Subsidized Wage Floors

[Mr. Dictator]

You know, the minimum wage. I don't really know much about it, but that's never stopped me from tinkering with it.

What should happen, armchair economists, if a national minimum wage was abolished and in its place a law requiring (states, counties, what have you) to have a minimum wage set at a percentage of that (state, county, what had you)'s GDP is established. If not GDP, then...some metric.

Speaking of metric, I had an idea for a thread earlier but decided not to bother. Still not going to bother, but I'll tack it on here to spice up the conversation.

What if metric conversions were made an Olympic sport? Every year, metric conversion scores will be collected from around the world, and the states with the highest scores would win a set of golden scales. Second place, silver scales, etc.

 

[Antilogic]

So states with higher GDPs would have higher minimum wages? I'm really confused as to what the replacement option is.

And what about this metric conversion olympics? Is the fox visiting Colorado and Washington?

 

[Silurian]

So if a large mine opens driving up the GDP of a unpopulated state but only employing a few hundred people the minimum wage would go up and when one closed the minimum wage would go down.

 

[GoodSarmatian]

You know, the minimum wage. I don't really know much about it, but that's never stopped me from tinkering with it.

What should happen, armchair economists, if a national minimum wage was abolished and in its place a law requiring (states, counties, what have you) to have a minimum wage set at a percentage of that (state, county, what had you)'s GDP is established. If not GDP, then...some metric.

And here's the problem:

So if a large mine opens driving up the GDP of a unpopulated state but only employing a few hundred people the minimum wage would go up and when one closed the minimum wage would go down.

GDP isn't really an useful indicator for anything, and politicians treating it like one already causes enough damage. Even if you use a better metric, it will probably still rely on some average and would force businesses to increase wages if there's some unrelated boom in their general vicinity, even if it doesn't increase their revenue at all.

 

[Cutlass]

The reason a more consistent minimum wage is a good idea is that it minimizes the differences between locations. If there are big differentials, it encourages businesses to move to low wage locations, which is a net loss for everyone.

 

[Azale]

Yea, this idea makes no sense.

Agitating for a higher minimum wage requires much stronger labor power and democratic processes in general. You can't just peg it to productivity increases or some other economic metric and call it a day, the erosion of these gains will be ever present without a larger movement across all industries and spheres of employments.

So it (minimum wage) should be limited only by the restraining actions of the workers and democracy itself I guess, if that makes any sense?

 

[Patroklos]

The reason a more consistent minimum wage is a good idea is that it minimizes the differences between locations. If there are big differentials, it encourages businesses to move to low wage locations, which is a net loss for everyone.

Thus raising the GDP there and it's minimum wages. I though you were all about redistribution?

 

[hobbsyoyo]

Thus raising the GDP there and it's minimum wages. I though you were all about redistribution?

*Maybe* the GDP would grow, but if we're talking about one company, they aren't going to contribute significantly to GDP to cause raises to rise. And on those wages, a company that is capable of moving to lower wage areas is not going to ever raise wages. They'll simply relocate to another lower wage area, rinse, wash and repeat. Ask Mitt Romney how it's done; I've heard he knows a thing or two about it.

 

[galdre]

The minimum wage should be based on the cost of living in an area

 

[Mr. Dictator]

The minimum wage should be based on the cost of living in an area

Yeah, that's the thing I was looking for.

Sorry guys, it was a Saturday night and I skipped over a key fact in this thread. I'm not arguing for anything like this, but more curious about what would happen if it was adopted.

 

[Antilogic]

I'll largely agree with GS that GDP is a garbage metric to begin with, but in this particular case we really should be focusing on something per capita since GDP does scale quite a bit with population. Should New York City's minimum wage be 100x to 1000x that of a rural village?

 

[Patroklos]

*Maybe* the GDP would grow, but if we're talking about one company, they aren't going to contribute significantly to GDP to cause raises to rise. And on those wages, a company that is capable of moving to lower wage areas is not going to ever raise wages. They'll simply relocate to another lower wage area, rinse, wash and repeat. Ask Mitt Romney how it's done; I've heard he knows a thing or two about it.

If its just one company then Cutlass's objection is irrelevant, and you in just claimed all companies would move en masse. Which is it? And if the effect of companies moving is more rapidly is just to raise wages higher in more places by redistributing it from wherever the higher wages were before.

Your theory has companies fleeing high wages, but they wouldn't flee if there were no high wages. So which one is going to be?

I don't think this is a bad idea btw, but it meshes perfectly with Cutlass's usual economic line so I am looking for him to have an objection consistent with that line.

 

[KMRblue1027]

All you get is companies bouncing around the country as there would have to be a delay on when the wages go up corresponding to cost of living. Or you'd have a problem where they'd just move overseas at a greater degree to avoid relocating once a decade. Not to mention how quickly cities would become wastelands which is the exact opposite you want to happen. It would just force more people on the road.

 

[hobbsyoyo]

If its just one company then Cutlass's objection is irrelevant,

Because...?

and you in just claimed all companies would move en masse.

I'll give the rest of your post a straight answer when you reread my post and admit this line and everything that flowed from it is wrong.

 

[Patroklos]

You said "if we are talking about one company." Nobody mentioned any such thing until you did.

 

[hobbsyoyo]

You said "if we are talking about one company." Nobody mentioned any such thing until you did.

Yeah, and how do you get from there to here:

and you in just claimed all companies would move en masse.

?