Systemic thinking is hard. It's hard to just say that a worker is worth some amount, because that worker is using tools that you own, and most of the productivity is from the tools.
Furthermore, the important factor with is compared to your competition. I'll give an example - let's say you want to buy a gas station. You can pick from a rural location and a highway next to the city. Which do you pick? That's not enough information, because obviously the gas station that gets more traffic, the city highway one, and thus higher profits, is going to cost more.
What happens if both gas stations get a raised minimum wage? You claim that their profits will drop, and if their profits drop then so does their land value. For the existing owner this is going to be a hit they have to take, but for you, someone who wants to buy after the change, you just put the numbers into Excel and it spits out a new formula for what you bid. The new number is lower, but your new ROI is exactly the same as it was. The only thing you really need to check is if the new land value for the rural gas station is negative, if it is, don't buy it. You don't have to fire anyone.
Minimum wages produce dead-weight loss, yes. But it's minimally small dead-weight loss, and in return they give workers collective bargaining. That collective bargaining gives workers more money, which can they be spent(which will in-turn allow you to raise gas prices slightly, this and many many other side-effects occur), which then creates incentive for more businesses to expand. It's countering the dead-weight loss coming from monopolistic practices. I wish we didn't need that bargaining, but until anti-trust has some teeth it's a required hack in the system.
If we could remove rent-seeking behavior, I would love to remove minimum wage with it.
I don’t see the logic. If what you’re saying was true, the free market would do this anyway. Employment is mathematically the same as any other commodity - mandatory price floors will make people who’s real value is lower than the market rate become unemployed.
I think evidence is important here. Look at the unemployment level of Singapore (no minimum wage). Now look at the same for Australia (high minimum wage). A great many jobs exist in Singapore that wouldn’t exist in Australia (such as people who conduct customer experience surveys at airports in SG) because it wouldn’t be profitable.
If you can give me a clear, direct, non vague, logically justified, and non conspiratorial alternative explanation, I’ll eat my hat.
By the way, we do not have a free market. We have a distorted market. Nobody is trying to get rid of the distortions in mainstream economics by the way so it is appropriate to give the current market the name capitalistic market.
Furthermore, the important factor with is compared to your competition. I'll give an example - let's say you want to buy a gas station. You can pick from a rural location and a highway next to the city. Which do you pick? That's not enough information, because obviously the gas station that gets more traffic, the city highway one, and thus higher profits, is going to cost more.
What happens if both gas stations get a raised minimum wage? You claim that their profits will drop, and if their profits drop then so does their land value. For the existing owner this is going to be a hit they have to take, but for you, someone who wants to buy after the change, you just put the numbers into Excel and it spits out a new formula for what you bid. The new number is lower, but your new ROI is exactly the same as it was. The only thing you really need to check is if the new land value for the rural gas station is negative, if it is, don't buy it. You don't have to fire anyone.
Minimum wages produce dead-weight loss, yes. But it's minimally small dead-weight loss, and in return they give workers collective bargaining. That collective bargaining gives workers more money, which can they be spent(which will in-turn allow you to raise gas prices slightly, this and many many other side-effects occur), which then creates incentive for more businesses to expand. It's countering the dead-weight loss coming from monopolistic practices. I wish we didn't need that bargaining, but until anti-trust has some teeth it's a required hack in the system. If we could remove rent-seeking behavior, I would love to remove minimum wage with it.