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CMV: The Minimum Wage Creates Inescapable Poverty and Should be Removed (self.changemyview)

HeavensFrost が 投稿

As a forewarning, this is a little economics heavy.

The minimum was has the correct intention but yields negative outcomes for the workers it is meant to target.

Consider the workers working at the minimum wage. The jobs are low skill that require minimal (if any) educational attainment. By establishing a minimum wage, a law claims that an individual is - no matter the circumstance - worth this amount per hour of labor. However, this is ignorant to the fact that there are workers, by virtue of personal ability or choice, who are not worth this value. A minimum wage law thus discriminates this person from obtaining a job since they are not worth the mandated value they must be paid by a company. This is immoral by modern standards.

Let's take that one step further though. Say these people who do not possess the capacity to work at a minimum wage were to get a job. The fact of the matter is that the company will operate at a loss because of this person's ineffective capacity resulting in a likely termination. There is an avenue to training to increase productivity, however, training beyond the bare essentials to the point that it actually increases someone's overall productivity, requires some time commitment to a company. A company being focused on profits, will not tolerate this time delay if there is (and there almost always is) a better person on the market that they can find to take the job. Therefore, the person who is not worth the minimum wage does not (usually) possess the ability gain on the job training. So then we find a person who cannot hold a job unable to receive training. And without a job, they cannot make money to find other avenues of education that could increase his/her overall productivity.

This essentially forms a poverty trap because those who cannot function at a level at the minimum wage or above, will not hold a steady job, receiving training, nor find an effective outside avenue to increase their hourly worth.

EDIT: I realized I missed a bit of my argument that pertains to social welfare programs. The idea that someone is motivated to not work based on welfare is a systemic problem. I feel like that could be too far off topic to talk about so I will keep it short. Removing the minimum wage needs to be accompanied by a similar removal of welfare systems. Companies could then not charge high prices or demand would be too slow to for a company to survive in the long run.

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[–]Averlyn_ [スコア非表示]  (9子コメント)

Here are a few arguments for the minimum wage.

  1. There is no point in people making below what it costs to live. As it is unskilled people often have to work two or more jobs to break even or get ahead. No minimum wage would make the marginal cost of working to the unskilled worker outweigh the MB in many cases.

  2. We are already at the natural rate of un-employment. If you look at current unemployment statistics we are very close to or at the natural rate of unemployment. While no minimum wage would create more low skill jobs these are not necessary in the economy right now. There are no masses without jobs now that would suddenly find work if there were no minimum wage.

[–]HeavensFrost[S] [スコア非表示]  (4子コメント)

As counterpoints 1. If you mean the marginal benefit of working, then that is a societal social safety net issue. There should never be an instance where not working is more beneficial than working. 2. The natural rate of unemployment has been met. However, that does not mean we cannot try to improve employability.

[–]tunaonrye28∆ [スコア非表示]  (2子コメント)

If you assume away every problem and imagine a perfect fair market without coercion, deception, exploitative relationships, exit rights, and a basic income, you edit: your argument follows.

The minimum wage is an imperfect pragmatic way to prevent such relationships in the real world.

[–]Iswallowedafly26∆ [スコア非表示]  (0子コメント)

There is a minimum that I need to live. That's a true statement.

If I get a full time job that pays be below the poverty line what's the point?

And unskilled workers have zero scarcity power. They are everywhere. It isn't like they can organize and negotiate for higher wages. If they don't do the job, someone else will.

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    [–]MrCapitalismWildRide29∆ [スコア非表示]  (12子コメント)

    And how exactly is this hypothetical person going to get an education, or, you know, survive, when making less than minimum wage?

    [–]HeavensFrost[S] [スコア非表示]  (2子コメント)

    Half of my point is that this already happens. A person without a stable job is already making less than the minimum wage. Preventing them from obtaining a more permanent possession through a minimum wage harms them more than helps.

    [–]MrCapitalismWildRide29∆ [スコア非表示]  (0子コメント)

    Do you have any statistics on how big this group that is allegedly being priced out of the work force is? If we eliminated the minimum wage, how many jobless people would get jobs?

