See post #53.
Really? Your post is your cite?
Because the vast majority of people here will not work for those wages. Remember, in your little going down the drain scenario, the first company C to come along and offer 5 cents more an hour will have his pick of the best workers.
But it is sufficient proof that your theory that without them corporations would cut pay rates to ridiculously low leves is silly.
Dude. What do you think a business is? Some sort of alien mind control conspiracy? Businesses are simply people joining together to pool their money, talent, and efforts to promote their own individual welfare. Promoting the general welfare is all about providing a safe environment for people to do just this.
Well, Renob posted some information in #16 and a link in #21. DMC criticized it in #26. The link is to a conservative leaning site. The information is based, I think, on bureau of labor statistics. Although they do not link there directly.
No.
It was shrieking idiocy and a sitting duck. And an ugly mixing of metaphors right there too. 
I should have said laissez-faire economics urges as much cost cutting as possible without hurting profits beyond the value of the cost savings. Problem is the markets don’t have the perspective of the workers or on site engineers who can envisage the effects of the most severe cuts. Everybody below upper management can see what will happen to production but upper management have the most to gain from impressing the market. Now before you give me a cynical rolleyes, bear in mind we don’t have at will employment. Layoffs can be an absolute Godsend for many people and it’s often the case where there aren’t enough redundancy packages for all the people who’d like to take them and run. Much of the lower echelon opposition stems from the fact that this is a bad business decision and it’s going to hurt our company and lower morale (which also hurts the company). Ill-conceived automation projects, merging and reduction of departments and casualisation of the workforce can do wonders for costs but I’ve seen it do long term harm to previously healthy organisations. This is what I rashly called ‘beyond the bone’. No economic ideology would call for it except in the case of capitalism today when it fails to live up to its tenets.
No it’s not a strawman. Kluge’s argument goes that a higher minimum wage means less are employed and vice versa. That is why the ignorant workers are cutting their own throats by demanding it. Now you mightn’t make that argument but then I wouldn’t have posed the question to you.
I think.
Let’s suppose workers were employed at $0.00 per hour for personal fulfillment and dignity or whatever. It’s not that bizarre since it does happen but even if it happened in the for-profit corporate world, companies would still only have as many employees as they need because wages are only a small majority of the cost of employing somebody. It’s one of the main attractions of casualisation but even casuals have non-wage, labour derived costs associated with them.
Well, some of it was shrieking lefty nonsense. Least I’m not shrieking now.
But this is still inacurate. Free markets urge maximization of profits. Your formula works this way, but it only considers cost cutting. It is just as possible that spending more money will increase profits in which case laissez-faire economics encourages that.
Some times yes. I’ve experienced this. It is quite common for everyone who’s money is not on the line to “know” that he would make a better decision. Sometimes they are even right. I’m not entirely sure what this has to do with minimum wages though. Perhaps I’ve become confused.
I’m not sure I understand this at all. Which tenet of capitalism is being ignored or ill served when bad decisions are made at companies.
Yes, but certainly some other enterprising person would come up with a way to employ those people. Do you really think that a pool of workers willing to work for free would be unemployed long? Unemployed at a particular company, perhaps. Unemployed in some number due to changing jobs almost certainly. But unemployed in the sense that they could not find jobs? Really?
JM replied to me: “I think that there ought to be some kind of wage floor for all workers…” Why?
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To prevent exceptions from falling too far through the cracks. It may not matter that much to rich highschoolers Biff and Tiffany whether they get $4.25 or $2.50 an hour from their summer job at the Oyster Shack, but it matters a lot to 17-year-old high school graduate Darryl which salary he’s earning during his first three months of making a living.
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There may also be an argument on the grounds of keeping MW workers competitive as compared to the under-20 subminimum-wage workers. I’m not sure that this counts for much because I don’t know how feasible it would really be for employers to slant their hiring significantly towards under-20 3-month temps just because they were allowed to pay them much less than minimum wage.
