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  1. #1471
    Reader in Slood Dynamics Rincewind's Avatar
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    Quote Originally Posted by MichaelBaron View Post
    So should not effective firms try to lower the costs...including cost of labour?
    No that is exactly what they do. My comment was countering the claim that minimum wage laws will price some labour providers out of the market. The argument is that if the cost of labour is too high then companies will just get out of the market because it is nonviable. However for jobs which cannot be moved overseas (say retail and hospitality) the minimum wage increases will be built into the cost for services since all providers will be subject to the minimum wage constraint on the cost of labour the market will remain profitable.
    So einfach wie möglich, aber nicht einfacher - Albert Einstein

  2. #1472
    CC Grandmaster Capablanca-Fan's Avatar
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    Quote Originally Posted by Rincewind View Post
    This is just wrong. The higher cost of labour will be factored into the market increasing the costs of goods and services to the extent that there is no capacity and pressure from competition to drive down margins. The exception will be from overseas competition but these exceptions will be minimal since there is already a large discrepancy in the cost of labour with overseas competitors and so those jobs have mostly already gone overseas.
    You can't force an employer to hire someone whose productivity is less than that politician-set minimum. All you do is discriminate against low-skilled workers and deny them the first rund on the emplyment ladder. But unions love minimum wage laws because it keeps out competition—then they petition leftist governments to make an exemption for their members.
    “If Algeria introduced a resolution declaring that the earth was flat and that Israel had flattened it, it would pass by a vote of 164 to 13 with 26 abstentions.” — Abba Eban on the UN general assembly

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  3. #1473
    CC Grandmaster Ian Murray's Avatar
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    Quote Originally Posted by Capablanca-Fan View Post
    You can't force an employer to hire someone whose productivity is less than that politician-set minimum. All you do is discriminate against low-skilled workers and deny them the first rund on the emplyment ladder. But unions love minimum wage laws because it keeps out competition—then they petition leftist governments to make an exemption for their members.
    The concept that minimum-wage (or less) workers are juniors first entering the workforce is a libertarian mantra divorced from reality. Half of them are over 25 years old.
    https://www.bls.gov/opub/reports/min.../2016/home.htm

  4. #1474
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    Quote Originally Posted by Capablanca-Fan View Post
    You can't force an employer to hire someone whose productivity is less than that politician-set minimum.
    This is exactly what my question was all about.
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  5. #1475
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    Quote Originally Posted by Capablanca-Fan View Post
    You can't force an employer to hire someone whose productivity is less than that politician-set minimum. ...
    How do employers know exactly what the value of the employee's work will be?

  6. #1476
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    Quote Originally Posted by Patrick Byrom View Post
    How do employers know exactly what the value of the employee's work will be?
    Why not approach this issue from another angle: if employees do not want a job, they have a right to refuse, if employers are underpaying below the market value - people won't work for them.
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  7. #1477
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    Quote Originally Posted by MichaelBaron View Post
    Why not approach this issue from another angle: if employees do not want a job, they have a right to refuse, if employers are underpaying below the market value - people won't work for them.
    And what will they live on without a job?

  8. #1478
    CC Grandmaster Ian Murray's Avatar
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    Quote Originally Posted by Patrick Byrom View Post
    And what will they live on without a job?
    Then they are forced on to the dole, as employers won't pay a living wage. To receive the dole they have to attend a set number of job interviews per fortnight, none of which under MB's scenario will pay what they need to live. Net result - an underclass below the poverty line and an industrial base with no unskilled labour.

  9. #1479
    Reader in Slood Dynamics Rincewind's Avatar
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    Quote Originally Posted by Capablanca-Fan View Post
    You can't force an employer to hire someone whose productivity is less than that politician-set minimum.
    You miss the point of my post. The minimum wage provides a constraint and as such increases the productivity of the worker since the minimum wage will be priced into the cost of the service being provided.
    So einfach wie möglich, aber nicht einfacher - Albert Einstein

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