How much should minimum wage be?

Master of Ossus · Post by **Master of Ossus** » 2006-04-18 12:46am

brianeyci wrote: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.

Yes, because they always have a choice not to work for two dollars an hour if it's too low for them. When lots of people make this choice, then businesses will raise wages until the needs of their company are in equilibrium with the needs of the populace. Some people may still choose not to work for the wage that is offered, and some will choose to work for the wage that is offered, but everyone involved will have a choice in the matter which is different from the involuntary unemployment we see, today.

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

My cut-off point would be 100% of income spent on rent, if that's what someone wants to do with their money.

Here is the logical fallacy in your argument:

You are unwilling to allow the market to dictate the wage rate under specific circumstances. Instead, you argue that we should impose a restriction such that no one who works (I assume you would require them to work a certain number of hours to qualify for consideration) should have to spend more than half of their total income on rent. BUT WHAT DETERMINES THE PRICE OF RENT IF NOT THE MARKET? You are, essentially, placing an unnecessary condition on one market by tying it to another market, with no justification or thought process behind this system of price-fixing.

I may have to go and get some work done, but if so I will try and log on tomorrow afternoon and continue if you so desire.

Big Phil · Post by **Big Phil** » 2006-04-18 12:50am

SancheztheWhaler wrote:
brianeyci wrote:
Minimum wage is good for the economy in that it forces people to go out and work and breeds out inefficiencies. Minimum wage promotes capitalism.

Brian
Can you provide evidence to back up this statement?

You know, I asked you to address this half a day ago, and you ignored it. Please provide the evidence.

brianeyci · Post by **brianeyci** » 2006-04-18 01:09am

SancheztheWhaler wrote:You know, I asked you to address this half a day ago, and you ignored it. Please provide the evidence.

Half a day is not that much time and if you look earlier the point of breeds out inefficiencies came from that journal article I posted. I replied to your point in one of my replies to MoO quoting you.

Journal of Economic Issues wrote: High Wages as Part of a "Transformational" Growth Strategy

Over the years, a number of economists have argued that high wages, through their direct impact on the behavior of firms, can contribute to an overall growth strategy. Marc Lavoie calls this the "Webb Effect" after the Fabian economist Sidney Webb, who was among the first to isolate and describe this phenomenon [Webb 1912; Lavoie 1992, 248-255].

Edward Nell has recently rearticulated Webb's argument that high wages can induce a more dynamic economy. Like Webb, he argues that this will occur through: (1) the elimination of marginal, low-productivity firms, and (2) the enhanced productivity of surviving firms. Nell proposes that the minimum wage be advanced, in real terms, every few years in order to force firms to aggressively pursue new productivity-enhancing technologies. He argues that the jobs lost from the inevitable bankruptcy of low-productivity firms would be partially offset when high productivity firms expand to fill the niche in the market left behind by the exit of inefficient firms. This expansion, in conjunction with the new technologies that would be developed and applied by surviving businesses, results in an increase in overall labor productivity [Nell 1988, 235-244; Melman 1983, chap. 9; Webb 1912, 981-985].

Webb observed that the minimum wage is a cost to the employer that is not fundamentally different than other regulations such as sanitary, safety, or building codes. Each of these requires a monetary outlay [Webb 1912, 988-989]. In this sense, the argument for a minimum wage is founded on the same logic that underlies any form of protective legislation. Moreover, it guides the competitive process of a market economy into socially beneficial channels:

Hence the mere existence of a Legal Minimum Wage, by debarring the hardpressed employer from the most obvious form of relief-one which is of no advantage to the community-positively drives him to other means of lowering the costs of production, which almost inevitably take the form of increasing productivity [Webb 1912, 983].

I can't link to this article because it's from a private database from my university, but if you really want it and have access to it otherwise from a university I could send it to you. The key point is the logic--if you force companies to pay more money to its employees, there will be less employees and the people left have to pick up the slack, efficiency. One man doing the job of two, and he's paid more for it.

If you're wondering where the "forces people to go out and work" is from, it was partly a response to Joe's point that instead of minimum wage there should be an income supplement. I wasn't exactly sure what Joe was saying back then and I thought he was talking about a kind of welfare, but now I know he was talking more about workfare or subsidized wages.

