How much should minimum wage be?

[brianeyci]

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.

It wouldn't be defined by what the person wants, but what is reasonable in the area. If there isn't any low cost housing in Seattle, then dishwashers there better be hired at a higher rate since the restaurants there are making shitloads of money and can afford to pay their dishwashers more. My idea has problems but not as much problems as letting someone working two jobs not have enough to pay the rent.

Brian

[theski]

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.

It wouldn't be defined by what the person wants, but what is reasonable in the area. If there isn't any low cost housing in Seattle, then dishwashers there better be hired at a higher rate since the restaurants there are making shitloads of money and can afford to pay their dishwashers more. My idea has problems but not as much problems as letting someone working two jobs not have enough to pay the rent.

Brian

What??????? because there is no low cost housing... Business are make tons of money?? There is no corrolation

[brianeyci]

What??????? because there is no low cost housing... Business are make tons of money?? There is no corrolation

If the rent there is expensive then the people who live there and eat out are more well off and businesses can pay more to dishwashers if they raise their prices.

Put it this way, how will you hire dishwashers if everybody living there needs to pay their rent and can't with two minimum wage jobs? You have to pay more, or find a way around it like family or do it yourself.

Brian

[theski]

What??????? because there is no low cost housing... Business are make tons of money?? There is no corrolation

If the rent there is expensive then the people who live there and eat out are more well off and businesses can pay more to dishwashers if they raise their prices.

Put it this way, how will you hire dishwashers if everybody living there needs to pay their rent and can't with two minimum wage jobs? You have to pay more, or find a way around it like family or do it yourself.

Brian

Brian.. dishwashers.. cooks.. Retail.. do not live in the expensive parts.. Its called a commute

[Big Phil]

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.

It wouldn't be defined by what the person wants, but what is reasonable in the area. If there isn't any low cost housing in Seattle, then dishwashers there better be hired at a higher rate since the restaurants there are making shitloads of money and can afford to pay their dishwashers more. My idea has problems but not as much problems as letting someone working two jobs not have enough to pay the rent.

Brian

Just a quick education on Seattle. Home prices in the city are $400,000 (on average), and most people cannot afford to buy. Rent for a 1-bedroom is about $900, unless it's a shitty, shitty apartment. Outlying areas (Tacoma, Everett, Renton, etc.) are less expensive, but then you have to commute. Some politicians are suggesting that rather than commute, the land in Seattle should be forcibly devalued to provide low-rent housing for low-income people. In other words, at the market rate, I could rent my 20 apartments for $1,200 each, but the city will force me to rent them for $700.

Or you could live in Algona and pay $500 to rent a trailer.

[theski]

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.

It wouldn't be defined by what the person wants, but what is reasonable in the area. If there isn't any low cost housing in Seattle, then dishwashers there better be hired at a higher rate since the restaurants there are making shitloads of money and can afford to pay their dishwashers more. My idea has problems but not as much problems as letting someone working two jobs not have enough to pay the rent.

Brian

Just a quick education on Seattle. Home prices in the city are $400,000 (on average), and most people cannot afford to buy. Rent for a 1-bedroom is about $900, unless it's a shitty, shitty apartment. Outlying areas (Tacoma, Everett, Renton, etc.) are less expensive, but then you have to commute. Some politicians are suggesting that rather than commute, the land in Seattle should be forcibly devalued to provide low-rent housing for low-income people. In other words, at the market rate, I could rent my 20 apartments for $1,200 each, but the city will force me to rent them for $700.

Or you could live in Algona and pay $500 to rent a trailer.

Dammm slum lords...

[Master of Ossus]

How low are you willing to go. Four bucks? Three bucks?

It's not a question of what I'm willing to do, it's a question of what businesses are capable of paying (ie., MRP of workers), and what workers are willing to work for.

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.

That's bullshit. Less than one percent of US workers work for wages that are at or below the current minimum wage. There is no evidence to suggest that the wages paid would fall in the absence of a minimum wage.

How is letting the unemployed working going to balance out the huge number of other people who will be hurt by no minimum wage.

Because very few people would actually be hurt by the absence of the minimum wage. You can't even explain why Wal-Mart pays people more than the legally binding minimum wage, today, without resorting to efficiency wages which would... still exist in the future without a minimum wage.

Economists view minimum wage from a totally different light than everybody else.

Yeah, it's almost as if years of studying the issue has given them a perspective that John Smith doesn't have.

I am willing to make concessions to the economy so the gap between the rich and the poor does not increase.

But minimum wage laws have generally been ineffective at limiting the growth of the gap between the wealthy and the poor.

At the cost of suffering for millions of people.

