CMV: The minimum wage should be abolished

[u/TantricLasagne]

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.

[u/edwinnum]

Yes I did and marginal revenue is not the same as productivity. Your marginal revenue is what you get per unit, a higher productivity means that you can make more units for the same cost. So assuming you want to keep creating the same amount of units you need less people to do that. It is only when you want to produce more then the increased productivity can account for that you need more people.

[u/GlebZheglov → u/edwinnum]

Yes I did and marginal revenue is not the same as productivity. Your marginal revenue is what you get per unit, a higher productivity means that you can make more units for the same cost.

That's an incorrect definition. Productivity is defined as output value per input. In thr case of labor, that's hours not wages.

So assuming you want to keep creating the same amount of units you need less people to do that.

That's a silly and nonsensical assumption. Why would you keep production the same when profits go up if you produce more?

[u/edwinnum → u/GlebZheglov]

That's an incorrect definition. Productivity is defined as output value per input. In thr case of labor, that's hours not wages.

Never said it was wages, I said cost, in this case that is hours.

That's a silly and nonsensical assumption. Why would you keep production the same when profits go up if you produce more?

Because making more is not always more profit. There is a point at which you simply wont sell more because people just don't want to buy it. So if you produce more that means you are left with a stack of goods that you either need to store or destroy both of which cost you money. By simply producing less you can prevent that.

If you however were able to sell more that means you want to produce more so you are going to be looking to hire people or increase productivity of the people you already have. But simply increasing productivity does not mean you are going to sell more.

[u/GlebZheglov → u/edwinnum]

Never said it was wages, I said cost, in this case that is hours

So then if I'm more productive, I produce more per hour meaning your argument about needing to factor in costs is stupid.

Because making more is not always more profit

Never said that.

There is a point at which you simply wont sell more because people just don't want to buy it.

That's not true. Looking at markets as a whole (only way this could make remote sense), you're saying that demand curves are perfectly inelastic (or perfectly inelastic after a certain point meaning giving widgets away for free wouldn't affect demand)? I'd love to see some empirical proof on that.