With the Federal minimum wage currently at $7.25/hr, that’s just $15k/year at full-time. That puts many minimum wage workers below many countries’ average wages [1]. But that’s before adjusting for purchasing power parity.
Being a single earner on minimum wage effectively guarantees you and your family will be in poverty in the US. That is effectively not true in most countries in Europe, even the poor ones. You don’t get to live well or anything, but you certainly aren’t planning on poverty.
[1] California, and San Francisco in particular, have a higher minimum wage but also higher expenses. Worse, many low-education workers are waitresses, which often have a “tipped minimum wage” as low as $2.15/hr before tips (again, San Francisco doesn’t do this, but it’s expensive to live here).
- Agreed on the single earner families on minimum wage guaranteed to be in poverty. But, pointing somewhere else and saying "It's better there!" seems off to me. Pick a specific policy and advocate for it. Higher minimum wage? Guaranteed housing? Universal basic income?
I explicitly didn’t want to make this comment about advocating for a policy, but first to make sure we’re all on the same page: the US minimum wage isn’t enough to get by on. I should have added that a huge portion of the labor force is at or near this rate, except again I’m on my phone, so I couldn’t back that with the precise number.
Since you asked, I’m one of the Basic Income folks :).
A lot of States (or maybe cities) have much much higher minimum wages for servers than my state. California, Las Vegas, and maybe New York pay higher than the $2.
Regardless of the correct level before causing a crowding out of employment, what do you believe the purpose of having a minimum wage is (if not to prevent poverty)? Why not just let the market decide?
Edit: I mean this seriously, and don’t intend it as an attack. I’m (personally) unclear on the perceived purpose of the minimum wage.
Edit 2: like many folks, my “we’ve never come close to it” is influenced by http://www.nber.org/papers/w4509 and similar studies, and I’m aware of the opinions that the study was flawed or doesn’t generalize (e.g., https://www.google.com/amp/s/www.forbes.com/sites/timworstal...).
What are some optimal tax rates? What are the target individual finances (food, housing, retirement, etc)? What should government spend money on?
I manifestly do not care what the absolute values are for minimum wage, fees, various tax rates, government spending, etc.
I do care about fairness, equal opportunity, rule of law, and empowerment. I care that people can feed and educate their kids, grow old, and play with their grandkids.
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I want a SimCity for IRL policy.
Policy makers first simulate their proposals. Then repeat their experiments in the real world.
First a little, then a lot.
Hypothesis, experiment, evaluate. Rinse, lather, repeat.
As circumstances change and new ideas crop up, better strategies displace old strategies.
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We're geeks. We should be thinking about this stuff systematically. Lead by example.
[0] https://stats.bls.gov/opub/reports/minimum-wage/2016/home.ht...
Inevitably, the market for unskilled labor is an employer market because there will always be a supply of workers unless each and everybody has a job. However skilled somebody is, if he doesn't find a job in his profession, he falls back onto the unskilled labor market in every other profession.
It is correct that minimum wage prevents the existence of some jobs. But it ensures higher wages for all of the unskilled workers who create more value and who are not replaced by a lower bidder.
The jobs that create less value than minimum wage are still available for freelancers. Companies have to buy them as a product or service.
- Many states have a higher minimum wage, so the BLS reports are annoying. They do strictly less-than-or-equal rather than also including “nearby” or even “minimum in state”, making the overall percentage fairly low. I’m guessing data for “What percentage of the labor force makes less than $15/hr” would be more helpful, but is too far from the current minimum wage to be a reasonable discussion.
- Anecdotally, informal labor is driven by workers without the right to work (whether due to immigration status or otherwise). So I don’t think it’s reasonable to suggest that people would suddenly end up below minimum wage; the more likely outcome is as others have suggested: companies will raise prices (keeping the job), invest in automation (removing the job), or both.
The other states just have to find a reason to can them so i imagine its "somewhat" more difficult.
Minimum wage is insufficient yet to put all population into poverty.
If we increase minimum wage to, say, $100/hour, then 99% of population would be not able to find any jobs [that pay minimum wage or more] and that would, effectively, put 99% of population into poverty.
With current $7.25/hr minimum wage only few percent of population cannot find jobs because they do not have enough skills to get minimum wage job.
No.
Minimum wage helps software developers to take away jobs from low skilled workers (because it forces employers to automate low-paying jobs).
Most of workers are hurt by minimum wage limit. The higher minimum wage limit is - the more workers are hurt by it.
It does NOT matter if job market is "employer market" or "candidate market". The impact of "minimum wage limit" increase is the same: lower skilled workers lose their jobs to software developers and other higher skilled workers.
However, every other job can be continued. Why should people be fired if employers can still make a profit? Minimum wage is like a hidden union that ensures that unskilled workers don't outbid themselves.
In the situation when employer is forced to pay more -- he, usually, would benefit more if he hires more qualified person (for that higher rate of pay). So less qualified (but cheaper) worker will be fired (or not hired in the first place, if you consider long-term effects of minimum wage increase).