Brian

brianeyci · Post by **brianeyci** » 2006-04-18 01:30am

Master of Ossus wrote:Yes, because they always have a choice not to work for two dollars an hour if it's too low for them. When lots of people make this choice, then businesses will raise wages until the needs of their company are in equilibrium with the needs of the populace. Some people may still choose not to work for the wage that is offered, and some will choose to work for the wage that is offered, but everyone involved will have a choice in the matter which is different from the involuntary unemployment we see, today.

Pick already gave a point about this. Skilled workers are the ones who get to dictate their wages, not poor people. Poor people basically have to accept the wages they are given or they do not get food on the table. They have to work, two, three jobs. The bold part made me laugh, I'm sorry. Businesses will raise or lower their wages until the needs of their company are in equilibrium with the needs of their company, not the needs of the populace. Minimum wage workers are non-unionized, and there are always people willing to work for less so your proposal for no minimum wage would have two or three dollar an hour people working in food courts and I don't want that. You may think that it's cruel that some people don't get to work, but in the long run it's better for the economy to create a more efficient economy.

My cut-off point would be 100% of income spent on rent, if that's what someone wants to do with their money.

Here is the logical fallacy in your argument:

You are unwilling to allow the market to dictate the wage rate under specific circumstances. Instead, you argue that we should impose a restriction such that no one who works (I assume you would require them to work a certain number of hours to qualify for consideration) should have to spend more than half of their total income on rent. BUT WHAT DETERMINES THE PRICE OF RENT IF NOT THE MARKET? You are, essentially, placing an unnecessary condition on one market by tying it to another market, with no justification or thought process behind this system of price-fixing.

I may have to go and get some work done, but if so I will try and log on tomorrow afternoon and continue if you so desire.

50% or less of their income spent on rent is not a hard and fast rule, but what I want for the definition of minimum wage. It's not a logical fallacy--it's called living wage based on wages increasing to match inflation and wages keeping pace with the cost of living. So for example, if it costs around x money to live, minimum wage should be 50% bigger than that at least. It's not that I oppose people spending more than 50% of their money on rent, it's that I don't want people spending more than 50% of their money on their rent if they don't want to and are working a full time job at the minimum wage. This as in my first post said would be decided through average rents in zones of occupancy around the business. It's not perfect but it's better than a flat minimum wage that may give enough for one area but not enough for another.

When I asked for your cut off point I was asking how low you would go not how high. If the answer is what I think it is, zero, then basically you are letting the market decide whether people go homeless or not or have to go on government assistance. Before it gets to that point, better to have minimum wage force employers to give their employees at least a basic level of decency. The work still needs to be done so the people will be hired whether it's a minimum wage or not. The question is how much they're paid and how many people are hired and whether minimum wage means less people being hired. I do not believe that, and it's time to show proof of your assertion that less people are hired to work because of minimum wage.

Brian

Meeper · Post by **Meeper** » 2006-04-18 01:38am

I have a fairly unique perspective on this argument; my father (who I also work for as an administrative assistant), is one of the five Commissioners on the new Australian Fair Pay Commission, the body under the new IR reforms that sets the minimum and award wages. I, therefore, spend a lot of time listening to various people talking about this subject. I would just like to repeat something which was said to me earlier today, being that an increase in the minimum wage would, in a large number of cases, not impact upon unemployment, because the amount of money paid does not quantifiably change the number of positions. Basically, if you need two hundred people to man machinery in a factory, because you're legislated into paying them an extra thirty bucks a day doesn't change the fact that you require two hundred men. I don't necessarily agree with this sentiment (e.g. in microbusiness, it's not always the case that a business can afford to pay an extra $30 a day), but I thought it was interesting nonetheless.

On another note, and this is purely out of my interest, in Australia we have an award wages system where different industries and positions have different minimum wages and conditions (note: this is an extremely simplified view of the awards system). Does America have anything like this?

brianeyci · Post by **brianeyci** » 2006-04-18 01:48am

Basically, if you need two hundred people to man machinery in a factory, because you're legislated into paying them an extra thirty bucks a day doesn't change the fact that you require two hundred men.

That's what I was trying to say with my "the work still needs to be done" but you've articulated it a lot better than I could, thanks

.

