Disparity

If artificial intelligence could not replace most of the jobs, what would actually happen with a minimal wage?

Would that affect local business and company profit ?

Don’t be silly.

Would the unemployment rate go up?

Not necessarily. From the society point of view, the demand of labour should remain constant. As many of our noble council members say, the work has to be done.

Then, would CEOs and senior administrators cut down their salary?

Of course not – if you put yourself into their shoes, you would rather cut down the salary of the middle class. (In practice, it probably means firing someone with a monthly salary of HK$20000 and hiring another to take up that job by HK$15000 per month, so that the HK$5000 saved would compensate for the minimal wage business.) The effect is easily concealed; the number of employee remains, the balance book stays the same, and, even the middle class themselves may not notice.

In other words, beginning with the beneficent intention of helping the grass roots, we end up damaging the middle class and promoting disparity of wealth in the society.

Yes, that’s pass-pointing – a sign of cerebellar lesion.

I shall not predict what would happen when it gets going.

PS. Discerning readers may argue it is only possible for large firms to cut down the salary of the middle class and make the compensation; for small business with just a handful of employees, the owner would have to swallow the bitter fruit of increasing the wage to the minimal standard. From the perspective of the society, that actually means we are enhancing small companies to be taken over by large conglomerates – another inadvertent effect that we may not like to see.