Minimum wage: It’s likely to hurt the very workers it aims to help

livemint.com:

₹1 lakh a month. Yes, this is a silly number, but bear with the exercise. It will be useful, pinky promise.

Okay, so would you personally still employ your help at ₹1 lakh a month? Most of us would not, and we understand that almost all maids and security guards (including our own) would be out of a job. Why only ‘most’? Because workers in the very richest of households—big business families, CEO homes or others in that approximate category—will probably not lose their jobs. Not only are their employers rich, these workers probably also possess skills or advantages—say, being able to cook multiple cuisines or speak fluent English—that make their work more valuable.

The advantage may just be as simple as having earned trust. Film star Salman Khan’s bodyguard, as we have heard, already earns above the ₹1 lakh a month threshold and won’t worry about losing his job. Now let’s lower the minimum monthly wage to a more ‘reasonable’ number.

Let’s say ₹20,000. Many more domestic helps and security guards would keep their jobs. But, as with the ₹1 lakh floor, they will all have some advantage over those who lose their jobs, even if it is as simple as living close to an upper-class neighbourhood.

The ones who lose their jobs will all be less skilled and less advantaged. If you’re with me so far, you would have gained an intuitive feel for what any minimum wage can do—it will most hurt the people that it is intended to protect. Those without skills, i.e., and those without advantages.

The sole advantage they have is their willingness to work for a low wage and a mandated minimum wage takes that away. This is true at any threshold, no matter how low. It is as true at ₹20,000 as it is for ₹1 lakh.