I agree with you that it’s not very efficient to put a wage floor under the earnings of people who don’t really need the money anyway. However, I’m wary of complicating the system too much with additional types of federally mandated age qualifications or means testing and so forth. I think the exceptions we’ve already got for the under-20’s, agricultural workers, and hospitality workers (is that the word? I mean waitresses and other people who traditionally get tips as well as wages) are quite complicated enough. The extra resources that would be required to determine that everybody entitled to the minimum wage really needs the money would probably far outweigh what those “government-supported rich kids” are costing us now.
(By the way, for those asking for a cite on the minimum wage boosting low-income workers’ wages in general, here is one.)
It’s all THE MAN trying to keep me down… J/k
Lets face it…Wages go up, the cost of living goes up…profits go up, the cost to doing business goes up. The only thing that’s not necessarily rising is the standard of living. And who’s fault is that? OURS. Look at the American peoples lifestyle changes over the past 50-100 years. We have gone from producers to consumers. At one point in time most of the goods and services that we are paying for we would have just made or done ourselves. Did your grandparents hire a lawn-service or have someone else paint thier house? Mine didn’t. Now these are things that we “can’t live without”. People are afraid of breaking a sweat. I mean, why should someone waste time cooking a meal when there are restaurants on every corner? And lets face it, if the neighbor has it, shouldn’t I?
DWT: And who’s fault is that? OURS. Look at the American peoples lifestyle changes over the past 50-100 years. We have gone from producers to consumers. At one point in time most of the goods and services that we are paying for we would have just made or done ourselves. Did your grandparents hire a lawn-service or have someone else paint thier house? Mine didn’t. Now these are things that we “can’t live without”.
Isn’t that what the post-WWII economy has been all about, though—encouraging ever more consumption? I thought the story was that after the war, industry did all it could to stimulate consumer markets to absorb its excess output, and US economic growth has been based on growing individual consumption ever since.
I agree with you that there are some downsides to switching from lifestyles based on thrift and self-sufficiency to ones based on commercial consumption. I just don’t think it’s quite fair to speak of the switch as though it were some kind of spontaneous epidemic of greed and/or laziness on the part of individual consumers. We’ve been ardently and expensively encouraged to make these “lifestyle changes”.
Wait a sec. What does this have to do with minimum wage, again?
I still don’t understand the need for BOTH the minimum wage and for welfare (ie, any type of social safety net deemed necessary). Is the MW considered a better delivery method for aid to the poor? As I said, there is absolutely no means testing, so I don’t see how it could be. You might argue that our current welfare system is not broad or deep enough to deal with the issues of poverty, but that only argues for making the system broader and/or deeper, not for mandating a minumum wage.
Aside from the fact that “business” is made up of people, any of our resident lawyers here will tell you that the preamble to the Constituation is not used as the basis for lawmaking or for determining the constitutionality of a given law.
JM: I still don’t understand the need for BOTH the minimum wage and for welfare (ie, any type of social safety net deemed necessary). Is the MW considered a better delivery method for aid to the poor? As I said, there is absolutely no means testing, so I don’t see how it could be. You might argue that our current welfare system is not broad or deep enough to deal with the issues of poverty, but that only argues for making the system broader and/or deeper, not for mandating a minumum wage.
Well, I think the rationale is that means-tested social benefits (“welfare”) will always be necessary to some extent to assist the disabled, unsupported children, and others who can’t support themselves by working. You are right that if such benefits were sufficiently substantial and wide-ranging, it could keep everybody out of poverty no matter how much or how little income they get from wages, so we wouldn’t need to set a wage floor.
I think that the minimum wage (and other incentives for earned income, like the EITC) are rooted in a psychological preference for having as many people as possible get their livelihoods from working rather than from taxpayer-funded benefits. If welfare is high and wages are low, the pecuniary advantages to working low-income jobs are small, so most poor people would probably opt not to work.
The idea seems to be that we want the wage floor to be high enough to make working for pay economically attractive, but not so high that it distorts the labor market more than absoutely necessary.
