Minimum Wage: What's the Other Argument?

[Flying Pig]

You are making this up as you go. Politically, almost no one opposing minimum wage is directly impacted at all. That is where the primary focus of this conversation sits.

You mean that almost no politicians opposing it are directly impacted? That's a bit of an odd one - it doesn't make their position any better if they're playing to constituents or donors who are.

Also, direct benefits is not a bar. Anyone can and will quote facts that favor their position. They are still facts. Environmental studies are not wrong because an oil company funded the study. Climate change studies are not wrong because they are funded by NASA.

Yes, but it's rare indeed for all facts to line up behind a particular position. We might justly wonder, when an oil company gives us 'facts' which suggest that climate change isn't happening, whether there are more pertinent facts out there. Incidentally, particularly bad example, given the many techniques by which oil companies and the like regularly do fund studies with the precise purpose of misinforming people! We had an interesting thread on some of the mechanics of it a while ago; I seem to remember Mise was quite involved.

 

[onejayhawk]

You mean that almost no politicians opposing it are directly impacted? That's a bit of an odd one - it doesn't make their position any better if they're playing to constituents or donors who are.

Yes, but it's rare indeed for all facts to line up behind a particular position. We might justly wonder, when an oil company gives us 'facts' which suggest that climate change isn't happening, whether there are more pertinent facts out there. Incidentally, particularly bad example, given the many techniques by which oil companies and the like regularly do fund studies with the precise purpose of misinforming people! We had an interesting thread on some of the mechanics of it a while ago; I seem to remember Mise was quite involved.

That is entire evasive. Politicians are not directly impacted, though you claim they are. I take it you accept the refutation of your statement. Whether it makes it is better or not is beside the point. You have not established a link between the politicians positions and the "constituents or donors who are." That is non-trivial.

You blithely dismiss facts presented because we, "might justly wonder" that the facts are less pertinent to climate change than those which do not support it. Welcome to the ranks of the deniers.

J

 

[bhavv]

LF 16 hours a week of min wage work, something easy that I can do sitting down because chronic illnesses.

The council's skills for work department has my details and replied that its being looked into, but still nothing more, gibe me wurk!!!!!

 

[Adebisi]

Hang on, I don't follow. If it's true that employers pay the lowest wages that they can get away with, then all employers everywhere should pay poverty wages? Are you not assuming that conditions - labour and otherwise - in the USA and Mozambique are perfectly identical? Also, I think you need to consider price differences, though I will concede that real wages are not equal everywhere, either. You've got questions of productivity, education, training, technology and so on to consider, to say nothing of potential markets - if an American worker can generate more money than one in Mozambique, he's probably going to be paid more. The lowest amount that he's willing to accept is higher.

I already mentioned the higher productivity to you. But the reason an American worker is paid astronomically much more than one from Mozambique is still high demand for for the highly productive American workforce. The labour market supply-demand equilibrium simply does not work the way you claim. Wages are still high without regulation.

I would challenge the idea that minimum wages create unemployment. The argument is that raising them will cause businesses to outsource or automate, and so put human beings out of work. That's a valid argument, I think, but it's totally outdated - it was true in the 19th century, and even into the fifties, but we're now in a situation where practically all of the jobs paying minimum wage - low-skilled manufacture, for example - that can be outsourced or automated already have been. So we're left with jobs that you can't outsource - you can pay somebody in India a pittance to provide tech support for a customer in Cleveland, for example, but you can never pay them to make him a Big Mac. Not coincidentally, these are also jobs with a large number of potential workers per position, because we've lost most of the jobs that you can start without any qualifications or experience, so they're paying below the breakeven rate. Bringing in a higher minimum wage here shouldn't affect employment, because each employee would remain profitable - it would, however, cut into the profits of the corporations hiring them, which is why so many of them oppose it. Alternatively, it would raise prices, effectively distributing money from those earning more than minimum wage to those earning it.

Hiring, outsourcing and automation are not the only options. What happens is that companies simply choose not to hire if the reward is not great enough. Investments are risky, payback times long, wages often the greatest expense. If there is unemployment, there is always some demand for workforce, at some pay.

No, opponents of minimum wage laws oppose them, by and large, because they directly benefit from them (and the lower prices/higher corporate profits that they entail) or are persuaded by those who do. Economists, too, will tell you that minimum wage laws are economically inefficient, so there would be more money around if we didn't have them. That may be true, but it's also beside the point. Minimum wages represent a limit on the amount that Peter can be robbed to pay Paul. I'd argue that a lot of the people who oppose minimum wages may not actively want Peter to starve, but they're not willing to take a cut in their paycheck or a hump in their food budget to stop him from doing so.

The assumption that companies can just make windfall profits simply by keeping wages as low as possible is of course false. There is always competition and the competitors have the same salary costs. It does not affect profits. But minimum wage does affect the poorest of the poorest, making them even poorer by denying them low-skills jobs. That is the reason why there is a consensus against rigidities in the economic sciences.

I understand that you want to do good by raising the minimum wage, but you should consider the other solutions preferred by economists, such as negative taxes.

 

[bhavv]

In the UK though the minimum wage doesn't pay enough to afford living, unless you have two people living together on min wage.

Its a joke.