At very little actual cost--virtually no one is actually affected by the current minimum wage, which should clue you in to the fact that the one we have right now isn't doing anything.

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.

What the heck is "an increase to match inflation" if not a living or a minimum wage?

But it isn't the same as getting rid of minimum wage entirely.

So what, precisely, is your proposal, keeping your wildly disparate goals in mind?

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.

Please continue with this strawman of yours, as I find it quite entertaining. While you're ignoring the ~6% of the population that works for a wage of ZERO right now but that wants to be employed, I have proposed a concrete strategy for mitigating the problem that they are having.

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

Brian

I contend that very few of them, if any, would be hurt by the loss of the minimum wage, and that you are in any case exaggerating the number of people involved. Only about 1% of the US population works for the minimum wage or less, and few of them would see an actual decrease in their wages due to the legislative change. Meanwhile, the removal of the minimum wage would allow for hundreds of thousands of currently unemployed people to find jobs.

[brianeyci]

I'm looking at the US Census Table 636 and I see about two percent of people who work under the minimum wage already, and about a percent that work at the minimum wage. I guess I took the people living under the poverty line at 30 million and just assumed they made minimum wage, that was a stupid thing to do. But there's still millions of people who would be hurt by axing the minimum wage, not to mention the unforseen consequences for taking the bottom out of wages like wages close to the minimum wage frozen because there's no longer a bottom to measure it against.

You make the economist blank assertion that these people who are unemployed are unemployed because of the minimum wage. If that was true people like SirNitram would be going out to work for two bucks an hour if there was no minimum wage which is obviously false. People are unemployed for a myraid of factors, not just because of the minimum wage. Minimum wage hurting poor people is bullocks, because there is a certain point where people will refuse to work and the people who are willing to work under the minimum wage are already working, six million of them. Unemployment won't magically fall away with the loss of the minimum wage. How many hundreds of millions of these people can't find work because they aren't willing to work for two dollars an hour and waste their time? You can't show how many, so you haven't met the burden of proof that people will be helped. For sure millions of people will be hurt by axing the minimum wage since you admit their labour is currently valued higher than it is worth. So your proposal throws millions of people to the wolves, all the people working at wages close to or at the minimum wage.

I would keep minimum wage at the very least matching inflation, moving up the minimum wage to match the purchasing power of the last time the minimum wage was raised to 5.15 and do it slowly in increments so as not to ruin small business. I think this was around 6.60, I've heard 7.25. Living wage usually refers to making wages match the cost of living which is different than matching inflation, I admit that I didn't really think through living wages carefully enough and it's bullshit.

If economists were in charge there wouldn't be universal healthcare in Canada. Their primary concern is increase in the GDP first, social justice next.

<edit>Sorry that should be "how many hundreds of thousands" instead of millions.</edit>

Brian

[Knife]

How many of those under mininum wage, are making money off of tips as part of their salary?

[brianeyci]

How many of those under mininum wage, are making money off of tips as part of their salary?

I don't know, Table 636 doesn't say .

Axing the minimum wage obviously hurts a lot of people and I don't see why there should just be the assumption that unemployed people will suddenly be able to find work without a minimum wage.

Brian

[Master of Ossus]

I'm looking at the US Census Table 636 and I see about two percent of people who work under the minimum wage already, and about a percent that work at the minimum wage. I guess I took the people living under the poverty line at 30 million and just assumed they made minimum wage, that was a stupid thing to do.

My 1% statistic counts only people over 24 and less than 65--I guess it makes sense that more people who are under 24 and over 65 could work for less than or at the minimum wage.

But there's still millions of people who would be hurt by axing the minimum wage, not to mention the unforseen consequences for taking the bottom out of wages like wages close to the minimum wage frozen because there's no longer a bottom to measure it against.

Appeal to ignorance fallacy.

You make the economist blank assertion that these people who are unemployed are unemployed because of the minimum wage.

Nonsense. I argue that the minimum wage contributes to involuntary unemployment; not that it is the only cause of unemployment.

If that was true people like SirNitram would be going out to work for two bucks an hour if there was no minimum wage which is obviously false. People are unemployed for a myraid of factors, not just because of the minimum wage. Minimum wage hurting poor people is bullocks, because there is a certain point where people will refuse to work and the people who are willing to work under the minimum wage are already working, six million of them. Unemployment won't magically fall away with the loss of the minimum wage.

This whole argument is a ridiculous strawman--the minimum wage contributes to unemployment by retarding job development. It is not the only cause of involuntary unemployment. Moreover, if people don't want to work for the wage that is offered, that would be their prerogative if the minimum wage were eliminated. However, people who are willing to work for below the minimum wage currently have no choice to do so because of the legal regulations on the matter.

