How much should minimum wage be?

[Illuminatus Primus]

Right, so we got that part settled. Which brings up the question, where the fuck is the state government going to find the money to pay for this proposed program?

Tax all businesses. What do you think the minimum wage is but a tax on those firms with the lowest-value jobs?

[Pick]

Right, so we got that part settled. Which brings up the question, where the fuck is the state government going to find the money to pay for this proposed program?

Tax all businesses. What do you think the minimum wage is but a tax on those firms with the lowest-value jobs?

Funny thing. They say Intel is quite possibly going to be paying all of ten whole dollars to the Oregon state government this year, the state where they manufacture quite a lot of their wares.

I guess that's what happens when you can afford good accountants. I hope the indigent are taking notes!

[Illuminatus Primus]

Right, so we got that part settled. Which brings up the question, where the fuck is the state government going to find the money to pay for this proposed program?

Tax all businesses. What do you think the minimum wage is but a tax on those firms with the lowest-value jobs?

Funny thing. They say Intel is quite possibly going to be paying all of ten whole dollars to the Oregon state government this year, the state where they manufacture quite a lot of their wares.

I guess that's what happens when you can afford good accountants. I hope the indigent are taking notes!

Anecdotal evidence. You suggesting that taxing companies is impossible? I'm partial to wealth taxes combined with some sort of across-the-board sales tax and reimbursement system. What is your utopia?

[Pick]

Anecdotal evidence. You suggesting that taxing companies is impossible?

Oh, no. Not at all. I just say that it's extremely unlikely to work as well as you are presenting. Larger companies have the resources, and often the determination, to skirt legislation in order to save themselves money. Small businesses do not have this luxury, and do not take in the big money that would pay out the same degree of tax money as larger corperations. Therefore, you are hurting small businesses and still not taking in the necessary sums for enormous government payoffs to the consequently impoverished.

I'm partial to wealth taxes combined with some sort of across-the-board sales tax and reimbursement system. What is your utopia?

I actually answered that on the first page, using that exact word, actually, in my cynical self-degredation. I would like to see a requirement for people to be paid enough that they are able to indepedently sustain themselves at a minimal level (defined in more detail in my original post.)

[Uraniun235]

Funny thing. They say Intel is quite possibly going to be paying all of ten whole dollars to the Oregon state government this year, the state where they manufacture quite a lot of their wares.

I guess that's what happens when you can afford good accountants. I hope the indigent are taking notes!

Oregon probably gives Intel tax breaks to begin with in order to entice them into investing more money into the area. Also, Intel is incorporated in Delaware, which may play a role in that; most of the income which Intel makes probably (I don't know how corporate taxation really work) doesn't count as taxable in Oregon.

Even if Intel did have a lot of taxable revenue in Oregon, it would definitely be in Oregon's best interest to be the most attractive location in which to invest further capital; the jobs that Intel creates are probably worth quite a bit more to the Oregon economy than a few million dollars in the state general fund.

I actually answered that on the first page, using that exact word, actually, in my cynical self-degredation. I would like to see a requirement for people to be paid enough that they are able to indepedently sustain themselves at a minimal level (defined in more detail in my original post.)

So, you think that every job must be capable of providing the worker with the means for independent living? I don't know economics, so I can't say one way or the other, but I can't help but wonder if that's really feasible.

[Pick]

Oregon probably gives Intel tax breaks to begin with in order to entice them into investing more money into the area. Also, Intel is incorporated in Delaware, which may play a role in that; most of the income which Intel makes probably (I don't know how corporate taxation really work) doesn't count as taxable in Oregon.

That's kind of the problem, as I see it.

Even if Intel did have a lot of taxable revenue in Oregon, it would definitely be in Oregon's best interest to be the most attractive location in which to invest further capital; the jobs that Intel creates are probably worth quite a bit more to the Oregon economy than a few million dollars in the state general fund.

Nevertheless, they are escaping payment due to their locational advantage. I'm not saying it doesn't make sense to have a nice little agreement with Intel; I'm saying that Intel is taking advantage of Oregon. I seriously cannot think of a good excuse why Intel's manufacturing areas should be paying no more than the taxation registration fee. Ten. Fucking. Dollars.