    Meanwhile, how many people who currently do have jobs at or near minimum wage who would no longer be getting paid a wage that they can survive on?

    Eliminating the minimum wage would create a net increase in people who are not making enough money to survive. Those people would have to go on government assistance, or die.

    [–]10dollarbagel [スコア非表示]  (0子コメント)

    Clearly this is hypothetical, but without the minimum wage providing some limits on what wages come from work, it's easily possible that the worker could have increased access to employment and still receive less compensation than before.

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      [–]gandalfmoth1∆ [スコア非表示]  (6子コメント)

      What incentive does a corporation have in offering a fair price for low skill labour? Especially when we've seen time and time again, that corporations will go to great extremes to pay people pennies for hours or even days of labour? Additionally, what incentive do people with few or no skills have to work, if they're not guaranteed a wage that allows them to survive? Unless you're making higher education free, these people will not be able to afford to upgrade their skills.

      [–]HeavensFrost[S] [スコア非表示]  (5子コメント)

      The incentive is that corporations need to sell goods they produce or they will go out of business. Employing people who cannot afford anything is essentially removing your own demand thereby harming the company.

      [–]UnaffiliatedOpinion3∆ [スコア非表示]  (3子コメント)

      That sounds circular. Paying people because if you don't, they'll stop paying you? On top of that, say you've got Walmart or some other company that provides necessities and is known for racing to the bottom in prices. If they cut pay and cut prices, people are still going to go to Walmart because those people still need to eat, and they've got the cheapest bread in town because they pay peanuts.

      How is paying a low wage going to put these companies out of business, but sending production over to a third-world country where their products are not even sold isn't?

      [–]HeavensFrost[S] [スコア非表示]  (2子コメント)

      It is circular. A company cannot sell products that a buyer does not have the money for. The idea of exports/imports is what facilitates global inequality because the group producing the products is not the intended buyer. Allowing a free market in a minimum wage globally would result in a concentration in labor like the Industrial Revolution - which was followed by significant depressions - or stability in wages and a more accepting market to those who have/earn less.

      [–]UnaffiliatedOpinion3∆ [スコア非表示]  (1子コメント)

      A company cannot sell products that a buyer does not have money for.

      What does that matter? If I pay you ten dollars with the expectation that you'll buy some product from me for that same sum, how am I better off?

      Especially places like Walmart where I mentioned, they have nothing to lose in this case because those people struggling will be spending what little is in their paycheck on necessities like food. Sure, that'll be a problem for places that sell non-essentials, but there are plenty of places who still stand to benefit from squeezing every last drop out of their workers.

      [–]gandalfmoth1∆ [スコア非表示]  (0子コメント)

      The incentive is that corporations need to sell goods they produce

      That sounds very expensive specially when there's already people with higher skills that earn a high wage. Besides if you pay someone less, you can still lower prices while maintaining a high profit margin.

      [–]Spodie [スコア非表示]  (21子コメント)

      If this were true, then there wouldn't have been Inescapable Poverty during the Industrial Revolution.

      I think we all agree that it's better now for the poor working man.

      [–]HeavensFrost[S] [スコア非表示]  (1子コメント)

      During the Industrial Revolutions, I would agree poverty was inescapable. However, Poverty though was escaped after the Industrial Revolution because firms fell out of business. Part of the reason why there were significant depressions following both industrial revolutions is that there was a lack of demand for goods produced. A firm can learn that paying an obscenely low wage will only result in their own turn.

      [–]nauticalmeatball [スコア非表示]  (0子コメント)

      You shouldn't agree with that, because it isn't true. 1880-1930 in the US saw unprecedented real wage growth across class, and income mobility was better than it is now.

      [–]stephenmac71∆ [スコア非表示]  (18子コメント)

      You're making the assumption that minimum wage is the only thing that improved the life of the "poor working man." You seem to have forgotten that the economy has greatly improved overall since the industrial revolution.

      [–]Spodie [スコア非表示]  (17子コメント)

      Nobody's assuming that without a minimum wage, wages fall and the working man earns less, descending deeper (more inescapably) into poverty.

