Ethiopia isn’t a “thriving, rich society”. Why would I pick that?
Anyway, I think it’s more a matter of mixing cause and effect. A MW doesn’t make a rich society. A rich society makes MW possible. Richer societies are able to deal with higher MWs because, well, they’re rich.
Yeah, in retrospect, my snarky response to “My policy positions lead to a flourishing, rich society” should have been, “It’s certainly worked wonders for Somalia, Ethiopia, and Tonga.”
I expect that when they become rich countries, like the US was in the 1930s, they will institute a MW as we did.
How is it that we became a rich country without one?
So, you mean no minimum wage at all? Well, if you want to define it that way then indeed the list is pretty short. But if we look at countries without universal minimum wage then there are several ‘flourishing, rich societies’ that don’t have universal minimum wage…similar to John’s Germany example. There are also a lot of examples of countries that DO have universal minimum wage that, well, aren’t exactly ‘flourishing, rich societies’…much of South America for example. And hot economic nations such as, oh, say Russia all have universal minimum wage. Several countries in northern Africa also have it.
Anyway, as to the OP:
[QUOTE=Anonymous User]
Should the minimum wage be lowered to $6 per hour?
[/QUOTE]
I doubt it would make much difference if you did. Not sure what problem you are trying to solve, but I doubt dropping the minimum wage would have much of an effect to be honest. Myself, I’d leave it be…it has a fairly minimal impact on the economy, and probably not a large impact on unemployment or the price of goods and services. If you were going to do anything I’d let the market set the price point for wages, instead of an equally arbitrary $6/hour (or any other equally arbitrary number), but my WAG is that wages would still mostly fall out in the same regions. Oh, I’m sure there would be some jobs that would drop wages even below the current minimum, but it’s going to be hard to attract workers for jobs that make a lot less than the current minimum in the US…IMHO anyway. And it wouldn’t substantially change the employment/unemployment equation or the current price points for goods and services…at least that’s my feeling.
I doubt it will have a very large change. Do you have any data (if it’s already been shown just give me a post number) to back this assertion up?
Certainly…and I’m sure it will have a non-zero negative impact. But it will probably not be a large one, and other things (such as the health care reforms) are going to have much larger impacts from what some small business owners I’m acquainted with are telling me.
Agreed, and few people attempt to live off of a single minimum wage job, though it does happen. But no…it’s not supposed to be a job that gives you a ‘living wage’, whatever that actually means…it’s a no skilled entry level position, which is why the majority of people who actually make minimum wage are kids just starting off or still in school.
[QUOTE=John Mace]
Anyway, I think it’s more a matter of mixing cause and effect. A MW doesn’t make a rich society. A rich society makes MW possible. Richer societies are able to deal with higher MWs because, well, they’re rich.
[/QUOTE]
Yes, exactly.
Or you could have gone with the workers paradise of North Korea (you’d have the irony factor since South Korea DOES have universal minimum wage). 
Well, except that they’re the exception. Most countries, even the very poor ones, have a minimum wage.
The only rich countries that don’t have a minimum wage are ones with very strong labor unions, where a minimum wage would be redundant. Germany is probably the only rich country where a significant portion of the work force isn’t covered, and they’re seeing problems from it. I guess maybe Singapore is the other example, but they’re a special case in many ways.
OK, now I’m totally ready the next time someone claims abolishing the minimum wage would lead to a prosperous society.
Knock off the personal digs. Stick to the discussion.
[ /Moderating ]
I guess we can’t judge them too harshly for mixing cause and effect, can we? Humans do that all the time.
But, seriously, did any of the 1st world, Western democracies pull themselves out of poverty by instituting a MW? I honestly don’t know, but if you know of one, I’d be interested in hearing about it.
Why are these workers allowing themselves to be exploited? If their labor is worth more than their current employer is paying, they should find another buyer.
One side doesn’t have all the money in a free market economy. There are several firms bidding for the labor of individuals. One side has all of the money only when the employers have formed a cartel. This only happens with the aid of government.
When you mention that one side has all the influence are you talking about political influence? If so I would agree that this is a problem. This is why an economy free from government intervention is best for the individual.
Not sure what you mean by “all around control”.
When you say resources I’m going to assume you mean capital goods such as machinery, tools, buildings etc. The fact that the employer has acquired these goods is good for the employee. They increase the productivity of the individual’s labor and make it possible for him to earn a higher wage.
In a free market economy that individual has several choices:
A) seek employment elsewhere
B) raise the value of his labor through training,
C) advocate policies that encourage investment in capital goods
D) form a labor cartel aka union
The above options a), b), and c) are hampered by government intervention into the economy. A) might not be an option if the individual works in a field in which government has encouraged cartelization. In all other fields there wi be several firms bidding for the labor of this individual. B) sometimes isn’t an option if firms would like to bring in trainees for a discounted wage but there is a minimum wage in effect. In regards to C), capital investment is crippled by taxation.
Ok let’s look at the choices faced by an employer. He owns a lemonade stand. He figures that someone running the stand will bring in 8 dollars per hour after all costs besides labor are factored in. Minimum wage is 9 dollars per hour. If he hires someone at this wage he will lose money. It’s a pretty easy choice.
I’m unsure how this would work; could you give me an example of a modern economy free from government intervention? If not, why do you suppose that is?
EE, John Mace is dealing handily with your ass, so I feel no need to respond. Also " . . . Somalia!" is really old schtick, pal. A libertarian worldview is just about the polar opposite of Somalia.
