Earning a living wage.

Great Debates
121

[QUOTE=Sarahfeena]
DrCube is right…gauranteeing a living wage IS communism. My point earlier is that even if a living wage law was created, prices would most likely be driven up until the living wage is no longer a living wage. Then the living wage would have to go up again…it would create horrible inflation. The only way to prevent the inflation would to also fix prices, and probably upper-ends of salaries as well (for everyone, not just CEOs/“the rich”). Once wages and prices are fixed, what do we have? Certainly not a free market. Sounds like communism to me.
[/QUOTE]

No, Dr. Cube is wrong and you are doubly wrong because you double posted. :stuck_out_tongue:

Communism typically involves a central state dictating what will be made and what will be charged for it. “This year the state will produce 4 million pairs of blue jeans to the following specs, based on workers’ needs.” “Salaries for doctors, janitors and cheese graters will be $457 a week. Salaries for electricians, linguists (cunning or otherwise) and piano movers will be $298 a week.” That sort of thing. As opposed to a free market where people sell what they can for whatever price they can get, and that includes people’s labor. Supposedly.

Just thinking that people on the bottom should have a basic, ground-floor decent standard of living isn’t communism, it’s just human decency in action, and it will ALWAYS oppose the sort of thinking you and Dr. Mark are engaging in. People aren’t machines and shouldn’t be treated as such, even by economists.

But answer me this: what do people who make lots of money in a free market do with it? Re-invest it? That can be risky. It’s so much easier to buy the people who make the rules and have them game the system for you so that you have a perpetual advantage over everyone else, especially those upstarts with less money than you who want to get rich like you did once. And you well remember all the corners YOU cut to get rich, so you know they’re vulnerable…

That’s the game we’re playing right now. And it ain’t called free market capitalism, it’s called corporate oligarchy.

122

I think it’s been explained to you many times why setting some arbitrary minimum wage significantly above the natural minimum wage of the job market won’t work. For some reason you don’t get it - it does not do any good because the price of goods will increase to the point that it will offset the actual buying power of the wage increase.

The market is not run by anyone. The market has no goals. The market does not care because it has no feelings.

The free market is the expression of millions of individual decisions and choices. It is based on the fundamental principle that people don’t have unlimited resources and must therefore make decisions as to where to allocate those resouces. I might be willing to buy a $0.99 burger but not a $2.00 burger. I can work at a job I love for $50,000 or a job I tolerate for $80,000.

The reason people advocate it is because it is more fair and impartial than some ministry deciding what wages or prices should be. If I’m selling a product, I should have the right to sell it for however much I can get for it. If you’re looking for work, you should have the right to work for as much or as little as you can get paid.

No one is advocating total Laissez-faire capitalism. No one would argue that all services should be subjected to the free market (ie the police and fire department). Indeed, not every business is even workable in a totally free market (ie cable companies tend to form natural monopolies). The market may be the best way to maximize the needs and wants of the people, but it does not guarantee that they will all be met.

I’m not sure why these threads degenerate into people arguing two completely polarized and extreme views - de facto communism on one side and Laissez-faire capitalism on the other. The government exists to provide support for it’s people and that support should include various safety nets so that when people do suffer a downturn, it becomes a temporary inconvienience, not a life altering event.

The problem of enabling everyone to maintain an acceptible standard of living is a complex one and it can’t be cured by simply setting everyone’s wages to some arbitary level. If that worked, we would simply give everyone a six-figure salary (and we’d all be paying $50 for an apple).

[QUOTE=Fear Itself]
Way to set the bar real high there, John; if it’s good enough for the third world, it’s good enough for America. Nevermind that most of those immigrants leave their families for sometimes years at a time. No, if they can do it, all the whining poor in America can too. Real pro-family attitude you got going there.
[/QUOTE]

I think the point he is making that many immigrants don’t have this American sense of entitlement. You know, the one where we think that we should automatically enjoy a higher standard of living or not have to compete with nations that can do it better and cheaper because we are Americans dammit!

