badgenome said:
And how much money it takes for a wage to be livable it determined by the economy. Whatever moderate impact a small raise might have on the life of someone who makes minimum wage will be offset by the rise in the cost of living that results from the rise of the cost of labor. You can't simply legislate everyone out of wage slavery.
No one suggested that a company will be absolutely unable to employ as many people. Although some are bound to be unable to do so, it doesn't really matter which of the reasons you listed (or didn't list) are at play. It's merely a fact of life that unemployment will go up and it will be even harder for younger, less experienced workers to find jobs than it already is, and crying about greed isn't going to change this simple fact.
You also destroy earning power by making things cost more, so how much of an economic boost there really is is, at the very least, highly debatable. Especially since most people already make more than minimum wage, so they won't be getting a raise even as you're now driving up the cost of living.
And who decides that $10/hour or whatever is "optimal"? As always, the market decides this stuff way better than politicians, who are always hellbent on trying to fit a round peg into a square hole for political gain and/or to fit their ignorant worldviews. |
You seem to think strong economy = higher prices. It doesn't have to work that way.
In a lot of cases, the limiting factor isn't supply, but demand. If more people have more disposable income, it allows them to buy more things, which increases demand for those things, which in many cases simply means more profit due to more sales for the company that makes those things. And if demand increases, companies can either increase supply or increase price. Increasing price will of course price out the very people that were able to afford it anyway, so increasing supply enables them to meet the demand and make the same profit. And to increase supply, they need to hire more people.
As for the idea that the market is a better way to determine this stuff - don't make me laugh. You clearly don't comprehend economics even to a mild degree if you think that the employment market is one that works well in that way. There is always more supply than demand in the employment market - you'll never have zero unemployment. As a result, companies are at the advantage, able to lower pay further and further. Since the difference between paying people just enough to survive and paying people less than enough to survive is zero as far as demand is concerned, and people being paid less need more hours to survive, the result is actually LESS employment.
The market is in no way a good method of controlling this sort of thing. Ever heard of the Prisoner's Dilemma? It applies in economics constantly - the optimal value isn't found, the nash equilibrium is found. And in most cases, unless you apply restrictions, the nash equilibrium is very different from the optimum. In the case of Prisoner's Dilemma, despite the fact that both prisoners cooperating is the optimal result, each prisoner gets a better result by defecting, and the result is one that is less optimal for both.
The government plays the role of the regulator. They provide ways to circumvent these sorts of problems. The minimum wage is one such control - in this case, a minimum wage set around the real optimum will provide the best net result for everybody, for multiple reasons.
Note that Australia has a minimum wage 50% higher than the one being discussed here. Unemployment in America is 7.6%, Australia's is 5.4%. Note that Australia also has much more generous unemployment benefits (which require you to continue looking for a job) that don't expire after a certain amount of time, so it's not because fewer people stay in the job market.
