This is simply not true. Free market philosophy holds that a freely negotiated deal between two parties should not be legislated against or interfered with. To read this as saying that anything of economic benefit should be allowed is frankly ludicrous. If I enslave someone, where is the “deal” that free marketers would have the government protect? If I murder someone, where is the “deal” there? Such actions are therefore perfectly open to regulation (i.e. prohibition) in a free market. If you like, free market philosophy is orthogonal to morality in this sense.
Heh. Except it says that supply and demand is not regulated under a free market, and non-economic considerations are not even mentioned. In a free market situation, the government will still be empowered to protect the rights of its citizens. Trust me on this one.
Besides, slavery isn’t even an exchange that can be covered under markets, since it’s coercion. Let me repeat myself. Coercive exchanges are not part of markets. A market can only refer to exchanges of goods where all parties are willing participants. Therefore, slavery is not part of a free market, and is therefore not protected by it.
Go talk to some of the libertarians on the board, and ask them if they support free market because they want to “steal everything that isn’t nailed down”. I will concede that some people support free market for entirely self-serving interests. To say, however, that everyone, or even the majority of people, advocating free market are in it for only greedy purposes is a ridiculous oversimplification.
That’s incorrect. By shuffling about money, you are altering incentives, which, whether you like it or not, has a long run effect on the economy.
I agree, the money must come from somewhere. I think that was your point here. Am I correct? In which case, why don’t you simply do plain old wealth redistribution through welfare and the like?
I’ll admit that I’m having trouble following your meaning. Perhaps this may be because you lack real analysis, and your argument is mostly rhetoric. Nonetheless, you’ve perked my curiousity. The part I’m having trouble understanding is how a minimum wage is at all useful in the safety net to a worker when that worker has been left unemployed because of it. Could you explain?
And what about the people who are making no money at all because they can’t get a job? They can’t even buy themselves food, much less clothes. I take it that’s worth it? I guess what it comes down to is I’m not comfortable with that trade off.
Why would I trust you ? You haven’t shown any knowledge or historical context within economic theory. There is NOTHING in the free market system about non-coercion. There is only non-governmental-coercion.
It’s almost like the line between the market and society at large is blurry and often illusory. But that can’t be what you’re saying, since it’s my point that you’re railing against.
Oh, so like if I asked a white supremacist whether they hated black people and they gave a song and dance about how it’s not really hate, that means they’re stand up guys. Right.
Oversimplification? GREED IS THE WHOLE POINT OF A FREE MARKET!!! Have you ever read any economic theory, or is this all garnered from a paragraph you read in middle school? The whole fucking idea behind free markets is that people will maximize thier profit by seeking their own ends without the flippant interference of conscience or governmental regulation. Of course, some of us consider profit to be one good among many, not even the most important in fact.
Bzzt, thanks for playing, they’ll have a copy of the home game waiting behind the curtain. Shuffling the money does jack shit all for economic growth. It’s only when value crosses the system boundary that the economy grows or shrinks. That occurs due to two factors, resource collection and value adding labor. Turning sunlight into chemical energy into money, in the larger view of things.
In this case, because the free marketeers have spent so many years destroying welfare and unemployment that they only serve as temporary stopgaps. The minimum wage is a long term control.
Ignoring the insult… acutally, not ignoring the insult. Take it to the Pit. You can’t understand the idea of equivalent revenue streams and you’re gibbering at me about empty rhetoric? Christ, hope you never get a job balancing books, they’ll have you in a straightjacket inside of a week. This’ll be my last response to you, since you can’t follow the topic and have no interest in learning.
Just did. In a comprehensive, structured system it wouldn’t make much difference. You would just establish a minimum income level (the whole point of the social safety net) and the actual manner of shelling out said income wouldn’t matter much. You’d get a certain amount of inefficiency due to regulatory costs, you lose a certain amount of jobs and profit as a result, and that’s your cost for the added service.