How many hundreds of millions of these people can't find work because they aren't willing to work for two dollars an hour and waste their time?

I don't know, because under the current system people are legally banned from working for wages under the minimum one. If even one person is willing to work for such a wage rather than earn nothing, and even one business is willing to employ someone for such a wage but currently cannot, then the minimum wage is artificially interfering with Pareto efficiency.

You can't show how many, so you haven't met the burden of proof that people will be helped. For sure millions of people will be hurt by axing the minimum wage since you admit their labour is currently valued higher than it is worth.

Once again, this is bullshit. In the absence of the minimum wage, people will still earn their MRP (the same MRP that allows tens of millions of US workers to work for more than the minimum wage, right now). I also never said that their labor "is currently valued higher than it is worth." That's a ridiculous distortion of God-knows what claim I've made that obviously went straight over your head. Ergo, "millions of people" will NOT be hurt by axing the minimum wage.

So your proposal throws millions of people to the wolves, all the people working at wages close to or at the minimum wage.

It would apply to them the same standards that are applied to skilled labor--they would be able to find their own jobs and make their own decisions about life. The proposal would also allow for new jobs to be created, and potentially for people to decide that they would like to fill one of those new positions.

I would keep minimum wage at the very least matching inflation, moving up the minimum wage to match the purchasing power of the last time the minimum wage was raised to 5.15 and do it slowly in increments so as not to ruin small business.

How does this help a small business? You're still raising their costs without raising their revenues.

I think this was around 6.60, I've heard 7.25. Living wage usually refers to making wages match the cost of living which is different than matching inflation, I admit that I didn't really think through living wages carefully enough and it's bullshit.

Fair enough.

If economists were in charge there wouldn't be universal healthcare in Canada. Their primary concern is increase in the GDP first, social justice next.

Nonsense. Economists are split on a wide variety of issues, including the minimum wage. It's bullshit to argue that they're interested in GDP, but thanks for once again demonstrating that your knowledge of economics consists of preconceived notions that bear no resemblance to reality.

[brianeyci]

However, people who are willing to work for below the minimum wage currently have no choice to do so because of the legal regulations on the matter.

Show that the amount of people who would be willing to work for minimum wage is greater than the people who would be hurt by elimination of the minimum wage. You can't. And they do have a choice. It's called cash. What makes you think anybody will work with the elimination of the minimum wage? It's not an appeal to ignorance--if you make a claim that something's better than the status quo you have to show it, and so far I'm unconvinced.

<edit>Sorry the first sentence should be "show that the amount of people willing to work for under the minimum wage is greater than the amount of people who would be hurt by elimination of the minimum wage. I know that you are not saying that minimum wage is the only cause of unemployment, but I would like proof that it is a cause of unemployment at all, instead of market demand. Why would axing the minimum wage necessarily open up hundreds of thousands of new jobs?</edit>

Brian

[Master of Ossus]

Show that the amount of people who would be willing to work for minimum wage is greater than the people who would be hurt by elimination of the minimum wage. You can't.

And that is not relevant to my argument.

And they do have a choice. It's called cash. What makes you think anybody will work with the elimination of the minimum wage?

Yeah, they can break the law. That's a great option.

It's not an appeal to ignorance--if you make a claim that something's better than the status quo you have to show it, and so far I'm unconvinced.

Appealing to "unforeseen consequences" isn't an appeal to ignorance?

Regardless, you haven't even established that anyone's going to be hurt by the elimination of minimum wage. You've spent this whole argument waving your hands around and claiming that millions of people will see their wages lowered as a result, even though they will still earn their MRP's and exactly their MRP's.

<edit>Sorry the first sentence should be "show that the amount of people willing to work for under the minimum wage is greater than the amount of people who would be hurt by elimination of the minimum wage.

Presumably, everyone who is currently unemployed has the option of working for less than the minimum wage or not working at all for any wage. Assuming only that they derive benefit from earning money, and that they have a cost associated with seeking work, it is trivial to show that they would prefer working at least a little bit to not working at all, since the costs associated with seeking work will encourage them to go through the beneficial act of working a non-zero number of hours.

I know that you are not saying that minimum wage is the only cause of unemployment, but I would like proof that it is a cause of unemployment at all, instead of market demand. Why would axing the minimum wage necessarily open up hundreds of thousands of new jobs?</edit>

Brian

I have given you this website three times, now. If you wish to continue ignoring it, then at least tell me what would constitute proof of this fact for you. The site cites a number of empirical economic studies that demonstrate nearly unanimously that increasing the minimum wage will also increase unemployment.