Yes, pervert, I cited myself. A cite is commonly asked for when someone gives a particular statistic which is in dispute. If I had said that 88% of the people collected minimum wage are their family’s sole income provider, you’d be perfectly valid in asking for a cite for that figure (especially as I just made that number up). But when somebody writes general text a cite is meaningless at best and vaguely insulting at worst. It’s the equivalent of saying, “I just read what you said but I want to see someone else say it because why should I listen to you?”
As for the fact that businesses are made up of people; I knew this (although a lot of supposedly pro-business people seem to forget it). But that’s the kind of statement that sounds like it’s saying something but really means nothing. Let me repeat what I’ve said: the government’s purpose is to serve the people not businesses.
As for the idea that it’s okay for Company A and B to both lower wages because Company C might be raising theirs; I was using a metaphor. Obviously, when I said A and B, I meant all the companies in a field. Can you offer a realistic explanation of why one company would decide to raise their expenses when everyone else was lowering theirs? I offered real world examples of places where worker wages are measured in pennies to back up my posts.
- Wages become so low that nobody (worth hiring) is willing to work for them.
- One of the companies realizes it can gain a significant competitive productivity advantage over the other companies by selecting to hire the most skilled and productive workers. In order to hire those workers away from Company A, they must offer a more attractive employment arrangement in comparison. Higher wages.
- Company X is located in Location Y. Nobody there is willing to work for less than $7.50 an hour, so guess what company X has to pay for labor?
- Any real world company who spends on R&D is “raising their expenses”. Any real world company that pays more than minimum wage is “raising their expenses”. In your example, any company that could get away with it would lower their wages to minimum.
Clearly anyone who pays anything other than minimum feels that they benefit more by paying their employees more than minimum. If minimum wage were repealed today, would all wages immediately fall? Doubtful. People don’t earn better than 5.15/hr BECAUSE of the minimum wage, they make more IN SPITE of the minimum wage
Market competition works both ways. Employees compete for good jobs. Companies compete for the best workers. To remain competitive, companies indeed try to cut costs, but they also compete to improve productivity. If a worker increases your competitive advantage in productivity, it makes sense to pay them more as the company will come out ahead in spite of “raising their expenses”. There’s no way companies could band together, agree to artificially surprises wages and get away with it. Attempts to collude with your competitors is called “anticompetitive” for a reason. It’s also illegal.
On this, we are in complete agreement.
But how is a minimum wage NOT a taxpayer-funded benefit? It’s just hidden in the increased labor cost of all goods and services. As it is, we have no real way of measuring, much less knowing, the cost of the minimum wage in as much as it is a “welfare benefit”.
I suspect that if there were no minimum wage, the unemployment rate would go to zero (or as close to zero as we could measure). One might require that any welfare payments be contingent on the recipient actually being in the workforce (with the exception of people who are disabled and incapable of doing any work). That would address your issue of prefering people to be in the workforce, and yet giving them some assistance, if necessary.
This arguement is non-sense. Companies ‘collude’ on an ‘agreed low wage’? Why would they do that when they are competing with each other? Workers have no say in this…are they slaves? Its amazing to me all the misconceptions people have towards business. Why ‘management wages would naturally be exempt’ for instance?? Why would companies lower wages across the board (except management of course :dubious: ) simply because the minimum wage was dropped? And if they did, how would they compete with other companies for labor? Companies are in the business of making money…pure and simple. If they alienate their labor, its going to be kind of hard for them to make money, no?
Since you are using free form arguements, let me try one. Say we remove the minimum wage. What happenes? Realistically companies who have labor categories at the bottom end of the scale would lower their wages to a level where they could still attract workers to fill the positions desired. They wouldn’t ‘collude’ with each other to set some ‘agreed low wage’…thats assinine, as well as being counter productive. They would lower it to the minimum they would need to pay a starting worker at an entry level position…and still be able to fill the position, and still be either competetive or have an advantage over their competition.
