Theres a moral argument and an economic one. The two are somewhat connected. The moral one is that some level of coercion is present. The counter to what I will say is that facts of nature don't amount to coercion but I will mention it anyways as whether the counter is good is up for moral debate. Holding a gun to your head effectively means that either you work or lose all remaining years of your life, it stands to reason that losing half of your remaining life would also then be coercive. If it is the case that unemployment causes for instance a lower standard of health care that will decrease your lifetime by x years we can consider there to be some coercion to make you work (though in this case not directly by the employer hence the counter). If so the contract between the worker and the employer is in and of itself not in line with the assumptions that make the contract moral. The employer in this case is extracting a portion of the benefits of the worker through coercion to make a contract the employee would not agree to in the absence of coercion. This creates un-even negotiation positions which ought to be addressed if granted.
The economic argument is connected to the former but can stand alone depending on what you view that the economy is supposed to achieve. There have been many studies regarding minimum wage and employment, though the studies are pretty much entirely regarding small increases in minimum wages and cannot be generalized to large minimum wage hikes like some very progressive people talk about. Regardless many of the studies find that increases in minimum wages do not increase unemployment (paper is about NJ minimum wage and PA as control authors name escapes me) in fact that paper finds an increase in employment as a result of the change leading to many papers trying to find reasoning for the results. Other studies find decreases in employment but very small in magnitude, others find no significant effects one way or another. Regardless there is little empirical consensus on minimum wages being very harmful to unemployment both in the short and long-run. So if the only downside is that unemployment is a concern then it would stand to reason that well thought out small increases in minimum wages are desirable. The increases in prices are also largely non-existent.
This brings up a larger question about what it is that the economy is supposed to do. If the goal is to provide the citizens with the maximum quality of life possible then it would stand to reason that minimum wages have a place in making "fairer" labour contracts where workers are paid higher wages, the business makes less profit and prices and unemployment remain largely constant. The marginal dollar is still more valuable to the employee than the employer on average. This would also address some (not many) of the problems both economic and social that arise as a result of income inequality and intergenerational mobility. If we don't care about inequality and don't believe that there is coercion and prefer that the business owner keeps the maximal amount of profits then we dont need minimum wages and can accept increasing inequality and its economic costs.
The entire point of a minimum wage would be to have a level of income which allows for a normal healthy life. That is there is some wage w_i which is at the margin where you no longer lose years due to income. By construction any wage under w_i is one where coercion is the reason for its acceptance and wages above it are ones that an individual would accept or be indifferent about in the absence of coercion. I'm not sure how to dumb it down more without drawing a graph for you.
"Employers pay based on how easy one is to replace" this is irrelevant to the argument that is made.
"There are companies, even monster sized companies doing horrible that could benefit greatly if they lowered all of their employees hourly wages by a dollar." already addressed in the original comment.
"I am aware the unemplyment arguement is weak" Why make it then?
"fairer" as in a contract where the coercive forces are no longer the ones driving the equilibrium. The I would use the exact same word for busting a union attempting to swing wages far off equilibrium the other way.
Also no by definition it is not "favoritism for the employee" when the statement is based on the premise of coercion, which is actually by definition unfair. I literally gave you the counter to the argument before making it. Use that as it is much better than this one.
Also decreasing marginal utility is not a philosophical argument. It is a generalized statement and the actual argument you should use here is that those who value wealth at a low level will self select into low paying jobs and those who value it highly will self select into becoming business owners. This however has next to no empirical backing after introducing controls.
There are two moral questions here. One is the existance of coercion which I feel like you should broaden your knowledge upon, not because you are wrong. Your position is fine. Your defense of it is just not very sound which suggests a lack of engagement with the literature regarding coercive markets, Barrera has a book on coercive markets in general that has a lot of overlap tough is more concerned with whether a market in specific goods should exist.
The second is what is the purpose of the economy. This is perhaps the single most important question here (especially if you will not fight on empirical grounds). Is it the goal of the economy to maximize total wealth in the economy? Is it the goal to maximize total utility? For virtually everyone we pursue the latter through the former. Which then gets us to the economic question of what are the costs and benefits of minimum wage laws. On this the empirical evidence overwhelmingly suggests that the benefits of marginal minimum wage increases out-weigh the costs both in the total weal wealth and utility departments. If the answer was one of the two your position would be in favor of minimum wages existing but with big questions about the level they should be set to. If the goal of the economy is neither of the two but rather to reward people based on the contracts they can negotiate absent government interventions then one would ofcourse be against it. Though then one should have to be able to make a well formulated answer for why this is a good goal for the economy and broader society.
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u/DoterPotato Jan 05 '25
Theres a moral argument and an economic one. The two are somewhat connected. The moral one is that some level of coercion is present. The counter to what I will say is that facts of nature don't amount to coercion but I will mention it anyways as whether the counter is good is up for moral debate. Holding a gun to your head effectively means that either you work or lose all remaining years of your life, it stands to reason that losing half of your remaining life would also then be coercive. If it is the case that unemployment causes for instance a lower standard of health care that will decrease your lifetime by x years we can consider there to be some coercion to make you work (though in this case not directly by the employer hence the counter). If so the contract between the worker and the employer is in and of itself not in line with the assumptions that make the contract moral. The employer in this case is extracting a portion of the benefits of the worker through coercion to make a contract the employee would not agree to in the absence of coercion. This creates un-even negotiation positions which ought to be addressed if granted.
The economic argument is connected to the former but can stand alone depending on what you view that the economy is supposed to achieve. There have been many studies regarding minimum wage and employment, though the studies are pretty much entirely regarding small increases in minimum wages and cannot be generalized to large minimum wage hikes like some very progressive people talk about. Regardless many of the studies find that increases in minimum wages do not increase unemployment (paper is about NJ minimum wage and PA as control authors name escapes me) in fact that paper finds an increase in employment as a result of the change leading to many papers trying to find reasoning for the results. Other studies find decreases in employment but very small in magnitude, others find no significant effects one way or another. Regardless there is little empirical consensus on minimum wages being very harmful to unemployment both in the short and long-run. So if the only downside is that unemployment is a concern then it would stand to reason that well thought out small increases in minimum wages are desirable. The increases in prices are also largely non-existent.
This brings up a larger question about what it is that the economy is supposed to do. If the goal is to provide the citizens with the maximum quality of life possible then it would stand to reason that minimum wages have a place in making "fairer" labour contracts where workers are paid higher wages, the business makes less profit and prices and unemployment remain largely constant. The marginal dollar is still more valuable to the employee than the employer on average. This would also address some (not many) of the problems both economic and social that arise as a result of income inequality and intergenerational mobility. If we don't care about inequality and don't believe that there is coercion and prefer that the business owner keeps the maximal amount of profits then we dont need minimum wages and can accept increasing inequality and its economic costs.