      That's not theory. It is demonstrated fact.

      [–]stephenmac71∆ [スコア非表示]  (16子コメント)

      Some working men do earn slightly less. That is, the man whose boss was willing to pay minimum wage, but has job applicants willing to work for less. However, the men who can't get a job because of minimum wage now have the opportunity to climb out of poverty.

      OP's point is that you can't escape poverty if you have no chance to work and improve your skills.

      [–]Spodie [スコア非表示]  (14子コメント)

      No. They don't. You can't climb your way out of poverty with poverty. It's as inescapable as digging your way out of a hole.

      [–]HeavensFrost[S] [スコア非表示]  (1子コメント)

      That is not true. I know immigration is off topic, but plenty of people move to foreign countries illegally with absolutely nothing in addition to a language barrier and find a way to become successful. These people started in poverty and worked out of it for far lower wages then an federally mandated wage that requires visas/green cards etc.

      [–]Spodie [スコア非表示]  (0子コメント)

      I'm sure there are success stories, but you are disregarding the overwhelming number of their fellows that don't. You're making my point. There are far more migrant laborers trapped in poverty than escape it.

      [–]stephenmac71∆ [スコア非表示]  (11子コメント)

      Yes, you can. It happens all the time. There is a relatively high amount of turn-over between the lower and lower-middle classes. If you have an entry level job, you can advance in that job, learn the skills to get a better job, or build the resume to get a better job. I don't know about you, but I do call that escaping from poverty.

      [–]crowboyandgadgetman [スコア非表示]  (9子コメント)

      you can advance in that job, learn the skills to get a better job, or build the resume to get a better job

      This requires time to acheive. How long do you think it takes for a person to get a promotion or raise in wages? How ever long, you are ignoring the fact that during this time the worker would not be making enough money to survive (Rent, Food,cell phone bill, gas money...etc). Then consider the time it would take to receive enough raises to make more than minimum wage when you are starting below it.

      [–]HeavensFrost[S] [スコア非表示]  (6子コメント)

      That is my point in essence though. It takes a long time for people to work for promotions and someone who is not able to function at a minimum wage will not last long enough. They will cycle through employment and unemployment without making any progress. At least in a permanent or long term job, there is a much stronger chance to develop a skill set.

      [–]crowboyandgadgetman [スコア非表示]  (4子コメント)

      someone who is not able to function at a minimum wage will not last long enough

      To not be able to function at minimum wage is an indicator of an actual disability for which there other avenues for support. The people that fall into this category would be a extreme minority and to get rid of a policy that is beneficial to a super majority for this group is illogical.

      [–]Spodie [スコア非表示]  (0子コメント)

      If you're too inept to function in a minimum wage job, you aren't going to just develop a functional skill set.

      People who can function develop. People who can't, don't.

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            [–]conspirized4∆ [スコア非表示]  (3子コメント)

            I won't say that the problem with severely unskilled workers doesn't exist, but I don't think that removing minimum wage is the solution. We already have an abundance of jobs that pay minimum wage available, the goal should be to find a way to provide incentives to work for that minimum wage rather than live in poverty and/or on government assistance programs.

            These jobs are already, as you mentioned, low-skill and require little or no educational attainment. In many cases even the mentally and/or physically handicapped can do them. The above mentioned workers don't have incentives to do so as they've found alternative ways to get by that don't require them to do these jobs (and they are usually shit-jobs that suck to work at, which doesn't help). If you make it so that a company can pay $4 an hour instead of $8 an hour you are not providing any additional incentives to get these people to work and continue working, in fact you're doing the exact opposite.

            [–]HeavensFrost[S] [スコア非表示]  (2子コメント)

            If the point is to get people off of government subsidized programs, then the incentive should be that there are no programs not that the wage should be increased. Motivation by a higher wage and motivation by removing government subsidized programs are very different societal problems. A step further in my argument would then be that motivation by a higher wage is not as effective (or beneficial to the individual or society) than motivation by removing subsidies.

            [–]conspirized4∆ [スコア非表示]  (0子コメント)

            I agree that raising minimum wage does not provide the desired effect, but government subsidized programs exist for a reason and we can't just remove them. It's a complex issue, hence the often fierce debate.

