Structuring of Wages and Minimum Wage

[@TheSandkastenverbot]

As you've said, the effect of a minimum wage is surprisingly hard to foretell. The only responsible and yet moral way is to raise them regularly but cautiously until layoffs, productivity loss etc. become too large. In Germany we have exceptions for internships, student jobs and the like. In some cases the government then has to provide the difference between minimum and living wage. It's actually very simple but still easily overshadowed by normative arguments like "people get lazy then" or "the market has to be left alone".

[@skaruts]

It's not at all hard to predict the effects. One of the effects is higher unemployment. I personally have a real hard time getting jobs because every employer requires experience, and that's one of the effects. All the effects he listed in the video are actually true (even those he claimed that aren't, and that you are admitting to be true), but there's also another effect he completely neglected here: the effect of price fixing. Wages are prices. And price fluctuations are one of the market's feedback mechanisms through which people can read supply and demand. If you fix a price, then people can no longer read supply and demand, which will lead to bad allocation of resources, and by consequence wastefulness and shortages, which will in turn affect many other prices upwards. Basically, if a price can't fluctuate, then other prices will have to compensate for it, and bad resource allocations will ripple out. *_"The only responsible and yet moral way is to raise them regularly but cautiously until layoffs, productivity loss etc. become too large."_* If there's layoffs (or reduction in hires) and loss of productivity, then that means everybody's worse off. So that can't be the moral way at all. The moral way is the one where everyone's better off. *_"In Germany we have exceptions for internships, student jobs and the like. In some cases the government then has to provide the difference between minimum and living wage."_* What that boils down to is people are paying a higher price, because government money is people's money, and is always handled wastefully. And when government does it, what that actually means is that people who don't benefit from it are paying for the people who do (which is actually theft).

[@twinnerNet]

I would argue a minimum wage also helps prevent companies from leveraging people's desperation against them in times of high unemployment.

[@dylanc9174]

@@FletchforFreedom Except for when large companies employ a large portion of s population. All you can do is work there or move. The second isn't an option.

[@advancedlamb]

@@FletchforFreedom Gotta love the "individualists" who believe that private corporations should control all of our lives and decide how much we can eat and drink. How many more billions do you right wing individualists want to kill? How many more famines and preventable disease deaths need to occur before you guys get bored?

[@kajekage9410]

@@FletchforFreedom you seem like a completely normal and emotionally stable guy who fully understands exactly the premise in OPs post.

[@travcollier]

@@dylanc9174 Yeah, folks tend to forget about all the 'services' provided by family/social support networks. The cost of moving for a lot of folks, especially lower income folks, is extremely high. That limits labor mobility and the effective competition between employers for labor. The most coherent argument against minimum wages involves a UBI (or an extremely robust social safety net). If people did not have to work to provide for basic necessities, then labor participation would actually be voluntary and "let the market decide" could work with minimal interference. Wages would be a lot less and (corporate) taxes much more, but it makes sense at least in theory. So long as participation in the labor market is pretty much compulsory to survive, we aren't in a "free market" sort of situation.

[@travcollier]

@@FletchforFreedom None of what you assert as "proven" is actually proven. The real world data as well as actual economic theory (past the 101 level stuff) shows that the effects of both minimum wage and UBI (and social safety nets in general) are complicated and mixed. Details matter. You really should try to think more like a scientist... Instead of just looking for whatever supports your preconceived notions, look for stuff which challenges it and try to prove yourself wrong. Or just go smoke some more weed with your Libertarian bros and tell each other how smart you are... But don't expect people with a clue to take you seriously.

[@Dan-ud8hz]

People who work full time shouldn't face homelessness. If a business can't afford to pay a living wage, that business doesn't deserve to exist.

[@GARYTHDawson]

In a perfect world all recompense would be just, I myself have worked for less than I should rather than have nothing. Not saying it's right but employers are sometimes a step away from going under, it's not always greed.

[@gnomatic]

They privatize the profits, and make us pay for the losses. Look at insurance, as soon as you're statistically old enough to need it, they kick you off private, and put you on public insurance.

[@kajekage9410]

@@gnomatic Another reason why we need universal healthcare.

[@gnomatic]

@@AG-sk5pv Public healthcare has improved the health of every country that's ever seriously adopted it, for obvious reasons.

[@kajekage9410]

@@AG-sk5pv your logic is extremely flawed, it's not really logic at all, just a made up right wing talking point. Just like your patently false claim about how meta analyses are done on gender and wage. Not sure where you got your research related education, but return any degrees you got and get your money back.

[@aleksszukovskis2074]

Well, what politicians say isn't a good indicator either.

[@hueyiroquois3839]

Actually, it usually _is_ a pretty good indicator that we should do the opposite.

[@ianthompson31]

Professor Dave, as someone who studied finance and has finance degrees, I appreciate the way that you brought up both sides of the debate. The one thing I disagree with, is that minimum wage hasn't outpaced inflation. For that I would need a place to compare the modern minimum wage to, for instance when started, the minimum wage was $0.25 in 1938, adjusted for inflation that is $4.93, that would mean that minimum wage has outpaced inflation for that time period. The graph given was adjusted for 1982-1984. I think using one adjusted for 1938 would give a more accurate representation of minimum wage changes through time, it is time to up minimum wage, and it's hard to predict what changes that might happen although a lot of the possibilities were raised in this video (Kudos). The current level should be around 10-12 dollars an hour according to a lot of the research I read but that may have changed since recent inflation levels are high.

[@AlexDestroyerOfEarth]

The congressional budget office already ran through as many things as they could with regards to the $15 min., I would suggest reading their report, it actually is the main reason the minimum wage increase basically got dropped. I think people tend to not actually look into things much, considering less than 1% of American workers are actually receiving minimum wage or subminimum wage, which includes tip workers, who tend to not report tips over minimum wage to begin with. Average hourly wage in America is around 15-16 dollars an houe, and has risen steadily every year.

[@hein7598]

Hi Prof. Dave just wanted to say youre content is really inspiring to me and you are awesome lots of support from South Africa

[@Ultra4]

your*

[@marybean2231]

@@Ultra4 What a glorious first comment on the channel

[@Bruno_Noobador]

I am really impressed by the animation in this video. I'm glad to see this channel improving.

[@kajekage9410]

Professor Dave is a planetary treasure.