123

So people will never re-invest money because it can be risky? What do they do with it then? Bake them into pies, I suppose. Re-investing wealth is what keeps capitalism going. It’s still going, so I’m going to say you’re a little off the mark with that one.

124

[QUOTE=Blalron]
Well, back in 1968 the U.S minimum wage ($1.60 and hour) was $9.12 an hour in today’s dollars. According to my calculations, that would be an $18,969 annual wage for a full time worker. This is very close to the 20k hypothetical you are floating. So it’s obviously quite feasible to set a MW like this. I’m not sure what data I’d need to look up to compare the lifestyle of a 1968 minimum wage worker with a 2006 MW worker, but I thought I’d throw that info in as food for thought. Your predictions seems to me to be exessively dire.
[/QUOTE]

Bad year to pick. We typically up the MW every 5-10 years in the US, so picking the first year of a change (MW went from 1.40 to 1.60 in 1968) is going to inflate things. And that year is the highest value the MW has ever been in all its history. I wonder why you just happened to pick that year. :wink:

This chart shows MW in today’s dollars from 1938, when it was first set. A fairer historical persepective would be given by the average of those numbers, which I’m going to eyeball at about 6.00 - 7.00 (if anyone wants to correct my eyeball calculations with real numbers, please do). That’s consistent with what I’ve been saying about having a $1 increae in the MW.

125

[QUOTE=Evil Captor]
But answer me this: what do people who make lots of money in a free market do with it? Re-invest it? That can be risky. It’s so much easier to buy the people who make the rules and have them game the system for you so that you have a perpetual advantage over everyone else, especially those upstarts with less money than you who want to get rich like you did once. And you well remember all the corners YOU cut to get rich, so you know they’re vulnerable…

That’s the game we’re playing right now. And it ain’t called free market capitalism, it’s called corporate oligarchy.
[/QUOTE]

You’ve never read a book that even tangentially had anything to do with economics, have you? Tell me, do you think that Bill Gates has a Scrooge McDuck-like vault in which he swims through gold krugerands? Does Paris Hilton have a secret closet that contains stacks of hundred-dollar bills that she picks up her cash from?

Of course that money gets re-invested. Hell, even if “the rich” just stick their money into banks, then that’s re-investing it, because banks take the money deposited and loan it out. It’s what banks do.

Said by a person who lumps the rich together into a mass and rails against them.

126

Negotiating with a company one to one is a losing proposition. No single worker is needed. If you die in a car accident on the way to work tomorrow ,the company will go on. The company knows that and so do workers. That is why unions came into being. They may not need one worker,but they can not go on with all of them gone.It is called collective bargaining. It is dealing strength to strength.
Minimum wage affects the entire economy. At 5.15 an hour. There may be few that stay there long. However getting 5.25 -5.35-.550 -6.00etc. They are all impacted by the starting line.
Migrant workers are not doing work that Americans wont as the Bushies keep saying is not true. We just won,t do it at the price they want to pay. Last week one of the Bushies said Americans wouldn pick lettuce at 50 bucks an hour. He got hooted off stage.
Corporations are designed to screw the worker. We have laws that protect us because we need them. Child labor laws weren’t enacted because it was a fun thing to do ,but because companies were using it. They use it now,except in Indonesia and other countries without protective laws… Some of our products are being made by child labor now. If companies can do that abroad ,must we allow child labor here to compete.

127

[QUOTE=John Mace]
Posters keep talking about people who just can’t, not matter what, raise themselves out of poverty. Fine, I’m sure such people do exist. But just how many people like that are there, and if it is (as I suspect) only a fraction of the people living in poverty, then let’s not use those people as the standard of measure as to whether a certain program is going to work or not.

[/QUOTE]

35 million americans are living in poverty. Of those, 7 million are “working poor” which, in many cases, is worse than being below the poverty level because you lose benefits that would otherwise help you get on your feet.

