Time To End Minimum Wage

[Ninjahedge]

Wow. This essploded.

 

[theevilsharpie]

Eliminating the minimum wage is a stupid idea in developed economies, because one of the benefits of a minimum wage is that it provides a huge incentive for organizations to invest in automation. Indeed, why would anyone invest in areas such as information technology, business process automation, time and motion science, or robotics (industries that themselves drive economic growth) if it's cheaper just to throw more people at the problem?

 

[DucatiMonster696]

If these folks are so desperate for unpaid jobs, there is always volunteer work. Once you reach absurdly low wages, that's really what we're talking about anyway.

That's a cop out to the point being made about allowing competition for wages and employees in the market. In addition the Fed has created incentives for those who cannot find jobs at lower wages to stay at home and collect checks rather then seek out alternative methods of work to establish themselves.

 

[DucatiMonster696]

Eliminating the minimum wage is a stupid idea in developed economies, because one of the benefits of a minimum wage is that it provides a huge incentive for organizations to invest in automation. Indeed, why would anyone invest in areas such as information technology, business process automation, time and motion science, or robotics (industries that themselves drive economic growth) if it's cheaper just to throw more people at the problem?

Care to back this up with something a little more substantial? Historically the move toward automation regardless of minimum wage laws being in place can be seen in examples as far back as the early industrial age (The 1800's when British Luddites rioted and destroyed textile equipment that replaced low skilled workers during certain phases of production.) as automation took hold in certain industries. In fact I don't see how any employer would decided to keep an employe for a job that can be (at a low relative cost/risk ratio) efficiently and safely done by an automated machine who will work 24/7 and won't ask for breaks or threaten to unionize.

 

[3chordcharlie]

That's a cop out to the point being made about allowing competition for wages and employees in the market. In addition the Fed has created incentives for those who cannot find jobs at lower wages to stay at home and collect checks rather then seek out alternative methods of work to establish themselves.

You aren't making a legitimate point about 'competition for wages'.

The only people who want sub-minimum wage jobs are students (who very simply need experience). You can barely feed yourself on minimum wage.

When you have "available jobs diluted in a solution of excess labour" you will eventually settle on a wage which is nomially above starvation (marginal return of working = 0). This situation currently (but not always) describes the unskilled job market in the USA (and many other places).

When you have "available labour diluted in a solution of excess jobs" you will eventually settle on a wage equal to the marginal return of that labour. This situation (almost) always describes the skilled job market in the USA (and many other places). This is also why minimum wage changes have very little effect on wages for 'well-paying jobs'.

Establishing a price floor for labour (and handing out the 'starvation wage' in the form of welfare) prevents the prevailing wage from falling to starvation-level. What this means is that no-one in the 'at risk of starvation' group is worse off under a minimum wage policy, but those who are actually working are better off.

In a purely capitalist society, this would be an abomination. Here in the real world, it's a pretty reasonable compromise.

 

[nehalem256]

Just as 7 dollars an hour bars the entry way for those who are worth less then that in the market.

But who are these people being bared from the wage market by a $7 minimum wage.

 

[theevilsharpie]

Care to back this up with something a little more substantial?

Compare the level of technology and automation in the automotive industry, where the cost of labor has (until recently) risen, to the technology used in the agricultural industry, where the cost of labor has been suppressed through political lobbying and flat-out illegal behavior.

See the difference?

The cost of basic industrial automation that was present at the dawn of the industrial revolution was easy to justify even without a minimum wage, because the machines could work orders of magnitudes faster than a human. One machine could potentially replace hundreds of workers. When the gains from automation aren't so extreme, the gains may not offset the cost of investment if the cost of labor is low enough.

 

[Darwin333]

$9 an hour is in no way a liveable wage.




Lets apply that philosophy of babies to employees. Do not hire employees until you can pay them a liveable wage.

Do you have any idea the amount of unemployed people we would have if companies were forced to pay people a "living wage"?

