From whence the faith in a free market?

[XT]

@blowero

You just aren’t following it.

I freely admit it…I am not following you. BTW, sorry about the flippant ‘truely dizzying’ part…I re-watched Princess Bride last night and had that on the brain.

@blowero

Am I not explaining this right? I pointed out two different assertions that have been made, that are contradictory. IMO, they have nothing to do with each other. But they have both been asserted.

You may want to go into some additional detail then because I don’t see any contridictions, nor do I feel that you are accurately representing what was said. Its obvious there is a disconnect here…especially since I am appearently not the only one not following you on this (were it just me I’d chalk it up to language difficulties).

@blowero

I don’t think you’re following. My position is that substandard wages do not exist, because we do have MW laws.

Er…so you are basing your assertion on a theoretical free market with no MW, and extrapolating from that that there would be ‘substandard’ wages (but not defining what those would be)? Is that a fair assessment of your position?

@blowero

I would disagree that it’s “freely accepted”. People must work to survive. If there are more people in a particular sector of the workforce than there are jobs, then they are in effect forced to take whatever job they can get. Not eating isn’t an option.

Certainly people must work to survive. Their choice comes in what work they do, and what they are willing to do for what price for their labor. Thats certainly ‘freely accepted’. If the job they are looking at doing pays less than they require, they are free to search for another job…or to take a second job, or to have their spouse also work…myriad other options. There are always options open to even the poorest and most unskilled person…and its up to them to assess their options and freely choose what they think is best for them.

When I was very poor and fairly uneducated/unskilled I had the choice of working at the local store for MW (it was $3 someting as I recall at the time), or for working construction for 2/hour more (there were a few other choices I didn't really consider like working in the fields picking lettuce and such). It was a lot harder labor working construction, but I chose to do that anyway as it was initially more an hour (I could save more), plus it had more potential for making more money in a shorter time (I was promised a .50/hour raise within 6 months). Later I chose to take my labor and join the service instead, with the promise of assistance with college, enhanced language skills and training in electronics (as well as housing and food benifits). It was my ‘freely accepted’ choice to decide what I was willing to do, and what I was willing to accept in exchange for my labor.

@blowero

Nonsense. I said no such thing.

No, you didn’t. I appologize for trying to put words in your mouth. But you implied it to me by saying this ‘And let me also point out that if one says a given wage is, by definition, not substandard because it’s the wage that the market will bear, that’s circular reasoning.’. To me you are saying here that wages being set by what the market will bear is circular reasoning…and through implication so therefore would the market as a whole, since it uses the exact same reasoning for setting pricing for goods and services. If one is ‘flawed’ then so would the other be. To me they are one in the same…labor, goods, services…the price of each is set by what the market will bear.

-XT

[blowero]

@xtisme

Certainly people must work to survive. Their choice comes in what work they do, and what they are willing to do for what price for their labor. Thats certainly ‘freely accepted’.

Again, I disagree. If there were more jobs than people, I would agree with you. But there are not. And you most certainly do not choose “what you are willing to do for what price.” I cannot choose to be a beer taster for $100/hour, because there are more people willing to be beer tasters than there are jobs.

If the job they are looking at doing pays less than they require, they are free to search for another job…or to take a second job, or to have their spouse also work…myriad other options.

I guess we’ll have to agree to disagree. I personally don’t think “You’re free to look for another job” is a good justification for paying shit wages. You obviously do. YMMV.

There are always options open to even the poorest and most unskilled person…and its up to them to assess their options and freely choose what they think is best for them.

I disagree. If we didn’t have a minimum wage, I believe there would be a whole sector of jobs that would pay much, much less than a living wage. That’s been the case in the past, and it’s still the case in many other countries. The upper classes have options, but the poor often do not.

No, you didn’t. I appologize for trying to put words in your mouth. But you implied it to me by saying this ‘And let me also point out that if one says a given wage is, by definition, not substandard because it’s the wage that the market will bear, that’s circular reasoning.’. To me you are saying here that wages being set by what the market will bear is circular reasoning…and through implication so therefore would the market as a whole, since it uses the exact same reasoning for setting pricing for goods and services. If one is ‘flawed’ then so would the other be. To me they are one in the same…labor, goods, services…the price of each is set by what the market will bear.

-XT

Sorry, I don’t follow you.

