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383 points imartin2k | 1 comments | | HN request time: 0.203s | source
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cousin_it ◴[] No.14330454[source]
I don't understand the libertarian argument for allowing low wages. Let's say company X is paying low wages, which allows it to sell goods for cheap. If company Y tries to enter the market and pay higher wages, they won't get any market share, because their goods will be more expensive. So wages will stay low forever. Am I missing something?
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jstanley ◴[] No.14330505[source]
If company Y is producing the same quality of goods as company X but trying to charge more money, they deserve to be out-competed by company X. Do you agree?

Equally, if employee Y is producing the same quality of work as employee X but trying to charge more money, does employee Y not deserve to be out-competed by employee X?

Employment is a two-sided market too.

Nobody would advocate for a minimum price for a packet of crisps just to save the poor crisp companies from earning too little per packet. It is obvious that if crisps were too expensive, people would stop buying them. The same applies for workers.

Minimum wage is just saying "if you can't produce at least $X of value per hour, you're not allowed to work at all". That's not fair.

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DougBTX ◴[] No.14330651[source]
> Minimum wage is just saying "if you can't produce at least $X of value per hour, you're not allowed to work at all". That's not fair.

That's an oversimplification, since it ignores what is paid to people who produce more than $X of value per hour.

Minimum wage says something closer to, "If you can produce at least $X+Y value per hour, you will be paid at least $X", where X is the minimum wage, and Y is the level of profit that a company needs to operate.

Assuming no upward pressure on X, a company will prefer to maximise Y and minimise X. Minimum wage laws are one way to apply upward pressure. Competition over constrained supply is another, but only applies if there actually is a supply constraint.

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jstanley ◴[] No.14330744[source]
What about the people who are unable to produce at least $X of value per hour? They don't matter?

You're surely not interested in protecting the somewhat-poor at the expense of the poverty-stricken.

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1. DougBTX ◴[] No.14333288[source]
I agree with you that a minimum wage law is effectively a ban on pay for very unproductive work, but I disagree with you on what that implies.

If someone can't support themselves, then I believe that the wider community should help.

The two groups of people which I have in mind are: 1) those who can't produce enough value to support themselves, and 2) those who can produce enough value to support themselves, but who are not paid a large enough fraction of that value to actually do so.

My understanding is that X is set high enough so that people in group 2 will get a large enough share to support themselves (so it moves people from the poverty-stricken group to the somewhat-poor group at the cost of company profits) while still being low enough such that anyone who produces less would fall into group 1 anyway, and would therefore need other more direct help, independent of any minimum wage laws.

Is your position that for any X, some people will be forced into group 1 who would otherwise consider themselves self-sufficient, and that the cost to them outweighs the benefit to those in group 2?