You yourself said that offering generous benefits inspires low end workers to tend to work for less because they can live on it and ultimately drives down wages.
In a fictional world without minimum wage or assistance a low wage employee can't afford to work for less than would be required to live for very long so one would expect the wage to float to somewhere in that neighborhood. Lets completely arbitrarily set that value at $10 an hour without worrying what the actual value would be. Imagine that the company expects to create $15 of value on average for each $10 paid out.
Note that in this universe even without a minimum wage the wage still can't float arbitrarily low because people can't live and certain people who truly don't create the needed value are STILL pushed out of the labor market by more employable people. Without any benefits they just die.
Now lets add welfare! People with enough to eat, free medical, cheap rent can indeed afford to work for less even if the company is still generating the same $15 net on each labor hour. Say the person effectively gets $7 an hour in benefits and companies average out to pay $5.
This means that in the original arrangement customers paid out $15 and the employee collected $10 the employer $5.
In the new situation the customer paid out $15, society kicked in $7, and the employee collected $12, the employer collected $10.
One could have achieved the same societal benefit by giving the employees $2.
Nations that provide sizable benefits to poor are obliged to set a minimum wage to avoid the situation where the social safety net represents a net transfer of wealth to low end employers by allowing employees to offer below living wages.
I see what you are saying but I don't think that addresses my point that the higher minimum wage, which by your example causes some of the welfare benefits to stay with the recipient and not the employer, also results in unemployment for people who can't bring enough value to the table.
I'm not claiming I have a good solution, just pointing out the side effects of the high minimum wage (higher that the otherwise natural market clearing price).
In a fictional world without minimum wage or assistance a low wage employee can't afford to work for less than would be required to live for very long so one would expect the wage to float to somewhere in that neighborhood. Lets completely arbitrarily set that value at $10 an hour without worrying what the actual value would be. Imagine that the company expects to create $15 of value on average for each $10 paid out.
Note that in this universe even without a minimum wage the wage still can't float arbitrarily low because people can't live and certain people who truly don't create the needed value are STILL pushed out of the labor market by more employable people. Without any benefits they just die.
Now lets add welfare! People with enough to eat, free medical, cheap rent can indeed afford to work for less even if the company is still generating the same $15 net on each labor hour. Say the person effectively gets $7 an hour in benefits and companies average out to pay $5.
This means that in the original arrangement customers paid out $15 and the employee collected $10 the employer $5.
In the new situation the customer paid out $15, society kicked in $7, and the employee collected $12, the employer collected $10.
One could have achieved the same societal benefit by giving the employees $2.
Nations that provide sizable benefits to poor are obliged to set a minimum wage to avoid the situation where the social safety net represents a net transfer of wealth to low end employers by allowing employees to offer below living wages.