[blowero]

@xtisme

You may want to go into some additional detail then because I don’t see any contridictions, nor do I feel that you are accurately representing what was said.

Well you aren’t one of the people who made the argument. But let me lay it out in detail, and you can tell me where I’ve gone wrong. Since we’re talking about a minimum wage in theory, I think it’s fair to assume a minimum wage that is only high enough to prevent businesses from paying substandard wages, and no higher (Otherwise, the argument merely becomes a quantitative one, and we want to get at whether the idea itself is valid rather than only discussing what amount is correct.)
Do you believe that the market self-corrects for substandard wages?

Does the word “correct” mean “to remedy”?

If so, do you believe that the market prevents substandard wages from being paid, without regulatory interference being needed?

If so, do you contend that a minimum wage is unneccessary?

If the purpose of a minimum wage is to prevent businesses from paying substandard wages, and the market already prevents that, is it not true that minimum wage laws have no effect? (Provided that the minimum wage doesn’t exceed what is necessary in order to not be substandard?)

If the minimum wage has no effect, is it not true that it cannot have an adverse effect?

If you answer “no” to any of these questions, please explain why.

[pervert]

@erislover

Of course, I am assuming that the only reason people would use political power to affect the market is because they are unsatisfied with what the market is doing in absence of such legislation, but you’ll forgive me if I think that’s a fair assumption.

But this is precisely the assumption I was challenging. People do all sorts of things for all sorts of reasons. It is entirely possible that political programs are enacted for purposes other than correcting some flaw in the status quo.

[pervert]

@blowero

If the purpose of a minimum wage is to prevent businesses from paying substandard wages, and the market already prevents that, is it not true that minimum wage laws have no effect? (Provided that the minimum wage doesn’t exceed what is necessary in order to not be substandard?)

No. The purpose of the MW and its effects may be entirely different things. For instance, the law would not be able to adjust to changing conditions as fast as the market. As this theoretically optimal substandard wage moves up and down there is simply no way for the law to keep up with it. Now, if you are proposing some sort of MW law which measures, somehow, the minimum wage a market would charge without itself, and then enshrines that number in law, then maybe you have a MW law which does nothing. If, however, you are talking about a law which requires that all employment pay a particular amount, then I simply cannot see how it could ever be said to do nothing.

Perhaps if you say that MW wage laws only have the effect of preventing businesses from paying substandard wages, then maybe the two propositions might contradict.

1)MW laws only have the effect of preventing substandard wages.

2)Free economies without MW self adjust to prevent substandard wages.

No, I still do not see that these are condradictory. Redundant, perhaps, but not contradictory.

I think that some of the confusion may be due to different understandings of “substandard wage”. I tend to take that to mean something like not normal wage, or different from the average (for a given job of course). But after reading some of your posts, I think you mean something much closer to “living wage”. That is, you are trying to say that any wage which is below a living wage is “substandard”. That it does not rise to your standard.

[LonesomePolecat]

@xtisme

…because they are so good at doing these things from a historical perspective.

-XT

Well, if it’s an historical perspective you want, my perspective takes into account the many years of early laissez faire * capitalism when 8-year-old children of both sexes wearing nothing but loinclothes worked 60 to 80 hours a week in coal mines for near-starvation wages. They died like flies of black lung or in cave-ins. They saw the sun no more than once a week for months or even years at a time. If they got uppity, they were beaten with steel rods.

But I guess that was just a market adjustment.

( * No, I’m not going to give anybody any God damned cites … )

[XT]

@blowero

Do you believe that the market self-corrects for substandard wages?

Yes. However, I define ‘substandard wages’ as unacceptable to the workforce…i.e. wages such that you can not attract the workers you need to do whatever job you have in mind.

@blowero

Does the word “correct” mean “to remedy”?

Certainly. If it wasn’t corrected or remedied then there would be no workers and the business would go under. Simple greed on the part of the owners won’t allow this to happen.

@blowero

If so, do you believe that the market prevents substandard wages from being paid, without regulatory interference being needed?

Yes.

@blowero

If so, do you contend that a minimum wage is unneccessary?

Yes. On multiple levels. If the idea here is to help people out trying to make ends meet, then a much better way would be to give them direct aid out of general funds instead of attempting to set artificial levels for what a minimum wage is. Let people decide what they think is a fair wage for their labor, and if they then need additional help give it to them.

