Why is minimum wage bad?

[Paulitician]

Hong Kong does not have a minimum wage. Last time I checked they have one of the freest economies and are one of the most wealthiest nations.

A little thought experiment: if the United States abandoned all minimum wages, do you think everyone would be working for pennies? Why are there currently so many jobs that pay above the minimum wage?

As for why minimum wages are bad... Well, they are good for some people, and not good for others. Kaju has already shown how it's not good for some people (such as unskilled workers, who happen to be the poorest ironically, since minimum wages are supposed to help the poor). I'll leave to figure out for whom minimum wages are good.

And as an aside, it's also not about wages/prices and how much money you have, it's about purchasing power.

[Knighted]

Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?

[newyearsrevolution08]

"Income Inequality"

we are not talking communistic wages here....

each job should pay a different wage

Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?

[apc3161]

http://video.google.com/videoplay?do...arch&plindex=2

That is a video that I love. If you can spare 30 minutes, I would definitely watch it. It is a great interview with a famous economist. He tears the concept of the minimum wage apart.

[jclay2]

The only thing I can say on this issues is real life experience that I have seen myself. I just graduated High School this summer and didn't have a job. I badly wanted some type of experience so I could apply for an internship particular to my industry next summer. Eventually I settled with my sister to be an intern for her company. She did not offer me an hourly wage or even a biweekly paycheck. Instead, we aggreed that I would be paid a base of $2000 for the entire summer with the option to be doubled to $4000 given good performance. Even though I had a decent possibility to make an average of 3.50 an hour, I took the job. WHY ON EARTH WOULD I WORK WITH THE POSSIBILITY OF MAKING 3.50 an hour and not getting paid until the end of the summer. Well the reason I did so is because I wanted experience badly. Why should the government tell me I can't work for 3.50 an hour if I want too? Well to finish the story off, I ended up doing a great job and learning more excel functions and VBA code than my brain can hold. I helped the company eliminate data entry significantly and my sister eventually ended up paying me $5000, 20% above the highest value that was promissed. With the experienced that I learned from my internship, I feel that I will be one of the most competitive candidates when I send out resumes to insurance companies this fall for an actuarial internship. And the thing is the experience I gained was worth way over what I actually got paid. If I was paid $0 dollars for the internship, I would still be ok because of the sheer amount of learning and experience that I got. F*** you minimum wage, let the people work.

[auctionguy10]

Well when the government has excessive taxes, inflates the currency, and has all sorts of programs that drive the cost of living up- that's why the minimum wage sounds like a good idea. What needs to be fixed is the high cost of living- not how much you get paid- that's the fundamental problem.

[RCA]

No where does the Constitution mandate a minimum rate of pay for anyone. In a free market, minimum wages will be a NATURAL occurrence due to competition. In a free market, it wouldn't be called a minimum wage, rather, the lowest wage one could find in the marketplace. Most likely the lowest available wage would be higher than today's minimum wage due to less government interference in the free market which raises the cost of doing business. If companies have more money to attract new employees with, then wages go up for anyone willing to work due to competitive bidding for employees. Also, a companies reputation would be on the line in a free market, keeping most companies from lowering their pay too much.

[krazy kaju]

Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?

Hong Kong has a 4.2% unemployment rate and 2% inflation. The United States has a 5.7% unemployment rate and inflation close or even in the double digits.

[noxagol]

Hong Kong has a 4.2% unemployment rate and 2% inflation. The United States has a 5.7% unemployment rate and inflation close or even in the double digits.

Not to mention Hong Kong 20 years ago was third world conditions where as we have been top dog for how many decades?

[krazy kaju]

^ Exactly. Hong Kong used to be a rock with a fishing village on top of it. Practically no natural resources and no farmland.