Why is it the employer's responsibility to provide a living wage?

[Mister Agenda]

Employers owe their workers a living wage because those employees are the only reason they have one.

I can certainly think of cases where they won't have one if they pay all their workers, say, 12 bucks an hour. Some jobs aren't worth $12 an hour. There's a simple formula: if it costs more to employ someone than their labor generates for you, there's no reason to employ them, except charity.

Say I run a car wash. I pay most of my people 8.25 an hour. After payroll, I'm making about two dollars per person per hour. The minimum wage goes to 10.10 an hour. Now I'm making 15 cents per person per hour. I either have to increase my prices to maintain my income (about thirty dollars an hour if I employ 15 people on average). automate, or go out of business because I can't live on 2.25 an hour. The best case scenario for my employees is the one where I raise prices, provided my customers don't very reasonably start going to a cheaper automated car wash.

The most likely outcome is I automate or go out of business after variable amounts of struggle. Are the people I employed, mostly high school dropouts, made better off by the wage hike? They weren't paid well, but at least they were getting work experience and learning important job skills that most of us take for granted but many HS droputs lack, like showing up on time and putting in effort.

If there is a minimum wage that no one should earn less than no matter what the work they are doing is worth, it should be subsidized. That's what we already do with severly handicapped workers, why not do it with people who lack the experience, skiils, or talent to secure a position worth what society deems to be the minimum anyone should make?

Of course you wouldn't want businesses to drop wages and let government take all the slack, but as I said, our government (the USA's and many others) is already in the business of determining how much a person's work is worth and picking up the slack, that would just have to be expanded.

A simpler scheme would be to exempt people under 25 or over 65 from the new minimum wage. They are the most unemployed age groups and the most likely to be negatively affected by minimum wage hikes. Being able to work at under minimum would make an otherwise marginal employee (little education, little experience, minimal skills, or limited physical ability) much more attractive. That counters much of the most serious consequence of minimum wages: potential employees being unable to accept lower wages in order to get hired, which is all some of them have in the way of getting someone to hire them. If you're under 25 or over 65, you'd still be able to offer that, say, down to the old minimum wage.

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I'm going to go with .. because the rest of us shouldn't have to subsidize the workers of cheapskate business owners who expect us to make their business plan work.

A minimum wage worker isn't necessarily low-skilled, lacking in ability, short on work-ethic, or otherwise risky to hire...but a goodly number are. Without business models that depend on those kinds of workers, many of them couldn't get employment at all.

At this point, I would like to add ex-cons to the list of people who should be able to get an exemption to living wage laws, down to living wage minus some percentage.

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Apparently it is not enough for employers to pay for the labor they get...they must pay for the people themselves. It doesn't matter if Joey's work is only worth 7 dollars an hour to the employer, Joey deserves 10 dollars an hour just for being a human being. Why should the difference between what Joey's work is worth and what Joey is worth fall solely on employers?

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[quote='downbeatplumb' pid='667828' dateline='1399722315']
A couple of thoughts on this:

1:If you are not paid enough to live on it is not a wage, its pocket money.

2:If I was offered a job that would not pay me what I need to live on then I would not take the job.

Well there's the thing. The demographics of minimum wage are actually that most of the people making minimum wage don't depend on it for their sole livelihood. About half the people on minimum wage are under 25. Sixty-three percent of people earning under 9.50 an hour are the second or third wage-earner in their family. Forty-three percent live in homes with household incomes of $50,000 or more. In other words, many minimum wage earners are young people from middle-class families or from working-class families they are helping out.

So a high proportion of the people working for minimum wage don't actually rely on it to live and aren't actually poor, which is why they can afford to work for less money than they can live on. As you say, it's pocket money.

That still leaves between one and two million people making minimum or close to it who take those jobs and do have to try to live on them because they can't find one that pays better. It's my contention that those are the people most likely to suffer from increased unemployment as a result of a minimum wage hike.

If the goal is to help the poor, wouldn't it make more sense to target aid (job training, wage subsidies) to these people who are presumably doing their best but still struggling to get by?

By all means, raise taxes on the 1%, the money has to come from somewhere, and put it in to results-based programs instead of the pin-the-tail-on-the-donkey approach to alleviating poverty that we've tended to take in the past, but we need to determine what the roots of the problem we're trying to address are rather than hacking at the branches. It's easy to 'feel' what someone else should do to fix what you don't like, but we have science to help us figure out what works. Maybe it will turn out that raising minimum wages would be great, but right now it looks like a very mixed bag, at best.

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Are you oblivious to the fact that those with the means to help are the same people that offer low wages?

Like your comments, Cato. Isn't taxing the people with the means to help a more sure means of targeting the people with the means to help than targeting employers? We have a tendency to think of big corporations when we think of employers, but in the USA, about 8 million people are employed by small businesses, and the average small business owner makes between 30 and 75 thousand dollars a year. To be considered in the one percent, you have to make at least a half million a year. A small business owner can be hit really hard by a wage hike, maybe enough to be driven out of business by it, and on average aren't really the people with the means to help.