[@nOOn3nOOn3]

If you think minimum wage has caused the current problems we face despite it not moving in decades, he may not be smarter then a flat earther, because even they're not that stupid enough to fall for that lie.

[@kajekage9410]

@@nOOn3nOOn3 you're a walking Dunning-Kruger graph who doesn't even understand the topic or who is saying what about it.

[@kajekage9410]

@baby kata OFFICIAL someone always gotta one up me lol

[@nOOn3nOOn3]

@@kajekage9410 hahahah... actually considering I took universities class on economics, and business. I don't think I am. Where did you get your degrees... youtube I assume? I think what has happened is I disagree with you, and you can't be wrong. Never... you or a guy that figured out the earth was round. Wow... he must have finished kindergarten. If any of the things he stated by minimum wage are true explain why it's currently almost 15 dollars behind current inflation. If minimum wage had kept up with inflation or was the cause of it as you have falsey claim it would currently be 22 dollars in the states not 7.25. 7.25 or even 11 dollars are slave wages, designed to make it impossible for people to live or even look for better work. Kind of hard, when you got 3 slave wage jobs and you still don't make ends meet. Like a large percentage of the states is currently struggling with. A minimum wage was designed to be the living able wage, despite what the decades of propaganda pushed by large corporations and conservatives to make excuses for badly paying their workers or rely on slave labor overseas. So explain how something that hasn't moved in decades has caused the yearly inflation we all suffer from. However, thank you for accusing me of the same thing ever flat earthers claims when you point out the earth isn't flat. You may need a better excuse to ignore reality. However, tell me more about this flat earth you believe in. I like laughing. Do you even grasp the dunning Kruger effect or is that also something you learned off youtube? Also, small business tend to pay above minimum wage, it's place McDonald's and Microsoft that pay people minimum wage. They also collect corporate welfare. Keep protecting those parsiste and spreading those lies about minimum wage. Your ignorance on economic and business is pretty obvious.

[@nOOn3nOOn3]

@@kajekage9410 you got admit. Trying to claim a minimum wage causes inflation, when minimum wage hasn't moved in decades but inflation happens every six months to a year. Is purely stupid even for you. I guess it was for some future time when minimum wage goes up right? You going to claim water finds level. next.

[@steveswangler6373]

having a minimum wage doesn't create layoffs and outsourcing. corporate and stockholder greed and managerial shortsightedness does.

[@celticlightning9703]

Minimum wage is a joke until the $15 hour raise. Even then it seems everything doubled in cost so when I was making $9.50 hr. at Rite Aid well $9.67 with my .17 raise there was absolutely no way in hell I could meet minimum living requirements. Now making $18. at another company I felt like I had possibilities. But I'm starting to see that slowly drain away since Covid. I wonder why? Every year seems I'm starting to go back to having to give up either a car or roof over my head.

[@chelsea0699]

@@FletchforFreedom Employers don't pay the value of your labour - the excess labour value you provide for the company (what they don't pay you for) is literally their profit. Companies just pay the minimum possible amount they can get away with before either they hit minimum wage, or people start switching jobs (for the most part). That isn't anywhere near the actual value of the labour you provide. That's why the government needs to be there to enforce a minimum standard that companies have to pay their employees, in order to minimise the exploitation of the workforce who are now massively struggling to pay a lot of their bills due to high inflation which isn't compensated for by rising wages.

[@chelsea0699]

@@FletchforFreedom Ok, so instead of raising the minimum wage to the living wage, do you suggest it's lowered or completely abolished and wages will end up rising? Also back in the agrarian society people actually owned what the produced! We now have a small minority of people owning a massive majority of production, allowing them to exploit the working class who can't afford to buy any means of production for themselves because it's all either taken or at egregious prices. Also could you provide a source for the $25 per hour median income?

[@miked6592]

Unless we quickly evolve into a more empathetic society, minimum wage/standards in general, are necessary. I do not see the recent significant increase in certain state's minimum wage as productive though. Minimum wage needs to go up, at least to match inflation. But, playing catch up hurts more than it helps. Raising the minimum wage [typically] 1-3% per year is somewhat manageable to absorb the increased costs - assuming those on fixed incomes [SSI] also receive that increase. Raising minimum wage ~10% per year for several years, negatively impacts small business and those in the lower middle-class/upper lower class. Most employers cannot sustain those wage increases and employees in the aforementioned classes creep closer to the poverty line. If this is just statewide, there is also competition from surrounding states. If your company can be impacted by labor in other states, for example US-Made washing machines can be made [reasonably] anywhere in the US and shipped to the box store. Therefore, having the manufacturing facility in a higher labor state (without any return benefit - higher skill) doesn't make sense and the consumer market will reject the price increase. Why buy US-Made brand A for $1,000 when you can buy US-Made brand B for $950? - Assuming all things being equal.

[@zephyrheartwell2416]

It is the LACK of adjusting minimum wage that created the situation you are describing. Before when we were adjusting minimum wage and we charged import taxes, it made sense to make and buy things locally. When we stopped adjusting minimum wage and reduced import taxes, it allowed any company at any time to move labor anywhere in the world just to save money. That is what has created our current lack of middle-class manufacturing jobs, and that has made the entire local economy here suffer massively. Many US companies could re-import their labor if we ensured that workers were being given healthy enough wages to BUY the things they MAKE.

[@miked6592]

@@zephyrheartwell2416 I both agree that it is a lack of wage adjustments causing the issue and I noted it in my reply. Minimum wage should be adjusted on a regular basis, most likely annually. I made no mention of anything outside of minimum wage because that is the topic of this video.

[@MisterItchy]

It's been a minute since you put out something that's simple enough for me to understand! Thanks! I am not an economist or even a smart person. It seems to me that an employer needs to pay a full-time worker enough for that worker to live on. The current federal minimum wage is not that. If the employer needs to raise the prices for it's services or products or, heaven forbid, take a smaller bonus, in order to accomplish that, so be it.

[@Milkmans_Son]

How much is enough for a high school kid still living with his parents?

[@LiftedBlader]

@@Milkmans_Son as much as is enough for an independent person to not be trapped in poverty while not having parents to rely on

[@GARYTHDawson]

@@Milkmans_Son If you ask that are you saying wages should rely on circumstance?

[@kajekage9410]

@@Milkmans_Son Might be worth getting educated on the topic before you focus on asking loaded questions that you think are gotchas.