Unfortunately, we don’t have a comprehensive, structured system. We have a hodge podge system that has been sliced and diced over the years in an effort to convert it from actually accomplishing its goal to being able to say we have a safety net while eliminating its protections to cut overhead in the name of the glorious free market. At this point, the minimum wage is the only part of the social safety net that’s somewhat intact, and that’s only until people like you drag us kicking and screaming back up the trees because you didn’t throw enough poop the first time around.
No such people with a social safety net. It’s been explained to you repeatedly, even by John Mace who’s on your side of the coin. You really should pay attention when people start saying things you don’t understand, it’s how you learn. You see, I want to create a system whereby government regulation ensures everyone with a base livelihood. I want to do this by taking a small amount of money out of the system and redirecting it towards this goal. Sort of like how we pave the roads and arrest serial villers and the like.
laigle, I apologize for the insult. It was arrogant and in bad form. My only justification was that I was still annoyed by your initial post in this thread. Again, I’m sorry.
Also, just so you know, I have taken an economics course, so I do have some idea of what I’m talking about. I am genuinely curious about your background on this matter.
And in all fairness, I have asked free market advocates about the role of government, and they say it would be to protect individual rights. Hence why I still contend slavery would not exist in a free market.
And while greed is of course the force behind market exchanges, it is not the only force behind ethical values, and people will sometimes make choices that are for the good of all. You believe that government intervention is the best for all, while free market advocates believe that the free market is the best of all. I am firmly convinced of this, so there’s no use arguing.
And I’m almost certain that your factors for economic growth are incorrect. While they are factors, the biggest factor is technology and productivity. By improving these, we increase how much we can take from nature, and we have economic growth. If you disagree, please tell me and tell me why. I really would like you to know.
And yes, I knew that a safety net would normally rescue the worker, I just assumed it away for the sake of argument. It was pretty illogical in retrospect.
Is there a limit to the number of hours per week it’s “okay” for someone to work in order to support themselves and their children? Going back to the book Nickel and Dimed, if someone has to work eighty hours a week just to put food on their table, is this a desired outcome? Ninety? One hundred? The thing about allowing employees freely to bargain with employers for their wage is that the less a worker is getting paid, the more that worker must work to meet his or her financial needs. Someone working one job that pays $5.50/hour and someone working two jobs that each pay $2.25/hour are ostensibly making the same amount of money…but the person working two jobs has to work eighty hours in order to realize the income the person working one job can receive in forty. Mightn’t there be larger social externalities associated with this, whereby it’s a “good thing,” generally, that people have time to see and care for their children, to be active public citizens, to have some amount of leisure?
Again, the word free. Seriously, do you not understand what it means? It does not mean anything goes even slavery. Can you explain what you think it means? I might be able to help with your misunderstanding.
Except in this case you have to explain how 1)the welfare system has been destroyed, 2) your ideal would amount to a small portion fo the economy, and 3) why over half of the 40% of GDP that governments now spend is directed into this safety net. Are you really suggesting that something like 20% of GDP is a small amount?
I have never understood the concept of (quote) ¨The generally accepted economic reason for not setting a minimum wage is that it eliminates jobs.¨ Seems like the idea is that business hires workers it doesn´t need just because they´re cheap.
There are jobs, most of them reasonably unpleasant, that have to be done. Somebody´s got to take out the garbage, sweep the floors, and so on. If you don´t hire the minimum wage worker because the $5.50 an hour, or whatever, is more than you want to pay, then either the garbage doesn´t get taken out or you have to get one of the higher-paid employees to do it.