Your assumption that these cases are rare would mean that everyone who is near or below the poverty level is just plain lazy. Of course there are some who are, but they are the ones in the minority. Poverty is an overwhelming problem in this wealthy country and there is no easy fix. Simply wanting to work is not all it takes to create a safe and healthy life. One setback; a sick kid, a broken car, a change in a bus schedule…and you lose your job.

Among the impoverished in America are disabled, mentally ill, functionally illiterate, and multi-generational welfare recipients; those who never had a role model who worked. There are deep problems with adjusting to the working world. Many people who have never had a working parent (or even a working neighbor, as is the case with many people who lived in the projects) have difficulty with authority, consider teen-age pregnancy to be the norm, lack the “soft skills” such as interacting with co-workers, punctuality, etc. They number in the millions.

The services required to help people get to the point where they can save something are underfunded and understaffed. We’re talking health care, transportation, housing, child care, family counseling, budgeting classes, abuse issues, birth control, remedial coursework to obtain a GED…the list goes on and on. It’s a complex problem and it’s a miracle anyone at all finds their way out of the labrynth.

128

[QUOTE=xtisme]
Are you claiming that you can have all that stuff (healthcare, personal transport, housing, good food, saving AND send kids to college) on $20k a year with two earners (i.e. a total family income of $40k)? Realizing that the healthcare is going to be part of that salary? Not to mention all that other stuff? Seriously?

Ok…fair enough then. Lets work with the $20k figure for individual income then. According to Google, the current minimum wage in the US (average) is $5.15/hr. That works out to roughly, what? $824/month? $9888.00 per year? So, you basically are saying that for a ‘living wage’ we would essentially double that salary…right?

[/quote]

Wrong. $40K a year is the median family income, as my cite showed. If you think that this is not enough for a comfortable (though not luxurious) lifestyle, then you’re saying that 50% of American families are in trouble. I’m not that radical.

I don’t know what exactly a living wage is - it varies by location - but I’m pretty sure it is well under median. I thought I had specifically said that I was not advocating raising the minimum salary to the median salary.

Forgetting about healthcare, since we need to do something structural about that problem and not throw money at it, why do you think $40K a year - or even less - is inadequate. Do you think comfortable means a new SUV every three years? Eating out three times a week? Wide screen TV? All the premium channels? Like I said, community colleges provide higher education at very low cost, assuming no scholarships.

The rest of your post makes the unwarranted assumption that I want to make median income the floor.

129

[QUOTE=Kalhoun]
35 million americans are living in poverty. Of those, 7 million are “working poor” which, in many cases, is worse than being below the poverty level because you lose benefits that would otherwise help you get on your feet.

Your assumption that these cases are rare would mean that everyone who is near or below the poverty level is just plain lazy. Of course there are some who are, but they are the ones in the minority. Poverty is an overwhelming problem in this wealthy country and there is no easy fix. Simply wanting to work is not all it takes to create a safe and healthy life. One setback; a sick kid, a broken car, a change in a bus schedule…and you lose your job.

Among the impoverished in America are disabled, mentally ill, functionally illiterate, and multi-generational welfare recipients; those who never had a role model who worked. There are deep problems with adjusting to the working world. Many people who have never had a working parent (or even a working neighbor, as is the case with many people who lived in the projects) have difficulty with authority, consider teen-age pregnancy to be the norm, lack the “soft skills” such as interacting with co-workers, punctuality, etc. They number in the millions.

The services required to help people get to the point where they can save something are underfunded and understaffed. We’re talking health care, transportation, housing, child care, family counseling, budgeting classes, abuse issues, birth control, remedial coursework to obtain a GED…the list goes on and on. It’s a complex problem and it’s a miracle anyone at all finds their way out of the labrynth.
[/QUOTE]

I meant to add that where a minimum wage increase would not help much, an increase in taxes is necessary to keep the impoverished heads above water. It’s a money issue, but not necessarily a MW issue (though I think a light increase is in order).

