Minimum wage

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Careful, here comes a pretty big rant. Read at your own risk.

Lots of people in the US and Canada are talking about minimum wage. The debates seems to be about raising it to 15$ an hour, or not doing that.

I am against it, for several reasons.

First of all, I believe that different jobs have a different value. This means that you can never pay everyone the same, it has to depend on several factors, including the actual value the employee brings the company.

I am not saying that it’s okay to abuse employees and pay them less than they are worth if you’re the boss. I just happen to believe that no one is entitled to a job, or to free stuff. Every job is a trade of money for services, and just like when you sign any contract or buy anything, this is only fair if both parties agree. The boss is allowed to pay you less than you are worth, even if that makes him an asshole, and you are allowed to leave. The contract lasts until one of you doesn’t want it anymore.

This means that if you raise the minimum wage faster than inflation, and make it as high as the salary of other workers who were paid a lot more before, then those workers also deserve a raise since they are more valuable. If they don’t also get a raise, this means that they become underpaid, as they are more valuable yet paid the same as the minimum wage employees. This means that any business that employs as little as one person paid less than 15$/h today, has to raise everyone‘s salary tomorrow, or else end up being unfair to their most valuable workers, and risk losing most of them. This means almost every single business in the country.

Then, when you are the owner of a business, and you instantly have to give a decent raise to every single one of your employees, the money has to come from somewhere. Here are your options:

1: You pay from your own pockets, making your own salary a lot lower to absorb the money loss from the raises.

2: You raise the prices of the services you are providing, in order to get enough income for the raises.

3: You don’t change anything, and therefore the company profits will take a big dive.

4: You outsource to a country with a lower minimum wage.

5: You fire enough employees to be able to pay the same total wages as before, and you overwork the remaining ones.

6: Replace most minimum wage workers with machines that cost a lot less, since machines are actually pretty close to be able to do most of these jobs today, so they definitely will very soon. Until then, you can replace some of the workers, and avoid the overwork problem of #5 while still saving money and firing people.

Let’s talk about the first three first.

For option 1 and 3, the bigger the company, the more damage it will do.

For option 2, the company size doesn’t matter that much, since more employees means a bigger total raise, but also usually a bigger customer base.

Now, as a minimum salary worker, you might have great respect for big company owners. In that case you probably think they worked hard, took big risks, and generally deserve their money. If that’s the case, you wouldn’t want them to lose a ton of money over this. On the other hand, you might also hate them with all of your might, because they fatten their wallets with people like you, and are rich from barely doing anything with money that you deserve. If that’s the case, you probably also think they’re selfish assholes. Now keep in mind that the owner can choose which option he’ll take. How likely is it that he will take option 1 if he’s so greedy? The same reasoning applies to option 3. It’s obvious to everyone that most big businesses could afford to pay that raise either from the millionaire owner’s pockets, or the profits pool. It’s also painfully obvious that as long as the owners are allowed to choose, they won’t choose this option.

I think we can all agree that most businesses will end up choosing option 2, or a mix of the three with more of option 2. We’ve already established that pretty much every single business in the country has to make that choice.

This means that a huge majority of all goods and services available in the country will instantly get more expensive. Maybe by 10%, maybe by 50%, maybe by 200%.

Everybody deserves a living wage? That might be what you think, but in that scenario, everybody gets a living wage for about a week. Then, the cost of life climbed so much, that you’re back to square one. The currency in your country also dropped in value in the process.

Now let’s talk about option 4. Option 4 is completely unavailable to small family businesses, which means the least “evil” of all the owners have less options and will get hurt more.

Obviously, option 4 is also unavaiblable to all businesses that rely on local customers, like a fast-food place. You can’t make the burger in India and give it to the American within a reasonable delay. So either way, 4 won’t get that much love. But for the ones who can, they might very well do it. If you’re working for them, then you’re out of a job.

Do you know what’s good to know about the minimum wage? It’s the minimum. This means that, out of all the working people in the country, you are equally placed with the least valuable people in the country. There is literally nobody under you. Obviously, some minimum wage workers are better at their jobs than others, but not by enough for their employer to even think about giving them more than the minimum. This usually means that their value as an employee is lower than minimum wage, and they’ve received a raise because it’s the law. This also means that any random person picked off the streets has a good chance of being able to do your job with minimal training, and statistically, they are about 50% likely to be better than the original employee at it. Maybe the employee is worth more than that. At least, his cognitive dissonance probably tells him that, no matter if it’s true or not. But in that case, he should ask himself, why isn’t anyone willing to pay me more? Either they disagree with him about his value, or they are actively trying to screw him over. In both cases, if our worker truly is more valuable than what he is currently paid, this means he could easily either negociate a better salary with his boss, or quit and find a better job and/or a better boss somewhere else. We have to keep in mind that our value is literally decided by the market. If every single employer in the world doesn’t see my value, it literally means that I don’t actually have any. If every single employer that I meet seems to agree that I’m only worth minimum wage, then they are statistically more likely to be right. If my employer is trying to screw me over by paying less than what he thinks I am are worth, then I’ll go negociate. He won’t let me go if I truly am that valuable, so I have the upper hand. And if I actually am worth minimum wage or less, then my next move is to figure out how to become more useful, more efficient, and overall a better employee.

