So does the board skew left?

[Mr.Svinlesha]

xtisme:

• If the labor costs for a certain good/service are X without any government intervention (decided by the dreaded market and mutually agreed upon by employeer and employee), but are set artificially at Y due to an attempt to regulate minimum labor costs by fiat (without reguard to the market value of that labor with reguard to the good or service being provided), and if setting said cost to Y costs consummers of that good or service extra…then doesn’t that mean you’ve ‘re-distributed’ money from those buying said service?*

I don’t think so. Basically I think that wealth must be distributed at least once before one can begin talking about “redistribution.” I mean, it’s not as if the recipients of minimum wage are paid first one wage at “market value,” whatever that might be, and then given a supplemental bonus, taken from the pockets of the owners. Minimum wage sets labor costs at the “point of origin,” in the first round of distribution.

If you’re arguing that minimum wage laws distort the market, I’d agree, although I find that to be a good thing.
Bricker:

• It belongs to the owners of the company. They have expenses that they must pay: electricity, supplies, taxes, leases, and salaries. But each of those are debts. The money received as income is not some sort of shared pool, owned equally by the workers and the owner.*

Yeah, true, at least for the time being. But things will of course change after the revolution when we finally establish a worker’s paradise.

The system works that way, but that’s just a value judgement. I know; I’m not making any sense. I’ll try again.

The idea that the money earned automatically belongs to the owners of the company is not a law of nature. It reflects a value judgement, one which forms the basis of a capitalistic society. One could just as easily claim, by default, that all the earnings belong to the workers, who then must pay for supplies, taxes, leases, etc. Such a view would reflect the basis of communist or socialist society.

So – prior to distribution, a decision has to be made about who’s money is being distributed. If your default view is “capitalistic,” then I suppose you can argue that, of course, since the money automatically belongs to the owners, then minimum wage laws are wealth redistribution schemes. But you win this argument by the manner in which you frame the terms of the debate.

On the other hand, from a Marxist perspective, the money earned by the company is precisely what you claim it is not; i.e., a “shared pool owned equally by the workers and the owner.” Or rather, to be more precise, a pool who’s ownership is contested between owners and workers. Workers press to gain more access to the pool, often via unions; owners struggle to keep the pool all to themselves.

Indeed, if the company loses money, are the workers out of luck? No - they must be paid their agreed-upon salary even if the company has a losing week.

You’ve never heard of lay-offs? Of Enron? Of bankruptcies?

It’s true that the labor market is less fluid, and “stickier,” so to speak, than, say, the commodities market. But workers most definitely share in the ups and downs of the company, albeit not in quite so immediate a manner as a stockholder.

• When the government forces an employer to pay more than he wishes, that’s the government taking money from the employer and giving it to the employee.*

Sure. If you frame the debate so that by definition, the money automatically belongs to the owner in the first place.
John Mace:

Come on. The money belongs to the owners of the company the instant it is paid to the company. The owners then pay the bills they owe, to suppliers, contractors and workers, etc. Are you seriously implying that the money is up for grabs until somebody happens to grab it?

Yup. Basically.

• What’s wrong with calling the MW wealth redistribution, btw? The government redistributes wealth all the time. If we said wealth redistribution = bad, then you’d have to argue to end wealfare, which I for one am not doing.*

Yeah, from my perspective it’s really a matter of semantics as well. It’s just that I’ve never heard of minimum wage laws being classified as wealth redistribution programs in my economics classes, or in the (relatively few) economics textbooks I’ve read. Find a couple of standard economics textbooks that do so – rather than citations from a well-known Libertarian think-tank – and I’ll gladly retract my objection.

[Liberal]

@Svenlisha

Find a couple of standard economics textbooks that do so – rather than citations from a well-known Libertarian think-tank – and I’ll gladly retract my objection.