My very small business is a reasonable example, I think. I have three employees: a part time secretary, a trained worker, and a somewhat mentally disabled kid who sweeps up, puts the tools away, sharpens chisels, and does most of the really boring work like sandpapering, which I hate. Supposing my business were in the USA where minimum wage has some relationship with real life, and I´m paying the kid $5.50/hour, I calculate that cost into the price of my products. Now if the MW goes up to, say $8, my choices would be: change nothing and lose money; fire the kid and then either pay the other guy $15/hour to do the work or do it myself after hours; let the shop get dirty and the tools dull and the products unsanded; or raise my prices. As long as the MW is required for every business, everyone else has to raise prices too so my market position isn´t compromised. If, however, other businesses can pay what they choose, then some of them are going to choose to pay starvation wages, and if I want to compete I have to pay starvation wages as well, which I don´t want to do. (Actually I don´t have any competition, at least not in Mexico- I make kaleidoscopes, mostly, which I export to places like Japan, and AFAIK nobody else does- so I can pay a living wage to my workers and still produce at a sellable price)
I know somebody´s going to jump up and say that all the best workers will gravitate to whoever´s paying more, but I don´t think that has much basis in reality: as long as there are more workers than there are jobs wages will always be controlled at whatever level the most desperate will accept. Adam Smith said that, and he admitted that anyone selling his labor could not expect more than the barest subsistence wage. (I don´t have a copy of The Wealth of Nations at hand, and the nearest English language bookstore is a long ways away- could someone help me out with the exact quote?) Not to mention that the demand for skilled workers is not increasing; as more and more automation comes online more and more jobs are reduced to whatever can be done cheaper than a machine can do it. No, I haven´t got a cite for that, but if anyone wants to argue they could start by explaining why the typical worker employed by Alcoa, General Electric, Sony etc. in the maquiladora plants in Mexico is a twentytwo year old woman with, on average, a third grade education, usually barely literate in Spanish (which is often their second language) and having no English at all.
The dumbing down of most jobs, and the resultant lessened need for skilled workers, is a subject for a different thread, I suppose. My main points: Does anyone think business hires employees it doesn´t need because they´re cheap? If they lay off the lowest level employees because the minimum wage does the work not get done, or do they get the higher-wage employees to do it? If there isn´t a minimum wage, how does a business manager who doesn´t like seeing his workers living in cardboard shacks compete with those who don´t give a shit?
because the minimum wage does the work not get done=
because the minimum wage is increased does the work not get done?
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No, the idea is that there are jobs which will simply not get done. There are very few jobs which must get done regardless of the cost. For all others a cost vs benifit competition is waged. If the cost rises above the benifit, then the job will cease to exist.
Even here, there will be other considerations. If the cost of taking out the garbage rises high enough, more people will recycle or create less garbage in the first place. BTW, I’m not sure at all that garbage men get minimum wage. I recall my uncle who worked for one such company did not. But that is not proof of anything.
Well, it could work this way, or some of your competitors might automate some of those jobs. Some of your competitors might change the way they do their work so that they are no longer subject to the minimum wage restrictions. Hiring several part timers, for instance might do it.
But you see, here you understand how supply and demand work against you, why do you not understand it the other way. All you have to do is remember that your worker is a free agent as well. He can simply refuse to work for starvation wages.
Just think of it this way. Even if you don’t have competition from kaleidoscope makers, you have competition from every other novelty product maker in the world. If you are forced to raise your prices disproportionally with any of them, you will lose business and be forced to cut back.
This is a link to much of the wealth of nations. Can you find the quote you were thinking of? I think you are misremembering something.
Because that is the labor which is available there? Because labor of a different type is much more plentiful and cheaper elsewhere? I do not have much knowledge of maquiladoras. But it seems to me that laborers there are what they are because those are the laborers sought by the companies which moved there. Companies which needed a different type of labor went elsewhere.
Of course not. But you have to remember that need is not infinately elastic. The need for a particular employee is directly tied to the productivity of that employee.
Typically the work does not get done.
He hires them to do work which produces more value than his competitors.
Yet a little more, and I will be persuaded to be a Libertarian.