I actually answered that on the first page, using that exact word, actually, in my cynical self-degredation. I would like to see a requirement for people to be paid enough that they are able to indepedently sustain themselves at a minimal level (defined in more detail in my original post.)

So, you think that every job must be capable of providing the worker with the means for independent living? I don't know economics, so I can't say one way or the other, but I can't help but wonder if that's really feasible.

It isn't, though I should mention that this would be for independants only (whether 16 year olds or gramps living out of his kid's spare bedroom.) As I openly said, it's an idealistic view which is not reasonable or realistic.

[Master of Ossus]

People who advocate zero minimum wage should give proof why they think large corporations like Wal-Mart would give a shit about their employees at all and not lower their wages to near slave labour levels. They also need to show that the money corporations will save will be put to hiring more people.

Since Wal-Mart already pays a wage that is well above the minimum one, it is ludicrous to assert that the minimum wage is responsible for even holding it that high, as opposed to market forces.

Economists look at the minimum wage differently. They are right because it will increase GDP, but wrong in that a disproportionate number of people will suffer. Minimum wage isn't about GDP, it's about alleviating suffering of the people at the lowest rung of society so the people with the least skills aren't taken advantage of and treated as chattel.

Post proof that "a disproportionate number of people will suffer."

Because if there's no minimum wage the first fixed cost a corporation like Wal-Mart can axe is the paycheque of its lower employees and the poor get poorer and poorer over time and the rich get richer and richer. I assume you have no problem with that though. I do.

Brian

The fact that Wal-Mart already pays a wage much higher than the minimum one is proof that the minimum wage is not holding wages paid up.

[The Guid]

The Minimum wage was only recently adopted in Britain, all the economic doom and gloom sayers have retracted their statements. Even our right wing parties don't want to scrap it.

I am amazed that people think that the minimum wage is going to seriously hurt businesses, the kind of money we're talking about is, if I recall correctly £4.10 an hour in the UK, I fail to see why any business will suffer for that. Especially as most of these jobs fall from large comapnies, comapnies that might try and tack the price onto the goods but they will try and get away with whatever price they can get away with ANYWAY because that's what companies do.

[Master of Ossus]

You do not address my point. That does not change the fact that without a minimum wage, it gives the corporation an opportunity in the future to fuck people over. If Wal-Mart suddenly hits hard times, the poor people suffer.

True. They will be fired, and hence make a wage of zero.

And if they hit really hard times--well, the poor people really suffer. You need a rule, business will not be self-regulating, they care only about the bottom line. Your trust in corporations who care only about the bottom line is astounding.

Corporations already do this in third world countries, you don't think they would do it here if they could get away with it? Please .

The reason that corporations in other countries can sometimes pay people wages that are below their MRP's is because job markets in other countries are not competitive.

Consumers should pick up the tab of lower income workers because "we're all in this together."

No, we're not. I am a skilled worker, and virtually everyone who works for the minimum wage or even close to it is unskilled or else working the job on the side. Furthermore, how does this support a minimum wage proposition?

[Master of Ossus]

The Minimum wage was only recently adopted in Britain, all the economic doom and gloom sayers have retracted their statements. Even our right wing parties don't want to scrap it.

I am amazed that people think that the minimum wage is going to seriously hurt businesses, the kind of money we're talking about is, if I recall correctly £4.10 an hour in the UK, I fail to see why any business will suffer for that. Especially as most of these jobs fall from large comapnies, comapnies that might try and tack the price onto the goods but they will try and get away with whatever price they can get away with ANYWAY because that's what companies do.

I'm not arguing that at all: I'm arguing that minimum wage hurts people who have a MRP below the minimum wage, since the law literally makes them unemployable. It also creates a significant wage disparity for workers who are not covered under minimum wage standards.

[The Guid]

The reason that corporations in other countries can sometimes pay people wages that are below their MRP's is because job markets in other countries are not competitive.

And the west, with its free markets, are going to remain competitive? I think that is a little niave.

It also creates a significant wage disparity for workers who are not covered under minimum wage standards.

Such as?