Hell, they would find a machine to replace your brother quick fast and in a hurry if they had to pay him and everyone that does his job $20 an hour. I bet he prefers what he is getting paid to nothing.

 

[DucatiMonster696]

You aren't making a legitimate point about 'competition for wages'.

The only people who want sub-minimum wage jobs are students (who very simply need experience). You can barely feed yourself on minimum wage.

I believe you do not understand or refuse to understand that allowing competition for wages and employees does not mean that a person is advocating that people should be forced to seek jobs for pennies on the dollar.

However this argument is advocating a case to allow for competition to take hold in the market place for wages and employees so that actual market forces can allow individuals themselves to determine what they are willing to work for and where they are willing to work based upon a mutually agreed upon wage rather then a having an inflexible policy that sets a artificial limit on who exactly can and cannot enter the market place of employment.

When you have "available jobs diluted in a solution of excess labour" you will eventually settle on a wage which is nomially above starvation (marginal return of working = 0). This situation currently (but not always) describes the unskilled job market in the USA (and many other places).

When you have "available labour diluted in a solution of excess jobs" you will eventually settle on a wage equal to the marginal return of that labour. This situation (almost) always describes the skilled job market in the USA (and many other places). This is also why minimum wage changes have very little effect on wages for 'well-paying jobs'.

I completely disagree. When prospective employees in one area of the market place for unskilled labor are in excess that basically means that there are open jobs for unskilled labor in another segment of the market place for those same employees. In essence historically the unskilled job/labor market has always been in flux where one area experiences a glut of workers and another area experiences a lack of workers hence the higher turn over rates for low/un-skilled workers.

Examples can be seen in even during this harsh economic climate where service sector jobs, farm laborer jobs (when not undermined by illegal immigration), construction jobs, entry level oil rigging jobs, etc all are competing for the same labor pool of unskilled laborers and all are bidding via wages to attract this same labor pool.

Thus employers who need workers will bid up the price of wages to sate their demand for employees and employees who are in search of low/unskilled work will eventually gravitate toward those jobs which offer up the highest wages unless they are disinclined to seeking better opportunities (i.e. they believe they are already being compensated well for their labor with current employment). Yet minimum wage laws have very no effect on the bidding of increased wages that employers use to lure employees because they don't actually incentives employers to bid upwards as they play no role in the helping to fulfill the needs of the employer.

However the effect of minimum wage laws have on such fluctuations is that they pretty much limit the ability of prospective employees who are seeking employment in saturated markets to bid for lower rate in order negotiate employment.

In addition you are in fact falsely insinuating and attributing that minimum wage laws would somehow increase employment rates which most creditable studies have long since proven to be false and in fact have also shown that minimum wage laws when they are enacted actually promotes further unemployment amongst those occupying the lowest rung of society.

Establishing a price floor for labour (and handing out the 'starvation wage' in the form of welfare) prevents the prevailing wage from falling to starvation-level. What this means is that no-one in the 'at risk of starvation' group is worse off under a minimum wage policy, but those who are actually working are better off.

In a purely capitalist society, this would be an abomination. Here in the real world, it's a pretty reasonable compromise.

Sweden, Finland, Denmark, Switzerland, and Germany what do these nations have in common?

They have no minimum wage laws. They have however admittedly compensate by instead favoring the use of either collective bargaining, employer groups, or labor boards etc to address wage issues. However the point is how they have compensate without such a policy but how surprisingly they have none of the ill effects you are stating would occur if we were to remove minimum wage laws.

So your notion that minimum wage laws are somehow protecting people from unemployment is false. So is the view that people would for all intense purposes refuse to seek work in other segments of the market just automatically accept what was given to them. In addition the negative effects of minimum wage laws which set artificial barriers to employment for those it purports to help is has been verifiably shown to exist along with the detrimental effect of increasing the cost of living when the rate is increased.

