Economics, very broadly speaking, is something of a balancing act. Supply and demand is the perhaps the most immediately apparent example, but wage earning is significant as well – and becoming ever-more prominent. Low employee compensation leaves a company with more capital and capability, but if it becomes systemic it also leads to poor purchasing power in the general populace. Those who can’t spend, don’t buy, and that means bad business. Balance is also a question in terms of competition. Ostensibly, one of the ways a company will strive to outdo its competition is by having a stronger pool of employees lured in by better-than-next-door wages; the teeter-totter of escalating pay keeps companies competitive and employee purchasing power high. The bad kind of balance is when businesses reach equilibrium by simply agreeing not to hire workers away from one another, as the so-called Silicon Valley “No-Poaching Case” demonstrated.
The minimum wage is perhaps the most contentious topic of all in discussions about income. What’s unreasonably low, and what’s infeasibly high? Much of the conversation revolves around the broad notion of merit: on the one hand, it could be argued that unlivably low wages wouldn’t exist because no company that offered them would remain competitive. On the other hand, job markets are not always competitive (layoffs, incorporation, a diminishing industry, etc.), and no-poaching agreements could be made. Another argument involves the notion of a business’ capability; lower wages mean more money that could be used to hire more employees. Taken to its extreme, however, this line of logic would allow for scores of workers with infinitesimal incomes, which goes back to the previous argument about competition. This holds true if taken in the reverse direction; no company can afford to pay all its employees exorbitant paychecks. Which returns, again, to the Goldilocks question: do wages need to be regulated to keep them in that “just right” zone, and do regulations run the risk of going past it? In theory anything is possible, but recent increases seem to be validated by the numbers, and one example of a substantial self-imposed minimum wage has been very well received.