@blowero

If the purpose of a minimum wage is to prevent businesses from paying substandard wages, and the market already prevents that, is it not true that minimum wage laws have no effect? (Provided that the minimum wage doesn’t exceed what is necessary in order to not be substandard?)

MW laws INTERFERE with the market by artificially setting a minimum wage limit that has no basis in market reality…i.e. it sets a limit on labor that has no bearing on actual costs or what said labor is worth. So, it is incorrect to say that MW laws have no effect…they have a great deal of effect. Also, it depends again more on your definition of ‘substandard wage’ and what exactly you are trying to achieve. I think thats where we are getting hung up, as ‘substandard wage’ obviously means something different to me than it does to you.

On preview Pervert said most of this…and he did a better job.

@blowero

If the minimum wage has no effect, is it not true that it cannot have an adverse effect?

MW laws have a measurable ‘adverse effect’ so you can’t very well say that it has either no effect or a neutral effect. Even those who advocate MW laws conceed that there are adverse effects. Their position is that the good effects of setting a minimum wage level outweighs the adverse effects that MW laws have on the market. By setting the MW low enough they certainly have a point. But I don’t know of anyone who thinks MW laws have either no effect or a neutral effect on the market.

What ‘adverse effects’? Well, off the top of my head I’d say the price of goods and services will go up in those business’s forced to hire people for more than their labor is worth to the company. This has a ripple effect on the entire economy. A gallon of milk or a loaf of bread will cost more than it would have, because businesses are going to fold in the added cost to the price of their goods or services…they aren’t going to eat the loss.

In addition, a good case can be made that if businesses set the level of their wage themselves they could potentially hire MORE workers, giving more people jobs at the low end (not that unemployment is rampant in the US, so this is probably a weaker arguement). If I am forced to pay someone $6/hour (I don’t remember what MW is in NM atm, this is just an example) I might hire one person. However, if I could set the wage at $4/hour and still attract workers with that offer I might hire two people and increase my productivity.

Hope this clears things up, at least from my own perspective.

-XT

[erislover]

@pervert

But this is precisely the assumption I was challenging. People do all sorts of things for all sorts of reasons. It is entirely possible that political programs are enacted for purposes other than correcting some flaw in the status quo.

pervert, perhaps you could simply address the issue I’m bringing up. How can you hope to have a free market if you think this? When people talk about their faith in the free market, they make some assumptions about human behavior. Yet when I adopt such an assumption, that they will behave reasonably, I meet with resistance. Help a fella out. What do we have to do in order to have a free market? Do we simply find some way to bar legislation and define “acceptable” as “what the market provides”? Or do we demonstrate our faith by suggesting that, in fact, people will be reasonably satisfied with their lot in the free market and won’t feel a need large enough to gain political force in order to interfere? If we are just suggesting at the outset, as you are, that people are just unreasonable then I don’t see what use the free market is supposed to be without severely restricting political power.

[pervert]

@erislover

pervert, perhaps you could simply address the issue I’m bringing up. How can you hope to have a free market if you think this?

Well, I don’t think we do.

When people talk about their faith in the free market, they make some assumptions about human behavior. Yet when I adopt such an assumption, that they will behave reasonably, I meet with resistance. Help a fella out.

Ok. Let me try.

What do we have to do in order to have a free market?

We have to exchew coercion in our dealing with one another.

Do we simply find some way to bar legislation and define “acceptable” as “what the market provides”? Or do we demonstrate our faith by suggesting that, in fact, people will be reasonably satisfied with their lot in the free market and won’t feel a need large enough to gain political force in order to interfere?

I think you have to do both. If there were a way for you and I to forge a constitution which would stand forever unchanged (except, possibly, by very new developments) them maybe we could devise a system of government wherein it is impossible to give up the free market. Otherwise, no matter how cleverly we add protections for economic transfers into the constitution, there is always the possibility that enough people will get together to undo it. It is one of the unfortunate side effects of a democracy.

If we are just suggesting at the outset, as you are, that people are just unreasonable then I don’t see what use the free market is supposed to be without severely restricting political power.

Well, I don’t think I suggested this at all. I merely wanted to point out that the existence of a law or governmental system does not in and of itself mean that a reasonable grievance was addressed by that system. I was not trying to suggest the converse, that the existence of a government system proves an irrational motive by those who instituted it.