Standard? Are you defining standard as Keynesian? […shrug…]

How about the Urban Institute, a leftist think tank created by Lyndon Johnson, that bills itself as “a nonpartisan economic and social policy research organization”? Gene Steuerle is a Senior Fellow there, and writes for PBS. He says:

“For the economy as a whole, any drop in employment involves a loss in total output. The minimum wage will also redistribute the remaining output differently among the remaining workers and owners of capital. You and I may earn slightly less so that surviving minimum wage workers can be paid slightly more. This remaining redistribution, however, is neither a net gain nor loss to the economy as a whole: it is the drop in employment that makes net output, after redistribution, decrease.”

http://www.taxanalysts.com/www/econpers.nsf/0/9e55590698f750cd852566db00613262?OpenDocument

The minimum wage is a form of taxation in which the government forces the redistribution of wealth without funneling the money through itself. A company has X dollars of its revenue to budget for payroll. Let’s call what it pays its least skilled workers M. Then what it has to pay the remaining workers is X - M. Let’s call that remainder R. Then, X - M = R. Obviously, as M increases, R decreases, and wealth is redistributed from R to M.

[Bricker]

@Mr. Svinlesha

The idea that the money earned automatically belongs to the owners of the company is not a law of nature. It reflects a value judgement, one which forms the basis of a capitalistic society. One could just as easily claim, by default, that all the earnings belong to the workers, who then must pay for supplies, taxes, leases, etc. Such a view would reflect the basis of communist or socialist society.

Except that from the standpoint of accountability, an individual worker may walk away from a losing company without being liable for any of its debts – and with his wages having been paid. Regardless of the success or failure of the company, his wages get paid. He cannot be held repsonsible for the company’s debts. Theo owner can, and is.

Now, perhaps in the future, after the revolution, some scheme will exist to create the responsibility that the workers must pay for the debts of the company – and, in fact, they would then be entitled to the defalut ownership of the company earnings. In fact, we have such a scheme today, in employee-owned companies.

You’ve never heard of lay-offs? Of Enron? Of bankruptcies?

Even with Enron, layoffs, and bankruptcies, workers got their wages. They lost their future employment, to be sure, but they were paid for the work that they did. In fact, they were in better positions than other creditors, who got little or nothing for their debts.

(With respect to Enron, workers who had invested their pension plans in Enron stock lost their investments, true, but that is not any different from workers investing their retirement savings in some unrelated financial vehicle that failed - it’s not a failure to pay wages.)

So – prior to distribution, a decision has to be made about who’s money is being distributed. If your default view is “capitalistic,” then I suppose you can argue that, of course, since the money automatically belongs to the owners, then minimum wage laws are wealth redistribution schemes. But you win this argument by the manner in which you frame the terms of the debate.

Except that we are talking about minimum wages in this particular system: the United States, TODAY. As you acknowledge above, that is how the system works now. It’s somewhat disingenuous for you to try to refute my definition by advancing a Marxist view of the system, when you acknowledge that system is not persently implemented.

I’ll short-circuit the discussion: I agree that under a Marxist system, a minimum wage is not “wealth redistribution.” But under the present legal and conceptual system here in the United States, it is. That’s not so much the “manner” in which I frame the debate – that’s the location and system about which the debate is being held.

[Stanislaus]

@Liberal

The minimum wage is a form of taxation in which the government forces the redistribution of wealth without funneling the money through itself. A company has X dollars of its revenue to budget for payroll. Let’s call what it pays its least skilled workers M. Then what it has to pay the remaining workers is X - M. Let’s call that remainder R. Then, X - M = R. Obviously, as M increases, R decreases, and wealth is redistributed from R to M.

But by that argument, any change in the payroll is a redistribution of wealth. If the company decides to increase wages for, say, it’s R&D division in order to attract a higher calibre of employee (or reward its existing ones), then X-R&D shrinks - but would you say wealth had been redistributed from Customer Service? It seems to me that they would continue to earn their contracted wage and that X would go up.

The UK instituted a minimum wage in 1998, which has been carefully scrutinised by a number of interested parties. If you scroll down to section 3.37 and 3.38 in this link, you can see the increase in wages in every wage percentile. There are big increases in the lower percentiles - but equally there are increases in every other percentile. Nobody earning more took a pay-cut to fund the minimum wage, in other words. In fact, wages still went up. Now, it’s possible that absent a minimum wage, these wage increases would have been still higher, but I don’t see that as wealth redistribution because I don’t believe that workers own next year’s payrise.

[FinnAgain]

Wow, um… Bricker said exactly what I wanted to.

And if any of you point that out in the future, I will deny it 'till I’m blue in the face.

[Liberal]

@amrussell

But by that argument, any change in the payroll is a redistribution of wealth.