            Right-leaning individuals like myself can't justify outright cutting government programs because it's not just lazy welfare moms with 8 kids that suffer. Their 8 kids suffer, people who are temporarily (or permanently) disabled suffer, and even people that have temporarily fallen on hard times suffer. At the same time, I'm a single father that worked his way up from minimum wage into the fairly high-paying job I have now - and I did it all while supporting a child and without any form of government assistance. When someone tells me that they have kids and, therefore, cannot provide for themselves and their children I can't help but scoff at them. Surely if I could do it, anyone could? That in and of itself is indication that minimum wage is not an "inescapable poverty."

            If I could present you with an alternative, maybe that would help shift your view a bit? Education is a foundation for pretty much everything we do. What if we were to alter government programs so that if an individual is capable of working all the means to do so are provided? What if they are required to attend programs that teach them how to save money and manage their time to allow for them to work and/or be a parent? What if there are time constraints on individuals that are deemed capable of working and choose not to do so?

            The above allows for us to retain minimum wage so that anyone who works full time has what is considered a "livable wage," but also provides the means to get further in life so that they aren't doing so for 30 years.

            [–]10dollarbagel [スコア非表示]  (0子コメント)

            If the point is to get people off of government subsidized programs, then the incentive should be that there are no programs not that the wage should be increased

            I think the clearly intended subtext to that is that we could illuminate the programs if people didn't require their existence. You can see the moral quandary of just cutting all aid to people already in hard places, no? Just cutting the programs without addressing the problems they mitigate is hardly a victory to anyone outside of very dogmatic libertarians.

            [–]WarrenDemocrat2∆ [スコア非表示]  (0子コメント)

            The people who truly do not possess the capacity to work at minimum wage pretty much have to have a disability, right? It requires no education. Or perhaps they're worthless for some time after they start bc they haven't learned the job. But legislators build in exceptions to this kind of stuff. The federal mw has an exception for disabled employees and I know California has an exception for 'learners', until training is finished.

            [–]cdb03b76∆ [スコア非表示]  (10子コメント)

            Without minimum wage there is no protection for the lowest earning jobs and poverty will become worse. Employers will always pay the least amount possible for workers. when there is no government mandated minimum that amount is next to nothing.

            [–]HeavensFrost[S] [スコア非表示]  (6子コメント)

            I don't believe this to be true. If employers were to pay people nothing, then no one could buy what is produced. On a macroeconomic level, the flow of money would stop and a massive recession would harm all levels of income.

            [–]Averlyn_ [スコア非表示]  (4子コメント)

            So you are saying that if there was no minimum wage that corporations would pay high wages anyway? Look at the wages in developing countries. They don't pay their workers more with the country's economic future in mind. CEOs are paid to enrich their company not help the economy. That's the government's job. If you were to go to any CEO and give them a way to cut their labor costs in half 99% would take your offer. Would there be a recession? Probably, but that's just how capitalism works.

            [–]HeavensFrost[S] [スコア非表示]  (3子コメント)

            They will pay wages according to the worker's value, high or low. Companies would also recognize though that cutting out the low wage worker from the buyer's market by keeping the prices high only harms the company.

            [–]Wierd_Carissa8∆ [スコア非表示]  (2子コメント)

            What about a company that only produces luxury goods? Surely the Rolex store isn't going to worry about paying employees less than min. wage because of the risk of creating more people who can't afford their products.

            Your argument focuses on the macroeconomic forces; but that doesn't account for many, many people poised to be (even more) exploited.

            [–]Kilrah757 [スコア非表示]  (0子コメント)

            If employers were to pay people nothing, then no one could buy what is produced. On a macroeconomic level, the flow of money would stop and a massive recession would harm all levels of income.

            Absolutely - but absolutely no small employer would understand/care about that, they'd just look at their balance sheet and be happy to pay nothing to make it look better (already happening to the maximum the law allows for... do you know many bar owners paying their staff a comfortable base wage they can live well on and keep the economy running instead of paying them minimum wage and telling them to make up for that not being enough to live with tips?)