[Master of Ossus]

And the west, with its free markets, are going to remain competitive? I think that is a little niave.

At least in the sense that there will be more than one company at which each worker can ply his trade. Why is this naive?

Such as?

Workers who are paid a salary, full-time college students, apprentices, student learners, workers under 20 within their first 90 days of employment, and workers with disabilities. There are more technical exceptions that are dependent upon the size of the employer's business and the employee, but those are the basic ones.

[Uraniun235]

Even if Intel did have a lot of taxable revenue in Oregon, it would definitely be in Oregon's best interest to be the most attractive location in which to invest further capital; the jobs that Intel creates are probably worth quite a bit more to the Oregon economy than a few million dollars in the state general fund.

Nevertheless, they are escaping payment due to their locational advantage. I'm not saying it doesn't make sense to have a nice little agreement with Intel; I'm saying that Intel is taking advantage of Oregon. I seriously cannot think of a good excuse why Intel's manufacturing areas should be paying no more than the taxation registration fee. Ten. Fucking. Dollars.

It makes for a nice soundbite, doesn't it?

I'm not saying it's proper, but I'm very hesitant to pass judgment without knowing more about how corporate taxation works and/or should work. I don't think Intel really does much (if any) direct selling in Oregon, so I'm not sure how the state could stake a claim on income that never really occurred in Oregon. Surely it can't be based on total income, or else national/multinational corporations would be hard-pressed to not be buried under taxes. And property taxes, if I remember right, don't go to the state; they go to counties and cities.

[brianeyci]

Post proof that "a disproportionate number of people will suffer.

That's easy. There are one in five workers in Canada working at a minimum wage. Number of people who stand to lose from no minimum wage? Half a million in Canada.

Number of people who stand to gain from no minimum wage? Nobody.

Of course I expect pissing and moaning about how the majority of these are students or temp or part-time workers and for some reason don't deserve to be paid as much. But guess what, students are people too.

Consumers should pick up the tab of lower income workers because "we're all in this together."

No, we're not.

Sure we are. You are a human being, I am a human being, so are the people who are paid at the minimum wage. My bullshit-o-meter rings whenever I hear anything that takes away privileges from people, especially poor people.

Why don't you follow through with your proposal and guess what happens over the long run if there is no minimum wage? Market forces will make work exactly what they are worth--but the floors still need to be mopped, the burgers flipped, and people will work for slave labour wages if that's what the job's worth and they are desperate. Humans deserve decency is the whole rationale behind minimum wage.

Since Wal-Mart already pays a wage that is well above the minimum one, it is ludicrous to assert that the minimum wage is responsible for even holding it that high, as opposed to market forces.

The minimum wage is part of market forces or do you deny that a worker will be more willing to work somewhere that pays a few dollars above the minimum wage as opposed to bare minimum wage. Here's a hint in case you never worked in high school--teenagers know that places that pay only the minimum wage are too "tight" and likely never to give you a raise so they avoid minimum wage places like the plague. It's the same with temp or part-time jobs I imagine. Wal-Mart is more attractive because it's a few dollars over the minimum wage and if there was no minimum wage I would expect if not cut then a freezing and inflation making the wage worth exactly what it's worth. Minimum wages set the baseline of human worth, and I don't want that worth to be exactly what the market dictates because the market may dictate that mopping floors is worth 2 bucks an hour. You don't see a problem with that, I do.

I'm arguing that minimum wage hurts people who have a MRP below the minimum wage, since the law literally makes them unemployable

That's a stupid thing to say, because anybody can mop a floor, flip burgers or make fries. Nobody has a MRP below the minimum wage is the whole rationale behind minimum wage, and if you don't agree with that basic fact of human decency then we have nothing to talk about.

Brian

[Master of Ossus]

That's easy. There are one in five workers in Canada working at a minimum wage. Number of people who stand to lose from no minimum wage? Half a million in Canada.

Number of people who stand to gain from no minimum wage? Nobody.

Of course I expect pissing and moaning about how the majority of these are students or temp or part-time workers and for some reason don't deserve to be paid as much. But guess what, students are people too.

