Home Economics Obvious Point About The Minimum Wage Is Obvious

Obvious Point About The Minimum Wage Is Obvious

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As newspapers left and right keep telling us there’s no harm to the minimum wage. It’s not true that people buy less of things that become more expensive, so there. Econ 101 is just too simple and we’re sophisticates we journalists are.

They never do go off and consider examples of places where the minimum wage is obviously too high. Say, South Africa, where for a black kid it’s near impossible to get a job in the formal economy. Sure, some set of hustles or side gigs in the informal economy can always be found. But that’s rather the point, isn’t it? Formal economy jobs have to pay the minimum wage. We get much the same but more in India where something like 80% of the entire workforce is in the informal economy and not all of them are peasants.

Then we have sensible people within economics who try to tell us that, you know, actually, there’s a problem here:

Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.

It’s point 11) that is obvious.

Minimum wages affect those at the bottom end of the labour market because minimum wages are paid at the bottom end of the labour market. Some divorce lawyer to the stars doesn’t give a toss about it because it’s simply not relevant to the £800 an hour she charges.

So, who are the people at the low end of the labour market? The less-educated, the teens and the young adults. So, that’s where we’ll see any effect of a minimum wage, obviously.

The effects of a minimum wage turn up first in the teenage unemployment rate. Something so obvious that even The Guardian should be able to grasp it although, to be fair, probably not Owen Jones.

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4 COMMENTS

  1. And even the Economics 101 analysis is oversimplified.

    Suppose that in an office building filled with highly paid people, there is one toilet cleaner, currently paid £10 and hour. The minimum wage rises to £15. Does the office manager sack the toilet cleaner? And maybe clean the toilets herself? Or leave them to have shit stains, bad smells, blockages (usually with women’s sanitary products, but occasionally with shit)? Does she let the wet drips accumulate around all the urinals? Or the toilet rolls run out?

    I suspect that the £15 is paid, and as much toilet cleaning is done as before.

    Now, do this in a government building, the NHS, or a University – there is likely to be a plethora of toilet cleaners, including a fair proportion of them on sickies or maternity leave. The minimum wage goes from £10 to £15. At that point, some bureaucrat sees the wage bill leap, and looks into the matter. All the toilet cleaners can be let go, and the whole budget is saved. It just needs the men to stand closer to the urinals, both sexes to flush and follow with the toilet brush (I prefer using paper, myself, as the brush is rough on the ring-piece!), and the women to take their blood home with them.

    Result: money saved. But also overflowing blocked toilets, toilet paper (if there is any) traipsed out into the corridor, because those bints who use long lengths to cover the toilet seat never dispose of it but leave it on the floor), mens’ urinals awash as chewing gum has blocked them and all the rest,

    I can never see why men dressed as women should want to use the women’s toilets, what with the queue for the only cubicle where the toilet pan isn’t blocked.

    Perhaps the answer is to do away with toilets altogether: after all, Indians shit on railway lines, don’t they? Ah! Fuck Dr Beeching, there’s never a railway line when you want one.

    • Thank you for telling me where those damn lengths of toilet paper come from. I must bitch to the local library about the unfairness of a unisex toilet.

    • What happens in clubs is that someone from the gig economy comes in and keeps the toilets clean. In male toilets these are typically a very large unit, immaculately dressed and smelling rosy, probably on a NRTPF visa or none at all and called Winston. He gets paid tips, and carries a basket of smellies, sells toilet roll in a couple of qualities, and ports a mop as he moves between the floors of the call centre as the break times occur. It seems to discourage people from taking too many breaks as there is pressure to tip.

  2. Funny bit in the States, all the old media campaigned for higher MW, were called for hypocrisy because they used unpaid college interns. Hold on, they explained, we’re providing real-world job experience, training, a chance for these young people to see if this industry is right for them, make contacts, etc. Funny thing is, that’s exactly what McDonald’s is doing with a minimum wage job for a teenager, except, of course they’re actually paying something.

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