I suppose what I was trying to say was that while it is certainly possible that various modification to the free market were made to address reasonable grievances against the free market, it is also possible that such modifications were made to address issues falsely blamed on the free market. We cannot assume either case simply by the existence of the modification in question.

I believe that for the most part people do behave reasonably. But, there are exceptions. If I may use some of my own predjudices, I think evidence of this is the fact that for the most part, America, in fact, a free market. But there are some exceptions.

I hope that helps.

[blowero]

@xtisme

Yes. However, I define ‘substandard wages’ as unacceptable to the workforce…i.e. wages such that you can not attract the workers you need to do whatever job you have in mind.

All right. Then we’re definitely not on the same page already. Your definition of “substandard” seems to be ONLY those wages which cannot attract workers. I would call that “ineffectual” rather than “substandard”.

I have a follow-up question, then. Is there any wage that you personally would consider unacceptable, e.g. 50 cents an hour? 10 cents an hour? Or do you believe that anything goes, so long as you can get someone to work for that rate?

Certainly. If it wasn’t corrected or remedied then there would be no workers and the business would go under. Simple greed on the part of the owners won’t allow this to happen.

Yeah, well the train of thought fails here, since we aren’t using the same definition of “substandard”. If you define it as “what people are willing to work for”, then this all becomes circular reasoning of course. So I’ll stop right here, since the rest of the questions become moot.

Even those who advocate MW laws conceed that there are adverse effects.

Just to clarify, I did not say there are no adverse effects. I said that if we follow a line of reasoning with which I do not agree, that there would be no adverse effects.

So I’m not sure where this leaves us. If I understand you correctly, when you say the market “corrects substandard wages”, all you really mean is that companies have to pay as much as workers are willing to work for, which is very nearly a truism. I’m not sure if the other people who made this argument meant it in such a tautological way.

[blowero]

@LonesomePolecat

Well, if it’s an historical perspective you want, my perspective takes into account the many years of early laissez faire * capitalism when 8-year-old children of both sexes wearing nothing but loinclothes worked 60 to 80 hours a week in coal mines for near-starvation wages. They died like flies of black lung or in cave-ins. They saw the sun no more than once a week for months or even years at a time. If they got uppity, they were beaten with steel rods.

But I guess that was just a market adjustment.

( * No, I’m not going to give anybody any God damned cites … )

Absolutely. In response to Libertarians who believe everything will just work itself out if we leave it alone, I keep pointing out that there is an abundance of evidence that businesses did, and do take advantage of people when left to their own devices. The point seems to be lost on them.

[pervert]

Well, then perhaps you are willing to give some cites?

If not, then are you willing to acceed to the proposal that workers some times take advantage of companies? That might even things up a bit.

[XT]

@blowero

All right. Then we’re definitely not on the same page already. Your definition of “substandard” seems to be ONLY those wages which cannot attract workers. I would call that “ineffectual” rather than “substandard”.

I kind of thought this was the case.

@blowero

I have a follow-up question, then. Is there any wage that you personally would consider unacceptable, e.g. 50 cents an hour? 10 cents an hour? Or do you believe that anything goes, so long as you can get someone to work for that rate?

Certainly there is a point where I, personally, think that my labor is worth more than a given offer…or I evaluate my situation and say that what is being offered is so low that I can’t afford to work a given job. I did this all the time when I was interviewing for various jobs before I started my own company in fact.

This particular level is different for everyone however…and it changes even for an individual depending on where they are on the road of life. When I was a young man, working for $3/hour was a good thing, and I happily exchanged my labor for this rate and considered it a good deal. Today I couldn’t live with that level…or even MW for that matter. To answer your question, its up to the individual to evaluate whats being offered and decide if the money offered is worth their labor and meets their needs.

So, yes, I believe that ‘anything goes’ as far as this particular issue is concerned, and that people should be able to make their own determination as far as what they feel their labor is worth, instead of having artificial limits set. If business sets the bar too low then they won’t get workers. On the other side of the equation, if workers can’t make things work at the salary given then I’m all for offering them direct government assistance. I really don’t understand your resistance to this idea…I would think it would appeal if your desire is to help out the poor. IMHO its the BEST way to provide such aid without undo negative effects on the market. And I think it would help in other ways as well.

@blowero

Yeah, well the train of thought fails here, since we aren’t using the same definition of “substandard”. If you define it as “what people are willing to work for”, then this all becomes circular reasoning of course. So I’ll stop right here, since the rest of the questions become moot.