Nice of you to claim that no one would gain from minimum wage. Canada, right now, has 6.7% unemployment rate, which would go down if there wasn't a minimum wage.

Sure we are. You are a human being, I am a human being, so are the people who are paid at the minimum wage. My bullshit-o-meter rings whenever I hear anything that takes away privileges from people, especially poor people.

I'm trying to give them jobs, I'm not trying to take away from them.

Why don't you follow through with your proposal and guess what happens over the long run if there is no minimum wage? Market forces will make work exactly what they are worth--but the floors still need to be mopped, the burgers flipped, and people will work for slave labour wages if that's what the job's worth and they are desperate. Humans deserve decency is the whole rationale behind minimum wage.

I love the way you state that people will be paid what they are worth, and then immediately claim that low-skill jobs must be done as if that refutes the underlying principle.

Moreover, decency means that you consistently prevent people from finding legal employment? How is that decency?

The minimum wage is part of market forces or do you deny that a worker will be more willing to work somewhere that pays a few dollars above the minimum wage as opposed to bare minimum wage.

The existence of efficiency wages supports my argument, not yours.

Here's a hint in case you never worked in high school--teenagers know that places that pay only the minimum wage are too "tight" and likely never to give you a raise so they avoid minimum wage places like the plague. It's the same with temp or part-time jobs I imagine. Wal-Mart is more attractive because it's a few dollars over the minimum wage and if there was no minimum wage I would expect if not cut then a freezing and inflation making the wage worth exactly what it's worth.

Complete bullshit. Wal-Mart pays an efficiency wage for a variety of reasons, but Wal-Mart never pays someone more than what they are worth to the company. Specifically, they pay an efficiency wage because it makes people more valuable, as you mentioned. There is no reason to assume that this force will disappear if the minimum wage is done away with.

Minimum wages set the baseline of human worth, and I don't want that worth to be exactly what the market dictates because the market may dictate that mopping floors is worth 2 bucks an hour. You don't see a problem with that, I do.

If they're only worth 2 dollars an hour, then right now they are getting ZERO because of the minimum wage laws. You obviously see no problem with that, but working for 2 dollars an hour IS BETTER than not working for nothing.

That's a stupid thing to say, because anybody can mop a floor, flip burgers or make fries. Nobody has a MRP below the minimum wage is the whole rationale behind minimum wage, and if you don't agree with that basic fact of human decency then we have nothing to talk about.

Brian

I love the way you immediately revert back to "human decency" as if believing someone should be able to find a job is indecent of me. Your argument is a laughable example of circular logic. People do not have MRP's below the minimum wage right now because the minimum wage takes all MRP's that ARE below it and sets them to ZERO. The minimum wage is an artifact from an era before there was significant labor mobility and from when there was little job market competition within a local area. Neither is the case, today, and it has begun hurting people far more than helping since only a miniscule fraction (about 1%) of US workers work for the minimum wage or less.

[Middleclass]

If the minimum wage increased to $10.00 an hour, Wal-Mart would be hit and so would other businesses. They pay more than minimum wage so they can attract better employees, and if the minimum wage went up their wages would have to go up or they'd lose the competitive edge in attracting employees. Yes, retail experience needs skill but just a different kind of skill. I'm guessing the turnover is high too so unless they offered more than minimum they'd have problems.

So Wal-Mart might end up having to pay 11 or 12 bucks an hour just to keep its recruitment up. Wal-Mart's CEO already said that if the minimum wage was raised, he would raise wages of his own employees IIRC so the idea that minimum wage hurts small businesses disproportionately is silly.

