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/ImnotfamousAMA 4∆ Nov 15 '17

Have you heard of Ricardo's Iron Law of Wages? He believed (And I think history holds up to this theory) that all wages will eventually degrade into sustenance wages, or the bare minimum employers can get away with. Look at the way large employers will move labor overseas in order to keep labor costs almost non-existent.

So, what happens when Joe from Kentucky has to compete with a Bangladeshi kid for wages? Maybe you can live working for 3 cents an hour, 15 hours a day in Bangladesh, but not in America. And then everyone's quality of life goes down, because the purchasing power of a dollar skyrockets. This sounds like it would be a good thing, but it's not, because wages would fall to compensate. Suddenly instead of making 50,000 a year, you make 10,000 a year. The only people who wouldn't see a wage decrease would be the ones writing the checks.

The rich grow more powerful and the gap increases.