The biggest problem with minimum wage is that it amounts to a half-assed universal basic income implementation, but one that is funded by a regressive tax (i.e. the poor you are, the more you pay).
The reason is straightforward - a higher minimum wage disproportionally affects goods and services produced by employees that get paid said wage, or close to it. These tend to be the cheaper products on the market, and so the poorer you are, the more such products are in your consumption budget. Obviously everyone has a substantial amount, so the tax is still spread around - but poor still end up paying proportionally more of it.
For another perspective at the same problem, consider what happens when the wage gets raised. Now your paycheck is higher - but so is the cost of your food, most likely, because the people producing it were also paid little, and are now paid slightly more. So the actual increase in purchasing power is less than the nominal dollar amount - and the difference is proportional to how many cheap (= produced by low-paid labor) products you consume. Whereas someone on the high middle class end of the spectrum will see some minor increases in restaurant bills and such, but it's a blip on the radar compared to their income (and their mortgage, education costs, car loan etc).
The obvious conclusion is that we should stop being half-assed about it, recognize that our existing arrangement, between min. wage and unemployment insurance, is already a kind of UBI, acknowledge that it means that we as a society are already okay with the moral argument behind UBI, and work on implementing it ASAP.
The minimum wage is there to prevent abuse of workers.
It's pretty obvious why when you look at the near slavery conditions that abused workers doing things like picking tomatos in Florida are subjected to. Shitty businessmen get away with nasty shit when workers lack protection.
The difference between today and 75 years ago is that we now import second class humans again who lack access to basic rights and import goods manufactured by peasants abroad.
My girlfriend, who worked for US Customs, has a story about the sugar industry here in South Florida. Sugar harvesting is done in the winter and the companies, for quality reasons, prefer to have the cane hand harvested. The companies would bring in island workers (legally) to work the three month harvest. The work was hard and by US standards, low paying. But per island standards, those three months brought in enough money for the harvester to not only not work for the remaining nine months, but raise a family.
But enough outcry about the companies "exploiting" the islanders was enough for the companies to say "uncle," and automate the harvest with machines. I'm sure that had an effect on the economies of the islands.
I can't really explain here why I'm in this situation for a few reasons (particularly anonymity - if my employer finds out I've said any of this I'll be fired and his "friends" will come for a visit), but here's what I can say:
my employer is a thief. Tax fraud, wage theft, copyright violation. Staff are expendable, and routinely fired for not working certain shifts (illegal, because the staff are hired for differing shifts and are not required to work extra). Contract fraud, multiple different types of harassment and abuse of staff, as well as threats against personal safety.
Basically, anything he can get away with to pocket a few dollars, he will do. I'm sure you can imagine that minimum wage is, to him, a target; if it didn't exist, he would pay us much less.
What keeps him in business is powerful friends in government (in a country with "low levels of corruption") who seem to help complaints get lost rather than actioned, and the local gangs who will have a chat with anybody who gets out of line.
> my employer is a thief. Tax fraud, wage theft, copyright violation. Staff are expendable, ... What keeps him in business is powerful friends in government (in a country with "low levels of corruption")
That sound horrible.
Is there anything that can be done to bring such people to justice without exposing dvtv75?
> The minimum wage is there to prevent abuse of workers.
It does part of that, but creates a precarious position for most of the workers. If the minimum wage is higher than the market-clearing wage (as might be evidenced by 100s of applicants for every opening at a fast food restaurant), then the employer knows there is little repercussion for firing (or force-quitting) an employee.
"Plenty more where they came from" and the employee knows that they just passed the 100:1 gauntlet to get this job, so they're a bit more inclined to put up with BS.
I see this continuing assumption that businesses of any sort always maintain minimum profits distributed so efficiently that any increase in worker pay always translates to increased product cost, perhaps because of an assumption that the owner class either is not taking an 'arbitrage' style profit, or cannot possibly seek to be competitive through taking less owner profit.
The rest of the argument I'm quite sympathetic to. It just always puzzles me, this assumption that labor share will always destroy itself by turning into exactly increased costs, as if owner profit was either nothing, or completely non-negotiable.
Deadweight losses. A bored teenager that'd rather have $3 than an hour of his time sits at home. A retired person would rather tell stories to a bored teenager for an hour than have $3. The law says that it's illegal to make this trade, even though both parties are better off afterwards.
There's other issues from messing with prices - shortages/surpluses, excesses or deficiencies of quality, search costs, and misallocation of resources. It really all boils down to the same thing, though. Prices provide feedback between what buyers want and what sellers provide. Mess with prices, and society starts lying to itself about what it wants or how hard getting it is. Do Not Mess With Prices.
>When you propose an alternate solution I'd like to see it in practice before throwing millions of people to the wolves.
We have an alternate solution, we just reserve it for people who somehow "deserve" to be treated humanely through virtue of being disabled or elderly. Everyone deserves to be treated humanely. Expand the current welfare system to everyone, eliminate the incentive distortions from means and needs-testing people, and pay for it through tax increases.
"Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated." - Thomas Sowell
Okay, you are a proponent of basic income. There are pilot programs happening. We'll see how that works out.
The perfect is the enemy of the good. Are the inefficiencies you mentioned significant? I suggest you read the empirical studies section of the Wikipedia article.
I think you can have an opinion but I don't think you can treat it as fact.
Note: your example of the teenager seems ridiculous as people get paid under the table all the time.
Edit: prices are always messed with. Inefficiencies are created and removed every day. A minimum wage is just a large union saying we want our share of the value we create. If you want to argue that they are messing with the efficiency of the economy or are shooting themselves in the foot then you should have damn good evidence.
The perfect is the enemy of the good.
When you propose an alternate solution I'd like to see it in practice before throwing millions of people to the wolves.