            You've just disproved your argument, if people were allowed to pay wages too low they would do so and it would cause a massive issue at a much larger scale than a few people being "excluded" and cared for differently.

            コメントをもっと表示する (3 返事)

              [–]Hq3473145∆ [スコア非表示]  (12子コメント)

              Minimum wage ensures that the a working individual can get bare minimum of money needed to survive.

              If a person works for less than he can survive on, that gap has to be made up. That means that the person will apply for welfare which is funded by taxes.

              So if we removed minimum wage the companies would just have to pay more taxes to make up the gap and fund welfare. So basically, minimum wage is a very efficient tax, because it does not require applications, welfare office, means testing, etc. By getting rid of minimum wage we would have to increase less efficient taxes to fund more welfare.

              The poverty trap would remain exactly the same too. People would hold jobs that don't pay minimum wage, receive welfare to make up the difference and not advance out of this state.

              [–]DickieDawkins [スコア非表示]  (0子コメント)

              Plenty of jobs are at the minimum, remove that minimum and they can find someone desperate enough to pay less.

              Removing the minimum wage would only help workers if workers were in the power position in terms of labor.

              [–]VertigoOne14∆ [スコア非表示]  (0子コメント)

              To quote John Green "It turns out actual labour markets are much more complicated than the models of labour markets created by college freshmen"

              https://www.youtube.com/watch?v=ZI9aDHLptMk

              [–]super-commenting10∆ [スコア非表示]  (0子コメント)

              This is good argument against a minimum wage that is too high but I don't think the current minimum wage suffers from this problem. Pretty much any able bodied person is able to work a minimum wage job at the current minimum wage.

              [–]groman2815∆ [スコア非表示]  (2子コメント)

              We have just about a century of experience with minimum wage, can you find any data or evidence that backs up this conjecture you're making? This stuff doesn't have to be hypothetical.

              [–]HeavensFrost[S] [スコア非表示]  (1子コメント)

              A user above elaborated on this -MrCaptialismWildRide I intentionally restricted this to a more hypothetical case because there is a lack of statistics for these people. No one wants to take surveys about being unemployed, especially if they are on welfare.

              [–]groman2815∆ [スコア非表示]  (0子コメント)

              Are you sure? Have you really looked? Again, we're talking almost a century of minimum wage, across dozens of countries.

              [–]TinynDP [スコア非表示]  (2子コメント)

              A minimum wage law thus discriminates this person from obtaining a job since they are not worth the mandated value they must be paid by a company. This is immoral by modern standards.

              What good does it do these individuals, or society as a whole, for them to be paid a non-livable pitance wage?

              This is not a minimum-wage thing. Its an any-wage thing. A profit driven company would be perfectly happy to replace its entire mid-wage engineering staff with low-wage engineering staff if possible.

              You are assuming that there is an unlimited supply of "good jobs" if only the individuals had sufficient training. Not the case, otherwise there would never be an "overqualified" person taking a lower job just because they just need a job, any job.

              You're assuming that everyone is "trainable" to an arbitrarily high degree. Some people just aren't. Which is OK because low skill jobs exist. But these people still need to be paid a live-able wage.

              You're also forgetting this the "low-or-high" goalpost is not a constant. In the past the line was a high school diploma. Now the "4-year Univeristy Degree" rate is so high that its not a guarantee of a good job.

              [–]HeavensFrost[S] [スコア非表示]  (1子コメント)

              A profit driven company would not replace a mid-wage engineering staff with a lower wage one. A company focused on revenue would recognize the difference between mid-wage engineers and lower wage ones and adjust accordingly.

              There will never be a unlimited supply of good jobs - it is a zero sum game. For every good job created, another good job is made worse off until it is a bad job.

              Everyone is trainable to some degree. I don't think that a minimum wage level is "arbitrarily high." These people face a significant problem in life. However, I believe they would be better off with a consistent job rather than a cycle of employment and unemployment at their current level.

              The 4-year university degree and goal post concept is not meant to be applied to the minimum wage field. It would be a rarity for a 4-year degree person to struggle escaping the minimum wage on the grounds of lacking the skill set.