[@Milkmans_Son]

@@kajekage9410 Or maybe it's a legit question I asked because I don't know, and you didn't answer because you don't either.

[@scottclark3761]

Hmmm. Minimum wage also raises the cost of goods, especially those stocked or handled by minimum wage workers, like in grocery stores. This causes a structural inflation that offsets the benefit for raising the minimum wage for the lowest paid workers. In the meantime, it raises the prices for those in the middle class, who do NOT get a pay raise when minimum wage is increased, thus lowering their buying power and their ability to spend. And also you should look into that wage gap. The one based on minorities has some evidence behind it, but the study on the male/female wage gap has some serious methodological flaws. They didn't control for industry, nor the amount of hours worked. I find these to be serious flaws. Of course someone working in a higher paying field working more hours is going to make more money than someone in a lower paying field working the minimum. Man or woman. And if you thought the former was a male automatically, that's because your brain was playing the odds. Men do work more hours than women. Even when women are given the exact same opportunities, like in the Scandanavian countries. I think a more nuanced look could be more useful.

[@Kenshin6321]

Hey the quality of your videos have gone way up recently. Keep it up! These videos are 😃👍.

[@cicik57]

one interesting and important point was mentioned here about the economy. In the awsome free market. Here, what work must be done is determined only by "todays demand" , without having any larger stragetical plans. Also the automatisation is mentioned as something undesirebla, and the outsource to the cheaper labot is mentioned

[@goatfood1504]

The U.S. economy is not a completely free market, in fact it is one of the most regulated in regards inflation rates and interest rates. This is done to ensure the economy is strong enough for jobs to exist, but not too strong that there is no motivation to work. The fundamental problem with a completely free market is it will leave people to starve to death on the streets or die of preventable diseases. To combat this social programs are formed to help provide for those who are unable to provide for themselves. However, jobs that do not pay a living wage leave people broke by retirement age and the government has to deal with it basically making the taxpayer subsidize jobs that really shouldn’t exist in the first place.

[@codehound8033]

The minimum wage is ways $0.00. An employer can not pay a worker more money than the employee produces. The employee will soon be out of a job (either let go or the business fails).

[@grmpEqweer]

Paying living wages will expand the market, because workers will be able to buy more stuff. We are a consumer-driven economy, right? So, ironically, it's actually good for business if workers get paid more across the board. As far as "It'll cause inflation!" We have inflation anyway. We also have automation. A business is always going to automate away any need to hire if they can do so. In fact, businesses hire as few people as possible. Hiring is driven by _customer demand for goods and services._ Which go up if people as a whole are making more money...

[@ItsTornHD]

In addition to the “it’ll cause inflation” argument, it seems like many people making this argument have the idea that product prices will increase linearly with the increase in wages which doesn’t seem to be the case

[@JHKanus]

Well done Prof

[@71beowulf]

Thank you for breaking it down to basics. As a leader in Fight for 15 for years it's great to see this issue discussed. We have raised the wages in 25 states and 56 localities in 2022. We're going to get all of them. We've passed Medicaid expansion legislation and right to counsel ordinance for evictions. Low wages actually place a blight on a whole community because poverty spreads. No investment leads to neglect and so on. It's really good common sense and a moral question as well.

[@zebyurd9530]

I really think it’s a question of values. I think that in our modern society everyone has the opportunities to succeed and get paid more than minimum wage. For example, anyone can go to their local library and get access to a computer where they can learn valuable skills like cad, programming, or graphic design which bring them above minimum wage. I think poverty is a result of a failure in our education system rather than a minimum wage set too low

[@avael2451]

@@zebyurd9530 Yeah it's not like businesses have the bargaining power over wages or anything...

[@71beowulf]

@@zebyurd9530 Yes education system is a problem. Go to any community where the majority of businesses are low wage employers. They're likely there in a long term lease and the developers probably had some tax abatement incentives to build there. Where's your investment in that community and it's infrastructure, families and workers. It's in the CEOs salary of McDonald's who makes 10 grand per hour yet the " essential" worker who makes their money is in line at a food bank . Equal fair market huh?

[@privettoli]

How would higher minimum wage not lead to outsourcing and automation?

[@zebyurd9530]

@@71beowulf It is a fair market because any one of those essential workers can rise above their place in the system. Bill Gates was successful not because he inherited a fortune but because he learned everything he could about computers to the point that he could make a better product and sell it. Anyone can accomplish the same if they work their balls off

[@GARYTHDawson]

Love your analysis of wage structuring and how you make it understandable. On this occasion I have a slight disagreement on the simplification of the automation argument. I believe automation is driven by the affordability of the technology first and will always replace labour once economical.

[@kajekage9410]

Yah that's not a disagreement that is you just not understanding what he's saying vs. what you are saying. You just said automation is driven by affordability... that fully aligns with what Dave is saying. If the business has to pay more to hire an individual it can make automation more affordable.

[@GARYTHDawson]

@@kajekage9410The affordability of technology will drive automation regardless of pay structuctures, even slave labour. Not saying this is right but hiring Vs mechanization usually only has one winner.

[@mikean7074]

Those points he was making at that part of the video against raising the minimum wage was, according to what he said, "what some economists say" about the matter.

[@Dan-ud8hz]

"If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality." -- Stephen Hawking, 2015 Reddit AMA

[@GARYTHDawson]

@@mikean7074 Yes he prefaced with "critiques say." so I understand this is not Daves point of view. I stated that I thought the argument was simplified and that is what I disagreed with, I acknowledge the use of the word disagreement was misleading.

[@prschuster]

A big part of the racial pay gap is the education system which results in more college graduates among Whites and Asians, and this has a lot to do with differences in social class. With women, it's more about choosing lower paying people oriented careers like teaching instead of engineering, as well as the division of labor in households where women tend to spend less time in the workforce and more time raising a family. Discrimination, based on race and gender, also exists to some degree. That said, I am in favor of the minimum wage being the same as an affordable wage. In 1970, the minimum wage was $1.60 in the US, Inflation has increased 7 fold and the cost of an apartment has increased 10 fold. So according to this, the minimum wage should be either $11.20 ($1.60 X 7) or $16.00 ($1.60 X 10).

[@zaphodbeeblebrox1st30]

Cost of living near an ocean* Rent in TN or KY is pretty cheap.

