You are mixing strawmen here, at least by using my quote to segue off about (presumably) Ayn Rand…or something. Pointing to Somalia and saying (in essence) that they suck and then underscoring the fact they don’t have a minimum wage is silly…Somalia sucks for a number of reasons, but not having a minimum wage is more a symptom of the general fuckupatude, not the (or even a) root cause. Attempting to say that Somalia would be/is a Libertarian ideal is equally silly, but is a totally separate point…Somalia IS the ‘polar opposite’ to both libertarians/Libertarians AND to Ayn Rand fans, who aren’t necessarily the same subset of people.
From your lips to god’s ears.
I agree, Somalia *is *the polar opposite of libertarianism. In Somalia the power vaccum left by a collapsing central goverment was filled by murderous warlords. In a true libertarian country the power vaccum left by a collapsing central government would be filled only by the peaceful sound of songbirds. Chirp!
Libertarians proposes some government (national defense at least) and the rule of law to enforce contracts so I have to agree with him. And now I feel dirty, thanks.
The anarchists are looking at Somalia as paradise not the Libertarians.
So we both agree too high of a minimum wage is bad.
At what level, in your opinion, is a minimum wage excessive? And why?
Well, historically the minimum wage in the US has been as high as $10.60 an hour, without any noticable impact on the economy. It’s currently close to $9.00/hr in a couple of states, and over that in some areas. Based on that I would say the minimum wage could be set to $9.00 an hour with minimal economic impact (this could also provide environmental benefit, as the loud whining from the right could be used to power wind generators).
As to what’s excessive–well, I don’t know if we’ve ever historically tested a high end. My gut tells me that around $15/hr you would start to see an impact on emplyoment numbers, but that’s just a WAG with nothing to support it.
By stumbling on one of the largest undeveloped mineral rich pieces of land on earth, which has two massive natural defense structures called the “Atlantic and Pacific” maybe? Certainly not because of libertarian principles.
[QUOTE=Evil Economist]
As to what’s excessive–well, I don’t know if we’ve ever historically tested a high end. My gut tells me that around $15/hr you would start to see an impact on emplyoment numbers, but that’s just a WAG with nothing to support it.
[/QUOTE]
That seems like a pretty fair WAG to me as well, and around what I was thinking too. I think at that price point (maybe even a touch higher) you are going to start to see a noticeable impact not only on employment but on the costs of goods and services. This isn’t to say we won’t see any negative change before that, but that it won’t be anything that’s really causing issues…that’s my own WAG anyway, FWIW.
That’s the right question. Just like it’s ridiculous to just be for “tax cuts”, because cutting taxes forever means no government at all, no military, no law enforcement, etc- it would be ridiculous to be just for “raising the minimum wage” all the time. The argument should be, IMO, what the most efficient number would be for taxes and for the minimum wage. For the minimum wage, my guess would be an incremental raise to something around $12, then it changes by small amounts each year per inflation. I’m sure I could be off by a few bucks.
I missed the guest’s name (I have been sick, so was drowsy from meds) but Bill Moyers was interviewing a fellow the other night (maybe last night?) who claimed that the buying power of the minimum wage peaked in 1968 and has been on a general decline (with a few minor bumps here and there) ever since. He claimed that the 1968 minimum wage would be worth about $10.50/hr. adjusted for today’s prices.
The guest was most interesting…if anyone knows who it was, please post the name so I can google.
I don’t know who the guest was, but the general facts are right; for example, see the first chart.
That wasn’t my point. The point was that we were discussing it in terms of effects on the economy, and whether those are good or bad, and the concept of a living wage is kind of out of scope in those kinds of discussions.
It’s kind of like having a hypothetical discussion about the nutritional completeness of low cost institutional diets, and then having someone chime in and say “It doesn’t taste good!”. Probably important, but ultimately not necessarily pertinent to the discussion at hand.
Because they’re desperate for income so they can pay rent and eat? Again, basically what you’re saying is “If they don’t like it, they can live on the street”. That’s what it amounts to. I realize people who elevate the free market over all other concerns have a hard time reconciling theory and praxis, but in the real world issues are never so simplistic. It’s akin to asking why women stay in abusive relationships when they could just leave. It comes off sounding very “Let them eat cake!”
So are you implying that to have a job that doesn’t pay a living wage practically just as bad as not having a job?
I think it’s better to have a job because while you do qualify for food stamps and other kinds of assistance, it’s not like you’re earning no money. You are at least trying to earn money and you don’t nearly need as much assistance when you do have a job (at a non-living wage) than if you don’t. The other main reason why having some kind of job, no matter how poor the wage, is that eventually you may get a raise. For example, you may start out at $7 an hour and require assistance (we’re talking about worst case scenario where that is their only income) such as food stamps, etc. and then once you get some experience, you can get a raise to $8 or 9 per hour. After some more time, you can start earning even more than that. So essentially, even if you do have a poor minimum wage job, not only will you require much less assistance than if you were unemployed, but you also have potential to get a raise which may be enough to live off of…eventually.
Actually, I agree with this. You do need some kind of arbitrary minimum wage. Not having a minimum wage could lead to excessively low incomes. Employers could literally pay their employees $0.01 an hour and have that be legalized if there was no minimum wage law. This is just asking for trouble.
I actually had the wrong idea before. Before I thought that since raising the minimum wage from $7 to $9 an hour is a 28% increase, so you would basically have a spectrum.