As to how this works, the minimum wage works exactly like a price floor for other goods (and, incidentally, it is unanimous among economists that price floors lead to excess supply problems).

[brianeyci]

Yeah, they can break the law. That's a great option.

Presumably six million people already do it. My argument is that the benefit from axing the minimum wage is not as great as you think it is since the people who would be working for under the minimum wage are likely already doing it.

It's not an appeal to ignorance--if you make a claim that something's better than the status quo you have to show it, and so far I'm unconvinced.

Appealing to "unforeseen consequences" isn't an appeal to ignorance?

Regardless, you haven't even established that anyone's going to be hurt by the elimination of minimum wage. You've spent this whole argument waving your hands around and claiming that millions of people will see their wages lowered as a result, even though they will still earn their MRP's and exactly their MRP's.

The unforseen consequences I meant were unforseen by you, I see them (hence the like this, like that). The minimum wage setting the bar for all wages above the minimum wage, and therefore places like Wal-Mart will no longer have any reason to raise their wage to draw more competent employees because the bottom value for unskilled labour will be lower than it is currently. Why don't you accept that?

It is your argument that the minimum wage is price fixing is it not (many people have said this)? Then how do you deny that the people currently working at or near the minimum wage have their worth fixed greater than what they are really worth to the market? And that these people will be hurt when the market equalizes their wages through either inflation or cuts to their real worth?

Presumably, everyone who is currently unemployed has the option of working for less than the minimum wage or not working at all for any wage. Assuming only that they derive benefit from earning money, and that they have a cost associated with seeking work, it is trivial to show that they would prefer working at least a little bit to not working at all, since the costs associated with seeking work will encourage them to go through the beneficial act of working a non-zero number of hours.

Then if you extend your argument, you agree to slave labour wages if the market values their wages that low. I have a problem with that, I don't see why you don't.

I have given you this website three times, now. If you wish to continue ignoring it, then at least tell me what would constitute proof of this fact for you. The site cites a number of empirical economic studies that demonstrate nearly unanimously that increasing the minimum wage will also increase unemployment.

As to how this works, the minimum wage works exactly like a price floor for other goods (and, incidentally, it is unanimous among economists that price floors lead to excess supply problems).

It's not that I deny that there would be no new jobs with no minimum wage. It's that I don't see the correlation between new jobs and new decent jobs. That's been my whole argument this time, and if you'd rather create slave labour sweatshops, that's a difference in the way we see society should be run that won't be resolved by any economic study.

<edit>Instead of slave labour, it's better for government assistance to kick in. Hence the minimum wage, forcing employers to maintain a standard to avoid slave labour, and if they can't hire more these people are better unemployed and society helping them out or others rather than working in slave sweatshops. But I suppose you'd rather all these people be valued under 5.15 an hour and work their ass off rather than the notion that human beings should be forced to work for slave wages.</edit>

<edit 2>And yes, I know you mean that everybody will have a choice to work or not, but in reality that will not happen. You are opening the door to legal sweat shops. They will work either because of stupidity or because they are hard working, but better to deny them that work because it's inhumane. Of course you won't accept that at all, but poor people are usually the least intelligent most taken advantage and if there is pressure or cultural reasons to avoid government assistance, guess what slave shops. I don't like sweatshops.</edit 2>

Brian

[TrailerParkJawa]

What??????? because there is no low cost housing... Business are make tons of money?? There is no corrolation

If the rent there is expensive then the people who live there and eat out are more well off and businesses can pay more to dishwashers if they raise their prices.

Put it this way, how will you hire dishwashers if everybody living there needs to pay their rent and can't with two minimum wage jobs? You have to pay more, or find a way around it like family or do it yourself.

Brian

Just because rents or housing prices are more expensive does not always mean the people and businesses there are better off. There are areas in the US where even the middle class are stretched to afford the average home or apt. Wages in my area might seem very high to someone from say...oh I duno...North Carolina. But my cost of housing is probably 4 times higher. I can guarentee you that my wages are not 4 times higher than a similar skilled person in NC.

The problem with the "living wage" idea is that different areas have different costs. There is no way a dishwasher deserves to be paid enough to afford a 1 bedroom in Blackhawk or Dublin when rents in those areas are out of reach for many skilled workers. The reality is that low skilled labor will have to commute from elsewhere or share housing.

[Andrew J.]

I have a summer job, and I'm pretty glad NYS has been raising its minimum wage (7 bucks an hour next year, bitches!) Sure it'll cause inflation...but inflation has been happening for ages, a little more won't kill me.

[Master of Ossus]

Presumably six million people already do it. My argument is that the benefit from axing the minimum wage is not as great as you think it is since the people who would be working for under the minimum wage are likely already doing it.

