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Comment by biztos | Hacker News Reader

Two days ago I was watching a German TV show in which the panelists discussed the low-wage-job boom: apparently unemployment is very low (5.6%) but an unhealthy portion of the jobs people are working are low-wage and/or exploitative of labor, and thus not really contributing to long-term social stability.

If too many people are working minimum wage and the minimum wage isn't realistic then sooner or later you have a big problem paying for social services.

(In Germany it's 8.84 EUR per hour but has only existed for a few years and I gather there's a lot of noncompliance.)

So, interesting map, but only telling part of the story.

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While I agree it is still a much bette situation than in Italy or Spain. Germany is relatively cheaper than France and has better infrastructure. Having a low paying job gets your feet somewhere.

Not having any employability in Spain or Italy is going to be a tough problem.

I'm more of an UBI guy. The whole minimum-wage stuff didn't seem like a good idea to me.

But since its conception I only read good things about it.

The crux is that welfare payouts need to be wholly discontinued in order for UBI to make sense -- the intention is that UBI replaces a unmaintainable patchwork with a universal safety net. Having both doesn't make economic sense and only causes confusion and financial pain.

To me minimum wage is great - but why (in UK) does a 24 year old need less than a 25 year old, or indeed deserve less?

Why do "apprentices" deserve less than is considered the minimum living wage.

Even minimum wage has been corrupted.

UBI, or something equally revolutionary, I think will be needed without a major population collapse.

One of the main risks of a minimum wage is suppressing the employment rate of less-skilled, less-experienced workers. If the minimum wage is too high, it's uneconomic to take on staff who don't deliver enough value for the business. The reduced rates for young people and apprentices exist to reduce this stifling effect - without them, you'd make it uneconomic for businesses to take a chance on new employees who might need a lot of training or support.

This does of course create a secondary risk of businesses laying off older staff in favour of young people and "apprentices", but I haven't seen any clear evidence that this is a widespread problem.

If you've never seen any evidence of that, you've not looked very hard: This is what every supermarket does for their filler jobs, and to a lesser extent for their till and other store facing jobs as well. If you're over 18, you have to be very lucky to keep your job (or more realistically, to keep being given work) in such a situation.

Outside of supermarkets this sort of practice is also pretty entrenched in a lot of small-medium IT businesses: They have a sizeable portion of their workforce as trainees or whatever (they may be underpaid legally, so they almost always are) and don't hire them after their time is up (ever, as a rule). New trainees are then cycled into the slots that are now vacant.

>without them, you'd make it uneconomic

Not uneconomic, but it would impact then in a way that might require reducing profits or flattening wage profiles.

That's not contrary to good management it's contrary to greed.

> it's uneconomic to take on staff who don't deliver enough value

This was the fear people had.

Somehow most people who were paid less that minimum wage delivered enough value.

Only a few companies needed to stop their service.

It's to do with employment rates and avoiding financial damage to small/low margin businesses, there's a commission of some kind that tries to work out the maximum viable level.

That's probably based on average years of experience and average / assumed value to the company? I don't know.

Why pay? A much more reasonable solution is to pretend that subtle systemic connections don't exist between all agents in society, and just let them suffer and die.

Sure, long term, that might lead to even bigger problems, but on the other hand, long-term is not NOW.

Careful not to fall into the mental trap of comparing with an imaginary situation. No one has ever achieved 100% employment without involving gunpoint; you have to decide between the real world alternatives. Namely: is it better to have more people on social assistance, or more people on very low wage? (Of course, here in Germany it's mixed - you get lots of social assistance based on your income level. Plus, "better" is a tricky word to pin down...)

It's certainly too early to declare "mission accomplished", but people actually going to work and actually earning their own money, rather than being clients in a welfare system, is tremendously important for long-term social stability.

true, but things like wages and social standards are other statistics.

Additionaly to the mentioned "low-wage-job" boom you have to mention part-time employment. Which does count as employment but doesn't result in the usual 40h+/week.

At least in Germany these things are connected, in that keeping people employed part-time, and not using fixed hours, serves to transfer risk from the employer to the employee, thus further undermining long-term social stability. Not to be too anti-capitalist about it, but one of the reasons societies grant rights to corporations is that they are supposed to move risk away from the workers and thus improve the buffer of economic stability. Obviously it doesn't always work like that in practice.

IANAStatistician, just pointing out that "hey look 5% unemployment" can be a very misleading statistic to use for laypersons.

Yup, is it better for society to have someone do a job that pays non living wages or being unemployed ?

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