alt Hacker NewsIt’s a lose lose. If you remove the wage floor many people with “livable” wages now would have theirs cut, it’s a problem of adversarial incentives a la nash.
It’s a lose lose. If you remove the wage floor many people with “livable” wages now would have theirs cut, it’s a problem of adversarial incentives a la nash.
Sure, but now there's a deadweight loss by allocation inefficiencies (plus the disemployment effects are strongest at the margin, so now many people are working less than they want to, because they cannot sell more of their work for less, so ie. they have part time jobs).
The "obvious" thing is to subsidize employment (by negative income tax for low-incomes to avoid discontinuities), and sectoral/collective bargaining (to avoid divide-and-conquer information asymmetry), and unemployment payments (to allow for the market to find new "healthy" equilibrium, so people don't have to take the first shitty job).