Brian

Middleclass · Post by **Middleclass** » 2006-04-18 02:38am

brianeyci wrote: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

OK, first off, if small businesses are shutting down, I really don't think their former employees are benefiting. Also, what do you mean by "startups will just have to be family run"? I was talking about small, privately owned, non-incorporated businesses. Mom 'n' Pop joints.

Secondly, no amount of time is going to ease their customers into paying double the previous rates. In many industries, people can just stop buying the goods altogether. If people cannot simply exit the market, then they are getting unfairly gouged.

Also, for the second time now, the EITC suggestion has not been commented on. Perhaps you would care to explain why it must be a minimum wage increase instead of alternative methods such as this. Specifically, what advantages does a minimum wage increase have over increased EITC benefits? Do these advantages outweigh the problems that a minimum wage increase may cause?

theski · Post by **theski** » 2006-04-18 07:53am

Ok.. $100.00 per hr.... does that make everyone happy.. WOOOOOO now we all can have a Living High on the hog wage.. no poverty..

What,??., Milk costs $20 a gallon.. Rent is 3000 a month.. HOW COME>.. wahhhhhhhhh

Big Phil · Post by **Big Phil** » 2006-04-18 10:20am

brianeyci wrote:snip

One question: How does a low margin business - McDonalds, janitorial services, unskilled laborers such as ditch diggers, fruit pickers, etc. - become more efficient? Low margin business will ALWAYS be present; not everybody wants to eat at Ruth's Chris Steakhouse everyday, nor could we all afford it even in our wildest dreams. If McDonalds now has to pay unskilled workers $9/hr instead of $6, that's a 50% increase in their labor costs for no increased productivity. That gets pushed off onto the customers, who pay higher prices for low quality food... and so on...

theski · Post by **theski** » 2006-04-18 10:26am

SancheztheWhaler wrote:
brianeyci wrote:snip
One question: How does a low margin business - McDonalds, janitorial services, unskilled laborers such as ditch diggers, fruit pickers, etc. - become more efficient? Low margin business will ALWAYS be present; not everybody wants to eat at Ruth's Chris Steakhouse everyday, nor could we all afford it even in our wildest dreams. If McDonalds now has to pay unskilled workers $9/hr instead of $6, that's a 50% increase in their labor costs for no increased productivity. That gets pushed off onto the customers, who pay higher prices for low quality food... and so on...

You are banging your head... This is the type of answer you will get..

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

No reasoning with that logic

Rogue 9 · Post by **Rogue 9** » 2006-04-18 10:43am

brianeyci wrote: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.

Any job that pays more than minimum wage does so because the labor performed is worth the wage. Therefore, a job that pays over minimum wage will not be affected by a lack of minimum wage. This is a large chunk of existing jobs, including those of Wal-Mart (at least on paper).

brianeyci · Post by **brianeyci** » 2006-04-18 11:01am

Well the solution to me to theski and SW's problems are an age limit for living wage. Then McDonalds, manned by teenagers won't see significant cost increases. If you're over eighteen, then the wage hikes to living wage. I'm actually rethinking my opposition to Joe's idea for an income supplement--if the government can pay part of the living wage through a subsidized paycheque then it might be a good idea. And I do not think that it is such a catastrophe that people are paid more for janitorial services or fruit picking and the cost is transferred over to consumers. There can also be layoffs, which increase efficiency. Don't tell me you haven't seen a McDonalds where there's been a dozen people and a couple of them doing nothing.

You also have to think what my opponents are saying--no minimum wage. These unskilled labourers are now fucked and if their work is worth 2 dollars and it's being held up to the minimum wage to five, well then they're going to get fucked. In America there are probably over thirty million people working at minimum wage, so their work is valued at more than its worth to the market. Thirty million people fucked up the ass if there's no minimum wage.

As for theski's 100 bucks an hour, this is a common tactic, whenever anybody talks about lessening the gap between the rich and the poor there's always idiots who try and strawman the argument into making everybody be rich.