Seriously, I get the logic, and on a philosophical level, I think the libertarians among us have the right idea. There is one thing that I never see the libertarian types address, and that is the cost of housing. Real estate prices, and therefore housing costs in general, including rents on very modest apartments, are way out of line with the earning power of low-wage workers in many parts of the country, and I don’t see that changing if the minimum wage were reduced, which would very likely reduce unemployment.
The people who cry about American workers being reduced to living in Third World squalor aren’t being overly emotional. Right now, housing that can be afforded by a minimum wage worker who is single with no kids is scarce. If the bottom wage were to be reduced by half, many people who are living in single room occupancy housing would either have to share with roommates, or be homeless, and really, how many employers are going to hire people with no address? And, at least here in Vegas, there isn’t a lot of SRO housing, and what there is is in neighborhoods where I wouldn’t want to be caught outside after dark.
If someone could convince me that housing costs would drop along with wages and, consequently, the cost of other goods and services, I would be all for eliminating the minimum wage, or at least reducing it. I just don’t see that happening, though.
Obviously way out of context for this thread, but I think I can make a connection, so I’ll chime in.
I think liberatarians would argue that one of the principle reasons that housing is so out or reach for very low wage earners is that low cost housing is illegal. Take a look at what is required to build new housing and you’ll find that a lot of wealth has to go into it. It is simply not possible to do that and then give them away or sell them at a loss. I’m specifically thinking of a case here in Arizona where a man was forced to leave his home because it was not up to code. He knew the risks of living ther, and was even making improvements. But rather than allow him to do so, they simply evicted him and condemed the building. To be fair, the building was a simple structure covered with cardboard and treated to keep out some rain. He would simply replace lost cardboard panels when he needed to.
I’m not sure anyone has argued that housing costs would drop just because minimum wages were reduced. I don’t think that is the point. The point is that those who do not have any job at all might be able to afford to live with roommates. They might be able to aspire to third world squalor. There are worse things, you know.
What I see here is a lot of justification- people who work minimum wage jobs are rich kids or old ladies with pensions, that they make tips and work off the books, and that everything really isn’t that bad.
Folks! People who work minimum wage jobs are not for the most part flipping burgers for their health. Even teenagers in school often need their money to pay for school-related expenses, food away from home (like at school) and to help out their family. Not everyone comes from happy-wonderful family where their parents pay for everything. Life really is that hard for some people. There is no magic way that they poor have to cope or get around being poor. They just suffer.
That said, I’m currently hanging out in India. India is a lot like America- it has the world’s largest middle class, lots of highly skilled jobs, a decent educational system and a good economy for the area. Unlike America, it does not have a lot of regulations.
Let me tell you about a world without labor regulations. Every time I go outside, I am surrounded by beggars- mostly kids or people with major health problems. I see a lot of kids working- mostly selling stuff and helping out their parents, but sometimes in full-on jobs like leading camel safaris. I then take a cycle rickshaw to whereever I need to go. The people that drive them bike around carrying people in India’s full heat for around $0.60 an hour- and they have to rent their rickshaws which apparently eats most their profits. They work all day and sleep on their rickshaws at night. There are few health and safty regulations and industrial accidents are pretty commonplace. Nobody really pays much mind when their workers are mangled or poisened.
Folks, you don’t want America to be like this.
Cite, please? No, I’m not doubting you, I was just wondering if you had a link to the story. I’d like to read it in detail. If an individual wants to build his/her own dwelling on a lot and live in it, and isn’t presenting a hazard to their neighbors, that is their right. Actually, as far as housing goes, I think maybe a 600 square foot studio apartment for a single person with no kids would be reasonably comfortable, although my mom thinks it’s much too small. I’m guessing that safe, comfortable multi-unit housing would be much cheaper to build and maintain than single family dwellings, and for most people would probably be adequate. Also, leaving aside the issue of new housing, here in Vegas, even “used” housing is going through the roof.