 

[DucatiMonster696]

Compare the level of technology and automation in the automotive industry, where the cost of labor has (until recently) risen, to the technology used in the agricultural industry, where the cost of labor has been suppressed through political lobbying and flat-out illegal behavior.

See the difference?

The cost of basic industrial automation that was present at the dawn of the industrial revolution was easy to justify even without a minimum wage, because the machines could work orders of magnitudes faster than a human. One machine could potentially replace hundreds of workers. When the gains from automation aren't so extreme, the gains may not offset the cost of investment if the cost of labor is low enough.

If this was at all true then there would be a grinding halt and reversing observable trend toward automation in the third/second world nations where US/Euro/Japanese companies have outsourced their labor. The reality is that businesses will always favor automation over manual labor when the cost to wage ratio is higher and at the given pace and pricing point of technology automation will remain a winner in the majority of cases where unskilled labor competes against it with or without minimum wage laws.

 

[nehalem256]

Do you have any idea the amount of unemployed people we would have if companies were forced to pay people a "living wage"?

Hell, they would find a machine to replace your brother quick fast and in a hurry if they had to pay him and everyone that does his job $20 an hour. I bet he prefers what he is getting paid to nothing.

Maybe not. We are talking about a guy who is working fast food because a constuction job that pays $18/hr is too hard :/

 

[3chordcharlie]

I believe you do not understand or refuse to understand that allowing competition for wages and employees does not mean that a person is advocating that people should be forced to seek jobs for pennies on the dollar.

However this argument is advocating a case to allow for competition to take hold in the market place for wages and employees so that actual market forces can allow individuals themselves to determine what they are willing to work for and where they are willing to work based upon a mutually agreed upon wage rather then a having an inflexible policy that sets a artificial limit on who exactly can and cannot enter the market place of employment.

You make no sense here. You most certainly are advocating that people be 'allowed' to seek jobs for pennies on the dollar. And you are advocating this because you are confident that it will happen. More broadly, "actual market forces" determine wages and employment levels in all markets, even ones with price floors and ceilings. Under minimum wage, we would expect some loss of employment, for any minimum above the starvation level.

I completely disagree. When prospective employees in one area of the market place for unskilled labor are in excess that basically means that there are open jobs for unskilled labor in another segment of the market place for those same employees. In essence historically the unskilled job/labor market has always been in flux where one area experiences a glut of workers and another area experiences a lack of workers hence the higher turn over rates for low/un-skilled workers.

Examples can be seen in even during this harsh economic climate where service sector jobs, farm laborer jobs (when not undermined by illegal immigration), construction jobs, entry level oil rigging jobs, etc all are competing for the same labor pool of unskilled laborers and all are bidding via wages to attract this same labor pool.

If recessions tended to be entirely sector-based, and counterbalanced with equal growth in other sectors, then the above would not be complete, utter BS. But it is.

Thus employers who need workers will bid up the price of wages to sate their demand for employees and employees who are in search of low/unskilled work will eventually gravitate toward those jobs which offer up the highest wages unless they are disinclined to seeking better opportunities (i.e. they believe they are already being compensated well for their labor with current employment). Yet minimum wage laws have very no effect on the bidding of increased wages that employers use to lure employees because they don't actually incentives employers to bid upwards as they play no role in the helping to fulfill the needs of the employer.

Read this to yourself. Seriously. Pretend someone else wrote it, read it, and then tell me what I'm going to say to this one. It shouldn't be hard.

However the effect of minimum wage laws have on such fluctuations is that they pretty much limit the ability of prospective employees who are seeking employment in saturated markets to bid for lower rate in order negotiate employment.

In addition you are in fact falsely insinuating and attributing that minimum wage laws would somehow increase employment rates which most creditable studies have long since proven to be false and in fact have also shown that minimum wage laws when they are enacted actually promotes further unemployment amongst those occupying the lowest rung of society.