<edit>To elaborate MiddleClass, even though the minimum wage is 5.15 and Wal-Mart gives their people seven bucks, that doesn't mean that raising it to 5.50 means Wal-Mart keeps it at seven bucks, and definitely not if they raise it over seven bucks. They pay their employees as much as they think they can get away with, and if employees start leaving because of attrition or they think they can get better working conditions or wages somewhere else, they'll leave so corporations will always have a couple bucks over the minimum wage.</edit>

Brian

OK, I guess I didn't really explain myself well. Let's use your example of Wal-Mart, currently paying $7 per hour, and a small business currently paying minimum wage. If the minimum wage is raised to $10 per hour, and Wal-Mart responds by paying $12 per hour, its an extra $5 per hour per employee, excluding small frictional costs. It's an extra $4.85 per hour per employee for the small business. But there are two more factors to be accounted for:

1: Wal-Mart has, pound for pound, more profits. They can survive this increase more easily. It's not unusual for a small business around here to gross $40,000 per year. This goes into the owner's pocket. Facing an increasing labor cost, assuming 10 employees, he loses approx. $100,000 in increased wages. To make up for the loss, he would have to at least double the price of his goods. Which leads to

2: Wal-Mart undercuts all of its competition. This is well known and often maligned. Wal-Mart can more easily raise its prices than small businesses, who due to lack of economies of scale and scope must charge more than large retail chains.

This leads to small businesses shutting down. Profit margins for small businesses are often razor thin, while Wal-Mart and its ilk command such a huge market share that they can survive the hit. That's why I detailed the idea of increasing EITC benefits. That comes from federal tax dollars, so nobody is unduly hit. The only reason I can think of to prefer an increase in minimum wage to EITC is a desire to hurt businesses through whatever pretext is available. I'm not trying to accuse anyone of ulterior motive, I'm just struggling to understand why alternative plans that accomplish the same goals without the potential problems don't even warrent a comment.

[Sriad]

That's easy. There are one in five workers in Canada working at a minimum wage. Number of people who stand to lose from no minimum wage? Half a million in Canada.

Number of people who stand to gain from no minimum wage? Nobody.

Of course I expect pissing and moaning about how the majority of these are students or temp or part-time workers and for some reason don't deserve to be paid as much. But guess what, students are people too.

Nice of you to claim that no one would gain from minimum wage. Canada, right now, has 6.7% unemployment rate, which would go down if there wasn't a minimum wage.

You're saying we should take away from the 20% of workers at minimum wage to give a bit of help to the 6.7% who are unemployed? That doesn't even make sense from a Soulless Utilitarianist POV.

[Master of Ossus]

You're saying we should take away from the 20% of workers at minimum wage to give a bit of help to the 6.7% who are unemployed? That doesn't even make sense from a Soulless Utilitarianist POV.

We wouldn't actually be taking anything away from them, assuming that their MRP's remain the same, though, and certainly we wouldn't be taking anything near what the newly employed people would be getting from the deal. Wages are not a zero-sum game.

[brianeyci]

Nice of you to claim that no one would gain from minimum wage. Canada, right now, has 6.7% unemployment rate, which would go down if there wasn't a minimum wage.

Prove this. This is a blind assertion that anti-minimum wage advocates always make, that if there was no minimum wage there will be more jobs. I can show that people will lose of there is no minimum wage or increase in minimum wage to match inflation because--tada, inflation. What is your proof that market forces will somehow direct the new profits to less unemployment? Theory?

Did you miss the excerpt of my article I posted earlier that showed that the minimum wage freeze through the 80's has been a failed policy? History is on my side, not yours.

Sure we are. You are a human being, I am a human being, so are the people who are paid at the minimum wage. My bullshit-o-meter rings whenever I hear anything that takes away privileges from people, especially poor people.

I'm trying to give them jobs, I'm not trying to take away from them.

No minimum wage means poor people have less money. It's as simple as that.

Why don't you follow through with your proposal and guess what happens over the long run if there is no minimum wage? Market forces will make work exactly what they are worth--but the floors still need to be mopped, the burgers flipped, and people will work for slave labour wages if that's what the job's worth and they are desperate. Humans deserve decency is the whole rationale behind minimum wage.

I love the way you state that people will be paid what they are worth, and then immediately claim that low-skill jobs must be done as if that refutes the underlying principle.

People will be paid what they are worth--but what they are worth is not always consistent with human decency. I do not want the person mopping my floor in the food court to be making slave labour wages.

Moreover, decency means that you consistently prevent people from finding legal employment? How is that decency?

