zlacker

No minimum wage is able to remove poverty. Set it too low and it has no effect, since it will be below the price you are able to get on a free market. Set it too high and fewer jobs will be available, and thus less people are able to earn money to fight their poverty.

>>patric+(OP)
That’s theoretically true, but we’ve (seemingly) never come close to that in the US. Moreover, as the article reminds us, the minimum wage has been drastically higher (in real terms) than it is now.

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...).

>>patric+(OP)
As far as I understand it, minimum wage helps people in employer markets. Prices would go down to zero or at least the minimum cost of living if people would fully compete for jobs in markets with more workers than jobs available.

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.

>>southe+vc
> minimum wage helps people in employer markets

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.

>>dennis+ZF1
Only the work of those who create value below minimum wage has to be automated. I agree with you that their jobs have to be automated by software developers, or restructured in another way. E.g. delivery or Uber drivers can earn less than minimum wage because they are often not paid for their time.

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.

>>southe+Ox2
> Why should people be fired if employers can still make a profit?

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).