Humans have certain fundamental maintenance costs. $100/hr vastly exceeds maintenance. However, if you pay below those maintenance costs, then society effectively picks up the tab via other social costs and programs. For instance, if employers don't provide healthcare, then we either pay more for emergency medical treatments and other publicly-subsidized healthcare programs, or we accept being a country with a bunch of people dropping dead at age 40 of entirely preventable problems.
This is very different from most other goods, because no one really cares if you break your chair, the chair's parents didn't spend 18 years of their life on it, etc.. If you break a chair, you bear the full costs of replacing it.
Also, the full cost of replacing a human is vastly higher than the maintenance wage.
It would be more efficient to pay someone market rate, have needed work get done, and subsidize their existence than to try and offload that cost onto employers.
Exactly. Minimum wages are an attempt to solve economic redistribution policies by obfuscating the cost to employers rather through the tax code, which is the cleanest way to achieve the goals of broad based prosperity.
It also has consequences like increasing the attractiveness of substituting capital (i.e., automation) for labor or simply leaving some work undone (e.g., many smaller restaurants in CA are going out of business due to multiple government policies, including very high minimum wages).
Why would it drive wages down? The less desperately that workers need a job (due to universal basic income), the more they can demand, assuming they also have skills that fill the employer's need.
The trick for this to work is that the UBI has to really cover a lot of basic needs.
Overall, this works better for lower skilled workers than it does for higher skilled and higher paid workers. But it could also make sense for people staying home to raise their children, a job which is not compensated today.
The alternative is that certain types of work simply do not get done, as shown by the article. That means if you care about providing for these people you'll now be responsible for shouldering 100% of their cost as they sit around unemployed.
Is it? Minimum wage is a pretty simple law, compared to the paperwork and bureaucracy of existing welfare programs. I suppose you could go with Universal Basic Income, but I'm not convinced society is actually ready for that one yet.
How would such a program even work? If we say the Maintenance Wage is $15, is the government just paying the difference between that and the market rate? If so, it seems the ideal salaries to offer are $0 (let the government subsidize it) and $16+ (but you could just get two $0 workers, so I'd expect pay scales to really start at more like $30?)
This seems like it rapidly descends into Bureaucracy or Communism
Just because a law is simple does not mean it's efficient. We are talking about the total value being produced. But if you want simple, something like a negative income tax would be simple and decently efficient.
>However, if you pay below those maintenance costs, then society effectively picks up the tab via other social costs and programs.
No, that doesn't hold because humans need these "maintenance costs" regardless of whether they're working or not. Therefore it's fallacious to claim that such "maintenance costs" stem from the job itself. It's a sunk cost arising from the person existing in the first place.
Exactly why healthcare should be just one more part of the standard social contract. We the people should collectively pay (single payer) for everyone to have the required basic healthcare in bulk, without the stress of billing, collections, etc.
Same idea as police, fire, basic education. We want a properly educated, health, safe workforce. That's the basis of a healthy, productive, strong society.
This is very different from most other goods, because no one really cares if you break your chair, the chair's parents didn't spend 18 years of their life on it, etc.. If you break a chair, you bear the full costs of replacing it.
Also, the full cost of replacing a human is vastly higher than the maintenance wage.