For middleclass, I know you meant family small businesses. When I mentioned "have to be family run" I mean they'll just have to deal with less workers. Small businesses are surviving against retail giants since they have quality, niche, or convenience, not price, so a price hike will not hurt them as badly if it's phased in over time. A minimum wage hike doesn't necessarily mean double prices even if it goes up to nearly double since small businesses can hire less people, and especially if you raise the wage in small increments of ten cents at a time so small businesses can adjust. In Canada there is Canada Child Tax Benefit, our version of EITC, and it's only for families and you have to apply for it. I guess the only major objection I have is its active instead of passive and restricted to families, and also puts the onus on the government instead of the consumer. Also I don't think any one approach is a solution, minimum wage can be increased alongside government benefits until a good mix is achieved. Definitely wages should keep pace with inflation.

Rogue 9 wrote:Any job that pays more than minimum wage does so because the labor performed is worth the wage. Therefore, a job that pays over minimum wage will not be affected by a lack of minimum wage. This is a large chunk of existing jobs, including those of Wal-Mart (at least on paper).

This is not necessarily true. I already mentioned that minimum wage sets the minimum value someone is willing to work for, and everybody must set their wages compared to that. So minimum wage does have an affect on Wal-Mart wage since Wal-Mart must keep their wage above the minimum wage a few dollars to attract employees. Remove this ruler and see the bottom fall out of wages. At the very least inflation will take care of wages and make the wage worth less and less over time if there aren't any raises in the minimum wage.

As for MoO we'll continue later tonight.

Brian

theski · Post by **theski** » 2006-04-18 11:10am

Its no strawman brianeyci
... Give me a number.. 10 bucks.. 20.... what will make you happy

and How do change it for cost of living differences in locations and states..

between NYCity and Rural NY.. Its unworkable.. that is why its a transitional wage..its not designed to be the only wage for a lifetime.

brianeyci · Post by **brianeyci** » 2006-04-18 11:24am

theski wrote:Its no strawman brianeyci
... Give me a number.. 10 bucks.. 20.... what will make you happy

and How do change it for cost of living differences in locations and states..

between NYCity and Rural NY.. Its unworkable.. that is why its a transitional wage..its not designed to be the only wage for a lifetime.

Why didn't you just say that instead of your 100 bucks a month then.

Are you happy having somebody mop your food court floors for 4 bucks an hour? I'm not. I think that's what it comes down to. Cost of living differences, I mentioned you could create zones around the business area and take the lowest costing housing and create a wage that way through a formula. The question to me about people who say that they don't want the minimum wage, is how many people would be hurt and that would probably be everybody currently living on the minimum wage or millions of people. So the burden of proof is high for people who don't want minimum wage, assuming they care about these millions of people. Even if all the unemployed are employed if you get rid of minimum wage, the millions of people on minimum wage right now would be hurt so even just by the numbers getting rid of minimum wage doesn't make sense. Hiking it, how high it should go, is debatable.

Brian

Big Phil · Post by **Big Phil** » 2006-04-18 11:36am

brianeyci wrote:
theski wrote:Its no strawman brianeyci
... Give me a number.. 10 bucks.. 20.... what will make you happy

and How do change it for cost of living differences in locations and states..

between NYCity and Rural NY.. Its unworkable.. that is why its a transitional wage..its not designed to be the only wage for a lifetime.
Why didn't you just say that instead of your 100 bucks a month then.

Are you happy having somebody mop your food court floors for 4 bucks an hour? I'm not. I think that's what it comes down to. Cost of living differences, I mentioned you could create zones around the business area and take the lowest costing housing and create a wage that way through a formula. The question to me about people who say that they don't want the minimum wage, is how many people would be hurt and that would probably be everybody currently living on the minimum wage or millions of people. So the burden of proof is high for people who don't want minimum wage, assuming they care about these millions of people. Even if all the unemployed are employed if you get rid of minimum wage, the millions of people on minimum wage right now would be hurt so even just by the numbers getting rid of minimum wage doesn't make sense. Hiking it, how high it should go, is debatable.