Prove that the minimum wage stops people from finding jobs. This "minimum wage hurts poor people" is exactly what the article from the academic journal I posted earlier (just the introduction) talked about. Guess what, if minimum wage was ten dollars an hour, Wal-Mart might have to lay people off but cash would still have to be manned and there would still need to be stockboys. Minimum wage redistributes the purchasing power to the poor.

The minimum wage is part of market forces or do you deny that a worker will be more willing to work somewhere that pays a few dollars above the minimum wage as opposed to bare minimum wage.

The existence of efficiency wages supports my argument, not yours.

Says you. Minimum wage is part of market forces. No matter how much you try and isolate minimum wage as a kind of maverick that has no effect on the economy at all, it does and taking it away means lowering the value of the work of people at the bottom of society.

Here's a hint in case you never worked in high school--teenagers know that places that pay only the minimum wage are too "tight" and likely never to give you a raise so they avoid minimum wage places like the plague. It's the same with temp or part-time jobs I imagine. Wal-Mart is more attractive because it's a few dollars over the minimum wage and if there was no minimum wage I would expect if not cut then a freezing and inflation making the wage worth exactly what it's worth.

Complete bullshit. Wal-Mart pays an efficiency wage for a variety of reasons, but Wal-Mart never pays someone more than what they are worth to the company. Specifically, they pay an efficiency wage because it makes people more valuable, as you mentioned. There is no reason to assume that this force will disappear if the minimum wage is done away with.

I am not just advocating minimum wage staying the same, but minimum wage over time going up to ten dollars an hour. I'm not saying that the force will disappear--I'm saying that big business has no reason to increase their wages to match inflation and people's work will be treated exactly what it's worth with no minimum wage. Eventually people will be living exactly what they are worth and if this is two dollars and hour then it's two dollars an hour. I have a problem with that.

Minimum wages set the baseline of human worth, and I don't want that worth to be exactly what the market dictates because the market may dictate that mopping floors is worth 2 bucks an hour. You don't see a problem with that, I do.

If they're only worth 2 dollars an hour, then right now they are getting ZERO because of the minimum wage laws. You obviously see no problem with that, but working for 2 dollars an hour IS BETTER than not working for nothing.

Bullshit, unskilled labour means unskilled labour. Anybody can do it. They are not getting zero, they are getting minimum wage because the work still needs to be done. The floors still have to be mopped and the burgers still need to be flipped. If minimum wage says they're worth five dollars an hour right now and in reality they're worth two, taking away minimum wage takes away poor people's purchasing power.

I love the way you immediately revert back to "human decency" as if believing someone should be able to find a job is indecent of me. Your argument is a laughable example of circular logic. People do not have MRP's below the minimum wage right now because the minimum wage takes all MRP's that ARE below it and sets them to ZERO. The minimum wage is an artifact from an era before there was significant labor mobility and from when there was little job market competition within a local area. Neither is the case, today, and it has begun hurting people far more than helping since only a miniscule fraction (about 1%) of US workers work for the minimum wage or less.

Ridiculous. Minimum wage doesn't set the value of work under the minimum wage to zero, because it's unskilled labour so anybody can do it and it still needs to be done no matter what. Minimum wage is holding up the value of this unskilled labour and without it the labour would be worth exactly what it is, maybe two dollars, maybe four dollars, most definitely less because there will always be people willing to work for less.

Parsimony--if you pay poor people more money, they will benefit from it. The burden of proof is on the people who say this is different, and usually the attempt is laughable. "Poor people are hurt by minimum wage hikes/existence because market forces would create more jobs or take care of them otherwise." Market forces are cruel and could make work like mopping floors exactly what it's worth. I have a problem with that.

Can you provide evidence to back up this statement?

Yes. Look earlier to the article I posted, I can post more sections of it if you want. It's logic--if the minimum wage is ten bucks an hour and Wal-Mart has to make due with less employees doing the same work, they breed out inefficiency (why have two people doing the job of one man). It promotes capitalism in that efficiency is rewarded.

Brian

[brianeyci]

Before we continue I would like to ask you MoO why assume a dollar value for every person's skillset. Do you accept that anybody (obviously not disabled people) can flip a buger or mop a floor? This will save us time.