[@Bingo_Bango_]

​@@zaphodbeeblebrox1st30 It can be argued that a *federal* minimum wage hike to $15 is effectively economic warfare on lower-cost states that haven't urbanized to the point of requiring such a high wage. This is because it erases the strong pressure on businesses to expand into low-cost areas instead of blindly crowding into cities where they can't afford to hire anyone. It is no coincidence that the loudest advocates of federal rate hikes are the people who wish to do their own local rate hikes already... If you already want the policy, why do you need the feds to step in? It's because their own local areas are unsustainable, raising the minimum wage wont help, and businesses are fleeing elsewhere. A factory owner or developer: "The costs here are high, we can operate our main facilities at a loss for 10 more years, but we need to have an escape plan." A city director in TN: "Please come to my state, $8-11 is a livable wage here and we will give you a preferential lease." Some real world examples with this exact exchange include Memphis winning Smucker's in the 70s using this exact trick, and Fisher in Wilson just last year. That advantage vanishes overnight if such a bill is passed. Also, prices will likely rise in these states *permanently* to compensate, since the markets in will be so flush with money that demand will excessively eat through supply and a new equilibrium will have to be established. Rather than cutting costs in New York or Chicago to make them livable on $11 ($2.5) again, why not hamstring the rest of the country so there's nowhere for people or businesses to flee to? Then you can keep wasting everyone's money and embezzling, and pretend you're pro-worker, all in one fell swoop...

[@vyor8837]

There is no pay gap between men and women. The difference in wages revolves around hours worked.

[@vyor8837]

There is also no evidence for minorities getting paid less for the same job and the same number of hours worked

[@vyor8837]

"more people having more money" That's just inflation. Prices would go up across the board and that "living wage" wouldn't be enough to live on anymore.

[@mikean7074]

Literally every reason you listed for why "some economists argue against a minimum wage" is a lie told by those people who have an incentive to maintain a vastly inequitable system. If inflation was driven by the minimum wage then we wouldn't have seen prices skyrocket like we have over the last 50 years. Prices have steadily gone up despite the minimum wage lagging WAY behind. Automation is not driven by a rising minimum wage. Automation is driven by advancing technology and Company owners who recognize that they can make more money in the long run by making a major short-term investment in these expensive machines and computers which have low maintenance costs. I don't recall all the points that were made and I don't have time to watch the video again at this moment but it sure is sad to see "some economists" selling out the working-class the way they do.

[@kajekage9410]

You do realize that he wasn't MAKING the argument for anyone, he simply stated the facts of the matter which included the arguments others made. He did not discuss validity.

[@pastramilover1012]

@@kajekage9410 agreed, he was just showing points made by others for the sake of argument and to show lack of bias. Like any good essay or in this case a video, it is helpful to elaborate the other side of an argument and use counterpoints against it.

[@mikean7074]

@@kajekage9410 You and the corpse lover who responded to you are kind of stupid for not recognizing that I already understood this and made it pretty obvious in my comment. By saying "the arguments you listed under 'some economists say'", I could have ONLY been referring to the talking points he was RELAYING and not actually making himself.

[@kajekage9410]

@@mikean7074 You seem like a great guy. I'm sure people hang on your every word.

[@mikean7074]

@@strangelyukrainian7314 Relative the cost of living, wages 80 years ago were much higher, even for jobs that were considered low-skill, the minimum wage has lagged FAR behind the cost of living. If businesses back then could thrive, why would bumping the minimum wage now to more approximate what the minimum wage was back then have such a devastating effect?

[@volnartheunforgiving3952]

Very intuitive and interesting video! I enjoy how you show both sides of arguments.

[@Aichomancer]

Yeah both sides, the one against minimum wage and the one that's based

[@mertalrooth01]

This was a crap shoot of a video comparatively to his other ones... No intuitiveness needed for reading definition.

[@tsilarij-p3726]

What if there's a strong trade union that sets the minimum wage in agreement with the employers? Are you going to make a separate video about Unions?

[@Grymyrk]

In my country companies who discriminate against minorities are companies run by those same minorities.

[@NobleMarcos]

Minimum wage was often used to push the budding competition under. Those poor and black people are doing our job cheaper? Politician man, please stop them, you can say it's to stop poverty.

[@maneatingcheeze]

Bull shit. Minimum wage started as a response to sweatshops and child labor. It was specifically aimed at preventing women and children from being exploited and to eliminate unsanitary and unsafe working conditions. Very few in the US at the time would hire a black man over a white man, no matter what the job was or how cheep they could pay them. And if it became known that you had passed on a white man to hire a black man, you better watch your back or the KKK, White Citizens Council, etc. would come after you.

[@cpt.silver8498]

Simple clear beneficial as usual,THX prof

[@PulzRemix-v1f]

A very precious video.

[@-JA-]

Awesome as always.

[@nidhimoda605]

Well Explained Prof.! Your lessons are really useful and DEFINITELY worth watching. Subscribed. And Happy Holidays! :D

[@Cris-hk4cn]

Dave you present was excellent!!! Thanks

[@95TurboSol]

Show me the incentive and I'll show you the outcome, today almost all large business makes the majority of their money via stock investments from shareholders, and to spur investment into the company they have to show good numbers every quarter that have high return/profit. So the CEO's goal is make the numbers look good and labor is one of the largest costs a business has and cuts are made until they hit a worker shortage and have to give a tiny bit more. Unfortunately, most of the jobs are low skilled ones which means almost anyone can do it and that means there is way too much on the supply end, and THAT means low pay. This has been drastically exacerbated by flooding the US in low skilled workers via illegal immigration, which is why I support closing the freaking border to help our people at the bottom.

[@justinwatson1510]

Prosecuting businesses would be the more effective way to deal with the use of “illegal” immigrants, a $30 minimum wage would be the best way without overthrowing capitalism. Don’t blame the poor people who are trying to escape the hellish conditions created by US meddling, let’s instead go after the rich assholes who bought politicians and had the CIA sent into South America to arm and fund extremist groups.

[@95TurboSol]

@@justinwatson1510 Yes but it's both, the market sets the wage value and supply and demand is one of the biggest factors. The reason a 30 dollar minimum wage would have unforeseen consequences is because we don't have a single US market, we have a global economy. We know exactly what a business would do when you set a 30 dollar minimum, they would move to another country and the US would become poor with high unemployment. Believe me, I wish it were as simple as putting a wage mandate but it just isn't, short of a totalitarian world government (which brings it's own danger), there is simply no way to force businesses to pay what we would want them to.