That’s right, but the only ethical concern, libertarianly speaking, is whether the redistribution of wealth is a voluntary praxis of the property owner or is an involuntary mandate imposed by coercion.

[Shodan]

@I don't care about your cat

No, no - Shodan. My comment was directed at FinnAgain’s completely un-helpful snipe. I was still waiting for your response, which I was hoping would be geniune. I was hoping you’d respond in this thread, especially after your entreaty for me to address the issue, which I went to considerable effort to do. If you feel you must start a new thread, I hope that you will include an explanation of why MW is wealth redistribution as part of your initial post.

Well, if you’d rather here, that’s fine. If you were objecting to the snarkiness, that comes with being in the Pit, and will be less personal (if no less common) in GD.

Bricker, Liberal, and John Mace have given descriptions of why they believe MW is a wealth redistribution. Do those suffice?

I think you are assuming that nothing can be a wealth redistribution unless the government actually takes possession of the money and hands it out directly. I believe the conservatives and libertarians in this thread and elsewhere believe that having the government direct how someone may or may not spend their money also counts. If you are forced to pay someone more than they would accept as wages on the open market, this is a redirection of your wealth away from whatever you want to spend it on and into the pockets of someone else.

It’s not a direct tax, true enough, but it is a deprivation of choice on how to spend money, and done for the benefit of someone else. Thus a wealth redistribution. I own the profits of my company, but I am prevented from spending part of it on what I want (company infrastructure, marketing, housing for my family, bourbon and hookers for myself - whatever) and am instead compelled to give it to an employee. It is possible to argue that this is a good thing, but it remains a coerced redistribution of wealth nonetheless.

Of course, as Mr. Svinlesha points out, it depends on who you think owns the revenues of a given company - those who founded and manage the company, or those who are hired by the company. It seems to me and to most of mankind that if you create something, you own it by default, and the appropriation of it without your consent by anyone, even the vanguard of the proletariat, is a redistribution of wealth.

It is possible, and Marxists do, argue that the fruits of my labor belong to everyone, and must be managed by the state for the common good. The economic history of large-scale societies who attempt to implement such a scheme has not, by and large, borne out the lofty predictions of those who suggest it. This seems to be because [list=A][li]In a society larger than a certain size (roughly, the point at which most of the members are strangers to each other, especially if their cultures differ), the Marxist ideal loses the motivation of enlightened self-interest that free marketers and other econonic libertarians see as the linchpin of progress. Altruism on behalf of strangers does not seem to be strong enough to overcome the inherent inertia of much or most of the populace. []The bureacracy necessary to administer and even to micro-manage the economic activities of a whole society exposes the society as a whole to the temptations of autocracy and authoritarianism. If you can make people give you their money, it is a very short step to telling them what to do with the rest of their lives. This is especially true when you are trying to prevent people from interacting with each other using the free market model that seems to be the default mode of economic interaction among strangers. []The attempt to set wages and prices at the level where they “should” be, instead of where they naturally stabilize in an uncoerced free market, loses all the dynamic equilibrium created by the myriad interactions of supply and demand. The market is information. The price of something on the open market is the collective decision of everyone who desires that something, arrived at with great rapidity, and continuously self-correcting as the desires and resources of those competing for limited goods change.[/list][/li]Minimum wage laws are an example of an attempt to be smarter than the market. This is not impossible, but it is not common. And it is based on a set of concepts that do not fit well into economics.

Those concepts are morality. The free market is not good, nor is it bad. It is amoral. Notice that I said amoral, not immoral. It is not evil that a given good costs a given amount, taking into account all the competing demands. Neither is it good. It just is.

It’s like the law of gravity. Is it good or bad that that objects are attracted to a common center of mass? It might be good if this means that a hydroelectric dam works on the water flowing downhill nearby. It might be bad if I drop a rock on my toe. But gravity itself is neither good nor bad.

Is it good or bad that X costs a lot of money? It’s good if I want to sell it, but bad if I want to buy it. Does that mean the free market is good or bad? Well, neither, really, because we don’t know if X refers to penicillin or cocaine. But the price of X reflects the same reality. What it “should” cost doesn’t enter into it.

If you see what I mean.

Is this what you wanted for an overview?