Brian

I am... you pay people what their labor is worth, not what they need to live on. That's a major difference between capitalism and socialism. If I ran my own business and was told that the fucking janitor needed to be paid $12/hr (marginally a living wage in the Seattle area) to push a bucket around, I'd probably just let the place get filthy or have my regular employees pitch in and clean. The work that janitor performs is NOT worth the living wage you are advocating that I pay him.

brianeyci · Post by **brianeyci** » 2006-04-18 11:51am

SancheztheWhaler wrote:I am... you pay people what their labor is worth, not what they need to live on. That's a major difference between capitalism and socialism. If I ran my own business and was told that the fucking janitor needed to be paid $12/hr (marginally a living wage in the Seattle area) to push a bucket around, I'd probably just let the place get filthy or have my regular employees pitch in and clean. The work that janitor performs is NOT worth the living wage you are advocating that I pay him.

Efficient isn't it.

Some janitors are worth a lot and do get paid a lot of money, in hospitals. Here, up to 17 bucks an hour.

But what if you have to hire an extra hand? Then you have to somehow suck up the cost of the living wage. The whole ratonale behind minimum wage is that everybody's time is worth at least a minimum amount based on human decency. If the minimum wage is too high, then I'm willing to debate that (10 bucks was just plucked out of thin air by me and so was living wage, my concern is more for keeping up with inflation than anything else). But that's a lot different than getting rid of minimum wage entirely.

Brian

Big Phil · Post by **Big Phil** » 2006-04-18 12:10pm

brianeyci wrote:
SancheztheWhaler wrote:I am... you pay people what their labor is worth, not what they need to live on. That's a major difference between capitalism and socialism. If I ran my own business and was told that the fucking janitor needed to be paid $12/hr (marginally a living wage in the Seattle area) to push a bucket around, I'd probably just let the place get filthy or have my regular employees pitch in and clean. The work that janitor performs is NOT worth the living wage you are advocating that I pay him.
Efficient isn't it.

Some janitors are worth a lot and do get paid a lot of money, in hospitals. Here, up to 17 bucks an hour.

But what if you have to hire an extra hand? Then you have to somehow suck up the cost of the living wage. The whole ratonale behind minimum wage is that everybody's time is worth at least a minimum amount based on human decency. If the minimum wage is too high, then I'm willing to debate that (10 bucks was just plucked out of thin air by me and so was living wage, my concern is more for keeping up with inflation than anything else). But that's a lot different than getting rid of minimum wage entirely.

Brian

Just to be clear, I have no problem with increasing the minimum wage, as long as you understand that it WILL drive other costs up. I have a huge philosophical problem with insisting that everybody must be paid a "living" wage, regardless of the work they perform. Governments in capitalist societies should work to ensure that workers are not mistreated by employers, but this living wage crap is sounding like you are advocating socialism.

theski · Post by **theski** » 2006-04-18 12:14pm

brianeyci wrote:
theski wrote:Its no strawman brianeyci
... Give me a number.. 10 bucks.. 20.... what will make you happy

and How do change it for cost of living differences in locations and states..

between NYCity and Rural NY.. Its unworkable.. that is why its a transitional wage..its not designed to be the only wage for a lifetime.
Why didn't you just say that instead of your 100 bucks a month then.

Are you happy having somebody mop your food court floors for 4 bucks an hour? I'm not. I think that's what it comes down to. Cost of living differences, I mentioned you could create zones around the business area and take the lowest costing housing and create a wage that way through a formula. The question to me about people who say that they don't want the minimum wage, is how many people would be hurt and that would probably be everybody currently living on the minimum wage or millions of people. So the burden of proof is high for people who don't want minimum wage, assuming they care about these millions of people. Even if all the unemployed are employed if you get rid of minimum wage, the millions of people on minimum wage right now would be hurt so even just by the numbers getting rid of minimum wage doesn't make sense. Hiking it, how high it should go, is debatable.

Brian

As I have stated before... I am for a minimum wage.. and I could live with $7.25 which is adjusted for inflation.,.. but this 12/'15 dollar thing is absurd.. and the same people that get that wage will be the ones most hurt by the costs of goods rising because of it

Master of Ossus · Post by **Master of Ossus** » 2006-04-18 12:15pm

brianeyci wrote:Pick already gave a point about this. Skilled workers are the ones who get to dictate their wages, not poor people. Poor people basically have to accept the wages they are given or they do not get food on the table.

Unskilled laborers have to take the market price. I don't see any problems with this, especially since most businesses have to accept the market price for unskilled labor as a given.

