Preezy wrote:Just going back to the minimum wage chat, my opinion on it is that workers should be paid based on their productivity, not what policitians think they should be paid. Workers should be able to sell their labour for whatever price they want, even if that's below what the government has decided is the minimum.
I think it's fundamentally wrong for a government to say to a person that unless a business is willing to pay you the minimum wage, you have to remain unemployed. There are people out there who want to work, have a job and a purpose but simply can't offer the productivity to earn the minimum wage, why shouldn't they be allowed to work for less?
Sure, so, let's say we want to reconcile the two goals of (a) not having a minimum wage and (b) everyone earning enough that they can feed themselves and rent a room. The way we would wrangle this - and to an extent this happens now with some low-wage workers - is that the government would effectively subsidise that job through in-work benefits. Because of this subsidy, very-low-wage jobs could end up being a drain on the public purse and possibly the economy as a whole. So a benefit of the minimum wage is that it ensures that only worthwhile jobs (from an economic standpoint) are created.
EDIT: To expand: You may think it's better for a company to create a job and pay something of a person's income, rather than having them be job-seekers whose entire income come from the taxpayer. But in a system where large wage subsidies via in-work benefits are acceptable, workers at the lowest end of the productivity spectrum would be taking a job purely to qualify for in-work benefits (which I imagine would be higher or less hassle than unemployment benefits, to encourage people to seek work). It would make no difference to them whether they were paid £5/hour and topped up £2/hour, or paid £1/hour and topped up £6/hour, right? So for what are currently minimum-wage jobs, there would be no incentive for employers to pay more than £1/hour. So now instead of just paying for unemployed people, the taxpayer is paying for them plus every low-end job. It would cost a fortune and the transfer in wealth wouldn't be to the poor or unproductive, it would be to the business CEOs who are saving money in wages.
EDIT 2: So you might say "Don't subsidise those jobs! Let the free market sort it out!" but then you're back with the set of problems we had before we had any social welfare safety nets like benefits and minimum wages -- people will inevitably take woefully-paid jobs out of desperation, but they'll only be slightly-less crushingly poor and still very much living in poverty. The free market won't fix that.
EDIT 3: (I keep thinking of extra things I want to say about this...) A universal basic income would fix some of these problems. If you pay everyone a bare minimum to live on and have work be something you do for spending money, then these problems go away and there's no ethical concern with a job paying £1/hour (because there's no life-or-death pressure to take that job). For this to be workable I feel our society needs a somewhat greater capacity to automate unskilled work than we have currently, but we're getting there slowly.