[@justinwatson1510]

Money is fake, and so is debt. The working class shouldn’t settle for $30 an hour, they should demand nothing less than total control over the means of production. I’m sick of rich assholes holding everyone hostage with the stock market, and hope I live to see the fall of US capitalism. Corporate America has proven itself to be thoroughly evil and not worthy of the privileged position it has on the world stage.

[@mertalrooth01]

Definitions or systems. I mean yay it explained the systems. But really didn't make too much a case for things. I guess from a prof stand point he did the job.

[@worldwarwitt2760]

if women were making less then there would be more women in all fields

[@mertalrooth01]

@@worldwarwitt2760 False Dichotomy. [If you truly think that's exactly how the other option should play out] Unsound even if you don't believe what you said is the only other way for it to play out. I disagree, with your statement. And it's clear you've not done your research into hegemonic masculinity. You are lacking lots of points to even begin speaking that statement. For instance why don't you look at the Pregnancy stigma against women in most hiring places.... That alone should tell you, you didn't come into this talk with bullets much less a weapon for said bullets. V/r

[@worldwarwitt2760]

​@@mertalrooth01 The various meta-analysis of the hiring practices where there are equal protection laws clearly shows that women at most only have a few cents difference in pay for the same work. The reason why men on average are paid more is that they work more dangerous jobs, they work longer hours, are less agreeable, that they are more aggressive at getting pay raises, and they are more likely to take risks. There is no pay gap. The only reason why people bring it up is that they don't understand averages. On average, the majority of the data points clearly show that women in general 1) choose and take jobs that pay less 2) They choose to work fewer hours 3) They choose to take time off to start a family. And while there was in the past a pay gap, economic pressures of supply and demand would drive the wages for men down, which they have. That is why wages have stagnated for everyone over the last 80 years, it is because the supply of workers doubled.

[@TheTruthKiwi]

Hey Professor Dave! I'm sorry this is off topic for this video but I just saw your Globebusters video and loved it. There is a small channel called Flat Earth Philosophy with an older gentleman from New Zealand that is convinced the earth is flat/donut shaped with the black hole in the middle. If you wouldn't mind having a quick look and throwing some facts his way that'd be awesome. Thanks for the brilliant content!!

[@jacoby6000]

How do some businesses in Europe afford to pay fast food workers more than they pay them in the US, while also charging less to customers?

[@privettoli]

Net they probably receive even less? But the reason might be as simple as locality. High density of population? Smaller transportation costs?

[@chemicalfrankie1030]

ehm... I am not sure which European country you are referring to since for sure in my it is not like that...

[@jacoby6000]

@@chemicalfrankie1030 Denmark. People there make 22$/hr at mcdonalds, and a big mac there is almost a full 1$ cheaper

[@jacoby6000]

@@somenameidk5278 At mcdonalds at least, this is not the case.

[@AlexDestroyerOfEarth]

@@jacoby6000 1 dollar is 6 danish krones, are they making USD 22 an hour or DKK 22 an hour? that would be nice to explain, beyond that, european fast food tends to cost more than it's american counterpart, you have much higher good and living costs in general, your currency is weaker, so of course your wages are higher, it's the same for Australia and Canada, the two countries closest in spirit to the US.

[@peergynt6515]

This is interesting outside of a vacuum too though. With legislation that allows unions to establish one might not need a minimum wage. Combine that with free public universities, or whatever allows for general access to degrees regardless of their financial situation. A skilled work force in abundance might incentivize automation, but with unions it will also allow the unskilled worker to have close to the same wage as an engineer. Both the demand and supply of skilled workers is high.

[@NoodleBerry]

I’d like to say that a lot of people who don’t make exactly the minimum wage still have wages that depend on it. Like, they consistently get 1 or 2 dollars above, and that goes up when the minimum wage goes up. This would be a huge deal for a family I know

[@sinpoeanarconna2974]

Professor Dave for President in 2024 & 2028.

[@daljeetsingh5127]

great video thanks :)

[@shanevandiver8457]

The idea as I have heard it is that the minimum wage was established to protect workers who were not able to effectively negotiate their wages. The better your negotiating skills the better your wage. However people get paid for their value in the marketplace. If their skills are not valuable then they will receive a minimum wage. If their skills are valuable and the worker is difficult to replace then that worker will be paid very well. If you aren't paid well then it is up to you to do something about it. Start a business. You don't need money to start a business. Their are a variety of courses that take a hold-your-hand approach to teach you. Also you could get a student loan and go to college or university so long as you pick a major that is actually useful. Or finally you could get into sales. Either way the idea is to become valuable to the marketplace and get paid a lot more.

[@goatfood1504]

Minimum wage is about the cost of labor. A job shouldn’t exist that pays you less than can be lived upon as the government will have to cover the excess cost for the employee. The U.S. Economy is not a completely free market economy, it is closely regulated by a complex system of banks and financial institutions that ensure the economy does well enough for jobs to exist, but not so well people can avoid working.

[@lwo7736]

The only problem I have with this video is the failure to pay lip service to the multitude of reasons why women get paid less per hour, all you said was "because sexism". While that's a factor, it's way more complicated than that. It's illegal to pay women less for the same job, if we did pay them less, why would anyone employ a man ever? They cost more apparently...

[@ashah0520]

Thanks

[@Twentydragon]

5:30 - I'm surprised that "people's survival expenses aren't negotiable" didn't make it into the list of points in favor of having a minimum wage. At a certain point, if you're not paying your worker enough to live, it does them more harm than good to keep them in that position. All the time that they're spending working for your peanuts they could instead be spending seeking more gainful employment, and since they'll have to do this anyway when they realize this, it's best not to string them along. Also, while I personally do believe that minimum wage should be enough for someone to live _comfortably_ on, I'm not arguing that here. I'm _only_ talking about the amount of money one needs to cover the basics: food, clothing, shelter, and transportation. If the wage you're paying can't cover those things, your position is, in a very literal sense, not worth their time.

[@AngelTaylorgang809]

i remember when i used to be wage slave, until ETH hit $4000.