Ok

@blowero

Just to clarify, I did not say there are no adverse effects. I said that if we follow a line of reasoning with which I do not agree, that there would be no adverse effects.

Oh. Well, obvious we disagree on this point then.

@blowero

So I’m not sure where this leaves us. If I understand you correctly, when you say the market “corrects substandard wages”, all you really mean is that companies have to pay as much as workers are willing to work for, which is very nearly a truism. I’m not sure if the other people who made this argument meant it in such a tautological way.

I don’t know if they did either…you’d have to ask them. I don’t see it as a tautological answer, but different strokes.

-XT

[John_Mace]

blowero: I think one of the problems here is that you keep using the phrase “substandard wagee” as if it has some kind of definition that everyone would agree to. What is your definition? Personally, I don’t think the phrase makes any sense. What is the “standard” price of a car, or a house, or painting? How do you think prices are determined, excpet by what people are willing to sell something for and what someone else is willing to pay? There is no objectively defineable price for anything.

[erislover]

@pervert

Well, I don’t think we do.

I don’t think we do either. What I’m asking about is whether we even could.

If there were a way for you and I to forge a constitution which would stand forever unchanged (except, possibly, by very new developments) them maybe we could devise a system of government wherein it is impossible to give up the free market. Otherwise, no matter how cleverly we add protections for economic transfers into the constitution, there is always the possibility that enough people will get together to undo it.

The possibility, sure. There’s a possibility that we will make Hillary Clinton a dictator for life by amending the Constitution. But we can scarcely imagine anyone urging such a thing if they are reasonably satisfied with our current system, and even if we remove some hyperbole we are still left with the daunting task of raising, er, political capital. Enough people must want the change. Enough people must be unsatisfied for long enough. We must not concern ourselves with the exceptions, they are but noise in the signal. It is not the one old man that blames the coal mines for his problems, but the thousands of them, in several areas, uniting with factory workers and seamstresses. We would like to think that people are generally reasonable; it is not a faith in the market, but in man; but it pains us to see that something has to give: the usefulness of the free market, or the rationality of man, lest we ignore history.

Well, I don’t think I suggested this at all. I merely wanted to point out that the existence of a law or governmental system does not in and of itself mean that a reasonable grievance was addressed by that system.

Suppose you have your free market. What happens to it? We need not mention that reasonable people can sometimes do unreasonable things, but it is a much longer step from there to political power. Many people must be unreasonable for some period of time. There must be something to gain. And suppose they are acting irrationally, even. Suppose it just happens that enough people can get together to threaten the sanctity of the market… isn’t it also the case that it could work another way? True, it isn’t rational to poison your neighbors with pollution, but if we allow for the possibility that people will just mistakenly blame the market for their failures, can we also not admit the possibility that others might “mistakenly” act against the market itself from within? Oligopoly, monopoly, collusion, activities and people which limit choice. Are these unreasonable people around, too? And when we pass laws to forbid tampering with the market, what do we do about this possibility?

Perhaps you think, but it cannot happen in a free market. Well I tell you, by the same token, that if the market satisfied people reasonably well, the political motivation to “tamper” with it could not come about. Some standstill. And yet…

I believe that for the most part people do behave reasonably. But, there are exceptions.

Exceptions rarely gain political power enough to cripple freedom. That is more insidious. But that is also my point. If people more or less behave reasonably, and the free market is the best we can do, then we might just suggest the free market could last. Now I would ask you to look to the past, now I would ask you, “What happened?” Is the regulation of economic behavior something we blame man for, or the system of organization? --If we grant that people won’t necessarily act rationally to the extent that they could screw up such a good thing as the free market, must we necessarily suggest that political power is the only thing that can mess up a free market?

[pervert]

@erislover

Enough people must want the change. Enough people must be unsatisfied for long enough. We must not concern ourselves with the exceptions, they are but noise in the signal. It is not the one old man that blames the coal mines for his problems, but the thousands of them, in several areas, uniting with factory workers and seamstresses.

Ok. But again, you seem to be saying that if more people believe in an idea that idea must have more basis in reality. I’m just not sure you can detemine such things this way. Just because a vast number of people believe in bearded men looking down on us lovingly from some cosmic vantage point, does not give the idea more of a rational basis.

