You are viewing a single comment's thread.

view the rest of the comments →


[–] Poco 0 points 16 points (+16|-0) ago 

Your are correct that anyone who is starting their argument with "This person doesn't deserve that much money" is a jerk. No one should be looked down just because of the job they have or their skill set.

That said, the straight up economics of it would suggest that people will only get paid by a business if they can produce more value than they are paid.

Let's say you run a business and sell widgets for $10 and it costs you $9 to produce the widgets. Let's say that $4 of that cost is wages and you are currently paying minimum wage. If minimum wage were to double then the cost of producing your widgets might go up by $4 and now it costs you $13 to produce each widget.

If the market for the widgets is highly elastic then there is a very good chance that people don't want to pay $13 for the widget. The $10 price was set based on what people were willing to pay, not based on how much it costs to produce.

If the market is inelastic then they might be able to charge $14 a widget and still sell just as many. However, if that was the case then you would likely already be selling them for $14 per widget and making even more money than you do now. There is probably some competition that is pushing the price down to $10 per widget.

So then the problem come if your competition is going to be affected by the minimum wage the same way you are. What if their cost is also $9 but they have a more automated process so only $2 of their cost is wages. Their cost would go up to $11 and now they are selling it for $12, undercutting you by $2.

Unless you can find a way to optimize your production then you might very well go out of business and have to layoff your staff and find a new line of business yourself. They can get jobs somewhere else, and so can you, but in the mean time you have been negatively impacted by the rise in minimum wage.

This is the real, non-emotional, problem that can happen. Not because they are being looked down upon or because they are worth less or don't deserve the money, but because the wages make it cost too much to produce a product in their current line of business.


[–] 1252693? 1 point 14 points (+15|-1) ago 

Ok, but over the last 3 generations the value of the individual hasn't been raised to their actual production value.


[–] TexasComments 0 points 2 points (+2|-0) ago 

The people aren't more productive the technology is which, in turn, makes it easier to stick lower skilled people into computer related jobs.


[–] whatthehelldamnguy 1 point 1 point (+2|-1) ago 

This is the most important fact here.

Worker pay vs. productivity:


[–] tothetop 2 points 2 points (+4|-2) ago 

I agree that this will likely happen if the minimum wage is increased. My issue though is why should the owner of the company be protected to make a profit on the widgets while the workers get shafted and have to work a second job or something? In my mind, if your company can't produce the widgets while paying your workers a livable wage, you are doing something wrong. If that company collapses, a different company that can do both will take its place if there is enough demand for the widget.

In my opinion, this draws a lot of attention to things like overseas manufacturing that drive the price down. It's good for individual consumers because they can purchase things for cheaper, but it drastically reduces the number of consumers in the US that can spend money.

It seems like a society where more people can buy widgets sold on a smaller profit margin is better than one where fewer people can buy them on a larger profit margin, and both would theoretically result in profits for the company.


[–] Hand-Banana 1 point 1 point (+2|-1) ago 

But we don't really produce anymore. Most min wage jobs are service jobs. And there employees make many times their wage for the employer. Everything else would have already left for countries where the labor savings far outweigh shipping it in.


[–] TexasComments ago 

McDonalds is already automating the cashier jobs just wait until we find a way to automate the food preparation.