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Comment by moistly | Hacker News Reader

I’m saying that without minimum wage laws, you’ll soon enough see corporations depressing wages to the point where a great many workers will be as desperately impoverished as the Bangladeshi, working 60+ hours a week in dangerous environments for wages that leave them literally starving.

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I think that's not going to happen because single corporations have no power in choosing wages. The labor market does. In the labor market the wage will reflect the market value of the job. Almost all current jobs already have market value above minimum wage (only ~2% doesn't). For the ones that don't, it's because well either the job is not valuable/the person is not skilled enough. https://www.bls.gov/opub/reports/minimum-wage/2019/home.htm

> I think that's not going to happen because single corporations have no power in choosing wages. The labor market does.

The labor market is not a magical entity. It's comprised of companies doing the hiring and people doing the working.

If you look at sectors where unskilled work prevails and corporations treat workers as fungible resources then the labour market lies firmly in the supply side, and workers have no alternative other than getting exploited. This means paying the least possible amount, which means less than minimum wage.

Think about it for a second: why do you think so many companies pay minimum wage, and not a single cent more? Is is because the workers' negotiating power magically breaks even at the minimum wage level, or is it because labor laws make it illegal to pay less than that?

Did you miss the evidence I provided? It's less than ~2% of the hourly paid workers. I know how the market works. That's why I also provided evidence that's not the case.

Also the alternative is having some of those people have zero income and no opportunity to develop skills.

Perhaps read what the latest Nobel price winners in Economics have to say:

Joshua D. Angrist and Guido W. Imbens “for their methodological contributions to the analysis of causal relationships”

They have done real world studies on the issues discussed here and arrive at a different conclusion from you.

I will, but keep in mind that economists are very divided on the subject - and many other subjects. I do listen to economists, but eventually I have to chose to which economist to believe in these cases, and to do that I try to asses how honest they are and if something they say in their reasoning seems flawed.

I agree with you in general. Economics is not a science. It is almost impossible to verify a theory and most Economists are simply advocating theories that confirm their personal politics/morals/values. However what is interesting about the economists I mentioned is that they have found clever ways to use real world data to “run” experiments. It is truly great work.

Companies can expend resources to push the government to implement policies (or ignore existing policies) that flood the labor market with labor from outside of the existing market. This isn't even theoretical, it's something that's been going on almost since the country was founded and continues to distort the labor market on a colossal scale.

Yes, and I'm in favor of allowing people form other countries to "flood" the labor market. I'm not a protectionist. I think people have a right to work no matter their nationality. (BTW I don't even live in the US).

> single corporations have no power in choosing wages. The labor market does.

Counterpoint: Bangladesh. The labour market does not choose to work 60hr 7day weeks for $75/mo performing skilled sewing of your clothing because they like it: it is because they are left no choice. Given the opportunity, corporations will just as happily enslave Americans as it does third world citizens. Already does, in fact: slavery is still legal via imprisonment.

Corporations could choose to pay their Bangladeshi labour significantly more, and it would cost you only pennies more for your shirts … but they don’t. They pay as absolutely little as possible. They will inevitably do the same to you.

Every company try to pay as little as possible. The only reason they can pay less in Bangladesh is because the economy there is much less developed. Raise the minimum wage in Bangladesh and companies will move to somewhere else leaving those people with subsistence jobs and no way up for the economy. Leave enough companies free to move there and eventually wages will raise as more companies will have to bid higher for the same labor.

> In 2019, 82.3 million workers age 16 and older in the United States were paid at hourly rates, representing 58.1 percent of all wage and salary workers.

I don't understand. How is the rest paid?

No Idea. Bonuses? I have extrapolated to all workers, but the actual number might be a bit different because of this.

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