I agree that there is something to be said for ideas being sane, normal, or acceptable enough that more people believe them than do not. But I’m just not convinced that you can point to the number of people who believe a thing and use that as evidence for the reality of the thing.

Exceptions rarely gain political power enough to cripple freedom.

Well, I would suggest that the history of the world disputes this claim.

If people more or less behave reasonably, and the free market is the best we can do, then we might just suggest the free market could last. Now I would ask you to look to the past, now I would ask you, “What happened?” Is the regulation of economic behavior something we blame man for, or the system of organization?

Well, again, I think we have to look at the specific regulation. I think a very good case can be made that pollution complaints against the free market have some rational basis. Monopoly regulations, IMHO, however, less so. I’m simply not convinced that the existence of either regulation* proves they were rationally based.

–If we grant that people won’t necessarily act rationally to the extent that they could screw up such a good thing as the free market, must we necessarily suggest that political power is the only thing that can mess up a free market?

I think partially this is axiomatic. The extent to which a market is regulated is the extent to which it is not free. I don’t think you have to worry about whether or not the regulations were rationally based or not.

Perhaps you think, but it cannot happen in a free market. Well I tell you, by the same token, that if the market satisfied people reasonably well, the political motivation to “tamper” with it could not come about.

This, again, is my original objection. It is entirely reasonable IMHO that a given incarnation of a free market could satisfy the “needs” of people quite well and that those people could still be disatisfied with their level of wealth AND they might not be irrational at all.

I’ve never seen a study about the market in general, but I have seen studies about health care which are similar to what I’m talking about. Here is one multinational study. (PDF)

The survey finds that, worldwide, people are generally optimistic about their own health and have a sense of some control over that aspect of their lives. Most respondents describe their personal state of health as being good. Out of 23 countries, Kazakhstan and Japan are the only ones in which fewer than a majority of respondents consider themselves to be in good or excellent health, and in no country do more than one in ten say they’re in poor health.

AND

Respondents’ optimism regarding their personal health status does not translate into confidence in their nation’s health care system. In 20 out of 23 countries, majorities - and in many cases large majorities - describe their nation’s health care system as being “in a state of crisis,” and in 17 out of 23 countries, majorities - again, often large majorities - disapprove of their government’s handling of health care.

AND Finally,

*Despite the level of concern about the state of the world’s health care systems - or perhaps because of it - the public may be ready to entertain some fundamental reforms. Although complaints about lack of funding for health care have been heard around the world for several years now, there is little or no positive correlation between approval of a government’s handling of health care and perceptions that problems in the health care system are the result of underfunding. This finding strongly suggests that people do not see more money as the remedy for failings in the system. Rather, people recognize, as do many experts in the field, that most problems in the system are likely due to structural and systemic issues that must be addressed by finding new ways to manage health care. *
So, we have,

1. People are generally satisifed with their personal health.
   2)People are generally disasitisfied with the health care system in their country.

I am proposing that this correlates pretty well with a system which meets needs but is still disparaged.

3)People are concerned enough to call for government action in order to correct these percieved problems.

Although the study did not go into detail I think we could agree that there are, in fact, some reasons to disparage a given health care system. That is, there is not too much evidence that the people questioned here were being irrational.

What this leaves me with (I think) is that peoples needs by and large are being met quite well and people are disatisfied with the system to an extent which could allow political action AND those same people are not being irrational.

Its simply not the case that people who enact government changes are either legitimately disatisfied or irrational. Large societal systems are too complex for such a generalization.

*I understand the that the existence of the regulation proves the fact that political capital had to be amassed to pass them thus demonstrating popular support.

[pervert]

You know what. After thinking about that last post of mine for a few minutes, I think I have a better way to say this.

The only thing needed to enact a freedom limiting market regulation is enough people to agree with it. Now, erislover has postulated that such people must either be irrational or actually agrieved by the market. I think what I am proposing is that they could simply be mistaken. I’m not sure that such a view necessitates the abandoment of the idea that most people behave rationally.

[blowero]

@John Mace

blowero: I think one of the problems here is that you keep using the phrase “substandard wagee” as if it has some kind of definition that everyone would agree to. What is your definition?

Let’s say that “substandard wage” means a wage that, if a person works 40 hours per week, would not allow that person to be above the threshold of poverty.

