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Politics : Libertarian Discussion Forum

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To: Road Walker who wrote (9925)	7/27/2014 7:10:46 PM
From: TimF	Read Replies (1) of 13056

And think how helpful it would be if they paid their folks a wage that kept them off government welfare? If they pay noticeably more than the market rate, and not for business reasons (not as attempt to get the best talent, reduce turnover etc.) then it is in a sense charity. Corporate charity can be beneficial, but corporations are not and mostly (not counting non-profit charitable corporations who's purpose really is charity) should not be expected to largely operate as charities. Also generally pushing up the price of employment pushes down employment. There are always other factors, and a particular minimum wage increase (or extensive increases in wages for other reasons) doesn't always result in more unemployment (esp. if its done in a very healthy economy, and it isn't too huge of increase), but if its large enough to actually give people more (clearly above the market clearing rate for low end labor) it will exert a negative influence on demand. Price controls (including those on the price in labor) could in theory happen to hit just the right level, and thus do little harm, but then they wouldn't do much good either. If your not talking about minimums (or even extremely strong pressure to pay a certain minimum without a direct specific legal requirement) then the result is unlikely to be as bad, but prices (including wages) really should almost never be a political issue. Why should you have to subsidize company employees? Its not the companies that make the government do so. Ask the people who support welfare payments and other subsidies. Subsidize shareholders? No such subsidy. Not every action that benefits someone is a subsidy for them. Welfare isn't a subsidy for employers any more then it is a subsidy for grocery stores. Also it probably doesn't help the shareholders. Almost certainly not directly, but even indirectly it probably hurts companies as employers (it might help them as sellers to people with the welfare checks, but then it hurts them as tax payers and as employers of tax payers). The more generous welfare (broadly defined) is, the higher reservation rates for employment potential workers are going to have. Most clearly they are unlikely to take jobs that pay less than the welfare check. Also even if the job pays slightly more many won't accept working 20 to 40 (or more) hours for only a relatively modest amount more than the welfare payments. So welfare likely increases the cost of hiring low end workers.

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