For all of you that tried and that didn’t work, you’re obviously very unlucky. Of course there’s no way you’re actually wrong about your value, right?

Also, Minimum wage jobs exist for three types of people. First are teenagers who want a little bit of money for themselves, while still living with their parents. They don’t need enough for living expenses, just to go to the movies every now and then and eat fast food with friends. Second, the people who are bad at negociating, and will settle for a job way under their actual skills. That’s probably what every non-teenager who works one thinks they are, but some of them are wrong. Then, there are the fully grown adult who either never tried or failed to learn a skill or two that are actually useful to a business and that not everyone can do.

Do all those people deserve a living wage? Well, I’d have to say yes. I think that, in modern society, we are no longer living in the jungle, and we should look out for each other. Not everyone has the same potential, and some people are literally unable to work some better paying jobs. But the thing is, there are also some lazy people. Maybe it’s 1%, maybe 50%, maybe 99%. There’s no way to know for sure, because all the lazy people either think they aren’t, or are actively trying to hide the fact that they are. Considering psychology and patterns, you have to take into account that denying them 15$/h will actually motivate some of them to go and learn to do something that will net them a better job. And even better, this will also motivate some percentage of the teenagers to do the same before it’s too late. Obviously they won’t all be motivated, but nobody can tell exactly how many. Is it worth the trade-off? I don’t know. That’s everyone’s decision to make. Obviously we don’t let them die of starvation, we’re past that point in modern society, I think.

But we need to create programs to allow people to at least get some decent skills for free. I am against free college, as many people work hard to provide this extremely valuable service. On the other hand, with the internet, it would be very easy to create courses about pretty much anything, once, from the pockets of the government, and then let people use it. That’s completely different from maintaining thousands of buildings and paying millions of teachers every year for free. Obviously, that’s an half-assed idea. I’m not even american, so I’m definitely not gonna create this program anyway. I just figured I’d give an idea for an alternative, considering that I’ve criticized raising minimum wage so much. It’s not a magical idea either. There would be some maintenance necesary, to make sure the content of the courses is always up to date and true. Some people need actual help when learning, so at least some teaching jobs would need to stay. But there is no way i see those fees ever coming anywhere near close to the cost of making all superior education free with our current methods. Keep in mind that real colleges would still exist. They are too expensive nowadays, so the internet thing would be a cheap alternative for people who can’t afford real college. Obviously some employers wouldn’t trust that as much as a real college degree, but in the end, as long as some competent people that used it are hired, this will make the businesses that discriminate against them suffer relative losses, as they hired a lesser employee because of their bias. Over time, this will probably solve itself, or at least become minor.

With those kinds of programs, it would definitely become a choice to not learn. There would be no “it’s too expensive” excuse. Anyone not actively improving their own skills with the goal of finding a better job would literally be saying that they refuse to contribute to society (not including people with physical or mental handicaps in that calculation. I’m talking about actual lazy people that aren’t willing to put in any effort.). This would allow a more effective way to figure out who’s lazy, and who’s working their ass off trying to improve their lives. At that point, it’s up to everyone to choose what to do with the lazy ones. They will eventually lose their jobs to robots, because they literally chose to stay at the bottom of the usefulness scale, so we have to make a choice. Do we actively remove their human right to freedom in order to force them to learn how to do something and earn their living expenses, or do we passively remove their human right to life by letting them starve? The last option is actively removing their human right to free will and brainwash them into stopping being lazy.

When you figure out that one of those 3 options is your future, I predict most people will stop being lazy by themselves anyway.

Just to make sure I’m not misunderstood. I don’t think that those three options are good, or even barely okay. I’m just saying that this is what it’s going to come to at that point. I also think that all this stuff only applies to genuinely lazy people. People who have plenty of physical and mental ability, and very well could become plenty useful to society, but just refuse to.

If anyone has a better alternative to solve the problem than raising minimum wage or my idea, feel free to share it. Both of those have huge problems, so I really think we should look for something better.

 

TL;DR – Money’s value is entirely relative, so the more money there is, the less it is valuable. If you give everyone more money, its value drops and you don’t achieve anything except inflation. If you only give some people more money, then you are being unfair and you are motivating more people to work low-end jobs since they are paid more in proportion to the effort and skill needed to do them.

“Everyone deserves a living wage” is not compatible with “equal pay for equal work”. I find it ironic that usually, those two ideas come from the same people. Actually, women were paid less than men for decades in 20th century exactly because of the “Everyone deserves a living wage” ideology. Since men were expected to earn all the money, they “needed” more money to live than women, who’s salaries were not expected and only seen as a small bonus to the household income. Some people literally need more money than others to live, depending on where they live, how many children they have, how many sick or old family members they have to support, etc. If everyone deserves a living wage, equal pay for equal work is impossible by definition.