Brian

[brianeyci]

This leads to small businesses shutting down. Profit margins for small businesses are often razor thin, while Wal-Mart and its ilk command such a huge market share that they can survive the hit. That's why I detailed the idea of increasing EITC benefits. That comes from federal tax dollars, so nobody is unduly hit. The only reason I can think of to prefer an increase in minimum wage to EITC is a desire to hurt businesses through whatever pretext is available. I'm not trying to accuse anyone of ulterior motive, I'm just struggling to understand why alternative plans that accomplish the same goals without the potential problems don't even warrent a comment.

Well to be honest I don't really care if small businesses shuts down or if small business is hurt disporportionately by minimum wage as long as more poor people are helped by minimum wage. If small business are too inefficient to keep up with the times, then so be it and startups will just have to be family run. I guess increasing the minimum wage over time is a fast and quick solution to increasing the purchasing power of poor people.

I think a way to avoid your problem is to raise wages very slowly so that small and medium businesses have time to adjust.

Brian

[Master of Ossus]

Prove this. This is a blind assertion that anti-minimum wage advocates always make, that if there was no minimum wage there will be more jobs.

What do you think, precisely, causes unemployment if not an inability for wages to drop such that markets can clear?

I can show that people will lose of there is no minimum wage or increase in minimum wage to match inflation because--tada, inflation.

Inflation supports the argument that minimum wage hurts instead of helps because it tends to make minimum wages irrelevant over time.

What is your proof that market forces will somehow direct the new profits to less unemployment? Theory?

Again, what do you think prevents markets from clearing if not an inability to lower the marginal person's wage such that the market can clear? Do you simply assume that no person is willing to work for any wage below the one that happens to be defined as the minimum one?

Did you miss the excerpt of my article I posted earlier that showed that the minimum wage freeze through the 80's has been a failed policy? History is on my side, not yours.

No, history is clearly on my side. One study done on a specific market by three researchers with an established ulterior motive does not impress as much as 50 years of empirical research on the minimum wage.

No minimum wage means poor people have less money. It's as simple as that.

Except for all of those poor unemployed people who have NO wages. And you have yet to demonstrate that inflation is going to magically make the very real, empirically measured efficiency wages disappear.

People will be paid what they are worth--but what they are worth is not always consistent with human decency. I do not want the person mopping my floor in the food court to be making slave labour wages.

Fair enough. Be the person who's out on the street because NO ONE can employ you. This is not a moral choice between whether or not we should value unskilled workers. It's a practical choice motivated by an opportunity cost, and clearly the minimum wage hurts unskilled workers by keeping them out of jobs more than it nominally raises the wages of those who find jobs.

Prove that the minimum wage stops people from finding jobs. This "minimum wage hurts poor people" is exactly what the article from the academic journal I posted earlier (just the introduction) talked about. Guess what, if minimum wage was ten dollars an hour, Wal-Mart might have to lay people off but cash would still have to be manned and there would still need to be stockboys. Minimum wage redistributes the purchasing power to the poor.

That's true, but it's also a net loss in terms of the amount of money that unskilled people collectively can earn. In the scenario above, Wal-Mart would lay off some portion of its workforce which would then not have any work. The MRP's of Wal-Marts remaining workers would be up, but they would no longer be able to hire any more workers because those unlucky enough to have MRP's below the new price floor would be SOL'ed. It's great that you want to do this to people, but I don't think that society is willing to do this.

Says you. Minimum wage is part of market forces.

How can the minimum wage possibly be "part of market forces" if the entire point of it is to prevent the market from reaching the solution it would ordinarily reach? Are you even reading what you're typing?

No matter how much you try and isolate minimum wage as a kind of maverick that has no effect on the economy at all, it does and taking it away means lowering the value of the work of people at the bottom of society.

It does have an effect on the economy--a negative one, as it turns out. Removing the minimum wage may slightly impact the wages of people who are currently employed, but it would also help markets clear more easily and thus prevent the kind of unemployment rates we're seeing today. Moreover, given the elasticities of demand for labor, unskilled people will earn more money in aggregate without a minimum wage than they do with one.

