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
Basically, I'm operating under the assumption that the need for a minimum wage is abnormal. The idea that we have to literally ban the option for consenting adults to agree to certain types of exchanges means that something else is very wrong inside the system.
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Aella
@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
Housing is finite and costs more than it used to. Raising the minimum wage alone isn't going to fix this; the bigger issue isn't that the minimum wage is "too small" it's the cost of many basic essential needs have exploded and negatively affect those with the least, the most.
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Merl Moore
@RDWALKER1
Replying to
@Aella_Girl
Try to understand that the employer always has the power so without a minimum wage the rich would just say, "I'm paying $0.10 an hour, you don't like it, starve to death." And some wouldn't take it, but some would, because $0.80 a day is better than nothing, like before the MW.
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Inquisitor
@MartialSociety
Replying to
@Aella_Girl
Low equilibriums are due to the marginal product of unskilled labor given current levels capital; competition between laborers drives the price of labor towards its marginal product. If you suspect that labor is undervalued, then I’d suggest starting a business.