What?!
I 'insinuated' nothing of the sort.
Now read what I wrote again, and say something about that if you like, but don't bother with the straw men.

Sweden, Finland, Denmark, Switzerland, and Germany what do these nations have in common?

They have no minimum wage laws. They have however admittedly compensate by instead favoring the use of either collective bargaining, employer groups, or labor boards etc to address wage issues. However the point is how they have compensate without such a policy but how surprisingly they have none of the ill effects you are stating would occur if we were to remove minimum wage laws.

So your notion that minimum wage laws are somehow protecting people from unemployment is false. So is the view that people would for all intense purposes refuse to seek work in other segments of the market just automatically accept what was given to them. In addition the negative effects of minimum wage laws which set artificial barriers to employment for those it purports to help is has been verifiably shown to exist along with the detrimental effect of increasing the cost of living when the rate is increased.

I don't keep up on the details of all the European states. However, a high degree of unionization has some of the same effects as minimum wage. And some very different ones.

European social safety nets tend to be pretty comprehensive as well, which can make a big difference.

In any case this is another red-herring. We weren't asked to consider a wide-ranging sea-change in labour relations. We were considering one simple change to the current American job market.

If the thread had been titled "Time to End Minimum Wage, and also to Outlaw Union-Busting" I'd have been inclined to agree.

 

[Matt1970]

If we do away with minimum wage High School kids everywhere will protest.

 

[theevilsharpie]

If this was at all true then there would be a grinding halt and reversing observable trend toward automation in the third/second world nations where US/Euro/Japanese companies have outsourced their labor.

Looking at it from a global perspective, my point stands. Rather than improving the efficiency of their operations to deal with the relatively high cost of Western labor, companies are simply moving those operations to areas where labor cost is lower, and making up for inefficiencies with more labor. High-tech manufacturing and support industries are exceptions out of necessity, but if you look at areas like textile manufacturing, metalworking, toy manufacturing, etc., the facilities are so primitive you'd swear that you just stepped into early 20th century America.

If you look at automation strictly within the scope of a third-world economy, then yes, developments in automation are proceeding regardless of labor cost. But these workers aren't getting the latest developments, they're getting basic, cheap equipment. If automation was moving forward regardless of the cost of labor as you suggest, there wouldn't be such a huge difference in productivity between workers in highly-developed economies and equivalent workers in less-developed nations.

 

[nehalem256]

Looking at it from a global perspective, my point stands. Rather than improving the efficiency of their operations to deal with the relatively high cost of Western labor, companies are simply moving those operations to areas where labor cost is lower, and making up for inefficiencies with more labor. High-tech manufacturing and support industries are exceptions out of necessity, but if you look at areas like textile manufacturing, metalworking, toy manufacturing, etc., the facilities are so primitive you'd swear that you just stepped into early 20th century America.

If you look at automation strictly within the scope of a third-world economy, then yes, developments in automation are proceeding regardless of labor cost. But these workers aren't getting the latest developments, they're getting basic, cheap equipment. If automation was moving forward regardless of the cost of labor as you suggest, there wouldn't be such a huge difference in productivity between workers in highly-developed economies and equivalent workers in less-developed nations.

I have thought on similar lines before. The only real way for the people to make a higher wage is for them to be more productive, which requires automation.

 

[piasabird]

Who is to say what a livable wage is? Do you really need 5 bedrooms and 3 bathrooms , an office, a study and a den and a 3 car garage? What happened to log cabins? Many people are happily getting by with less. When I got married I lives in a room I rented from a house owner and not much else. It was the happiest time of my life.

 

[nehalem256]

Who is to say what a livable wage is? Do you really need 5 bedrooms and 3 bathrooms , an office, a study and a den and a 3 car garage? What happened to log cabins? Many people are happily getting by with less. When I got married I lives in a room I rented from a house owner and not much else. It was the happiest time of my life.

Well considering we cannot even get an answer for how many people in the household a livable wage should be based on. I would not hold my breath for the answer.