130

[QUOTE=DrCube]
By the way, I meant to address this. You’re right, most of us don’t have a choice of whether or not to work. But most of us certainly do have a choice of where to work. And that choice is what gives workers power.

[/quote]

Most of us on this message board, true. Many of us have the good fortune to possess skills that make us marketable, that allows us to negotiate for salaries well above the minimum. Some degree of that is work ethic (and how much of that comes from genetics and/or a good home environment) and some is just intelligence. I don’t think this makes me naturally more deserving, which is the heart of the philosophical divide here.

Over the past five years productivity has gone up faster than wages. How do you explain this? Would you agree at least to a MW increase equal to the increase in worker productivity, if not inflation? Do you think that companies can measure worker contributions exactly? I’d guess that all workers pretty much contribute at least as much as their salary, or the job would go away if the problem is structural, or the worker would get fired if it is personal. With that floor, do you really think no MW worker is contributing significantly more than MW?

But the heart of this discussion is that people who are productive members of society in that they work do deserve to make enough to live on. If you don’t think so, do you also think that kids should be allowed to work? Practically speaking, if companies band together to screw workers, someday workers will use political power to band together to screw the companies, and no doubt go too far. I’d hate to have no-fire labor laws, like those in Europe, as a reaction to this kind of stuff.

131

[QUOTE=Evil Captor]

I understand what communism is, but the last sentence here is the rub…how do we have a free market, if wages are dictated? How do we then control inflation without also dictating prices? And once wages and prices are controlled, how is this not communisim?

132

Once again, have you factored in capital expenditures into this?

133

[QUOTE=Kalhoun]
35 million americans are living in poverty. Of those, 7 million are “working poor” which, in many cases, is worse than being below the poverty level because you lose benefits that would otherwise help you get on your feet.

Your assumption that these cases are rare would mean that everyone who is near or below the poverty level is just plain lazy. Of course there are some who are, but they are the ones in the minority. Poverty is an overwhelming problem in this wealthy country and there is no easy fix. Simply wanting to work is not all it takes to create a safe and healthy life. One setback; a sick kid, a broken car, a change in a bus schedule…and you lose your job.
[/quote]

The fact that we have X number of people living in poverty now says nothing about how many of them are stuck in poverty in the sense that you stated when we started this discussion (emphasis added):

Please clarify exactly who these people are and how many there are. And if it’s true that the can never compete in society, then that’s a completely different topic than what we’re discussing in this thread. I picture those people as severly physically handicapped or mentally retarded or maybe patholgoical substance abusers. Setting a LW will not help those people because it doesn’t sound like they are capable of tying their own shoes in the morning (no offense meant by that, just an honest statement of a fact).

Or a redirection of tax money we already take in. This country burns up something like 30% of its GDP in federal, state and local taxes. We should be able to take care of the truly unfortunate with that type of revenue if we set our priorities correctly. I’m hesitant to just throw more money into the government’s pot because we have no guarantee that it will be spent on programs needed to help the truely desperate as opposed to builiding up the military for another war.

But, if we are going to go for more taxes, let’s do it at the state or local level where it’s closer to the problem and where we can see experimentation by different states to find different solutions.

134

[QUOTE=Evil Captor]

But answer me this: what do people who make lots of money in a free market do with it? Re-invest it? That can be risky. It’s so much easier to buy the people who make the rules and have them game the system for you so that you have a perpetual advantage over everyone else, especially those upstarts with less money than you who want to get rich like you did once. And you well remember all the corners YOU cut to get rich, so you know they’re vulnerable…

[/QUOTE]

:rolleyes:
Yeah, that’s how you get rich. By cutting corners. Or you could go to business school, get a job with Goldman Sachs, work 120 hours a week and hope you get one of those fat bonuses. That seems like an easy shortcut.

Since the purpose of this board is to fight ignorance, you need to stop posting about any topic related to business or economics. Your posts are increasingly misinformed and bizarre.

[QUOTE=gonzomax]

Negotiating with a company one to one is a losing proposition. No single worker is needed. If you die in a car accident on the way to work tomorrow, the company will go on. The company knows that and so do workers.

