Minimum wage compromise

[Nathyn]

@Trianglechoke7

The best solution to minimum wage is for there not to be one, however, I believe I have a decent compromise that is better than what both parties advocate now and at the same time will be able to pass through the pro-communist road blocks in congress.

What if minimum wage was completely eliminated, but the government, not the employer, provided you with an extra wage to compensate for your lack of earnings. For example, let’s say that minimum wage proponents believe minimum wage should be $7.50 per hour. If you make $4/hour then the government will give you an additional $3.50/hour that you work.

Under this plan, there will be no welfare for not working, as you know have very very little excuse not to work because certainly someone would at least pay you $0.10/ hour or something like that. At least this way you will be producing something for the economy instead of getting wages for absolutely nothing.

Perfect solution, no, but it is better than what we do now?

I support the negative income tax, which seems similar to your proposal.

Until most people recognize that employers can’t always force the poorest people’s wages down to subsistence levels, there will never be significant reform to the minimum wage.

@nirgrahamUK

how about we have a minimum wage law on the books. but the wage is set below the effective rate.

that way we can point to the law, say we’d enforce it. then never have to.

That’s actually worse than NO minimum wage, because a very low minimum wage can act as a psychological target which causes all firms to set the wage even lower than what the natural rate would be.

[Niccolo]

@newson

totally agree with stranger. if your bottom-end workers cost nothing (1cent for example), why wouldn’t the economy revert to a third-world model? that is, who would pay for a fork-lift when it would now be almost costless to employ hordes of drones to lift heavy objects (pyramids, anyone?). fields could be profitably (from the company perspective) tilled by human labour, but the wealth destruction would be wrought on society at large, and eventually impoverish even businesses who could profit in the short-run from the free grunt.

I doubt you’d even be able to find one third of the productivity using human labour as opposed to human technology.

That would sort of defeat the purpose of technology, eh?

[newson]

@Niccolò

@newson

totally agree with stranger. if your bottom-end workers cost nothing (1cent for example), why wouldn’t the economy revert to a third-world model? that is, who would pay for a fork-lift when it would now be almost costless to employ hordes of drones to lift heavy objects (pyramids, anyone?). fields could be profitably (from the company perspective) tilled by human labour, but the wealth destruction would be wrought on society at large, and eventually impoverish even businesses who could profit in the short-run from the free grunt.

I doubt you’d even be able to find one third of the productivity using human labour as opposed to human technology.

That would sort of defeat the purpose of technology, eh?

precisely. but taken to the extreme case of 1c min wage, it would be far more profitable for companies to favour labour intensive modes of production, regardless of the disastrous outcome this would have to the economy at large over the long term. basically it see the capital stock wither. not to mention the enormous burden on the public purse, hence higher taxes, hence lower investment in capital etc etc.

[nirgrahamUK]

@Nathyn

That’s actually worse than NO minimum wage, because a very low minimum wage can act as a psychological target which causes all firms to set the wage even lower than what the natural rate would be.

as i said above, i was only joking, so i thought twice about responding to this critique of something I would not support.

However, perhaps there is a point worth making in all this?

this critique about natural rates and psychological targets seems to skirt over the marginal productivity aspect of how wages are determined. so lets say some portion of business managers who hire, experience this psychological effect you mention, and try to offer wages lower than marginal productivity. they will find there are shortages for their positions, or that staff leave before long. or else maybe there is in what you write a criticism of marginal productivity theory?

[pairunoyd]

Why fulfill the purpose of technology when you can hire a million slaves? Heck, if you hired 100 million people at 1 cent per hr and you made 2 cents per hour off their labor, you’d make 1 million dollars per hr. If you hire 33 million tractors the government isnt going to pay 99% of the cost as it would with humans.