Personally, I don’t think the phrase makes any sense. What is the “standard” price of a car, or a house, or painting? How do you think prices are determined, excpet by what people are willing to sell something for and what someone else is willing to pay? There is no objectively defineable price for anything.

Prices aren’t immutable, if that’s what you mean, and neither is the minimum wage. But we can certainly define average prices, average salaries, poverty threshold, and the like. In fact we have a government agency which does exactly that:

http://www.bls.gov/cpi/

Not that you said this, but I don’t think we can say that poverty doesn’t exist just because there isn’t an exact, immutable line at which it starts.

[erislover]

@pervert

The only thing needed to enact a freedom limiting market regulation is enough people to agree with it. Now, erislover has postulated that such people must either be irrational or actually agrieved by the market. I think what I am proposing is that they could simply be mistaken.

Not BE irrational, they only have to act irrationally. But I also used the word “mistaken”. So I think you should reread my post.

But again, you seem to be saying that if more people believe in an idea that idea must have more basis in reality.

The basis we should concern ourselves with here is that it will affect the free market! I’m not looking to justify any activity which brings the market down.

But I’m just not convinced that you can point to the number of people who believe a thing and use that as evidence for the reality of the thing.

I’m not. Please reread my post. I’ll not respond to the rest of your post because you seemed to have misunderstood me.

[Shodan]

@blowero

Let’s say that “substandard wage” means a wage that, if a person works 40 hours per week, would not allow that person to be above the threshold of poverty…

I think one of the difficulties is that your definition of “substandard” seems to be a moral one.

The market, however, is an amoral phenomenon. Not immoral - amoral.

Prices and costs and so forth are neither good nor bad - they just are. It’s like the law of gravity. Is it a good thing that things fall? No, nor is it a bad thing. It is a function of the nature of the universe.

Prices are communication. They make it clear where the point stands where supply and demand meet. It makes no more sense to blame low wages on the market that to blame low temperatures on the thermometer. Prices, including prices for labor, communicate how much demand there is for a given product, or a given job. If an employer can fill all the available positions for ten cents an hour, then that communicates that labor is available (taking all costs into consideration, not just wages) at ten cents an hour.

Which is why minimum wage laws make no sense. They can either do nothing, if the prevailing wage is greater than the minimum wage, or they can shift the costs of employment and partially hide them.

If your labor, as measured in a free market, is worth $4 an hour, and minimum wage is $3.50, no problem, and MW laws have had essentially no effect. If mimimum wage is $4.50 an hour, then you tend to be out of a job.

Note therefore that the mimimum wage has not changed the cost of providing work. It has merely shifted off to other people and partially hid it. Unemployment is one of the “costs” of the MW.

It might help to think of it in terms of a total amount of unpleasantness involved in working for low wages. If there is a minimum wage law in effect, and therefore employment is reduced beyond what it would be if no MW existed, then the increased benefits of employment for higher wages is offset by the increased unpleasantness of unemployment for no wages among the unemployed. IOW, the minimum wage has simply shifted the cost and hid it, changing it from low wages to higher unemployment.

Fortunately or otherwise, mimimum wage laws have tended to have little effect in the US. Most jobs pay above $5.15 per hour. The last time I looked, less than 3% of all workers in the US earned minimum wage, and most of those were not supporting a household. So, despite the increase opportunity cost of hiring, the MW is low enough that most can overcome this artificial barrier.

The greatest affect of the MW seems mostly to be the shift from unskilled labor overseas, to countries where labor is willing to work for less than $5.15. per hour. Thus labor which is worth less than that tends to migrate to those countries. Again, notice that the minimum wage has not reduced the overall amount of unpleasantness, simply moved it around such that increased employment overseas among those who are willing to work for less is offset by decreased employment among the same class here in the US.

I read an article about the move to a 35 hour per work week in France, and how many politicians there have classed it as a failure and are working to remove it. It seems relevant, because it is based on the same economic notions as the MW. The idea in France was to increase employment. That was the intention. The effect seems merely to have been to increase the cost of hiring someone.

Again, for those whose labor is worth the actual increase in pricing involved in an enforced 35 hour week, no problem. For those on the margin, who may not be, it seems not to have worked out.

Because the notion of “let’s help people by making it more expensive to hire them” has some serious, inherent problems. The appeal being, of course, that it is a simple and straightforward answer to the problem of low wages.

Simple and straightforward is not always all that it is cracked up to be.

Regards,
Shodan