              [–]TinynDP [スコア非表示]  (0子コメント)

              A company focused on revenue would recognize the difference between mid-wage engineers and lower wage ones and adjust accordingly.

              Well, the entire history of the working world says otherwise. Sometimes those companies are wrong, and are hurt for that decision, but the decision still gets made and the people still get fired.

              However, I believe they would be better off with a consistent job rather than a cycle of employment and unemployment at their current level.

              That is a different issue than minimum wage. There is nothing stopping a business with a low skill job to fill keeping the same minimum wage employee from 18 to 65.

              The degree thing totally applies. Below this line is "crappy minimum wage jobs" and above this line is a wide range of "good jobs". That line is not the same today as it was in 1950.

              [–]CoyotePatronus6∆ [スコア非表示]  (0子コメント)

              By establishing a minimum wage, a law claims that an individual is- no matter the circumstances- worth this amount per hour of labor.

              Ok.

              However this is ignorant to the fact that there are workers, by virtue of personal ability or choice, who are not worth this value.

              Why? And how is this any different than ‘if a person, either by personal ability or choice, cannot do a given job, they don’t have that job?’

              A minimum wage law thus discriminates this person from obtaining a job-

              Not any more than not being able to do a job regardless of pay discriminates against a person from getting said job.

              If a person cannot perform a job or does not have the ability to perform a job at the pay level that job is given- whether its minimum wage or $100,000 a year, they don’t get that job.

              People who do not have the capacity to work even a minimum wage job don’t work. They would not have the capacity to work any job. I don’t see why having a set minimum wage changes the dynamic of ‘if a person can’t work this job, they don’t get this job’.

              [–]arkonum1∆ [スコア非表示]  (0子コメント)

              I will take a side step from your POV and agree that the minimum wage is a flawed concept, but it doesn't lead to 'inescapable' poverty. In reality, no western society hosts 'inescapable' poverty at all as everyone has the opportunity to climb with the only thing stopping them being their own motivation and effort.

              Minimum wage creates MORE disparity and lowers opportunities of employment almost exclusively in lower income areas and low paying jobs. This however does not translate to inescapable poverty. It has been shown in studies that in western societies (namely US) that in the case that a lower income/impoverished person coming in to wealth, they will fall back into poverty within a reasonably short time. The same is shown when reversed, that a wealthy person who falls into poverty will more often than not climb the ladder into at the very least middle to upper class.

              Although minimum wage does in fact affect lower class areas negatively, this does not mean that there is 'inescapable poverty'.

              [–]SchiferlED10∆ [スコア非表示]  (0子コメント)

              Do you think that people who do not have the physical or mental capacity to be worth more than minimum wage for their labor should have to work for less than a livable wage? Without social welfare programs, this seems to be the case.

              The idea that someone is motivated to not work based on welfare is a systemic problem.

              What about a system like UBI that proposes to pay everyone a livable income regardless of employment? They don't lose this extra income if they decide to work. People are incentivized to work by the same incentives that encourage people to work for more than a minimum living wage today. People naturally want to be able to afford more, and it is (IMO) unethical to use basic survival as an incentive to get someone to work.

              Another point:

              People in poverty will resort to crime to get what they need to survive if crime is easier than the amount of work they would have to do to afford basic living. Heck, a jail cell with free food starts to sound appealing when the alternative is 80 hours of menial labor every week. Your proposed system of no minimum wage and no social welfare would breed a society of exceedingly high crime.

              [–]VernonHines3∆ [スコア非表示]  (4子コメント)

              Who are these people who do not possess the capacity to work a minimum wage job?

              [–]Accademiccanada [スコア非表示]  (0子コメント)

              West Virginia would like to have a word with you.

              Minimum wage prevents businesses from essentially turning you into a Slave. "We pay you 4.50 an hour, and bread at the only store nearby is $20. The work store sells bread for 4.00 though!"

              A minimum wage helps regulate prices for all people across all classes. Even poor people can afford food, in theory, because goods intended for everybody to use are usually priced based on minimum wage.