He does not present his opinion as if it were self-evident truth. This is Great Debates, not In My Humble Opinion.
20 seconds with Google reveals that in fact there is a statutory minimum wage for construction workers, electrical workers, janitors, roofers, painters, and letter carriers in that country. Also, minimums negotiated by collective bargaining are enforced by the government. So, apparently, Germany does have a minimum wage, at least for a portion of the work force.
Throughout much of US history there was a shortage of labor, driving the price of it upwards. That was one reason the US innovated a lot of labor-saving devices and practices. When the population rose, however, and there started to be labor surpluses the situation changed, hence we started to see minimum wages laws for some workers in the early 1910’s with the first Federal level laws in the 1930’s – you know, during the Great Depression when there was a huge labor surplus and people in real danger of starving. This was interrupted in WWII when, due to so many men going off to war, there was such a labor shortage women were encouraged to replace them in industry. After WWII there have been periods when labor surplus was an issue, such as right now.
You see, the difference between widgets and people is that you can store widgets in a warehouse until you need them again. People, on the other hand, need to eat and have shelter and so forth whether they’re employed or not. They won’t simply go off and meekly starve to death when there are inconveniently large numbers of them. You can’t provide food, clothing, and shelter to yourself on a dollar an hour in the US so… what would driving the lowest wage lower do? It would result in employed people who have no place to live, who can’t purchase decent clothes, who can’t buy the education and training needed to raise themselves up in the world. In other words, it creates a permanent and highly exploitable underclass.
I keep seeing this asserted, does anyone have actual data on the current situation during the high unemployment/recession period? Because right now there is a labor surplus in many areas and I’m wondering how many experienced workers desperate for a job might be taking them just to have some money coming into the household, thereby displacing the “no skill entry level kids” (their unemployment levels are up, too).
It’s like the assertion I hear that American citizens won’t take, say, lawn mowing/landscaping jobs. Funny, I see a lot of white and black faces doing that work around here, it’s not all Mexicans. That, and based on my own recent experience with unemployment and job-seeking, a number of people employing such labor want to pay wages considerably under the minimum and utilize illegal workers because it makes it easier to break the wage law.
Again, unlike widgets, people require constant maintenance. They’re desperate, so in order to avoid complete destitution they take what they can get.
The problem is when there is such a labor surplus that the supply drives wages down below survival level.
With material objects when there are far too many of them we can just bury the excess at the local landfill. We find it objectionable to bury people in that manner, which leaves the problem of what to do about them.
Really? Local business leaders can’t collude among themselves? They need the government to hold their hands and show them how to do this? Please, that is ridiculous.
Best for the individual on top, yes – didn’t work so well for the individual at the bottom. Where do you think the support for communism came from? Happy contented rich kids? Why do you think there was a labor movement in the late 19th/early 20th Centuries? There was a LOT less government interference back then, if it was such a paradise why did so many oppose it so violently?
Possible, not inevitable. There is NOTHING that forces the owner to raise wages as productivity rises. In fact, the owner has an incentive not to raise wages because not doing so increases his profits.
A bit of a problem when, like now, there are multiple work-seekers for every job opening in most areas.
Education costs money, which the long-term unemployed usually do not have. Have you looked at the cost of college tuition these days?
How does this benefit the person who has no money to invest in capital goods? Why shouldn’t that person, hypothetically facing homelessness and destitution, advocate policies that benefit him directly, such as, say, social safety net/welfare/food stamps/housing subsidies/heath care/education subsidies? The well off and powerful know what benefits them, but they seem clueless that what is good for them is not necessarily good for other people. Why are they so surprised when the poor advocate what helps the poor rather than what helps the rich?
Right… because back in the Gilded Age so much freer from government interference when labor did that the top echelons of society hired people to kill them when they tried to do that. Anyone who has actually studied the history of labor and unions has to laugh when someone proposes that workers are so “free” to form unions. Why do you think laws were passed to protect workers who attempt to organize? Congress was bored that day?
Oh, boo-hoo – the US has had much higher taxes in the past without “crippling” industry. Other nations currently have taxes higher than the US, including oh-so-prosperous Germany, without coming to a screeching halt.
Yes, either he needs to get himself a new job doing something he can actually profit from, or find a more efficient way to run his business. Maybe he can only staff the stand with himself. Or, like I said, get a job where he’s actually able to turn a profit. The “answer” is not to employ people at either illegally low wages or, in the absence of minimum wage, at a wage so low that no one wants to do the job. Or else you get workers that are truly only worth that abysmally low wage and you’ll be wondering why the hell you can’t get someone who will show up on time or is able to stay sober on duty or won’t piss in the lemonade pitcher instead of the toilet.
See, that’s the real reason some jobs go unfilled – the bosses say “no one wants these jobs!”. No, no one wants those jobs at that wage. Workers are supposed to yield due to market forces but heaven forbid the employers do so.
Yeah, it’s an oldie but a goodie.
Somalia is a basket case now, but as one of the few countries in the world without a minimum wage, it’s on the path to prosperity, no doubt, and those libertarians will delight to rub it in our faces, I’m sure. I’ll just hold my breath.
Yeah, because we all know that the only reason Somalia is a basket case is because they don’t have minimum wage laws.
Damn, I love commas, too much.
This is an important point, well-stated. It should be read aloud formally at the beginning of every debate about job creation, like a religious invocation.
Well, they don’t have an effective, functioning government. Which is much like they system libertarians would like.
Oh wait. We’ve been told that Somalia is the “polar opposite” to libertarianism. Because. Someone read it in a book of fiction by a crackpot author.