That's my point. Obviously, increasing the minimum wage to $1000 is ridiculous. But so is the idea that raising the minimum wage by $1 has no consequence, as some claim. The higher cost you impose on employers for low skill jobs, the more likely it will be that employers will attempt to hire fewer of those workers or reject unskilled candidates. It's simple logic.
For instance, the hamburger-making machine will replace teenagers who need a job at McDonald's. [1] Why wouldn't an employer just purchase a machine that will reduce costs, create a consistent product, and not call in sick if it can do so at an equivalent or lower cost than an unskilled teen who would be required to earn $10 or $12 an hour?
Why do you think a hamburger making machine is a bad thing? Automation in the long term is good for the economy, if it wasn't for automation those same teenagers would be manually plowing fields instead of flipping burgers.
If anything raising the minimum wage a bit should spur a lot of automation industries, and those same teenagers would be more likely to get an entry level job there, instead of at a menial job.
It's not a bad thing for us. It's a bad for the people that minimum wage is supposedly trying to help. Increase minimum wage, decrease low skilled jobs, and increase mechanization.
It is a bad thing for us (software developers) too: yes, we would get a contract to automate these low-skilled guys jobs, but then who's going to pay for these low-skilled guys' unemployment?
Besides, our automated solutions would still deliver higher-than-before prices, because if automation was cheaper, then low-skilled jobs would have been automated away without government's legal help.
I guess the point is that, as the min wage grows, certain considerations that were not viable before become viable now, and as a consequence people who otherwise may have been considered for a job would no more, or would lose the job, or the job itself would disappear.
Its actually pretty reasonable to posit that raising the minimum wage will have no effect on employment. Take a look at S&P 500 profits over the last few years. Then look at real household income. If you want to get crazy, look at productivity measures. Profits are going up while income is falling in real terms. It stands to reason that there's a buck to spare there.
This is terrible reasoning. A million different variables go into real household income, productivity, and corporate profits.
Just because corporations are making profits does not necessarily mean a significant number of people making minimum wage won't be fired when the minimum wage is raised. It's not like you have managers sitting around saying, "Well, we're making money... so we can afford to pay a worker $9/hour even though their output is only worth $8/hour." If it does not make economic sense to retain a worker, a company will fire that worker.
Oddly enough it may not be true - the share of GDP captured is roughly 40% for corporations - and has dropped for wages. That is whilst the share of GDP for companies has remained roughly same for past few decades, wages share has dropped.
This means that the share of wealth going to wage earners and working stiffs is dropping - but is not being captured by company profits.
Where is it going? To self employed dividend earners - basically there are more one person bands now, freelancers etc. Some will be tax efficient schemes for bankers, but most are, well, us on HN.
I was talking about the last 5 years, as opposed to the last 30. Although household income has been declining in real terms for the last 30.
I'd be interested to see your link. I was under the impression that most growth has been captured by larger corporations rather than free-lancers, and if they refer to 'self-employed dividend earners' that could easily be people collecting dividends and capital gains on stock. But that's all speculation -- hit me up with the link if you get a chance.
FTFY. I don't normally do this, but since you are relying on classic straw man for your argument, I thought I might as well make it obvious that your whole argument is suspect logically.
Not really, no. I know loads of people with low-wage jobs. None of them like doing those shitty jobs so much that they'll turn down a wage rise, or a funded unemployment, or a higher-paying job, to "protect" their particular employer. Nobody wants to work more for less, and when you talk about a system that keeps productivity down (ie: a race to the bottom between labor wages and the price of automation), you are ultimately talking about everyone working more for less.
> None of them like doing those shitty jobs so much that they'll turn down a wage rise, or a funded unemployment, or a higher-paying job, to "protect" their particular employer.
No, but I'm sure they like them better than not doing anything, since they have the choice to not do anything right now. If the minimum wage is raised above what they are capable of producing in value, they will no longer have the choice at all.
Submitting link spam onto blog posts.
Washing cars.
Wiping reflective metal surfaces in elevators.
Doing inventory.
Growing and mowing lawns.
Frying chips.
Bathroom attendant at a nightclub.
Really? So no one would pay to have their car washed, keep their elevators clean, have a count of their inventory, have a nice lawn, or eat fried chips? (I'm stumped on the bathroom attendants, but I assume someone likes their mouthwash, towel, and mint services)
If someone would pay to have those things done, then that means they value it. They have value. The crappy thing is that the minimum wage prevents people from matching the value in those tasks with someone willing to tolerate that drudgery for the reward. Government knows best, as usual.
For instance, the hamburger-making machine will replace teenagers who need a job at McDonald's. [1] Why wouldn't an employer just purchase a machine that will reduce costs, create a consistent product, and not call in sick if it can do so at an equivalent or lower cost than an unskilled teen who would be required to earn $10 or $12 an hour?
[1]: http://www.gizmag.com/hamburger-machine/25159/
EDIT: 5.2% of US workers earn at or below the minimum wage, 50% of those are under 25: http://www.bls.gov/cps/minwage2011.htm