No Price Inflation and Lots of Unemployment<------------------------------------------------------------------------------------------------------>28% Price Inflation and No Unemployment
But I was wrong; if wages increase by 28%, that doesn’t mean that the whole price has to be multiplied by 128%. For example, if a burger costs $5.00 and $1.00 of that is being used to pay employees, you only multiply that $1.00 by 128%. So in that case the burger would only cost $5.28, and this is if you strictly rely on inflated prices in order to compensate for the raised wages. You could also use the aid of unemployment and then the price inflation would be even littler.
So I suppose that it isn’t as bad as I made it out to be before in the other thread and in my OP for this one - at least not for price inflation.
What is happening here is that all the people are subsidizing low wage employers by making it easier for them to pay non-living wages. It would seem a lot more reasonable to have the “job” of unemployment compete with low wage jobs. If there were no additional benefits, the employer would lose out to unemployment, and would have to raise wages or lose business due to lack of staffing.
In the burger case we are seeing a voluntary transfer of money from the relatively well to do to minimum wage workers. No one is forced to buy a burger. This seems fairer to me than a mandatory transfer through food stamps for low wage workers. And I definitely agree with those who say that, since this is a level playing field, the market will decide which businesses are efficient enough to profit from a higher MW and which are not. Driving wasteful businesses from the marketplace might be painful, but it is good for the economy.
You also have to take into account the percentage of minimum wage employees as a share of total employees and the share of spending on burgers as a percentage of average income, so the calculation might look like this:
Inflation = 28% * 20% * 5% * 1%
Which is: wage increase multipled by wage contribution to cost multiplied by share of employees earning minimum wage multiplied by average spending on products produced by minimum wage workers as share of income. And that would be at the high end.
We might see offsets, such as: higher productivitity now that workers are paid more, reduction of overall costs of employees due to reduced turnover, decreases in profits rather than increases in prices, additional demand for burgers allowing profits to remain constant without increasing prices (those higher-paid workers might spend a piece of their additional income at the burger place).
In general, I would think that the price increase from changing the minimum wage to $9 would be so small that you couldn’t measure it, if it happened at all.
No, what I’m saying is that creating a bunch of crappy jobs that pay shit wages isn’t a solution to the unemployment problem. You have to create good jobs that pay living wages, so that the people in those jobs contribute positively to the economy.
I agree with you that MinWage jobs aren’t Living Wage jobs, which means the solution to the unemployment problem is NOT creating more MinWage jobs.
I’d also point out that lowering the MinWage will likely also draw down wages of huge numbers of people who make near the MinWage, and drive more gov’t assistance to them.
A job created as a result of lowering the MinWage to $6 is not a career.
Ultimately, I think the MinWage is a tempest in a teapot. Modest increases to it don’t save MinWage workers, it doesn’t ruin businesses or drive us to unemployment hell. It just keeps the MinWage at a roughly consistent buying power over time, and not much else.
Or they can just go out of business.
I don’t know why you people don’t get the concept that you can’t force businesses to stay in business. As well meaning as it is, driving up employment costs for businesses doesn’t help the economy.
It’s not the government’s job to make sure you can earn a living wage. People who don’t like their compensation have the option of learning to be a teacher or nurse or heating and refrigeration repair and make significantly more money.
Markets are not fixed. How much the market will absorb the excess demand and labor of a failed firm depends on the cross elasticity of demand between firms in that market. IOW, 3 supermarkets at higher prices won’t necessarily support as large a market as 4 supermarkets at lower prices.
Of course not. All those goods and services were already just sitting there being ignored by the Indians.
If I interpret your sarcasm correctly, what percentage of America’s wealth do you attribute to libertarian values vs. what percentage do you equate to the fact that we didn’t have infrastructure built before the steam engine, the overcrowding of Europe+the deforestation, and no borders with enemies and the protection of the Pacific and Atlantic+nearly unlimited natural resources by the standards of the time?
In other worse, it’d be almost impossible NOT to become wealthy if you gave (nearly) ANY ideology virginal America that the natives kept in a nearly pristine, natural state that you were willing to slaughter them for. The fact that there weren’t labor laws and a minimum wage at first was utterly irrelevent to America becoming a super power.
I’d consider that a pretty fundamental job of the government.
No, they can’t. If you can’t afford to keep a roof over your head you can’t afford the tuition for learning more profitable skills. Seriously, what do you expect the very poor to do, simply not eat for a semester and sleep in the school hallway?
I’m earning *above *minimum wage and I still can’t afford to go back to school to learn new skills. The money is not there. Even with growing most of my vegetables, eating meat only 2-3 times per week, and having a rent that’s only 50% of the usual market value for this area I have no money at the end of the month. NONE. I spend it all paying for room and board and gas in the car to go to work and other essential bills. The internet being the only “luxury”, and even that not much as it also has a utility for finding work and earning money. I’m making more than minimum wage and can not go back and learn a new skill because I don’t have the money to pay for it. Nor is there as much financial aid as people think there is, that’s all been cut over the years, or directed at kids coming out of high school.
Here’s the bitter truth - other than food stamps there is no government assistance guaranteed. I spent years researching this while looking for permanent work. There is no housing subsidy for me, not anywhere. If I can’t come up with rent money I am out on the street, period. There is no assistance in retraining to new skills. How nice, I won’t actually starve but other than that I have to come up with money for everything else and if I can’t I really will lose everything - everything I’ve ever owned, every material tool which I could use to earn a living, clothing, everything. And a minimum wage job is NOT enough to keep my head above water and roof over my head.
Gee, maybe that’s why 3 out 5 of the people working minimum wage at my place of employment the last year and a half were living in homeless shelters!