[/quote]

Obviously you have never been in a position to hire someone. As a businesses needs become more specialized, it becomes increasingly difficult to find quality people. If you’re just a generic worker bee, however, there are a thousand other bees just like you.

135

Well, xstime, according to this site, McDonalds serves 17,155,000,000 customers every year. Which means they could raise 2 billion dollars by raising the price of each customer’s meal by about twelve cents.

Kind of puts the whole “$30 cheeseburger” hysteria into perspective, doesn’t it?

136

[QUOTE=Voyager]
But the heart of this discussion is that people who are productive members of society in that they work do deserve to make enough to live on.
[/QUOTE]

Once again you are assuming something that I have repeatedly pointed out as a flaw and you have repeated failed to address. Why does every single job in this country have to pay enoguh “to live on.”? Your earlier answer that, well, those companies that can’t comnply will die and another one will replace it is pure fanatsy. If labor costs are too high, no company will come in and fill the void, or the company will just outsource as much of the labor as it can to lower wage states or countries. So, you may be thinking you’re “sticking it to the man” and tough shit if their company fails, but it’s the workers at that company who are going to be hurt more than “the man”.

Let’s look at the practical effect of your policy. Suppose I’m just a stay at home parent with little or no skills. I decide at some point that I’m ready to go back into the workforce. My spouse is the principle breadwinner, but I want to add to the household income so that we can have a better life-- maybe I want to pay for tutoring for my HS kid, or to send the kids to private schools or whatever. What you’re telling me is that I can’t work unless my labor is worth “X” amount in the market and “X” is enough to “live on”. But I don’t need “X”, I just need enough to make it worth my while and to do the extra things I want for my family. Sure, I’d love to get "X if I could, but my labor isn’t worth “X”-- I don’t have any skills and I’ve been out of the workforce for quite some time.

Or, I’m a kid just out of HS, living at home. I’m trying to break into the workforce and want to get some experience so I can eventually have the skills for a job that can support myself. You’re telling me I can’t get a job until I already have those skills. Gee, thanks a lot!

137

[QUOTE=John Mace]
The fact that we have X number of people living in poverty now says nothing about how many of them are stuck in poverty in the sense that you stated when we started this discussion (emphasis added):
[/quote]
Obviously, there are no hard numbers because we don’t have crystal balls. But wouldn’t you agree that 2nd and 3rd generation welfare recipients are likely to remain on welfare unless we provide the right tools (personal assistance tools such as counselors, tutors, career coaches, etc.). and childcare and transportation funding, if they are expected to compete for low-end jobs?

Those are exactly the people I’m talking about. The functionally illiterate (21 to 25 million estimated in 1990), the chronically ill who cannot get promoted because they’re sick often enough that no manager wants to take a chance on them (these would be uninsured workers – the Walmart clerks, the gas station attendants, etc. who can’t get adequate care for their illnesses). People who have children and cannot afford daycare, and then end up caring for their grandchildren as well. Unless we drastically change the way we provide assistance to these people, they will never climb out of poverty. They may get a break here and there, but they frequently cannot absorb even the most minor glitch in their plan. They get caught up in a cycle of “starting over from square one”. They never get flush with their landlord. They can’t make it to payday so they get a payday loan to keep their lights on. That throws them back another step.

I’d much rather see a redirection of current tax dollars. They could start by cutting waste in military spending. I’m sure I could find a number of other areas that could use some cleaning up, but I’d have to think about it.

138

[QUOTE=monstro]
I don’t understand, though. There is no objective value to anything. Doctors twenty years ago got paid more than they are paid today. Were they more valuable in the 80s than they are now? The average teacher salary is more than the salary was fifty years ago. Are they more valuable now?
[/QUOTE]

Well, dude, if you adjust for inflation and it turns out they are still making more money than before, then yes, they are more valuable.