Where, exactly, are you getting your information? Also, there's a difference between doing odd-jobs illegally and having a steady job that you can go to every day at 9:00am.

The unforseen consequences I meant were unforseen by you, I see them (hence the like this, like that). The minimum wage setting the bar for all wages above the minimum wage, and therefore places like Wal-Mart will no longer have any reason to raise their wage to draw more competent employees because the bottom value for unskilled labour will be lower than it is currently. Why don't you accept that?

Because it's bunk. Wal-Mart already pays even its least skilled, starting cashier more than the minimum wage. There is, therefore, no reason to assume that Wal-Mart will cut wages to below the current minimum wage, given that it already pays people more than it is legally required to pay them.

What, precisely, is your logic in moving from "The minimum wage is gone" to "Wal-Mart cut its wage down well below the old minimum, and in fact it will cut its wages to well below their levels when there was a minimum wage?" There's no logical connection there, especially since even Wal-Mart must pay its workers their MRP or they're not going to continue to work for them.

It is your argument that the minimum wage is price fixing is it not (many people have said this)?

It is a price floor. They're not the same thing.

Then how do you deny that the people currently working at or near the minimum wage have their worth fixed greater than what they are really worth to the market?

You prevent workers from entering the market whose MRP's are below the current minimum wage. What part of this is confusing to you?

And that these people will be hurt when the market equalizes their wages through either inflation or cuts to their real worth?

Their real wage is their MRP. What part of this is difficult for you to understand? Let's do a simple thought experiment: persons A and B both run small businesses, and person C is an unemployed worker who wants to work for A or B. Person C is a pretty good worker, but not a great one, and every hour that he works for person A or B, they will get $10 of additional revenue for their store. What are they going to pay him to work for them? If person A offers him $5, person C will take it rather than not working, but person B will stand to benefit by offering person C $6 so that he will now make a profit of $4, whereas before person C wasn't producing anything for him. The process will continue until person C's wage is $10, and neither store benefits from offering him more. Nor can any store pay him more, because then they would be losing money each hour person C came to work.

Now, consider the case of the minimum wage, and set it at $15/hour. Person C is now permanently unemployed. Neither store is willing to pay him that much money, because he's not that productive.

Then if you extend your argument, you agree to slave labour wages if the market values their wages that low. I have a problem with that, I don't see why you don't.

Because if they didn't take their "slave labour wages" then under the current minimum wage their labor would be valued at zero. Slave labour wages are better than zero, and hence it is in everyone's interest to eliminate the minimum wage.

It's not that I deny that there would be no new jobs with no minimum wage. It's that I don't see the correlation between new jobs and new decent jobs. That's been my whole argument this time, and if you'd rather create slave labour sweatshops, that's a difference in the way we see society should be run that won't be resolved by any economic study.

I would rather create "slave labour sweatshops" that pay people some money rather than see people permanently unemployed.

<edit>Instead of slave labour, it's better for government assistance to kick in.

Except that government assistance still kicks in when people are working for low wages; it just doesn't have to be quite as expensive because the person is making some money (see American EITC program, for instance).

Hence the minimum wage, forcing employers to maintain a standard to avoid slave labour, and if they can't hire more these people are better unemployed and society helping them out or others rather than working in slave sweatshops. But I suppose you'd rather all these people be valued under 5.15 an hour and work their ass off rather than the notion that human beings should be forced to work for slave wages.</edit>

I would rather see them working for SOME MONEY and earning government assistance than seeing them make NO MONEY and relying entirely on government assistance, but I guess this argument is too nuanced for you to understand since you seem to be incapable of comprehending anything beyond the notion that "no minimum wage"=slave labor for less than what people are worth.

<edit 2>And yes, I know you mean that everybody will have a choice to work or not, but in reality that will not happen.

Why not? Because you say so?

You are opening the door to legal sweat shops. They will work either because of stupidity or because they are hard working, but better to deny them that work because it's inhumane.

I love the way you argue that if they're working for a low wage then they are a sweatshop labourer working in inhumane conditions.

Of course you won't accept that at all, but poor people are usually the least intelligent most taken advantage and if there is pressure or cultural reasons to avoid government assistance, guess what slave shops. I don't like sweatshops.</edit 2>

Brian

Do government assistance programs where you live really engage in the idiotic idea that if you work for $1 you therefore no longer qualify for government assistance? If so, then that's a problem with your government but has no bearing on a debate about minimum wage laws in countries with assistance programs that were not designed by brain-dead howler monkeys.

[brianeyci]

There's no logical connection there, especially since even Wal-Mart must pay its workers their MRP or they're not going to continue to work for them.

