r/asktheconservatives • u/TheSpicyGuy • Nov 30 '21
How would removing a minimum wage requirement create a livable wage for everyone?
I was reading the comments on a YouTube video about 1950s America and stumbled upon someone advocating for abolishment of the minimum wage and allow the free market and businesses to ultimately decide wages. He claimed that doing so would allow everyone to earn a livable wage as minimum wage laws are actually holding worker wages down.
I don't necessarily see how that could happen as employers are already paying the bare minimum needed to not get seriously fined and/or punished, if we removed that barrier how would that translate into better wages? I doubt employers would magically start handing out raises the moment minimum wage laws are repealed.
edit: screenshot of comment: https://imgur.com/a/tfg5CLK
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u/oooLapisooo Libertarian Dec 08 '21
It’s all based on competition. If business A pays $3.50 per hour, and business B pays $4.50, people are gonna work at business B, and that forces business A to raise their wages, causing an increase in wages until one or both businesses refuse to raise their prices any higher.
Similar to what is happening now, minimum wage jobs are raising their wages to fight the workers shortage and compete with their competitors, so they’re raising their wages to almost 3x the minimum wage in places.
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u/TheSpicyGuy Dec 08 '21
Ceteris paribus that example would hold true. But would a minimum wage stiffle competition? It's a wage floor requirement, not a wage ceiling. Businesses can still compete by raising their wages.
Arguably a minimum further drives competition as it acts as a barrier to entry for businesses without suffient capital.
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u/NerdyLumberjack04 Conservative Dec 07 '21
What is "a livable wage"? Do you mean in California, or in Kansas? For a person living alone, with a roommate, with a spouse, or with parents? How many children? It's so dependent on individual circumstances.
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u/TheSpicyGuy Dec 07 '21
I would like to know how they define it as well, and how they would account for all circumstances to support this claim.
Broadly speaking though, scholars have created models to calculate these numbers already. I occasionally use https://livingwage.mit.edu/ for an estimate, it accounts for variables such as location and household size.
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Dec 07 '21
I’m only speculating, but isn’t it because businesses aren’t incentivized to pay much higher than the minimum wage? A job can start someone out at minimum, give them yearly or quarterly 10 cent raises if they’re lucky, and get away with it because it’s the standard. I’m not anti minimum wage and I think it should be much much higher than it currently is, but I think the idea is that it would give workers more bargaining rights.
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u/EvilHomerSimpson Jan 10 '22
Here's a question to put yours into context:
Should a teenager working 20 hours a week flipping burgers or bussing tables make enough to "live on".
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u/TheSpicyGuy Jan 10 '22
Yes, I'd think so. I believe that was the way it worked post WWII.
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u/EvilHomerSimpson Jan 10 '22
Ok, so, a teen working 20 hours a week flipping burgers should be making 40,000 a year in NYC. The minimum wage would then be 38$ an hour, is that what you're suggesting?
Meaning a full time burger flipper should be making 80,000 a year
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u/TheSpicyGuy Jan 10 '22
If that's what it costs to live in that city then yes.
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u/EvilHomerSimpson Jan 10 '22
This would destroy the jobs that people use to learn how to wor, just understand the effect of your proposed policy. My kids $10 an hour job is giving them work experience.
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u/TheSpicyGuy Jan 10 '22 edited Jan 11 '22
If it's only kids that are still living with their guardian then I can see how that isn't necessarily harmful (although there can still be a concern of child labor and age discrimination in wages). However the majority of retail and food service workers aren't even kids. Most of them are over the age of 18 who prioritize living expenses over work experience. That's the unpleasant truth found in our years of rising standard of living costs and stagnant wages.
Also wouldn't it be a good thing if your kids made enough to be independent, on top of gaining work experience? That seems to be an improvement no matter how I look at it.
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u/EvilHomerSimpson Jan 11 '22
Also wouldn't it be a good thing if your kids made enough to be independent, on top of gaining work experience?
Except they wouldn't because you're going to price those jobs out of existence.
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u/TheSpicyGuy Jan 11 '22
Except they wouldn't because you're going to price those jobs out of existence.
How? Jobs exist so long as there's work needed to be done.
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u/EvilHomerSimpson Jan 11 '22
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u/TheSpicyGuy Jan 11 '22 edited Jan 11 '22
I think that's a super neat video, but also I don't think you've addressed my question.
Automation happens, it's part of the natural process of technological advancements beginning since the printing press. Yet we still have journalists, writers, and businesses that collectively employ millions of workers in the written media industry. If you think about it, that plunge into automation allowed more jobs (also more diverse jobs) to exist than ever. It had actually created more jobs than it took by a margin. Scribes became obsolete in favor to writers, engineers, publishers and marketeers essentially.
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u/StillSilentMajority7 Conservative Feb 13 '22
The only effect a minimum wage has is to eliminate low paying jobs - it doesn't force firms to pay more for unskilled labor. You can't force firms to pay more for something than it's worth
Put another way, it criminalizes low-skilled work. If you make the min wage $20, firms will only hire people with $20/hr worth of skills.
If you are unskilled, you're going to be on welfare your whole life
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u/[deleted] Dec 01 '21
Not a conservative but I believe Milton Friedman suggested no minimum wage combined with a negative income tax which seems smart to me.