There are people whose labor is worth $8/hr but not $11/hr. Raising the minimum wage will not result in "giving them a pile of cash", it will result in them no longer having a job.
There are people whose labor is worth $8/hr but not $11/hr.
You seem to think value and price are the same thing and both can be absolutely determined. Also it sounds weird to talk about people's labor as if they were potatoes, while you assert that minimum wage will result in them not having a job as if it's a nature law.
I'd try to reason with you, but it seems we're not in the same world anyway.
> I'd try to reason with you, but it seems we're not in the same world anyway.
Claiming that I'm too unreasonable to debate with won't win you any points.
> Also it sounds weird to talk about people's labor as if they were potatoes
It's not weird since it's something that has a market value. People are not their labor. Someone's labor can be bought and sold, and the availability and price of labor is subject to the same economic laws as potatoes.
Some potatoes are worth $0.60 but not $0.80, and if the price of potatoes were dictated to be $0.80, the $0.60 would go in the trash.
I don't want potatoes or people's labor to go in the trash.
>> I'd try to reason with you, but it seems we're not in the same world anyway.
> Claiming that I'm too unreasonable to debate with won't win you any points.
It did with me... Seriously, I think you misconstrued this statement as a personal attack, whereas IMHO its simply used to highlight the flaw in your logic: If we have a complex system where A implies B and B implies C and C implies D and so on which possibly goes back to A in subtle ways, but you're just saying "A implies B, B implies no A, hence this won't work, QED" you are assuming a very simplistic view of reality.
You cannot just stop at one step and draw a definite conclusion from that. As pointed out, the wage increase can be rolled over to a price increase for instance, instead of now having to fire everyone. I'm not saying that no loss of labor could occur, but definitely it's only one of many possibilities and the economy is a highly complex system with all kind of direct and indirect effects that are at play here.
All that said, I would actually argue for basic income than a minimum wage as it will completely eliminate the possibility of the labor loss resulting in a wage loss, but in absence of this, minimum wage seems still better than having an increasing amount of working poor.
Some have argued that skilled labor actually benefits the most from a minimum wage increase (can't find a citation offhand). This is caused by wage inflation as employers must increase compensation to retain workers.
I'm trying to understand your potato metaphor. The US government has a long history of setting a price floor beneath agricultural products.
Let me try it: Saying that my labor isn't worth $11/hr surely doesn't sound nice to me. But the intentions of saying that to me are making a huge difference. If you're just being mean, begrudging, racist or otherwise inhumane - offense is duly taken. But there can be a compassionate intention too. Denying that this intention could exist, leaves me believing the world is against me instead of actively acquiring working skill.
Coming from the other side of $8/hr I can assure you that you'll had so much inhumanity coming at you, you will very likely recognize the true intentions.* Looking back, I cannot thank the moments of compassionate harshness enough and could almost get angry at those denying these moments exist. Instead I say to them: It's easy to wear those rose-colored glasses if you don't have to live with its repercussions.
* granted, this works well on a personal level, maybe not so well if it comes out as a political press release
It seems that you misunderstood me, probably my fault. It's not a question of humanity. Treating labor just like any other good is terribly naive. How economy works is much more complex since good salaries feed the demand while a huge mass of poor people near the level of societal exclusion will cause unrest and problems for everybody. See Venezuela, not so long ago one of the richest countries of the subcontinent. It's in the best interest of middle classes to have a decent social net, specially considering you never know what the future holds for yourself.
Funny how moralistic value enters into the discussion when it comes to pricing wages. When it comes to any other commodity, the standard is supposedly "whatever the market will bear".
It's not moralistic. It's "worth" in the sense that how much marginal revenue that person produces. If you have to pay someone to sell $9 worth of coffee an hour, they're not "worth" more than $9 an hour, regardless of morals.
Then the store should change their prices, or perhaps close. If everybody is paying the same overhead (like staffing all day when they make money only during peak hours) then competition will operate as normal, prices may change to reflect costs etc.
Staffing is more complicated than "how much they sold during their shift"?
Sure, they'll try and pass off the costs to their customers. But with a higher price, there will likely be less coffee sold and less employment regardless.
Yes, staffing is more complicated, but min-wage labor cost for a restaurant are a significant portion of the costs and profit margins are very thin [0]. Many won't be able to absorb a ~50% increase in labor cost.
All will have the same labor costs. Minimum wage has gone up before; there are still coffee shops.
Its easy to play 'dot-to-dot' with these things - higher cost means lower sales means people fired. OR more money in the working class pocket means more coffee purchases means more hiring. You can connect-the-dots lots of ways.
The truth is, some of everything happens, and then it settles down into something workable. Yes we'll pay more for our coffee, but we'll also have more money in our pockets. And so on.
Morality is always there, or should be. Picketty has shown that our understandings of the Market as anything conducive to a stable society were a fiction caused by recent history.
It will stimulate the economy to promote more jobs. "There are people whose labor is worth $8/hr but not $11/hr" is a non-sequitur because this fuzzy concept of "worth" varies in time & space. (For example, demand-push inflation will change the numbers.)
The money doesn't just vanish when you raise the minimum wage. People who make less than about $20/hour are going to be spending pretty close to 100% of any additional income they get. It's fair to suggest it might raise the price of goods and services. All real-world examples of minimum wage hikes I've seen show real wages going up even though inflation does eat some of the gain.
But as far as reducing the amount of goods and services available, that isn't really backed up by anything. It's crazy that we're still relearning the lesson that we learned in the first half of the twentieth century, which is that when you raise the wage floor, consumer spending rises, which drives economic growth.
To have been in a country where there are "high" minimum wages, the low value added jobs are the first going away because they're too expensive for what they are.
The opportunity cost of a service is the limit for which one would be expected to pay for it. If forced to pay $1,000,000 to have someone clean your bathroom, you'd end up cleaning it yourself.
Grocery stores have something like a 1-2% margin, and people are often price-sensitive when shopping for food. So they'd have trouble raising prices. Probably they'd try to depend on self-checkout machines more. I imagine fast food companies like Taco Bell would lose sales.
High-margin software companies wouldn't care about the cost of their janitors, like you suggest.
> High-margin software companies wouldn't care about the cost of their janitors, like you suggest.
The CEO might not, but an enterprising facilities manager would certainly try to cut expenses by replacing the pleb who vacuums the hallway with a plus-size Roomba.