Why is it hard for you to accept that the minimum wage is a market force? If someone sees a job here that pays minimum wage and another job that pays a dollar more, they go to that place that pays a dollar more. The minimum wage has an affect on unskilled labourers because the minimum wage sets the legal lower limit. If that lower limit is zero, the entire range of wages will go down if the minimum wage was holding them up. Why do you not accept that?

Why is it hard for you to accept that people who are working at or near the minimum wage now would be hurt with removing the minimum wage because the minimum wage is holding up their salaries over what they're really worth?

As for employment insurance in Canada, it's notoriously hard to get on it because you need a lot of hours of previous work to qualify. And you can work part-time while on EI, fifty bucks a week. Low wages do promote inhumane working conditions because if an employer pays below the minimum wage you have to wonder whether how else they are cutting costs.

Brian

[Master of Ossus]

Why is it hard for you to accept that the minimum wage is a market force?

Because it isn't. There would be no minimum wage without the government, ergo the minimum wage is not a market force.

If someone sees a job here that pays minimum wage and another job that pays a dollar more, they go to that place that pays a dollar more. The minimum wage has an affect on unskilled labourers because the minimum wage sets the legal lower limit. If that lower limit is zero, the entire range of wages will go down if the minimum wage was holding them up. Why do you not accept that?

Because it's not true, empirically, as was demonstrated by a series of studies that I linked you to, and because it makes no sense that the absence of a legally stipulated minimum wage should affect the entire wage structure. Wages are not set by a pyramid, such that person A always makes x times what person B makes. Wages are established by productivity, and productivity does not massively drop just because no legally stipulated minimum exists.

Do you not accept the existence of the MRP (even though its existence is logically necessary even a priori), or do you simply reject its influence over wages? If you reject its influence over wages, then how do you refute the thought experiment I posed in my last post (which you dutifully ignore).

Why is it hard for you to accept that people who are working at or near the minimum wage now would be hurt with removing the minimum wage because the minimum wage is holding up their salaries over what they're really worth?

Look at the thought experiment that I provided. How does the removal of the minimum wage affect everyone above person C?

As for employment insurance in Canada, it's notoriously hard to get on it because you need a lot of hours of previous work to qualify. And you can work part-time while on EI, fifty bucks a week. Low wages do promote inhumane working conditions because if an employer pays below the minimum wage you have to wonder whether how else they are cutting costs.

Oh, for the... "you have to wonder how else they are cutting costs?" It has become abundantly clear that you are making up rationalizations to support your house of cards as we continue with this argument. It would be much better for you, at this point, just to concede and go away.

You have not attempted to refute the chain of logic which I showed in my last post, that shows not only how wages are set but also how they would be unaffected by abandoning the minimum wage. Either explain what is wrong with my thought experiment or concede.

[CmdrWilkens]

[<snip>The unforseen consequences I meant were unforseen by you, I see them (hence the like this, like that). The minimum wage setting the bar for all wages above the minimum wage, and therefore places like Wal-Mart will no longer have any reason to raise their wage to draw more competent employees because the bottom value for unskilled labour will be lower than it is currently. Why don't you accept that?

Actually they have plenty of reason to keep their wages up depending upon region. Let me give it to you by way of experience on my own part as a manager with hiring responsibilities at a retail store (JCPenney if you care).

The labor we are looking for is generally considered "unskilled" but that hardly means we'll take whoever comes in off the street. The same is true with Wal-mart, they are looking to get people to do a job and have the motivation to do it well for a certain wage. In the region I work in (central MD) there is currently a severe drought of workers who would be willing to work at minimum wage. Simply put the labor market is such that even unskilled labor has a great enough benifit (in terms of filling my schedule enough to enable productivity to remain high) that it is advantageous for me to pay a rate much higher than the minimum (right now somewhere between $6.75 and $7.50 with absolutely no prior experience). The though experiment with the productivity versus cost between vendor's A and B over employee C is a real world dilemna that low cost high volume stores like Wal-Mart face: they require a large number of personnel to staff enough to enable the customer to shop and spend money so the buisness MUST hire people and if the labor market is shallow then you MUST pay enough to attract enough people and the buisnesses will literally compete with one another to obtain enough personnel.

You can believe that or not but even if minimum wage laws were abolished this second I would STILL be offering the rates I gave to almost every single prospective employee because unless I offer at least that much a competitor will and they will work for them and I will have holes in my schedule. Thus the buisness operator is left with the dilemna of spending the money or not earning the money and they WILL spend the money.

