I think you are right in a way, but all we are doing is setting a minimum market rate for employees so that they can't be exploited. If a business can't afford that employee at that rate then it can't afford to do business without being exploitive and so it needs to reconfigure itself until it can.
I am not saying it's a net good or bad for the economy by the way, I don't think I am qualified for that. But I can tell be pretty confident that exploitive wages are bad for employees and good for employers, a balance for which we have a lever to adjust.
Whether or not someone’s being exploited isn’t determined by a wage.
For example, my wife is an administrative assistant for an NGO. She makes about average for an administrative assistant, but that makes her one of the highest paid employees.
Some of the employees are true believers and donate much of their salary back. Others are broke, and can hardly make it by.
Most are women with husbands who make the real money.
I know for a fact that the “higher ups” get paid less than the lower end. But many are retired lawyers and bankers. They also have seats on the board.
Some of the people who work there do so at great personal cost. The kids just out of college can barely eat.
Is this exploitive?
If my wife was the primary breadwinner, it sure as heck would be.
But everyone there could easily make much, much more in a heartbeat.
I think you're trying to suggest that an NGO couldn't run without a low minimum wage because it couldn't afford it, but there are ways to structure an organization that society is willing to volunteer labour for without jacking up the rest of the community. I say that as someone with a partner in a very similar position to yours.
No one is working at McDonalds out of the kindness of their heart. For my partner's work, they simply have a delineation between volunteer participation and worked hours, and it makes it very clear which hours you're paid for and which you aren't. They have "working bees" and "volunteer weekends" and so on, and people are happy to sign up for them.
Similarly, theatres (as in performance art not cinema) are often for-profit but still quite heavily volunteer reliant, because people want to support the arts and the theatres wouldn't run without them they can make it work. If a petrol station tried to do that, no one would sign up for the volunteer program, and "the market" has happily chosen which businesses can run with volunteered labour or not.
Ok, maybe a better example is being a secret agent for the CIA.
The CIA is able to recruit people for the Clandestine Service who could easily make millions at a bank. They get paid about 90k a year, for more work.
Why? Because they get to be freaking secret agents!
Are they being exploited? I know some folks who used to work for intelligence agencies. They seem to think so. The “secret agent” factor is bullshit. They have to live in high cost of living areas. And 99% of the time the job sucks.
Mostly just office work.
I certainly see something exploitive about that … offering one thing and not giving it.
The military is famous for that shit.
I’m sure there are other industries that do the same. Hollywood comes to mind. So does programming computer games. Etc.
To be clear was talking about exploitation regarding the minimum wage, I agree with you that there are many other ways exploit people.
A great example in your favour is pilots working for minimum wage because people just want to be pilots so bad. But these are really exceptions, the vast majority of people just want to eat and make rent with any job and they're not able to. Companies know they've got no choice but to work at non-livable wages, so that's the most prominent exploitation around minimum wage that we're trying to solve by raising it. Make it so people in poverty don't have to trade there lives in exchange for money that can't even sustain their position in poverty.
I'm not an economist, but isn't it bad for overall economic health to have huge swaths of your country's workforce tied up in failing firms indirectly propped up by the government?
Yes, but why do you think the government is supporting them and why do you think they’re failing?
My own experience is that failing firms pay more. They can’t offer security, and tend to lay off as many people as possible. The layoffs leave the firm top-heavy. In order to recruit new staff they have to pay more. Who wants to be VP of a failing company?
Regarding propping them up, I don’t see how making up the difference between a given wage and the amount necessary to live a decent life is propping up the company.
I’m very much in favor of minimum wage laws. But I don’t see them as government propping up failing companies.
I would say the government gets to control private businesses because it is the government. Businesses exist at governments discretion. Everything about how business is done is within scope of the government to regulate
They should enforce things like minimum wage because it's doing welfare and social support, but they have the power regardless.
If the state chooses to offer benefits, great! But the state shouldn’t blame businesses having to offer those benefits.
If the state wants people to have more money than the market provides, the state can simply increase benefits to that level.
Wage subsidies are supported by both conservative and liberal economists.