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Comment by jrajav | Hacker News Reader

The elephant in the room is that the US labor market is, as a whole, already taking advantage of lowest earners across the board. They are getting paid less than the lowest earners from any prior time historically, while cost of living is only getting higher, and working conditions have been on a steady decline too - all this while the productivity they generate is at an all time high. For many workers, there is a total absence of a 'good' choice.

This is why when one company manages to lower the bar just a bit further and find new loopholes to exploit to pay workers less, give them even worse working conditions and benefits, or give them even less power and autonomy, it sticks out more than it normally would in a healthy labor economy.

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Yeah, true. I guess the un-intuitive part is that minimum wage is _supposed_ to act as a national / state labor union. It's just that, when working as intended, the effects feel wrong.

In this "minimum wage makes the government a union" metaphor, if you find a way to work for less than minimum wage, even if it's your only option, you're crossing the picket line and you're wrong. You're supposed to make a worse decision for yourself, so that everyone together avoids a race to the bottom.

So it is working as intended. But I don't like the intention, because it means, if the market can't price your labor above minimum wage, you just can't work. You have to find some other way to work for less than minimum wage, maybe working under the table, or getting qualified as disabled, or making YouTube videos.

Are we really asking poor people below that labor price floor to be on strike forever, to protect the jobs of other poor people who are barely above that price floor? It seems like a bad solution.

The alternatives are things like UBI or NIT or wage subsidies, which are not politically popular.

And maybe I'm committing the Golden Mean Fallacy, but I think if we had some combo of UBI and wage subsidies and then just let the market work itself out (and keep stuff like OSHA, of course), it would be better than setting price floors on labor.

Disclaimer: I became interested in UBI a few years ago after seeing SSC (Yeah, I know...) rail against basic jobs programs in this piece: https://slatestarcodex.com/2018/05/16/basic-income-not-basic...

A minimum wage IS a good idea. It says that any work that is worth less than this is not economically desired by society and should not be done.

The issue is quality of life vs all wages, as reflected in buying power and the ability to have a good life. Rather than an inflationary focus on raising the minimum (a hidden tax on the non-ownership classes, as the land / property / business owners will just raise their rates to keep up); quality of life should be raised by raising Buying Power, not by raising the minimum.

Raising Buying Power is tough though, since it requires market regulation and leadership. It means the price of food, of services, and of housing must go down to make quality better. However we'd all be better off under such a model (owners and rent/profit seekers less so, but still better other than the profits).

If you need a law to dictate what is “economically desired by society” then it’s a fib. It would be economically desirable you’re just blocking that activity arbitrarily, if it wasn’t economically desired you wouldn’t need to block it, it would just naturally not exist.

You're assuming that raising the minimum wage will automatically result in more unemployment, but that is empirically not the case. Higher minimum wages implemented in Europe and in the US have usually translated to local economic boosts and lower unemployment, especially when the prior minimum wage was especially below indexes of productivity and total GDP.

There is probably a line where the gains of increasing minimum wage even out and start to negatively impact some industries, but the data points to us being far below that line right now. We could easily pay lowest earners more and see only positive effects from it for everyone. And since that's the case, it seems less defensible that someone can work 40 hours a week and not even come close to providing the most basic necessities for themselves.

If somebody is commanding high profit margins in a locale it seems obvious that raising minimum wages could have benefits for most people. Given the examples in the US of wage increases largely happening in high CoL, high earning cities though, is it likely to be the case that applying the same playbook to less advantaged communities will have the same effects? In particular, would you not expect that a typical rural community has businesses with low margins and thus couldn't afford wage increases without major changes somewhere?

> But I don't like the intention, because it means, if the market can't price your labor above minimum wage, you just can't work. You have to find some other way to work for less than minimum wage, maybe working under the table, or getting qualified as disabled, or making YouTube videos.

The intent is that this is an empty group, except the people that actually are disabled.

Temporary unemployment will exist, of course, but the intent is that every moderately motivated, healthy, and non-disabled adult is qualified for many minimum-wage jobs and has a good shot at getting them when there are openings.

> all this while the productivity they generate is at an all time high

I see this claim repeated a lot but you didn't say where it comes from so it's a bit hard to discuss. In particular, you are making a claim about the productivity of low earners but I don't think this is something that is measured in the US? My understanding is the BLS computes industry-wide productivity measures, ie mean productivity (as opposed to say median productivity), and one would expect this distribution to be significantly right-tailed and the mean to be mostly influenced by the right tail.

I haven't seen any data that breaks down productivity growth by income, so if you have a source for your claim I'd love to update myself. When I search for "productivity growth by income" I see versions of your claim but again they are all about population _means_.

There are several sources that measure with this in mind, focusing on production and non-supervisory workers, or by breaking it down by sector. Here's one such: https://www.epi.org/productivity-pay-gap/

I haven't yet seen a source, whether it's a total average measure or bucketed, that doesn't at least show that productivity has always continued increasing year-over-year - not always at pace with GDP growth, but "productivity at an all-time high" still holds true. I think this tracks intuitively too, given that we continue to add infrastructure and technology to support production and services.

The key point is that lowest earner's share of income has consistently decreased at the same time. That discrepancy alone, and the fact that the discrepancy has been allowed to widen for many decades now, is what gets us to the situation we're in today.

Even if all laborers and professions have enjoyed productivity gains, if those gains favor higher-earners more, then the share of income of the lowest-earners will consistently do down... Is there something wrong with that?

Yes, because of the other fact that lowest earners' wages have stagnated for decades in the face of those gains and are currently unlivable.

... this comment has got to be missing a "/s" at the end.

I’ve very curious why productivity is considered higher, especially for gig work.

How are people delivering food faster/cheaper than 30 years ago? There is more road traffic and cities are bigger (further to drive).

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