They have to work, two, three jobs. The bold part made me laugh, I'm sorry. Businesses will raise or lower their wages until the needs of their company are in equilibrium with the needs of their company, not the needs of the populace.

See... in economics we have something called a Labor Supply schedule and a Labor Demand schedule. A firm is in charge of one of these, and the populace is in charge of the other.

Minimum wage workers are non-unionized, and there are always people willing to work for less so your proposal for no minimum wage would have two or three dollar an hour people working in food courts and I don't want that. You may think that it's cruel that some people don't get to work, but in the long run it's better for the economy to create a more efficient economy.

Bullshit. The economy right now is not Pareto efficient by your own admission. Allowing people who are willing to work for less than the current, legally stipulated minimum wage do so will by definition make the market more efficient.

50% or less of their income spent on rent is not a hard and fast rule, but what I want for the definition of minimum wage.

It's not a logical fallacy--it's called living wage based on wages increasing to match inflation and wages keeping pace with the cost of living.

It is logically fallacious to whine about how you don't trust the market to establish wages, and then immediately turn around and propose that a... market should dictate real wages.

So for example, if it costs around x money to live, minimum wage should be 50% bigger than that at least. It's not that I oppose people spending more than 50% of their money on rent, it's that I don't want people spending more than 50% of their money on their rent if they don't want to and are working a full time job at the minimum wage. This as in my first post said would be decided through average rents in zones of occupancy around the business. It's not perfect but it's better than a flat minimum wage that may give enough for one area but not enough for another.

How is it any better? What do you think establishes the prices of rent? The whole point of your proposal is to eliminate market power over wages then your proposal fails utterly because it simply uses a different aspect of the market to establish wages. It is actually dramatically worse than the current system as such, because the current system actually takes into account the demand and supply of labor whereas your proposal ties wages to an essentially unrelated market with its own supply and demand schedules.

When I asked for your cut off point I was asking how low you would go not how high. If the answer is what I think it is, zero, then basically you are letting the market decide whether people go homeless or not or have to go on government assistance.

Right; I have no problem doing so.

Before it gets to that point, better to have minimum wage force employers to give their employees at least a basic level of decency. The work still needs to be done so the people will be hired whether it's a minimum wage or not. The question is how much they're paid and how many people are hired and whether minimum wage means less people being hired. I do not believe that, and it's time to show proof of your assertion that less people are hired to work because of minimum wage.

Brian

Not better to have minimum wage.

And I have shown proof that minimum wage leads to involuntary unemployment. What do you think 50 years of economic research demonstrates? I also see that the minimum wage disproportionately affects blacks, but I'm sure they're a group that's capable of handling more economic hardships.

brianeyci · Post by **brianeyci** » 2006-04-18 12:19pm

Okay, I have to concede that a living wage as in living expenses all paid is a stupid idea. Probably the adjusted 50% on rent too, because it gets too complicated with more than one job.

I hold the line on getting rid of minimum wage entirely though, and I still think that a person who works two or three jobs or a set numbers of hours a week shouldn't have to pay more than half his salary on rent if he doesn't want to. If this isn't best dealt with by a living wage, then maybe it can be dealt by some way else.

Brian

Master of Ossus · Post by **Master of Ossus** » 2006-04-18 12:19pm

Meeper wrote:I have a fairly unique perspective on this argument; my father (who I also work for as an administrative assistant), is one of the five Commissioners on the new Australian Fair Pay Commission, the body under the new IR reforms that sets the minimum and award wages. I, therefore, spend a lot of time listening to various people talking about this subject. I would just like to repeat something which was said to me earlier today, being that an increase in the minimum wage would, in a large number of cases, not impact upon unemployment, because the amount of money paid does not quantifiably change the number of positions. Basically, if you need two hundred people to man machinery in a factory, because you're legislated into paying them an extra thirty bucks a day doesn't change the fact that you require two hundred men. I don't necessarily agree with this sentiment (e.g. in microbusiness, it's not always the case that a business can afford to pay an extra $30 a day), but I thought it was interesting nonetheless.

Even if the business does temporarily pay the higher wages in the short-run, in the long-run it will exit the industry because of the change.