This would increase profits to the company…AND give companies the ability to expand by hiring more people. It would also lower the price of goods and services. Because the companies, out of the goodness of their hearts would want to pass the savings along to the customers? :dubious: Hell no. Because companies would want to increase their market share, and to do that they would lower the prices on goods and services because now they COULD lower the prices and still keep their profit margins intact. They would hire more workers…not because its morally or socially the right thing to do, but because the lower wages would allow them to expand their operations while still maintaining their profit margins.
Companies who didn’t do this, who lowered their labor costs to the bare bones and who kept their prices high, and who didn’t expand by hiring more workers, would lose market share and eventually be force to either change or die. Companies who attempted to lower their labor costs too much would find that either the quality or quantity of the workers would decrease…or more likely both. In other words, people would go find work elsewhere.
With more people working and prices on goods and services dropping, there would be MORE real buying power available to the lower classes…the very people who need it most. There would be more money brought in through taxes, thus there would be more money available for welfare type programs to fill in the gaps. This benifits the greatest number of people in the end.
The poor benifit from lower prices and more jobs available at the lower tiers. The middle class benifit by lower prices also, as well as the expansion of businesses which would open up more jobs at the middle tiers. The rich of course benifit the most because of lower prices of goods and services, higher profit margins both from labor saving costs and expansion.
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I hate it when people say we are a nation of “consumers”. It is a meaningless and ignorant assertation. We don’t “produce” because we aren’t a nation of farmers and mill workers? Bullshit. We have the largest and most powerful economy in the world. Do you think that comes about by not producing anything? Much of our economy is a “service” economy. That is to say we provided much of the brainpower for new development and innovation as well as managing the vast amount of information business need to run.
What is wrong with hiring painters and roofers or whatever? Did you ever hear of something called “specialization of services”? Sure I could paint my house myself but my core competancy is not housepainting. It’s business. It’s more efficient for me to hire a specialist in housepainting so I can focus on what I do instead of taking 5x as long to buy the equipment and paint it myself.
If you had an understanding of economics, you would know that a group of people trading goods and services based on their areas of expertise produces a greater benefit than each person trying to do everything themselves.
Your suspicions are incorrect. I don’t make anywhere close to minimum wage. That doesn’t stop me from becoming unemployed at times. Unemployment is a function of skillsets as well as wages.
I really think that people here need to grasp the concept tha there are multiple variables in the economics equation and that you can’t simply alter one without causing a change in the others. If it were simply a matter of setting some arbitrary wage then the government would just do that and everyone would be happy.
My suspicion might be incorrect, but your argument does nothing to prove that it is. You are forgetting that a minimum wage exists throught the country, and you have no way of knowing whether or not you’d be unemployed if there were no MW. I am only postulating that there are so few people whose skills worth less than $.01 per hour, that we might as well say there are none.
You stated that “if there were no minimum wage, the unemployment rate would go to zero”. This statement is proven false by the fact that there are people who normally make significantly more than minimum wage that become unemployed. Companies do not let people go because the market wage falls below minimum.
There is a market wage for any particular job (ie accountant, programmer, fast food worker, whathaveyou). This based on a number of factors including demand for work, supply of workers, investment in time and money required to train for such a position. A company will not hire a programmer from the American workforce who is willing to work for $10,000 a year because they quality of such a person would be suspect. By the same token, no programmer in his right mind would work for such a low salary because of the education costs associated with the position.
As for a person with skills worth $0.01 an hour, you are essenially talking about a volunteer. Someone who has a service to provide for which no one wants or is able to pay them, yet they continue to wish to provide it.
Most people will not work for nothing or next to nothing because for all practical purposes no money is the same as not enough money to buy anything usefull. For that reason, companies simply cannot “cut labor costs to the bone and beyond”. There is probably a natural minimum wage (probably not far off from the legislated one) where companies simply cannot hire anyone because it is just not worth it to put in the time working.