 

[Incorruptible]

1) Must adopt the baby? I'm sorry, did I miss the headline that Incorruptible was just made dictator?

2a) Didn't ignore it, just thought it was obvious. There will always be corrupt politicians as long as they're more concerned with taking lobbyist money so that they can build up their war chests for the next campaign season.

2b) I agree; I think the Dept. of Defense is a ridiculous department with idiotic weapons programs and should be abolished.

I said they should adopt the kids, I never said to use force, if the parents cant take care of the kid then they should do the right thing and adopt

Your always going to have corrupt politicians answering to special interests becuase government has too much power, as long as they have it others will want to get in, which is why the government must obey the constitution and have limited government

 

[bfdd]

imo it's a driver of inflation.

 

[Incorruptible]

Do you have any idea the amount of unemployed people we would have if companies were forced to pay people a "living wage"?

Hell, they would find a machine to replace your brother quick fast and in a hurry if they had to pay him and everyone that does his job $20 an hour. I bet he prefers what he is getting paid to nothing.

Agreed. Liberals have no sense of reality, everyone cant just be paid high wages because companies cant afford it

 

[Lithium381]

Raising minimum wage pushes everything else up too(cost for example), and devalues college degrees and such.

 

[PrinceofWands]

The minimum wage law discriminates against people with low skills, many people dont have the skills required to justify getting paid the minimum wage and should be paid what they are worth

If the minimum wage is $7.25/hour but a person doesn't have the skills to justify those wages they cant get a job, there would be more jobs available without minimum wage

The government doesn't have a right to tell businesses how much they have to pay their employees. This is why I believe the minimum wage needs to be abolished, do you agree

Milton Friedman explaining minimum wage
http://www.youtube.com/watch?v=ca8Z__o52sk

While I'm not overly fond of the minimum wage I completely disagree with most everything you say.

People aren't paid what they're worth, or what they deserve, they're paid what their employers offer and what they offer is whatever makes them personally (often through their stockholders) the most money.

If businesses would pay enough for people to survive without government prodding, if the 'controllers' would lower prices enough for people to exist with government intervention, then none of it would be needed. However they don't, because they're all ignorant and greedy, and therefore we have no choice but to have government act. I just wish they'd act 'differently'.

Instead of a minimum wage they should enforce tax code and take us back to a 70-80% progressive, start nailing corporations to the wall on earnings and offshoring, and end all the protections for people with money or property...do that, and you can abolish the minimum wage because all the sudden businesses will be willing to give money to employees since they can't keep it themselves.

 

[masteryoda34]

The minimum wage law discriminates against people with low skills, many people dont have the skills required to justify getting paid the minimum wage and should be paid what they are worth

If the minimum wage is $7.25/hour but a person doesn't have the skills to justify those wages they cant get a job, there would be more jobs available without minimum wage

The government doesn't have a right to tell businesses how much they have to pay their employees. This is why I believe the minimum wage needs to be abolished, do you agree

Agreed. Didn't read other posts. It is wrong for a person who has won a popularity contest to threaten violence against two other people who form a mutually consenting agreement with which they disagree.

 

[Throckmorton]

Libertarian ideology would destroy the entire developed world if it ever gained significant traction.

 

[Throckmorton]

You are not answering my question what would occur if you were to raise the minimum wage to $25 dollars an hour?



Except for those who typically have had a harder time establishing a work history because they are not worth $7, $10, $15 or yes even $25 dollars an hour.

How the fuck can a person work if he can't even afford food to feed himself?

You buy a robot, you pay exactly what the robot needs for maintenance. You buy electricity to run it, you pay to have it serviced, lubricated, etc. But somehow a human is different? Even a pack animal gets what it needs to live in return for the work it does.

The idea that you can pay a person less than that person needs to live to do a full time job is farcical. It is absolutely mind boggling that this somehow makes sense to libertarians and the far right nuts on this forum.