Conversation

Aella
@Aella_Girl
One thing I don't fully understand is why the equilibrium for the demand/supply of labor is not enough to live on. Why does the hiring party get to be more picky (and thus pay less) among potential employees, while employees get to be much less picky in their job? Some theories:
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Aella
@Aella_Girl
Maybe 'not enough to live on' is a false premise - maybe the natural equilibrium *is* enough to live on for a subsection of people, and artificially pushing the equilibrium upwards (minimum wage) somehow has spillover effects onto people who need higher pay (like a family)
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Aella
@Aella_Girl
Maybe there's something weird specifically with *low* pay labor/demand markets. High paying jobs often do feature very strong employee power - lawyers can make private practices; head hunters try to poach employees, etc. Why is the equilibrium inadequate for low wage categories?
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Aella
@Aella_Girl
Maybe there's not enough 'natural' competition among companies at low wages? Just, not enough jobs in general offering entry level positions. If more jobs opened up, employees could put way more pressure on companies, and wages would naturally increase to be competitive.
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Aella
@Aella_Girl
Replying to
@Aella_Girl
My priors make me want to guess that regulations that make it difficult for new businesses to pop up, or tax burdens that make it difficult to hire more employees, and lobbying'd laws from corporations that suppress competition, are the real culprits for low equilibrium.
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Dr. Poop Muscles, PhD
@Space_Boy_Ben
Replying to
@Aella_Girl
Look at wages and working conditions during the industrial revolution before mandatory minimum wages and safety regulations. The people who "own" all the means of production have no incentive to treat the lowest classes as anything other than cannon fodder in the workplace.
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Daniel Zylberkan
@danzyl66
Replying to
@Aella_Girl
Oh, if there was no minimum wage nothing would stop capitalists from maximizing the amount of surplus value they could get from workers and then maybe the system would collapse quicker
Thomas Basbøll
@Inframethod
Replying to
@Aella_Girl
Yes. Correcting the wrong requires implementing basic income (which lets us abolish minimum wage), and shifting the entire tax burden off income and onto land (Georgism). Then people can buy and sell labor as they choose.
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Mark Schaller
@mjschal
Replying to
@Aella_Girl
One thought, probably dumb: min wage law doesn't physically prohibit sub-min-wage work, but gives workers leverage over their employer b/c they can always turn them in. Afaik, the penalty is asymmetric. Presumes leverage redistribution is good... reasonably, imo.
Andrew
@Oyster_Grit
Replying to
@Aella_Girl
Min wage is an irresistible populist lever for some politicians. I completely agree with your take here: it's just a ban on some consensual exchanges. E.g. How is a person with low IQ and no job exp supposed to attain job skills and exp when they're not yet worth the min wage?
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