[@gzunfariqbalgazanivlogs7197]

Superb professor

[@jimstylin]

If businesses don't calculate or can't pay the minimum/living wages for it's employees then it has a poor business model and should not be in operation.

[@cheongzewei6792]

Hold up. I would like to contest the "Women gets paid less". Are you talking in terms of the same job with the same hours, or generalizing all jobs by gender?

[@helpyourcattodrive]

Yas!!!!

[@sorvex9]

in Denmark we have less poverty than in the United States and guess what guys, we DON'T HAVE A MINIMUM WAGE.

[@thomashubbard288]

More people drown when ice cream sales go up, don't buy ice cream!!!!!

[@justiceforall6857]

Well, unions have a strong influence in Denmark, and those unions enforce a de-facto minimum wage for companies to pay their employees. So, in a way, Denmark does have a minimum wage.

[@bisoroumieh9780]

Please , can u explain the mechanical ocsillation?

[@biastv1234]

The minimum wage should be viewed as “ the lowest the employer can pay without going to jail”

[@Juan_rivera]

Perpetuating the wage gap myth eh

[@johnwellbelove148]

I'm always astonished to read about how many Americans have two jobs or more just to 'survive'.

[@thesandwich7151]

I love your videos :D I am interested in one thing, have you ever tried working or collaborating with kurzgesagt? If you did, how was it?

[@EeekiE]

My parents grew up in fucking easy mode compared to me. I remember my dad ribbing my younger brother for complaining about how much he’d get for doing a paper round. Because he got far less and was awake very early to do it and all of that shite. Chuck what he used to get in an inflation calculator and it was significantly more money than my little brother would make doing the same job today. Massively more, to the point it would be worth getting up early. Not to mention him getting a mortgage for a huge house on a shitty job with zero qualifications, where the cost of the house was only 4x his annual salary. I’m looking at 12-15x more for a significantly smaller house with a job that requires far more qualifications to do. All this millennial mocking over a fucking avocado or an iPhone when they grew up where it was normal to feel entitled to buy a house on an average shitty job. The old have cannibalised their own young and didn’t maintain the same country for future generations. We’re still miles behind what they had and they’re the largest group resistant to any changes to make it fairer for us.

[@Liliputian07]

we should move to a co-op model

[@Liliputian07]

@@FletchforFreedom you are either very stupid or a liar. food insecurity and shelter insecurity are significant problems in the United States and most of Generation Z will never own a home unless they inherit one. financial instability in the US is extremely well-evidenced and only a legitimate monster would ignore it

[@Kilmoran]

I do not think any job I know of with the word "entry-level" pays anywhere near the minimum wage. Usually when I see that terminology it is for skilled labor. Not saying my experiences are correct overall, just noting what I have seen.

[@pepperVenge]

Love it! You touch on both sides of the argument fairly. I personally am for minimum wage equaling a Living Wage. I often consider starting a "$27 by 27" campaign in my home state; meaning $27 an hour by 2027. Because that is LITERALLY how much you need to Earn in my state in order to keep out of poverty.

[@edilialemus]

You live in Cali? cuz in my state that is a pretty good amount.

[@pepperVenge]

@@edilialemus $27 an hour would be good anywhere. But no, I'm in Colorado. It's pretty expensive out here. A lot of Rich people wanna live here, and big houses Pop up all over the place. Drives everything up. A decent 1 bedroom apartment will cost you $1600 a month. You could go cheaper, get a 1 bedroom for maybe as low as $1100, but at the cost of living in a decent area and a quality place. My sister and her boyfriend are paying $1600 right now. Her mom is paying about $2,000 a month for a 2 bedroom, but she makes $100k a year. My sister works a restaurant while she does school.

[@theprfesssor]

You would want the minimum wage to increase by 125% (2.25 times) in 6 years........... That would absolutely hinder many businesses in your state, especially the small businesses and you think prices are high now........ food and agriculture is a big industry in Colorado along with manufacturing any business paying minimum would have to more then double their prices at the same rate in order to compensate Would also lead to is a mass exodus of many things from investment to people to businesses to going to other states Colorado is rated as one of the best places to start a business in the country..........think that would remain

[@pepperVenge]

@@theprfesssor Lol spoken like a die hard conservative. Those companies would see massive increase in sales, which means a massive increase in revenue. The more people make, the more they spend.

[@theprfesssor]

@@pepperVenge So you think it would be all benefit........ People would have double the money to spend Think prices of goods wouldn't adjust accordingly especially in tight industries like restaurants or small private businesses This reminds of how the current group in power views inflation, just keep throwing money......has it worked yet

[@CatPerson136]

This question might have been asked before but where do you see yourself on the political Spectrum? Not asking for your political beliefs but I want to see where you stand on the Spectrum.

[@Milkmans_Son]

My money is not on the right.

[@2367J]

I've made $7 an hour playing trumpet for 8 hours in a musical I enjoy. I've also made $500 an hour doing magic shows. Should I NOT BE ALLOWED to work at the musical for $60? I like doing it because it keeps my chops in shape but you'd FORCE them to either pay me minimum wage or else I need to donate my time??? The gig economy could have been our salvation because it allows people to make less doing what they love and find fulfilling. If I'd rather Uber than play a driving video game, why do you care so much how much I get paid?

[@tvathome562]

No minimum wage only Living wage, anything else is just slavery by another name. More money in the pockets of those who need more will raise living standards far higher than having to subsidise workers from other people taxes. The workers will also spend on things that they need to work, and reducing taxes stress on the government which could help the Middle class who usually bear the cost unlike the rich who own big business and don't pay taxes at a fair rate.

[@DaddiiDickins]

Determining wage on the basis of “need” is incredibly dangerous. I hope you understand that

[@lawdizzy4829]

@@DaddiiDickins Thanks for your input. He doesn't, explain.

[@AurorunWolf]

Ngl wishes you went more detailed into the wage gap discrimination. Extremely complex situation.

[@mynameisnotyours]

It's not. Men, women, and people of different races make different choices and prioritize different things. Too many do not prioritize that which maximize profit and long term financial success. It's not a man's world. It's a doer's world. And most don't.

[@pixelated_cow]

@@mynameisnotyours what a completely self-serving way to deny something that is empirically true

[@ProfessorDaveExplains]

A little too complex for this high school level series, but once it's over perhaps I will go more in-depth with certain topics.