I am not just advocating minimum wage staying the same, but minimum wage over time going up to ten dollars an hour. I'm not saying that the force will disappear--I'm saying that big business has no reason to increase their wages to match inflation and people's work will be treated exactly what it's worth with no minimum wage.

"Big business" does have a reason to increase wages with inflation, though: if they don't, then the efficiency wage they currently pay will lose its effectiveness, over time.

Eventually people will be living exactly what they are worth and if this is two dollars and hour then it's two dollars an hour. I have a problem with that.

I don't--it's better that they're working for two dollars an hour than for nothing like those same people are living for, today. Meanwhile, the rest of society will be more-or-less unaffected by the change.

Bullshit, unskilled labour means unskilled labour. Anybody can do it. They are not getting zero, they are getting minimum wage because the work still needs to be done. The floors still have to be mopped and the burgers still need to be flipped. If minimum wage says they're worth five dollars an hour right now and in reality they're worth two, taking away minimum wage takes away poor people's purchasing power.

In the scenario you describe, minimum wage laws would require the employer to fire off workers until the MRP of the guys he has left rose to $5/hour. That's pointless, senseless, and heartless. I can't believe that you don't have a problem with persistent, involuntary unemployment in the economy.

Ridiculous. Minimum wage doesn't set the value of work under the minimum wage to zero, because it's unskilled labour so anybody can do it and it still needs to be done no matter what.

Right. I JUST SAID THAT.

Minimum wage is holding up the value of this unskilled labour and without it the labour would be worth exactly what it is, maybe two dollars, maybe four dollars, most definitely less because there will always be people willing to work for less.

It's only holding up the value of unskilled labor by keeping other people from getting jobs. If that's the trade-off you're willing to make, then so be it, but it's not the choice that I'm willing to make.

Parsimony--if you pay poor people more money, they will benefit from it. The burden of proof is on the people who say this is different, and usually the attempt is laughable. "Poor people are hurt by minimum wage hikes/existence because market forces would create more jobs or take care of them otherwise." Market forces are cruel and could make work like mopping floors exactly what it's worth. I have a problem with that.

Well, then, perhaps you'd like to take a stop by the unemployment offices and tell the people there that you'd like to keep them out of jobs. That's not something that I'd do, and I've been in a company that gave its workers the option of either taking every other Friday off or seeing a certain fraction of the work force get pink slips. Yours wasn't the choice that we made, either.

[Master of Ossus]

Before we continue I would like to ask you MoO why assume a dollar value for every person's skillset. Do you accept that anybody (obviously not disabled people) can flip a buger or mop a floor? This will save us time.

Brian

Of course I do, but I would also contend that some people are better at mopping a floor and flipping burgers than others. And, yes, you can put a dollar value on what people do--businesses make those choices all the fucking time.

[Master of Ossus]

Well to be honest I don't really care if small businesses shuts down or if small business is hurt disporportionately by minimum wage as long as more poor people are helped by minimum wage. If small business are too inefficient to keep up with the times, then so be it and startups will just have to be family run. I guess increasing the minimum wage over time is a fast and quick solution to increasing the purchasing power of poor people.

I think a way to avoid your problem is to raise wages very slowly so that small and medium businesses have time to adjust.

Brian

Great, just drive them out of business slowly. That'll help.

[brianeyci]

Before we continue I would like to ask you MoO why assume a dollar value for every person's skillset. Do you accept that anybody (obviously not disabled people) can flip a buger or mop a floor? This will save us time.

Brian

Of course I do, but I would also contend that some people are better at mopping a floor and flipping burgers than others. And, yes, you can put a dollar value on what people do--businesses make those choices all the fucking time.

I'll answer your entire post after this, but here's the question. If you accept that some jobs everybody can do, then are you willing to let the market decide their fate rather than accept that there's a basic level of decency in the minimum wage. If the market says that mopping floors or piling shit or whatever is worth two dollars an hour, are you willing to let them be paid two dollars an hour.

The minimum wage puts a dollar value on every person's work regardless of their skillset. This is a basic tenent of human rights, that everybody is worth something. Just defining that worth is the only problem to me, but you seem to be willing to let the market define the worth. For me the worth is clear--50% or less of income spent on rent. What's your cutoff point?

Brian