Wage Subsidies

[@MarginalRevolutionUniversity]

Continue learning with practice questions: mru.io/1ek

[@edwardrenton6076]

Why? if the market wage is $10.50 and the wedge is $4. Is the amount received by workers $12 and paid by firms $8. Wouldn't the Market Wage need to be $10?

[@emmafrost889]

Are wage subsidies as effective during periods of low unemployment, such as right now? I am wondering how that would affect the demand for labor.

[@baddospirito2926]

Isn't this overlooking the fact that both the wage subsidies and the taxes that are required to pay those subsidies are creating deadweight loss? I don't see why you would ever want to subsidize wages instead of just lowering taxes and getting rid of the minimum wage?

[@adamthornton7880]

How would these 2 approaches compare to having the government offer to hire anybody who applies for a particular wage rate? E.g. anybody who can prove they are a citizen aged 18 years or more can sign up to do 40 hours of work for the government for $200 each week, with no questions asked, no serious applicant rejected.

[@logoschristianacademy6044]

Adam Thornton The main difference between the government hiring low skilled laborers and businesses hiring them (as with a wage subsidy) is that businesses have an incentive to empower the low skilled workers to provide as much value to society as possible, whereas the government doesn't. That said, I would much rather see the "welfare" safety net consist of a guaranteed government job than a guaranteed government hand-out. A wage subsidy and a job guarantee could work hand in hand to ensure jobs for all willing workers.

[@othmanskn]

The demand for labour is decreased to a non-slave level wage. Not having a minimum wage is allowing illegal exploitation of labour which is bad overall. Wage subsidy is bad because the money can just be paid to everyone more effectively to combat poverty. Wage subsidy or any subsidy creates waste by encouraging employers to hire unnecessarily. Also creates unnecessary businesses. Wage subsidy benefits the rich because the poor and unemployed do not get anything. In fact, the wage subsidy benefits the rich, which is the employers more. Employers think they get cash incentives but in the end they suffer because poverty is not eradicated causing crimes and corruption, bad customers and poorly educated pool of workers.

[@luck3yp0rk93]

thats not how money works... kzbin.info/www/bejne/nGK3hKhvlL59ea8

[@Mujangga]

Why not just get rid of Minimum Wage?

[@kyh6767]

think for 2 minutes and you'll get the answer, if you can't, well that means you're kinda slow gluck.

[@kennethha8173]

@@kyh6767 xD

[@fufu3539]

So, rich people not even having to pay for workers is being promoted? A new low of lobbying audacity.

[@fufu3539]

But, how is that wage paid for? Taxes or inflation? But, oh, it saves cost to the rich so you dont care...