[@gnomatic]

@@mynameisnotyours Let's make brick laying college expensive, and convince society that college is a necessity to be a brick layer. Then brick layers would be worth a lot more. It's all marketing.

[@grmpEqweer]

@@pixelated_cow Did you see dog whistles in that?

[@redfruit1993z]

Funnily enough, we never talk about abolishing minimum wage to enforce a maximum wage.

[@goatfood1504]

Cuz it’s a dumb idea

[@juanbigstoner3413]

Minimum wage, maximum folly

[@ParanoidAlaskan]

If the minimum wage was enough in the past, and the only thing to change was increased inflation. Maybe we should focus on lowering inflation instead of increasing minimum wages.

[@kajekage9410]

Inflation literally only became an issue again recently.

[@werewolfjedi38]

There are issues with that idea. The globalized market is the main one. On the first. You would have to get something on the scale of the U.N. to agree on a flat rate, and match it to a flat minimum wage. That wont happen. Different countries have different needs and different views on economics. This rolls into economic power as well. Take china vs the US. China has been trying to undercut us for decades. And now that they have some economics rivaling ours, they have begun to eat our companies with stock markets. Look at ten-cent. Its ruining how the entertainment industry used to work with china. It litterally gatekeeps people out of that market as much as it can and then offers deals where it will be the local seller. It then takes a huge chunk of the profits. So the American company never sees the money it used to from the old china market and now has to work through a Chinese government sponsored company.

[@ParanoidAlaskan]

@@kajekage9410 the graph he showed does not show that.

[@ParanoidAlaskan]

@@werewolfjedi38 It's up to the federal government if they print more or less money, not the UN. They won't thought because it's beneficial for the rich, and in extension the politicians, to lower the value of money because it hurts the middle and lower class more.

[@BladeValant546]

Seems like we just need to move on from forcing jobs being a requirement for survival.

[@smarteveryday1606]

yea, but in reality few company controls everything, and the min wage you talking, the grocery and service companies knows that and will adjust their price according to that. if everyone is equal in society then what's the point of being rich and shinny.

[@ShionWinkler]

Thank you for saying there is evidence that contradicts the arguments against a minimum wage. While watching the part you gave all the reasons people give against a minimum wage, I was thinking "ya, to bad there is no historical evidence to back up any of those argument. And in fact there is a TON of historical evidence that show those arguments are just out right wrong, and in many cases, as the people giving them know they are untrue but say it anyways, are just out right lies."

[@Ugly_German_Truths]

And yet they will ber repeated for another 100 or 200 years. Cause sometimes they work for the ones knowingly misleading voters with their use.

[@privettoli]

How would higher minimum wage not lead to outsourcing and automation?

[@chasethechase2298]

Red flags

[@williamoldaker5348]

Wage Slavery is completely ignored.

[@naaaaaaatalieeeee9620]

Hey, I just watched your debate with Jesse Lee Peterson, you did amazin! Lol. Seriously though, I dont understand how someone can be so uneducated and delusional. Liked and subbed!

[@kamikeserpentail3778]

Let's pretend that minimum wage did increase automation. How is that a problem, that sounds like a wonderful thing to me. The job gets done with less people, or the same amount of people in less time, therefore more people have free time. We could drop down to a 30-hour work week and be just as productive. Oh I know people say that only the rich who own the machines will have any money and everyone else will be poor. That's one approach and it leads to violence. An alternative is some sort of basic income. Both ways suit me just fine. And as far as minimum wage hurting smaller businesses more, I'm personally curious the outcome of minimum wage being based on some percent of the company's earnings. Larger companies would have to pay their employees more, which might partly make up for their tendency to view their employees as faceless numbers, and might discourage them from attempting mindless and irrational endless growth just to appease shareholders.

[@chemicalfrankie1030]

if companies paid their employees more, they would have to raise prices, with the following need to raise the wages even more to compensate for the increase cost of living, with further increase in prices, etc etc

[@periloushydrous6606]

wa ge

[@luker.6967]

Economics is an ideology as much as it is a science.

[@ProfessorDaveExplains]

It's neither of those things.

[@luker.6967]

@@ProfessorDaveExplains What is it then?

[@ProfessorDaveExplains]

It is a social science.

[@Usersunited]

"Women earn less wages than men for a variety of cultural reasons." Yeah, and you best continue to remain vague and not explains reasons, such as less hours worked on average compared to men, and more women in part time positions, and less women in high-risk life threatening fields of work. we no like women or color people. unga bunga.

[@afgor1088]

cry harder incel

[@justpaulo]

Politicians (left or right) love minimum wage. It's a quick, easy way to literally buy some votes at the last minute.

[@andy-kg5fb]

Let's just go socialist then

[@andy-kg5fb]

@@romany8125 there are various forms of socialism. Countries like communist china, north korea and USSR were authoritarian dictatorships, which was thier main problem. Economically it(USSR) did pretty great for a country that started poor, went through 3 revolutions, two world wars(in both of which a massive amount of land, population and resources were lost), a civil war, genocides, idiot dictator, problems in trade with other countries cuz all of them hated it and competing with America mainly in space and arms race. Thier economy was still increasing at a reasonable rate. Also various communists including myself argue that these authoritarian countries aren't socialist. They were based on socialist ideals but ended up as something different. socialism is the collective ownership of means of production, while the means of production were owned by the government in these countries, since they weren't actually democratic it wasn't COLLECTIVE ownership of means of production. I personally only know one country that I can say with certainty is socialist and it is the republic of Cuba. Also a lot of people argue socialism is doomed to fail and to that I ask, if it is doomed to fail why do capitalist countries have to try to make them fail? They spent millions of dollars to make a system that is "doomed to fail" fail.

[@andy-kg5fb]

@@romany8125 no there are various ways to be cannibalism but to be cannibalist means to eat other members of your species. Socialism is the collective ownership of means of production so unlike cannibalism it doesn't cause harm to people by defination. "Communism are totalitarian by definition"🤣🤣 lol do you know what communism is. Communism is by definition STATELESS, so it couldn't be totalitarian. I was arguing about whether socialism can be totalitarian which it couldn't.

