[navi0]

Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr?

(Btw, the American healthcare system is about as far away from a free market as it gets. Don’t think that example supports your point.)

[handoflixue]

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.

[zeroCalories]

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.

[biztos]

I wonder how the “replacement cost” of a human should be calculated in light of the low birth rates in so many countries.

> Also, the full cost of replacing a human is vastly higher than the maintenance wage.

[gruez]

>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.

[bawolff]

> Real question: If government-mandated wages are good policy, why not set the minimum wage to $100/hr?

Because min wage policies have a cost and a benefit. The benefit only happens at relatively low numbers (enough for basic necessities). After that point you dont get more benefits but the costs still increase.

[navi0]

Please define basic necessities.

Is a three-bedroom house in [pick nicest neighborhood in any metro area] a necessity?

How about a one-bedroom apartment in the same neighborhood?

An in-law unit (e.g., "granny flat") on a farm just outside town?

A room in a six-bedroom co-op house where meals are collectively prepared and shared?

Same could be asked about food, clothes, etc. I can buy used clothes for $5 or new ones for $100.

"Basic necessities" is woolly term that in practice is full of paternalistic value judgements. Every individual has a variety of resources to draw upon that would make them willing/unwilling to work a job at a given wage.

A government-mandated minimum wage means some people who could find employment will not because their output do not exceed the wages the government has declared must be paid. In practice, it also means many people starting out in life or who are less skilled never get the chance to be hired and learn new skills that increase their pay.

Minimum wages remove the lowest rungs on the job ladder that often teach skills required to be successful higher up.

[watwut]

How is that a real question? If it is reasonable to make a policy with number X, how come it is not reasonable to make a policy 5X or 0?

Because you intentionally picked large unreasonable number and now want to argue it implies much smaller number is reasonable.

If maximum speed of 50km/h is reasonable in cities, why not making it 5km/h?

[kaashif]

It is still useful to ask the question just so we know the answer. I admit the person asking in this case probably didn't mean it this way... :)

On speed limits, when it comes to road deaths, you get people saying "one death is too many" and so on when one of their loved ones die, even when speed limits are set to 20 mph.

These people are wrong. Asking why a 1 mph limit is bad can help reveal that we do put a cost measured in lives on convenience, and we do face the risk of death when driving a car, and everyone has a number they think is reasonable.

Asking why $100/hr is too high can at least help us decide on a quantitative way to decide on a number rather than just guessing.

[HPsquared]

In the early days, the speed limit was indeed walking pace - often with a person needing to walk in front waving a flag!

https://en.wikipedia.org/wiki/Locomotive_Acts#Locomotives_Ac...

[navi0]

Another reply already addresses your question about speed limits, which is another great example through which to examine these questions.

"Reasonable" is a completely subjective standard and not a good way to run a complex economy with an infinite combination of job seekers and providers.

Who gets to decide what is reasonable has big real world implications for millions of people. Get it wrong, and as we see in California here, people lose their jobs and businesses close all because some politician or bureaucrat (or misinformed voter) thinks they know better than workers and employers what the correct price for labor should be.

[itsmek]

Your question can be applied to literally any market intervention with a grey area. If housing code is good policy why not make all houses 10 times as strong?

If your question is why is minimum wage a good policy, you could start here for a summary of the arguments and evidence: https://en.wikipedia.org/wiki/Minimum_wage

[navi0]

It's the same question, really. If we make housing too expensive to build through stricter codes, then housing won't get built and at some point (e.g., last decade in California discussed in the parent article), the homeless population increases and people/businesses decide to relocate because the math doesn't work.

I don't think a full look at the history of minimum wages will be kind to their supporters. Minimum wages were created by labor unions for the sole purpose of excluding other workers who are more productive or less expensive than their members[0].

Going back further, labor unions were created during the railroad boom by racist white workers to exclude Chinese laborers who were 2x more productive for the same price. Instead of responding to competition by getting better, American railroad workers formed labor unions and lobbied politicians for relief, culminating in the Chinese Exclusion Act [1] that forcibly expelled 400,000 Chinese immigrants and led to some horrific violence and racism towards Asian people in this country.

In all cases, the role of government should not be to mandate wages or prices or anything else that markets are better suited to establish, or there will necessarily be higher unemployment. Governments can help by establishing some health and safety standards and policing abuses, but when it comes to accomplishing the social goals that minimum wages intend to, that's better done through tax policy and income redistribution (e.g., guaranteed minimum income, earned income tax credit, welfare benefits).

[0] https://en.wikipedia.org/wiki/Workingmen%27s_Party_of_Califo... [1] https://en.wikipedia.org/wiki/Chinese_Exclusion_Act

[6510]

I think the solution here is to have you work at a fast food restaurant with a salary just low enough not to be able to eat at the end of the day. There really is no substitute for experiencing first hand what it is like to stack 500 burgers on an empty stomach then telling your kid there wont be any dinner today. Imagine some land whale exploding over her 7th burger not approaching perfection closely enough and that it seems you are not taking the issue seriously enough.

[lsaferite]

You were doing fine until you jumped to an aspersion.