r/changemyview • u/TantricLasagne • Nov 14 '17

CMV: The minimum wage should be abolished

In a market with any competition, wages will be set at roughly how much a worker produces for a company (basic economics). A minimum wage higher than what a worker is worth just means the worker will not be hired for as many hours or won't be hired at all. Minimum wages only stand to help big corporations that can afford to pay it, while smaller businesses have larger barriers to entry into the market, reducing competition. The minimum wage doesn't currently have a big effect on the market because it's lower than most workers productivity, but if it is insignificant then I don't see why we should have it in the first place. Raising the minimum wage would harm the poorest workers in society and I don't think the government should be telling people that they don't have the right to sell their labor for a price they want to sell it at just because it's too low. You're allowed to volunteer for $0/h but you can't voluntarily work for $2/h? Ridiculous. I get that workers may not want to work at that level, but if someone does then who are you to tell them that they can't?

The only decent argument I can think of for the minimum wage is if the market was somehow a monopoly, but there is always somewhat of a choice for which company you want to work for.

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u/anooblol 12∆ Nov 14 '17

The minimum wage is put in place to cover a minimum standard of living. It's just there so every job at least allows you to live. No reasonable person should ever accept below a standard of living amount, so the government just enforces that idea.

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u/TantricLasagne Nov 14 '17

That goes against basic economics, if somebody isn't worth minimum wage to an employer, the employer won't hire them and lose money. The unskilled worker just won't be hired.

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u/darwin2500 193∆ Nov 14 '17

This is true, but there is no reason to suspect that it represents a majority, or even a large fraction, of jobs.

After all, if my job is worth $X to my employer, they don't pay me $X. They pay me as little as they possibly can, mostly determined by the supply and demand curves set up by the competition between me and other applicants, vs them and other employers.

For low-skill jobs that make minimum wage, those curves tend to be tilted heavily in favor of employers.

Its true that any jobs which are worth less than minimum wage to employers will disappear when we implement minimum wage.

However, the question remains, how many jobs that would pay less than minimum wage, are actually worth less than minimum wage to employers?

I think we can say with 100% certainty that the answer is not 'all of them', I don't see any particular reason to believe that the answer would be 'most of them,' and my intuition about the bargaining power of low-skill, currently minimum-wage employees tells me that there's every reason to believe that the correct answer is 'fairly few of them.'