[@andy-kg5fb]

@@romany8125 and about collective ownership is existing in current model, yeah.(I assume you are talking about unions) there was a study that found out that unions are much more stable(atleast in the beginning years), they don't grow huge like Tesla or something but are much more stable and work pretty great. I think they aren't huge as traditional firms partly cuz they are discriminated against by the system ie. banks not giving loans and partly due to slow decision making(an inherent legit problem). So let's see, Advantages of worker unions(market socialism): workers get good wages, better working conditions, wealth being more equally distributed, the working class can get out of poverty, a more stable job. Disadvantages: We don't get huge buisnesses owned by techno daddies. (If you have any more disadvantages or advantages add them and evaluate it yourself)

[@andy-kg5fb]

@@romany8125 yes Soviets did self report like crazy high devolopement which was completely untrue, and thier economy was trash, but there was progress. They were getting richer(slowly), Russia greatly urbanised (by killing a lot of people, so ya they were bad) in that period. The economy was better than it was in the earlier Tsar period(though the economy was getting better in that period aswell). Also I won't say the Soviet union was good, it was terrible, it commited atrocities and it's progress wasn't as great as capitalist democratic countries.

[@charlescole645]

There are people who think minimum wage = socialism, seriously.

[@daraphairphire]

My problem is that minimum wage prevents wages from dropping lower then that point, preventing communication of worker requirments when labor is higher then demand. This is the cause of the massive saturation of unskilled workers as skilled positions are left vacant.

[@kajekage9410]

Those skilled positions should be paying more.

[@pepperVenge]

Wages should never be dropped. Even if a company decides to go that route, there's nothing reasonable about a wage cut. My Grandma worked for a Private company once for about 3 years until the owner told her they're cutting her salary in half. He literally thought she'd be ok with that.. But she surprised them all when she resigned. No one would ever be ok with that. But that's a great way to motivate a worker to quit.

[@grahamlive]

Your problem with the minimum wage is that it prevents employers from plunging people EVEN DEEPER into poverty? Wow! That's some take.

[@pepperVenge]

@@grahamlive Yeah.. News flash genius: the less money you make, the poorer you are..

[@prince5063]

Very good job at showing both sides of the issue. Plz grow your hair back out.

[@GJames007]

Minimum wage = living wage is dumb. Minimum wage jobs are for students or temporary jobs. No one with a family is working for minimum wage. If they are it’s likely they keep losing their job and starting from scratch.

[@grahamlive]

Why should companies be allowed to exploit students and temporary workers? They deserve a decent wage like everyone else.

[@cheapjake8161]

Professor Dave is out for fucking blood in this comment section. Tread carefully, brothers.

[@Soapy-chan_old]

There is literally no reason to not pay people enough money to LIVE.

[@joeclown4612]

Moral of the story: don’t be an adult trying to live off minimum wage. Don’t mess your life up and you’ll be fine

[@grahamlive]

Or don't be a greedy corporation exploiting the workforce for nefarious purposes.

[@carrier2659]

Minimum wage did not cause greedy companies to exploit workers overseas, lack of regulations to prevent greedy companies from exploiting workers overseas is. Minimum wage increasing is not causing increased automation, fewer workers, or outsourcing, greedy companies are causing that. Let's shine the light where it actually needs to be, please.

[@kajekage9410]

Always so depressing to see the massive demonstration of Dunning-Kruger in some of the responses. I don't understand why some of you follow Professor Dave. You aren't here to listen or learn, you're here to respond on topics you clearly know little about. Edited for clarity as I fired this one off from the hip and on my phone.

[@ProfessorDaveExplains]

Did you have something to say, kiddo?

[@kajekage9410]

@@ProfessorDaveExplains No no, I think I need to reword that, I'm talking about the people responding on this topic who clearly have no understanding and are accusing you of being biased. I fully support you and the work I've seen thus far.

[@kajekage9410]

@@ProfessorDaveExplains Edited to better articulate my point. The Dunning-Kruger was referencing the people posting strong opinions on the topic of minimum wage laws when they clearly don't have a basic understanding of the topic. Not to mention accusing you of being biased in your demonstration.

[@ProfessorDaveExplains]

Ah, gotcha. Yeah, the economics and history tutorials have been a haven for morons to spew their conservative programming.

[@kajekage9410]

@@ProfessorDaveExplains damn man, I was just telling my wife I thought I pissed off one of my favorite educators. Glad it got cleared up, and fully agree with you. Keep doing your thing, I wish I had a fraction of your knowledge and educational talent.

[@atlasfox6451]

minimum wage exists, yet if they had a choice, they wouldn't pay you at all.

[@charlescole645]

That's so true.

[@arthurmorgan1550]

Wage labor is exploitative.

[@krispyboy149]

Earth is flat it made up of 70% incubated water so it flat

[@Glider5858]

Silence fool

[@justinwatson1510]

Economists who oppose high minimum wages should have to work for the minimum wage.

[@RunningOnAutopilot]

Did this man just give equal time to a robber baron take. Dude no this has been disproven during the guided age and the Great Depression and the Nike sweatshops. You are doing the equivalent of equally teaching creationism flat earth and evolution

[@zemorph42]

Citations needed. Another commenter here asserted that the minimum wage was implemented for racist and bigoted reasons and that other countries without the minimum wage have higher wages. I asked them for citations as well.

[@ProfessorDaveExplains]

Um, no. Try to listen when people are talking.

[@grmpEqweer]

@@zemorph42 Other countries didn't have their unions successfully crushed. 😕 The unions require a living wage. So...tell those people who spout about "No minimum wage!" that we just need unions as strong as those countries to enforce good compensation. 😁 I'm sure the libertarian bros will love it.

[@zemorph42]

@@grmpEqweer Someone else already mentioned the strong unions to that person, but thanks. I'm always suspicious of anti-union and anti-worker rhetoric, but lack the knowledge needed to push back against it. I also lack experience in the workforce for several reasons, but I'm grateful for those who do work for a living and believe they deserve a living wage.

[@kajekage9410]

That is not even remotely what he was doing. Try actually listening to what he had to say. He made no arguments but simply repeated the claims of others. He presented facts.

[@silver_tongue9644]

Oooo getting political there you’ll be making a video about trans right next;) and I’ll love it

[@ProfessorDaveExplains]

This is an economics tutorial.

[@silver_tongue9644]

@@ProfessorDaveExplains fairs, I hadn’t watched it yet But I kinda assumed since it would be talking about minimum wages intelligently and there for would at the very least be considered political by the idiots online

[@kajekage9410]

What a strange segue.