Regards,
Shodan

[John_Mace]

@Bricker

I’ll short-circuit the discussion: I agree that under a Marxist system, a minimum wage is not “wealth redistribution.” But under the present legal and conceptual system here in the United States, it is. That’s not so much the “manner” in which I frame the debate – that’s the location and system about which the debate is being held.

Exactly. I didn’t realize that on this board one had to preface a statement about economics with “in a non-Marxist economy…”. For the record, I am always talking about a non-Marxist economy, unless I specify otherwise.

[John_Mace]

@amrussell

But by that argument, any change in the payroll is a redistribution of wealth. If the company decides to increase wages for, say, it’s R&D division in order to attract a higher calibre of employee (or reward its existing ones), then X-R&D shrinks - but would you say wealth had been redistributed from Customer Service? It seems to me that they would continue to earn their contracted wage and that X would go up.

You could, but since the change was not mandated by the government, it wouldn’t make much sense to do so.

The UK instituted a minimum wage in 1998,

There was no Min Wage in the UK prior to 1998???

which has been carefully scrutinised by a number of interested parties. If you scroll down to section 3.37 and 3.38 in this link, you can see the increase in wages in every wage percentile. There are big increases in the lower percentiles - but equally there are increases in every other percentile. Nobody earning more took a pay-cut to fund the minimum wage, in other words. In fact, wages still went up. Now, it’s possible that absent a minimum wage, these wage increases would have been still higher, but I don’t see that as wealth redistribution because I don’t believe that workers own next year’s payrise.

That’s not a Min Wage in the sense that most people use the term, if everyone had their wages upped by exactly the same amount. Still, someone paid for those extra wages somehow, either thru higher product costs or lower profits. I know it rains a lot in the UK, but unless it has started to rain money, you cannot just create extra wealth by legislation. And if everyone paid exactly the same amount toward the system to fund these increased wages, what is the point? No one actually ends up with more money. Something is inconsistent with your analysis.

[elucidator]

And that’s a very important point, John, in that it keeps you seperate from all the Marxists, so that the careless reader is not confused, does not lump you in with all those Marxists. Which teem and abound hereabouts, so many Marxists, so little time.

[John_Mace]

@elucidator

And that’s a very important point, John, in that it keeps you seperate from all the Marxists, so that the careless reader is not confused, does not lump you in with all those Marxists. Which teem and abound hereabouts, so many Marxists, so little time.

Apparently you didn’t read the post from Mr. Svin in which he argued that Min Wage laws should be considered redistributive because they would not be considered thus in a Marxist society. I agree, they wouldn’t. Hence my post (actually **Bricker **beat me to it.)

What exactly was your point???

[elucidator]

Simply to reassure you that none of us are likely to mistake you for a Marxist.

[John_Mace]

It’s reassuring to know that you’ve got my back. I think.

[elucidator]

And while I’m about it, what exactly is da deal with “redistributive”? It seems so many of our rightish leaning Dopers fling that word as though it possessed some power, that we would shrink away in horror and dismay. If my principles of economic justice demand that those who have more will have less, and those who have less will have enough, why should I care if a label such as that be applied? Of what consequence? Am I expected to be dismayed?

We need not redistribute, we don’t have to hold the rich by thier ankles and shake them until all the loose change in thier pockets scatters on the pavement to be snatched up by urchins and commissars. Our ends can be achieved more modestly, simply by ensuring that distribution be adjusted in the first place, so that no “redistribution” is needed.

If I can go to the poorest neighborhood in America, and spy a schoolgirl skipping on her way to school, and know that if she is sick, she will be cared for, that her school books are the equal of any in the nation, that her teachers are as well qualified and well paid as any in the nation, and that her prospects are as bright, or as dim, as any other child…I wlll rest content, Ms. Hilton and Mr. Trump can keep thier noisy, shiny crap without let or hindrance from yours more-or-less truly.

I don’t call that “redistribution”. I call it “common decency”.

[John_Mace]

You’ll have to ask some of those rightish posters, not me:

@JM

What’s wrong with calling the MW wealth redistribution, btw? The government redistributes wealth all the time. If we said wealth redistribution = bad, then you’d have to argue to end wealfare, which I for one am not doing. Farnkly, I think there are better ways to redistribute wealth than the Min Wage, but that’s another issue altogether.

