Realistic or not, the effect is the same, just not as extreme.
If the minimum wage is below or equal to the actual wage, it's redundant,; and if higher, it increases the risk of layoffs.
So rather than raise the minimum wage, how about raising employability so as to raise salaries natrually.
Also, should we introduce some kind of peace corps or some other organization that guarantees employment for the unemployed, then that would serve as a kind of minimum wage in that the moment this peace corps becomes more attractive than what's being offered on the market, people would join this peace corps, thus causing labour shortages in the private sector, thus forcing the private sector to outbid this peace corps. This would in effect serve to create a kind of unofficial minimum wage anyway.
What you seem to be suggesting is that without minimum wage all wages would drop to zero. If true, then how do you explain that many jobs pay above minimum wage as is?
The problem with a high minimum wage is that you can price an employer right out of business. Fast foods is a prime example. Ignoring the fact that most of it isn't healthy these places do provide a lot of employment and not just the minimum wage clerks. Now if a hamburger was to be priced at $10.00 to provide all the workers with a decent wage how many people could afford to buy a hamburger? This could very well force a closure or severe curtailing of the business.
We start our construction laborers at $12/hr with no experience. About 1 in five is worth that much. Probably 1 in five is worth more than that. That leaves 3 out of five that are a dead cost. Those good ones we try to keep but by having too many high priced helpers we become uncompetitive in the market and they all loose their jobs. Me too for that matter.
So you ageree then that the minimum wage also hurts unskilled labour I assume?
If so, that's exactly my point. The minimum wage hurts those it aims to help the most, ironically enough. Anyone who actually cared about unskilled workers and the unemployed would support eliminating the minimum wage and instead find ways to actually help them rather than hinder them.
What you describe is essentially the situation in much of Europe. Wages for the average worker are higher, therefore, the amount charged in various businesses has to be higher to cover costs. Europeans, however, do not seem to have much problem with paying the higher prices judging from the number of small businesses that flourish in every town. Mom and Pop businesses seem to exist on every street corner and in between.
I suspect that higher wages may have a dual effect. One is that they make goods and services more expensive. But the other is that they give the average wage earner a bit more to spend so one may cancel out the other.
So if they just cancel each other out, then what's the point?
I'm not sure how the situation relates to Canada. For one thing minimum wage is a provincial responsibility, so the federal government has no control over it. However, I will say that if a job exists then the person doing it is entitled to a decent living wage. No one should be forced to work in conditions of dire poverty with little or no chance of advancement.
I agree. I could see a situation whereby anyone would have the right to quit his job and go on social assistance at any time without being penalized. In this way social security would serve as a natural minimum wage of sorts, but I'm sure most people would rather work at a low wage than get the measely amount the government gives. Minimum wage takes that choice away whereby a person who would rather work at slightly below the current minimum wage is forced out of the market and forced to accept social assistance at half that. Is that not a form of cruelty and abuse? Certainly if social assistance is generous enough, then there ought to be no need for minimum wage, or likewise if some kind of guaranteed government employment programme like some kind of peace corps paid a decent wage that would serve as a form of wage control too.
When we have to introduce minimum wage, is that not a tacit admission that social security sucks so badly that we need a minimum wage to prevent people to willingly work for less? If social security or other guaranteed employment programme were decent, it would be redundant, don't you think?