Arguments Against Raising Minimum Wage Don't Hold up

It is always a problem because the pressure on margins never ends. Our history of productivity growth is proof. We've been automating in one form or another since before there was a minimum wage, since before we were even a nation.

 

You've made the argument yourself many times when we've discussed eliminating fraud in the government. You've said that the cost of eliminating the fraud is more than what could be gained by eliminating the fraud. Now, you and I disagree with that statement because you believe the fraud is much less prevalent than I do.

But in this case, if the cost of driving efficiencies is more than is acceptable for the return on investment, it won't be done. Increase labor (minimum wage) to double, and let's see how that pans out.

 

All other things held equal, improving technology alone makes the substitution ROI positive. The minimum wage of fast food workers has been raised before, and the supply of fast food is greater than ever. If substitution becomes excessive society-wide, then society has a decision to make: will the marketplace, commerce, the economy, be conducted for people, or for machines (and their owners)?

 

Ah. How often is that the case?

 

Real wages among the lower quintiles have been falling for some time. What about productivity?

 

First, may I say that I'm pleased you now look at real wages rather than nominal ones. Bravo, sir.

Second, productivity gains are not just limited to wage stagnation or the trimming of labor. How did you put it? Ah yes, all things are not equal.

 

if the guy that flips burgers tries to negotiate a higher wage, it's socialism, borderline communism

if the guy that makes the burger flipping robot negotiates a higher price, that's capitalism

 

What?

If the guy that flips the burgers tries to negotiate a higher wage, it's just that - salary negotiation. Perfectly normal in any capitalistic society. If he feels he is underpaid, he has two options:

1. Show his boss he is worth the extra money by outperforming and/or making himself someone his boss can't live without

or

2. Leaving to find a better paying job.

Now...if the government tells the employer he MUST pay more for the guy flipping the burgers, then we're talking more socialism.

 

government has just become a tool both sides use

 

Both political sides, maybe. But the worker sure doesn't have any representation for his plight. He's just courted on the wage issue in order to get his vote, not because anyone cares about his situation.