On another note, and this is purely out of my interest, in Australia we have an award wages system where different industries and positions have different minimum wages and conditions (note: this is an extremely simplified view of the awards system). Does America have anything like this?

America has the Earned Income Tax Credit system, which rewards people who make less than $7,200/year (adjusted for a couple of factors, such as if you have a family or not) with a subsidy for working. That's the only remotely analogous system.

theski · Post by **theski** » 2006-04-18 12:22pm

I think brianeyci is fighting a emotional battle while the rest of us are doing it Economicly, and most of us have Run Businesses or managed some.. (no offense its just real world experience)

brianeyci · Post by **brianeyci** » 2006-04-18 12:29pm

Master of Ossus wrote:Unskilled laborers have to take the market price. I don't see any problems with this, especially since most businesses have to accept the market price for unskilled labor as a given.

How low are you willing to go. Four bucks? Three bucks? Unskilled labourers, over thirty million of them, have their wages held up to five fifteen right now and your plan would hurt probably the majority of them. How is letting the unemployed working going to balance out the huge number of other people who will be hurt by no minimum wage.

See... in economics we have something called a Labor Supply schedule and a Labor Demand schedule. A firm is in charge of one of these, and the populace is in charge of the other.

Economists view minimum wage from a totally different light than everybody else. I am willing to make concessions to the economy so the gap between the rich and the poor does not increase.

Bullshit. The economy right now is not Pareto efficient by your own admission. Allowing people who are willing to work for less than the current, legally stipulated minimum wage do so will by definition make the market more efficient.

At the cost of suffering for millions of people.

It is logically fallacious to whine about how you don't trust the market to establish wages, and then immediately turn around and propose that a... market should dictate real wages.

Fine, I concede the living wage example as stupid, but I honestly still do think that if someone works two or three jobs and puts in the hours, he should be able to support himself. If this isn't best dealt with a living wage but with an increase to match inflation, then so be it. But it isn't the same as getting rid of minimum wage entirely.

Right; I have no problem doing so.

Then you have no problem harming millions of people who are now on minimum wage and whose labour is likely valued higher than it really is.

Not better to have minimum wage.

And I have shown proof that minimum wage leads to involuntary unemployment. What do you think 50 years of economic research demonstrates? I also see that the minimum wage disproportionately affects blacks, but I'm sure they're a group that's capable of handling more economic hardships.

Millions of people are on minimum wage and would be hurt. How do you justify getting rid of minimum wage?

Brian

Big Phil · Post by **Big Phil** » 2006-04-18 12:32pm

theski wrote:I think brianeyci is fighting a emotional battle while the rest of us are doing it Economicly, and most of us have Run Businesses or managed some.. (no offense its just real world experience)

It sure sounds this way, but I don't know him or his situation.

brianeyci wrote:Okay, I have to concede that a living wage as in living expenses all paid is a stupid idea. Probably the adjusted 50% on rent too, because it gets too complicated with more than one job.

I hold the line on getting rid of minimum wage entirely though, and I still think that a person who works two or three jobs or a set numbers of hours a week shouldn't have to pay more than half his salary on rent if he doesn't want to. If this isn't best dealt with by a living wage, then maybe it can be dealt by some way else.

Brian

Even this argument has problems with it. What do you set the minimum wage at regionally? What if somebody is a dishwasher and wants to live in a Manhattan apartment? The cost of living in Manhattan is much higher than in the Bronx or Harlem. Lots of folks argue that the working class can no longer afford to live in Seattle, which is true and unfortunate, but living in a capitalist economy that's what happens when property is in great demand.

brianeyci · Post by **brianeyci** » 2006-04-18 12:33pm

theski wrote:I think brianeyci is fighting a emotional battle while the rest of us are doing it Economicly, and most of us have Run Businesses or managed some.. (no offense its just real world experience)

Yes I'm a snot nosed kid who's deep in debt and has never run a business on my own and wouldn't know the first thing about running a business.

But I know what would happen if you get rid of minimum wage. Sweat shops become legal, slave labour. If you need slave labour to run a business, then the cost is too high. MoO is saying getting rid of the minimum wage entirely if you haven't noticed. Someone working two jobs and sixty hours a week should be able to support himself, and if he can't then there's something wrong with the system.

Brian