 

[TheMeInTeam]

1. Market should set minimum wages, not the government...IE don't raise it.

2. In the long run, raising the minimum wage will make the labor market here non-competitive and result in shipping of jobs to places without a high minimum wage. However, this has switching costs and in the short run low-income families will be better off before inflation and loss of work muscles them out of the labor force. Also, any time you introduce the necessity to incur switching costs new options are evaluated. Making the labor market non-competitive with other countries will force firms to come up with ways to make labor more efficient, either through management, incentives, or technology. You could make a case that the resulting innovation would push the country further in technology while utilizing labor + infrastructure in other places will give them the potential to become wealthy (if their governance doesn't screw them) and eventually do the same.

 

[Borachio]

In the UK though the minimum wage doesn't pay enough to afford living, unless you have two people living together on min wage.

Its a joke.

It's not a joke, it's a disgrace. You have people in full time work having to claim benefits in order to be able to live.

In effect, the government is subsidizing poor employers.

 

[onejayhawk]

In the UK though the minimum wage doesn't pay enough to afford living, unless you have two people living together on min wage.

Its a joke.

It is not supposed to pay enough to make a living. Common mistake.

It's not a joke, it's a disgrace. You have people in full time work having to claim benefits in order to be able to live.

In effect, the government is subsidizing poor employers.

It is not a disgrace. It is the ground floor, the starting point, entry level. If you have been at a job more than a year and are still making what you started at, why aer you still in the job? Make the employer spend some money hiring someone else. Otherwise you are subsidizing a poor employer.

J

 

[Borachio]

Fine. You're plainly not one to stay at entry level yourself.

That's a kind of blinkered outlook you have there, though. In the real world, most (or a great number of) people do stay at entry level. Hierarchical power structures require it. You can't have all chiefs and no indians, as they say.

And in any case, a lot of jobs don't have any career structure to them at all. Garbage men don't generally "graduate" to become waste disposal operatives on their own account.

 

[onejayhawk]

Fine. You're plainly not one to stay at entry level yourself.

That's a kind of blinkered outlook you have there, though. In the real world, most (or a great number of) people do stay at entry level. Hierarchical power structures require it. You can't have all chiefs and no indians, as they say.

And in any case, a lot of jobs don't have any career structure to them at all. Garbage men don't generally "graduate" to become waste disposal operatives on their own account.

Not exactly. It's that you are asking for something to serve two conflicting purposes. A minimum wage is not supposed to be a living wage. In the real world, entry level is often above minimum wage. In the real world most starting salaries, even hourly, are raised after the breaking in period.

What Garbage has to do with minimum wage is a mystery. Garbage disposal workers never get paid as low as minimum wage, but they do get raises based on time in service. There are promotions in garbage service. Someone gets to drive the truck, for example.

J

 

[bhavv]

It is not supposed to pay enough to make a living. Common mistake.

It is not a disgrace. It is the ground floor, the starting point, entry level. If you have been at a job more than a year and are still making what you started at, why aer you still in the job? Make the employer spend some money hiring someone else. Otherwise you are subsidizing a poor employer.

J

But benefits pay more than min wage.

 

[onejayhawk]

But benefits pay more than min wage.

Benefits? Sometimes, but a year spent working will put you in a better place than a year spent collecting checks. You learn things. You gain skills, associations and habits.

J

 

[Flying Pig]

It is not supposed to pay enough to make a living. Common mistake.

Yes it is - otherwise, the money needed to make a living comes out of everyone's pocket (from taxes) rather than specifically from the people who benefit from hiring you. That's not fair. When benefits are paying more than wages, it's a sign that wages are unfairly low - though the Conservative government appears to favour the alternative, by making sure that people in work and people out of work are put in equal levels of poverty.

 

[Zelig]

A minimum wage is not supposed to be a living wage.

Says who?

 

[onejayhawk]

Says who?

It's why they call it minimum.

J

 

[Zelig]

It's why they call it minimum.

J

There's nothing in the definition of "minimum" that suggests it should be lower than "living".

 

[Cutlass]

1. Market should set minimum wages, not the government...IE don't raise it.

2. In the long run, raising the minimum wage will make the labor market here non-competitive and result in shipping of jobs to places without a high minimum wage.

Why? There are virtually no minimum wage jobs with competition beyond a 10 mile radius.

However, this has switching costs and in the short run low-income families will be better off before inflation and loss of work muscles them out of the labor force.

Why would either of those things happen? MW won't effect inflation or the unemployment rate.

Also, any time you introduce the necessity to incur switching costs new options are evaluated. Making the labor market non-competitive with other countries

Again, why? There is no international competition for the product of minimum wage jobs.

will force firms to come up with ways to make labor more efficient, either through management, incentives, or technology. You could make a case that the resulting innovation would push the country further in technology while utilizing labor + infrastructure in other places will give them the potential to become wealthy (if their governance doesn't screw them) and eventually do the same.

 

[daft]

Make all banks state owned. Share some of their wealth (how many billions of $ would that be?) with common people, those making 20k-30k a year, struggling to feed their families, pay mortgages and taxes.
Oh yes, taxes. IRS should be ashamed of themselves, ripping citizens off year by year, counting every buck people make, meanwhile the government, corporations and banks do whatever they want with the tax money. Sports and entertainment wages should be cut/monitored.
The only excellent thing (in America) is the justice system, you can defend your property/family, well, in some states at least. Canadians and Euros have lost it with the human rights concept (for criminals)

 

[Ajidica]

Canadians and Euros have lost it with the human rights concept (for criminals)

Criminals don't have human rights?

 

[onejayhawk]

There's nothing in the definition of "minimum" that suggests it should be lower than "living".

Sure there is. It means the extreme of the range. Nothing past this point. Lowest. "Living wage" does not fit that description.

J