Actually, it seems to be the leftish posters who are reading a negative slant into that phrase-- assuming that redistributive = bad. You’d almost think they were afraid of having people see the real nature of policy, wouldn’t you…?

[Bricker]

@elucidator

If I can go to the poorest neighborhood in America, and spy a schoolgirl skipping on her way to school, and know that if she is sick, she will be cared for, that her school books are the equal of any in the nation, that her teachers are as well qualified and well paid as any in the nation, and that her prospects are as bright, or as dim, as any other child…I wlll rest content, Ms. Hilton and Mr. Trump can keep thier noisy, shiny crap without let or hindrance from yours more-or-less truly.

That will never happen. The poor we will always have with us.

But you’ll get CLOSER to that goal by permitting the free market to work, enriching ALL to a decent standard of living, even while the most successful under that system are able to go even further.

[Excalibre]

@Bricker

That will never happen. The poor we will always have with us.

But you’ll get CLOSER to that goal by permitting the free market to work, enriching ALL to a decent standard of living, even while the most successful under that system are able to go even further.

How does the free market enrich all to a decent standard of living?

I don’t mean the slightest snark by that question - but it’s not obvious to me how it ensures everyone a decent standard of living.

[Liberal]

@elucidator

And while I’m about it, what exactly is da deal with “redistributive”? It seems so many of our rightish leaning Dopers fling that word as though it possessed some power, that we would shrink away in horror and dismay. If my principles of economic justice demand that those who have more will have less, and those who have less will have enough, why should I care if a label such as that be applied? Of what consequence? Am I expected to be dismayed?

We need not redistribute, we don’t have to hold the rich by thier ankles and shake them until all the loose change in thier pockets scatters on the pavement to be snatched up by urchins and commissars. Our ends can be achieved more modestly, simply by ensuring that distribution be adjusted in the first place, so that no “redistribution” is needed.

If I can go to the poorest neighborhood in America, and spy a schoolgirl skipping on her way to school, and know that if she is sick, she will be cared for, that her school books are the equal of any in the nation, that her teachers are as well qualified and well paid as any in the nation, and that her prospects are as bright, or as dim, as any other child…I wlll rest content, Ms. Hilton and Mr. Trump can keep thier noisy, shiny crap without let or hindrance from yours more-or-less truly.

I don’t call that “redistribution”. I call it “common decency”.

I call it “common fallacy”. It is not the case that two people (or schools, or communities, or teachers, or families) having equal amounts of dollars will result in equal outcome of investment. Nor is it the case that equal dollars ARE equal dollars, depending on where they’re spent — $10,000 in Tupelo buys a lot more than $10,000 in New York City. Nor is it the case that limiting the income of Ms. Hilton and Mr. Trump would benefit the little girls, since the noisy, shiny crap that they buy might be built and sold by her parents and kin. And that is setting aside that the HIltons and Trumps employ a shitload of people. It isn’t all (or even mostly) just spending money on trinkets (otherwise, they would be worth more than their companies).

In the meantime, there is nothing stopping you from marching into the poorest neighborhood you can find and handing a check to the poorest family there — seeing as how that would make you content and all.

[I_don_t_care_about_your_cat]

@Shodan

Bricker, Liberal, and John Mace have given descriptions of why they believe MW is a wealth redistribution. Do those suffice?

Not really. John’s reasoning was that the net effect is the equivalent of the process, to which I disagree. Liberal’s idea of discourse is to quote my entire post and write one sentence saying that it’s “bullshit”. Bricker said, “When the government forces an employer to pay more than he wishes, that’s the government taking money from the employer and giving it to the employee.” That’s not really an explanation of why it’s wealth redistribution; it’s merely a re-statement that it is. I’d still like to hear your explanation.

I think you are assuming that nothing can be a wealth redistribution unless the government actually takes possession of the money and hands it out directly.

I’m not assuming anything, I’m using the definitions of the words as I understand them. To my mind, “wealth redistribution” means the government taking money away from one person and giving it to another person. Perhaps we should start with what your definition of “wealth redistribution” is.

I believe the conservatives and libertarians in this thread and elsewhere believe that having the government direct how someone may or may not spend their money also counts.

So are you saying that any time the government affects how I can spend my money, it’s "wealth redistribution?