[brianeyci]

First of all you did not link me to any studies. You linked me to four paragraphs and a massive bibliography for me to do my own research. Although I appreciate the resource, I would rather you not make me do homework for your points. If I linked to a left-wing site with four paragraphs touting the minimum wage and a bibliography, I'm sure you would not accept it either. I could very easily look up the essays and the articles on my own, but you'll forgive me if I don't go through a hundred sources and spend a week reading your material.

Of course I accept the MRP. People's work is worth a set value. What I dispute and what you seem not to be willing to accept is that the people currently working at or near the minimum wage have their work valued more than their MRP because the minimum wage is forcing their wages up. These people would be hurt by no minimum wage because their wages would go through the exact same process as your thought experiment and be worth less than the current minimum wage of $5.15.

Another problem with your thought experiment is it assumes a bidding war between unskilled labourers. Only skilled workers can dictate their wages and salaries, not unskilled workers. Unskilled is unskilled--anybody can do it. I'm not disputing that there aren't better moppers or fruit pickers than others, but that the power is not in the unskilled labourer's hands. What if both A and B set the price at five dollars and the unskilled labourer C must work at A or B or be fucked? He has to do it, and A and B know that they will always be able to get a cheaper worker somewhere else. No minimum wage means increasing the gap between the rich and the poor over time at the very least. This invisible hand of free market you're so keen on wouldn't work on unskilled labourers since if C is not willing to do it, there will always be a D who will work for less since it's guess what, unskilled. Once you reach the bottom, the only conclusion is that over time the gap between the rich and the poor will continue to grow with no minimum wage since there will always be desperate people willing to work for less.

Brian

[brianeyci]

You can believe that or not but even if minimum wage laws were abolished this second I would STILL be offering the rates I gave to almost every single prospective employee because unless I offer at least that much a competitor will and they will work for them and I will have holes in my schedule. Thus the buisness operator is left with the dilemna of spending the money or not earning the money and they WILL spend the money.

A key part of my argument is that there is no reason to raise it to keep pace with inflation, not just that it would be necessarily lowered. If A and B get into a bidding war for C but the wage doesn't keep pace with inflation, the gap between the rich and the poor grows. And of course there's always D willing to work for less and if D can do the same thing as C but is willing to accept a lower wage, wouldn't you take him? And if A and B are bidding but their wages aren't raising fast enough to keep up with inflation, well then it kind of sucks to be C? The minimum wage stops the bottom from going below a certain point. I don't necessarily see what's wrong with this safeguard.

Brian

[brianeyci]

Anyway it should be clear that by not raising the minimum wage, the poorest people are losing purchasing power. Just checking the chart here today's 5.15 was worth 6.09 since the last raise. That means today's minimum wage workers have 85% of the purchasing power from their wages from inflation alone. Anybody who denies that doing nothing about the minimum wage is not increasing the gap between the rich and the poor is not looking at the numbers. Getting rid of the minimum wage would mean everybody currently working at the minimum wage would either stay where they are and their wage would be worth less and less from inflation just like what happened between 1998 and 2005, or the thought experiment would happen in reverse for the minimum wage jobs and person D willing to do 5.15 work for 4 bucks would be hired instead.

Now what is this invisible hand of free market going to do to drop the gap between the rich and the poor? Make all unemployed have a chance to work for less than 5.15? That seems a large gamble to take given the reality that all workers who currently work at the minimum wage would suffer.

<edit>MoO I will concede to you if you can show me a juristiction in practical terms where the minimum wage was eliminated and the purchasing power of the poorest members of society increased. If this is so great an idea, I'm sure there's somewhere in the world that has done this already.</edit>

Brian

[Master of Ossus]

First of all you did not link me to any studies. You linked me to four paragraphs and a massive bibliography for me to do my own research. Although I appreciate the resource, I would rather you not make me do homework for your points.

That is a government resource that gives 1 sentence summaries of the relevant studies. I would happy to provide you with specific links to any one of them.

If I linked to a left-wing site with four paragraphs touting the minimum wage and a bibliography, I'm sure you would not accept it either. I could very easily look up the essays and the articles on my own, but you'll forgive me if I don't go through a hundred sources and spend a week reading your material.

If you linked me to a site that touted dozens of empirical, economic studies that have been done to support your side then I would have to take that very seriously since my understanding of the topic is that only one study has ever been done that has found no link between the minimum wage and unemployment--and that study was in a single region and only in a single industry. The fact that so many economists support my argument should be proof of my position.

Of course I accept the MRP. People's work is worth a set value. What I dispute and what you seem not to be willing to accept is that the people currently working at or near the minimum wage have their work valued more than their MRP because the minimum wage is forcing their wages up.

