You can't work for a business which has been driven out of the market. And that is how markets can work for good, by selecting efficient businesses (but also bad - the market itself doesn't care), but if you look at businesses in the market, if they all race to subsistence wages then businesses willing to pay more can't operate and the city around the market declines. If the wages stay higher, the cost of goods are higher, but other opportunities rise, and the city as a whole can prosper. If the wages are way too high, then that can also be bad that can also cause a decline.
Right, but this doesn't seem to describe what happened here. Before Amazon moved in, people in San Bernadino weren't working for efficient businesses paying great wages; they just didn't work.
How long should we have kept them unemployed to wait for a new high-paying business to show up?
If we systematically select businesses that pay subsistence wages, the concern is that better employment may never show up, and the overall economy becomes more and more unstable over time. But it's hard to know for sure and that is one of many different outcomes.
But still it's not an area you want to move forward with no introspection.
Edit: If low-workers are paid such a low margin that they have no personal buffer for uncertainties such as automation in warehouses, then we also guarantee that the government ends up paying for that transition (or we get unrest and/or economic malaise). If they're paid a higher margin, the economy ends up more efficient at flexibility transitioning from changes like warehouses becoming fully automated. (because offset workers can make individual transition choices that that make local sense instead of trying to apply slowly responding gov't policy).