It’s not a direct tax, true enough, but it is a deprivation of choice on how to spend money

I’d agree with that. That’s a much better description than “wealth redistribution”. Government regulations affect how we can spend our money all the time; there’s nothing intrinsically wrong with that. I’m not allowed to purchase a nuclear bomb, and I’m rather glad that such a regulation exists.

and done for the benefit of someone else. Thus a wealth redistribution. I own the profits of my company, but I am prevented from spending part of it on what I want (company infrastructure, marketing, housing for my family, bourbon and hookers for myself - whatever) and am instead compelled to give it to an employee.

Not exactly. You certainly have the option of not hiring employees.

It is possible to argue that this is a good thing, but it remains a coerced redistribution of wealth nonetheless.

So again, do you contend that any time the government affects how you spend your money, it’s “wealth redistribution”?

Of course, as Mr. Svinlesha points out, it depends on who you think owns the revenues of a given company - those who founded and manage the company, or those who are hired by the company. It seems to me and to most of mankind that if you create something, you own it by default, and the appropriation of it without your consent by anyone, even the vanguard of the proletariat, is a redistribution of wealth.

Well Mr. S made a good point, but to be honest he lost me when he started talking about “the revolution”. Anyway, you own your company but you don’t own the workers. They are free human beings, and as such have a right to be treated with dignity.

It is possible, and Marxists do, argue that the fruits of my labor belong to everyone, and must be managed by the state for the common good. The economic history of large-scale societies who attempt to implement such a scheme has not, by and large, borne out the lofty predictions of those who suggest it.

Oh, I’m totally with you on that. But I think you’re going WAY overboard if you’re suggesting that a MW is anywhere close to the end of the spectrum where Marxism resides. (I don’t think that’s what you’re saying, is it?)

I’m gonna snip some of this because I’m certainly not going to take the pro-Marxist position. …

The attempt to set wages and prices at the level where they “should” be, instead of where they naturally stabilize in an uncoerced free market,

Gonna stop you right there, because I submit there is NO SUCH THING as an uncoerced free market, and as I said before, that is the failing of Libertarian theory. In the real world, we don’t have unlimited choices and opportunities, and the strong DO prey on the weak. As the man said, “If men were angels…”

Minimum wage laws are an example of an attempt to be smarter than the market. This is not impossible, but it is not common.

Do you have any evidence to back that up? When did the majority of appalling wage conditions for workers exist in the U.S.? Before or after MW laws were enacted?

And it is based on a set of concepts that do not fit well into economics.

Those concepts are morality. The free market is not good, nor is it bad. It is amoral. Notice that I said amoral, not immoral. It is not evil that a given good costs a given amount, taking into account all the competing demands. Neither is it good. It just is.

It’s like the law of gravity. Is it good or bad that that objects are attracted to a common center of mass? It might be good if this means that a hydroelectric dam works on the water flowing downhill nearby. It might be bad if I drop a rock on my toe. But gravity itself is neither good nor bad.

Is it good or bad that X costs a lot of money? It’s good if I want to sell it, but bad if I want to buy it. Does that mean the free market is good or bad? Well, neither, really, because we don’t know if X refers to penicillin or cocaine. But the price of X reflects the same reality. What it “should” cost doesn’t enter into it.

If it’s neither good nor bad, then why doggedly insist that we strive for it? You are suggesting that anything that hinders the “free market” is to be avoided. You seem to be making an assumption that the “free market” is intrinsically desirable, and that all regulations are intrinisally undesirable. But I don’t see any reasoning to suggest why this is the case. To my mind, there’s some circular reasoning going on here:

The free market is best.

Everything that is not the free market is inferior

Why is it inferior? Because it’s not the free market

Morality is not intrinsically bad.

Is this what you wanted for an overview?

Regards,
Shodan

Yes, great job.

[I_don_t_care_about_your_cat]

@John Mace

Actually, it seems to be the leftish posters who are reading a negative slant into that phrase-- assuming that redistributive = bad. You’d almost think they were afraid of having people see the real nature of policy, wouldn’t you…?

I think you’re being disingenous again. I still believe Libertarians have carefully chosen that wording to sound alarming and “Marxist”. The phrase “minimum wage” describes the policy perfectly and is in fact a more accurate description. There is no need to call it anything else. What is the purpose of giving it another name, if not to characterize it?