Minimum Wage Myth

It's so damn tiresome to have to listen to all those myths and outright lies in defense of the owner class. Some of the most infuriating among those are the objections against raising the minimum wage. Mind you, that's objections against paying workers a living wage, and a defense for paying them a starving wage...

_{source: YouTube}

I can already hear the libertarians in the back of the room shouting "hey, dip-shit, the contract between employer and employee is voluntary, so if the employee agrees to a sub-minimum wage, no foul done, and if said employee doesn't like it, he can go work somewhere else!!" Oh, such charming and empathetic people, these libertarians and anarcho capitalists...They are of course wrong about the "voluntary" part of their argument; in reality there's a huge power-imbalance between employer and employee, and the latter will be forced to take whatever job they can get. The power imbalance we're talking about here is a "monopsony": a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The many would be sellers are the employees selling their labor. Interestingly this same market mechanism can be put to the benefit of the entire population by implementing a single-payer healthcare system in which the government is the sole buyer of healthcare. You know, healthcare for all...

Then there's the age old story that says that raising the minimum wage would raise unemployment. The most charitable comment on that would be that this hasn't been proven, and going by what real world examples we have, it's most probably just nonsense, like most capitalist narratives. But even if this is true, this would only be true for small businesses; no one in their right mind believes that multinational corporations, the largest employers, aren't able to pay their workers a living wage. The logical response would be for the government to offer these small businesses conditional support, maybe in the form of tax deductions, to make it possible for them to pay a living wage without having to fire anyone. Remember that this is money well spent, not just directly for the people involved, but for the economy as a whole as this money will flow right back into that economy, it boosts currency circulation which is a sign of a healthy economy.

The effects of a minimum wage increase on labor markets has been studied in past economic literature extensively, and there is evidence to support claims for and against the $15 minimum wage. Some economists, such as (Reich, et al. 2016) have estimated with confidence that the $15 will not result in huge job losses. While others such as (Evan and Macpherson, 2017) have starker findings: their model estimated that for each 10% increase in the California minimum wage, their findings implied that would reduce employment for all employees by 2%. A study by Purdue University in 2015 suggested that paying fast-food restaurant workers $15 per hour would lead to higher prices. Prices at those businesses could increase by approximately 4.3% according to the study.

What is important to note in the context of the minimum wage increase is that not even economists have a final answer on whether or not raising the minimum wage to $15 will have a profoundly negative or positive impact. First, the evidence on the disemployment effects are heavily contested, and there are studies that find negligible impacts in the United States and European countries. Second, the literature has suggested that minimum wage increases reduce employment for the least skilled workers who tend to be young or early in their careers. Third, economists know a lot less about adopting a much higher minimum wage, such as $15. Finally, there is a great deal of uncertainty about the employment effects of a $15 minimum wage, especially when factoring in the COVID-19 pandemic and the disruptions in public health and consumer behavior.
_{source: Berkeley Economic Review}

Besides all that, what if the jobs lost are the extra jobs workers have to work at because none of the jobs they currently have pay a living wage? Maybe now these people can live on the wages of 1 job instead of 2 or 3. The job of a government, my dear libertarian and anarcho-capitalist dreamers, is not just to protect the borders and (private) property rights, it's the promotion of the well being of we the people. Right now the government serves only the owner class and the working class understandably feels betrayed, and flee into the arms of populist far right clowns like Trump.

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