How does the minimum wage "force their wages up?" Why would anyone hire even a minimum wage worker and pay them more than what they can produce?

These people would be hurt by no minimum wage because their wages would go through the exact same process as your thought experiment and be worth less than the current minimum wage of $5.15.

Except that these people wouldn't be working in the first place unless they were producing at least $5.15 worth of goods or services per hour. You have no mechanism for dodging the MRP--it would be retarded for a business to hire someone at $5.15 if their MRP was less than that.

Another problem with your thought experiment is it assumes a bidding war between unskilled labourers. Only skilled workers can dictate their wages and salaries, not unskilled workers. Unskilled is unskilled--anybody can do it. I'm not disputing that there aren't better moppers or fruit pickers than others, but that the power is not in the unskilled labourer's hands.

Sure it is. Even unskilled laborers do not get a "get out of jail free" card when it comes to dealing with the MRP--and neither do skilled workers, for that matter. While the two do different tasks, and empirically the skilled workers' work is more valuable, neither gets to ignore their MRP during the hiring process. If they ask for more than that, then they won't be hired.

What if both A and B set the price at five dollars and the unskilled labourer C must work at A or B or be fucked? He has to do it, and A and B know that they will always be able to get a cheaper worker somewhere else.

Collusion is illegal for a reason, and those laws wouldn't go away with the minimum wage. And, btw, since you seem intent on ignoring the thought experiment, person B has an incentive to pay labourer C more than whatever person A is paying him--he has significant incentive to break the cartel agreement at any given time (as, for that matter, would anyone who's paying less than the MRP). This can be a big deal in countries that lack labor force mobility, but the US has a very developed infrastructure that makes it relatively easy to change jobs.

No minimum wage means increasing the gap between the rich and the poor over time at the very least.

A process that would occur, anyway, and has nothing to do with the minimum wage. The minimum wage actually makes the gap between the richest and the poorest grow faster beause the poorest are prevented from getting jobs and hence work for nothing.

This invisible hand of free market you're so keen on wouldn't work on unskilled labourers since if C is not willing to do it, there will always be a D who will work for less since it's guess what, unskilled.

The same can be said of a market for skilled workers, too.

Once you reach the bottom, the only conclusion is that over time the gap between the rich and the poor will continue to grow with no minimum wage since there will always be desperate people willing to work for less.

Brian

But the minimum wage does nothing to prevent this, and in fact exacerbates the problem by preventing the least skilled workers from getting any wages whatsoever (ie., by keeping them out of work). This is not an insignificant problem, and it is endemic to minimum wage.

[Master of Ossus]

Anyway it should be clear that by not raising the minimum wage, the poorest people are losing purchasing power. Just checking the chart here today's 5.15 was worth 6.09 since the last raise. That means today's minimum wage workers have 85% of the purchasing power from their wages from inflation alone. Anybody who denies that doing nothing about the minimum wage is not increasing the gap between the rich and the poor is not looking at the numbers.

I love the way you define the poorest person not as the person who isn't working and is therefore getting no wages, but by the person who is working for the minimum wage (even though it doesn't even cover all workers).

Getting rid of the minimum wage would mean everybody currently working at the minimum wage would either stay where they are and their wage would be worth less and less from inflation just like what happened between 1998 and 2005, or the thought experiment would happen in reverse for the minimum wage jobs and person D willing to do 5.15 work for 4 bucks would be hired instead.

Nonsense. MRP is a real measurement, and hence establishes a real wage. All of your "insights" in this entire debate consist of massive strawmen that have nothing to do with real economics. The thought experiment in reverse assumes is an example of an efficient market--the two people wouldn't have that choice under your system.

Now what is this invisible hand of free market going to do to drop the gap between the rich and the poor?

What the fuck does it matter? That measurement is completely meaningless except by crybabies who can't understand that different people have different MRP's.

Make all unemployed have a chance to work for less than 5.15? That seems a large gamble to take given the reality that all workers who currently work at the minimum wage would suffer.

You still haven't demonstrated this.

<edit>MoO I will concede to you if you can show me a juristiction in practical terms where the minimum wage was eliminated and the purchasing power of the poorest members of society increased.

The United States. For practical purposes, the minimum wage has been eliminated by inflation because the equilibrium wage even for unskilled workers is greater than the minimum wage, making it an ineffective price floor. A worker at Wal-Mart, by your own inflation data, who makes $8.15 today (the starting salary for the least-skilled Wal-Mart employee) is better off than the minimum wage worker was when the minimum wage was established (in a tribute to increasing productivity).

If this is so great an idea, I'm sure there's somewhere in the world that has done this already.</edit>

Brian

YES! The United States.