Warning: I’m not an economist in this post. I’m telling you what I think, don’t expect me to be nice as I’m not intending to be. If it insults you I’m sorry, take it as a representation of my depth of feeling around the issue rather than a sledging if you can.
Let me start this by underlying everything with a certain point – living wages are idiotic if our concern is to make sure that the worst off in society have a sufficient income. By imposing a “price floor”, you are ensuring that there are a group of people who can’t get jobs and will get hurt – unions don’t care because they don’t represent the unemployed, but I find it morally abhorrent. You want a minimum standard of living for societies worst off – have a minimum income, it’s as easy as that.
Now this article in the Herald says people need $19hr to live. What, when we think about the ability to live we actually need to look at access to income not hourly wages right? When they release their full “analysis” I’ll be sure to say why this is nonsensical (eg where are lifecycle earnings, investment in human capital, defining necessities, access to credit etc) – but for now whatever.
Let’s take someone working full time at $19hr. What does this person earn pre-tax $39,420pa (this excludes benefits which they are targeting to increase it further). What is nominal GDP per capita. $47,157pa.
So either we have a society where different types of labour, and different peoples requirements for income (eg a 18 year old and a 57 year old), aren’t terribly different and so people shouldn’t get paid very differently – and as a result the potential worker who “offers the least” may well still get hired – or this will lead to higher unemployment and cut backs in hours for these people. Who won’t get hired in this sort of situation – people that are risky to hire or haven’t developed skills yet. So the young, the vulnerable, those that have been out of work.
I mean I swear to god unions, and their determination to get what they want without thinking about the consequences for other people, makes me sick. There are people who struggle, and as a society I think we should try to help them – part of this is ignoring faux research by unions, and making sure that we actually push government to sufficiently redistribute to the poorest among ask (with the acknowledged cost that this redistribution does lead to less income/production overall).
Yes I know, I’m a “capitalist” right wing economist blah blah blah – but when people choose to actually think in terms of costs and benefits we can actually have a sensible discussion about social justice, and how society is willing to trade-off between equity and efficiency. Introducing a policy like this isn’t just inefficient, it is inequitable and unjust – and will hurt those who are already the most disenfranchised.
Sidenote: You may say this is unfair as they aren’t saying “make this the minimum wage”. But think of it this way, they are trying to make the case for $19, so they can turn around and make $17 seem like a reasonable demand – while still ignore the costs stemming from this. It is a misinforming marketing tool – that hardly makes it better!
Sidenote 2: No offence but an actor that can’t get a sufficient wage is receiving a signal to look for other work – if you can hardly pay your bills and decide to continue acting you are “consuming” that acting. If you can’t afford to live because you are busy with that, it’s your own fault. Be careful asking for a higher minimum wage, it is likely you just won’t be able to find any work at all. Remember, when computers with economics word generators replace me I’ll have to do the same thing.
Sidenote 3: I am surprised that a church allowed a union to talk them into making it an issue of wages instead of income adequacy – I don’t remember catching the part of the bible that said that only those who have the opportunity to work given their endowment and the arbitrary policies of government should be allowed a minimum living standard. Was there a “parable of the deserving poor” where we are taught to decide who deserves society’s support and who doesn’t?