Maybe I’m not making my distinction between value and utility clear enough: Utility is the intrinsic amount of happiness or what-have-you that a consumer gets from a product or service. It varies by individual. Value is the amount of money that product is worth in that particular market. This varies across time. Utility is totally subjective and only depends on personal tastes and wants and needs. Value is objectively determined by supply and demand. So if supply goes down or demand goes up, then value increases.

This is why burger-flipping isn’t a high-paying job; it’s not because some evil CEO is exploiting the poor burger-flippers, it’s because burger-flipping is a common skill. You don’t have the leverage to say, “I’m going to take my cherished burger-flipping skills elsewhere and you’ll have a hard time finding somebody to take my place.” The idea is that if you find yourself in the position that burger-flipping is your only skill, you need to make yourself more valuable by getting more skills, not petition the government to give you more money because you’re “worth it” as a human being. This is price control of the worst sort. We might as well just decree that bread is now worth twenty dollars a loaf because it’s demeaning to wheat farmers and bakers that their product is so cheap.

I’ll agree with you that exploitation (for some definitions of that word) is bad and that we need to take steps to end it. But you seem to be saying that paying people what their services are worth is exploitation, and that’s where we differ. And it is so basic a premise that I don’t think any amount of arguing in the world is going to sway either of us.

139

[QUOTE=Evil Captor]
Yeah, because thinking of human beings as anything other than a disposable commodity is communism. Caring about whether human beings can lead lives with something approaching dignity is communism. Yeah, right. Sorry, buddy, no sale here.

You must think there are a LOT of Communists out there …
[/QUOTE]

Communism and a command economy are different but related beasts in my mind. I really should define every term I use in GD because people always assume I’m saying something completely different. In my mind a command economy is necessary for communism, but communism itself is the belief that everybody gets what they “deserve” not based on what they put into the economy but based on some standard of how “dignified” everybody should live. In fact “everybody gets $xx.xx because thats the amount you deserve as a person” would be the defining statement of communism in my mind. And a command economy seems to me the only possible way to institute that policy.

I care about people. I have a sliding scale of priority from my family, friends, me, acquaintances, all the way down to random joes who affect me very little if at all. I really don’t love all of humanity equally. I’ll do everything I can for the ones at the top of my list, but I really have no incentive to help everybody on Earth. The ones at the bottom of the list should have the same rights and opportunities as me, but I don’t want to be forced to support every Tom, Dick and Harry. I worry about me and mine, and Tom, Dick, and Harry worry about them and theirs. I’m very interested in ensuring everybody has the same opportunities as me, but I’m not interested at all in ensuring everybody has the same standard of living as me.

Just so that’s out in the open. Everybody seems to be working from some unstated axioms and it’s only fair for me to be as open as possible about how I feel. I don’t think any amount of arguing over how many people starve and what the minimum wage was in 1968 is going to do any good if we have deep philosophical differences about what people really deserve.

140

[QUOTE=Kalhoun]
Obviously, there are no hard numbers because we don’t have crystal balls. But wouldn’t you agree that 2nd and 3rd generation welfare recipients are likely to remain on welfare unless we provide the right tools (personal assistance tools such as counselors, tutors, career coaches, etc.). and childcare and transportation funding, if they are expected to compete for low-end jobs?
[/quote]

Well, something is wrong, for sure. I’d like to see a good scientific study of what causes that cycle of poverty before I rush off with a list of solutions. I wouldn’t be surprised if good sex education and access to birth control was up towards the top of the list-- right next to staying in school (tutor or no tutor) and staying awar from drugs. But hey, whatever is proven to work is worth a try!

How many of those “functionally illiterate” are that way because they dropped out of school? If you can’t read, don’t fucking drop out of school. Now, we do have to deal with those people, but just giving them money isn’t the way to go, if you ask me. I’m willing to give help, but they have to show initiative and do what it takes to learn how to fucking read. As for children… well, once you go on the public dole, I want some kind of assurance that you’re not going to have more children. Or, if you do, then you tag the father and we tap him for child support.