply increase in price. Paying people who have been working for you for a few years 3 or 4 times what you would pay a new hire would be an effective way of providing incentives to produce and be a part of the team. What we are seeing instead is everyone getting the minimum wage, or close to it, and no one receiving the kind of compensation that allows for consumption of luxury items, and the hiring of gardeners, housekeepers, and other personal assistants, all of which provides additional velocity to the money going through the economy, and allows every dollar to go through several times.
The wealthy are becoming so tight-fisted that they are driving us broke.