That’s kind of my point. I’ve never seen the issue addressed, and it’s really the only thing between me and economic libertarianism. I can readily believe that if labor costs went down, the cost of Just About Everyting Else would follow suit. Housing is the only thing I don’t see going down and I don’t see anyone arguing that it would. If someone could convincingly argue that housing costs would go down along with the price of Just About Everything Else, I could get behind the idea of eliminating or at least substantially reducing the minimum wage. That’s what ties this back to the topic of this thread. The minimum wage is predicated on the idea that a working person should be able to adequately feed and clothe him/her self, and kids if any. Housing eats up so much of a low-wage worker’s income that often utility bills get juggled around so people can keep food on the table.
Are you committing the dangerous act of posting while tired? That kind of reads funny.
Anyone have a take on the notion that eliminating the minimum wage might lead to an inefficient, and normatively undesirable, use of workers’ time? It’s laid out in post #105, above.
I’ve haven’t mentioned India but I have pointed out how the effects of having no minimum wage laws has worked in other countries. Not surprisingly, the people who support eliminating these laws because of theoretical beliefs have completely ignored these examples of how their theories would stand up to reality.
The other article of faith I continue to be amazed by is the belief that the free market is perfect and cannot make any mistakes. Politicians, union workers, teachers, soldiers, scientists, policemen, students, doctors, clergymen - any one of them is prone to human error. But somehow, by the miracle of the free market, the owner of business is perfect and every decision he will make will be correct.
These people will now jump in and claim they never said any such thing. And on the narrowest of technicalites they are right. But what basis can they make for saying that nobody should ever interfere with the working of the free market or restrict the decision making of business owners in any way unless they think these decisions are always right?
Myself, I respect the free market. Overall, it works and benefits both individuals and society. But I don’t have blind faith in it. The free market acknowleges that a lot of people in the free market are doing something wrong either from intent or ignorance. And if you concede that mistakes are being made in the free market, you open up the possibility of correcting those mistakes.
I think lots of people are talking past each other in this thread because it’s about minimum wage specifically and not poverty reduction in general. I would say most everyone right of center economically would like to see the minimum wage removed. Those on the far right would also like to see welfare abolished. However, many of the more moderately right economically (including me, and it sounds like John Mace) would just like to see the assistance in the form of direct transfer payments instead of price fixing. I think that those of us closer to center economically would expect either a raise in the level of welfare, or a lengthening or removal of time limits for welfare to go along with the repeal of the minimum wage.
Direct transfer payments have the benefit of goverment records that we can examine to see 1.) how much money we are moving, 2.) who is receiving that money, and 3.) who we are taking the money from. When we try to benefit low wage workers through price controls, we really have no idea about these measurements. Obviously some are benefitting, but who is paying for it?
Obviously if we removed the minimum wage, we would have to be prepared to directly subsidize those working at a wage that would not pay for basic needs. To keep incentives straight, we would just have to structure it so that working for a low wage and receiving additional government income would pay more than not working at all and just receiving welfare. (Gadarene, does this help out with the 100 hour work week scenario you envision?)
I think that’s the problem with your business as an example, Mapache. You only have three employees. Can you see how if you had a dozen janitors, a forced rise in their wages might lead you to let one of them go? (And you might not necessarily let one go, you might just not refill the spot when someone quit or was fired for other reasons next time.) All the cleaning wouldn’t necessarily stop, things would just get cleaned a little less often. So, the remaining eleven would benefit from the raise, while one would lose his/her job and all your employees would have a slightly less clean work environment. Multiply this by the whole nation and you can see how it’s very difficult to say who wins/loses by the minimum wage.
My first thought is that such a thing is unaffected by the existence or otherwise of a minimum wage. Overtime is a common phenomenon amongst hourly wage earners, and I don’t believe there’s a national minimum overtime requirement. In fact, the people I know who work by far the longest hours tend to be in salaried professional jobs where their pay is unaffected by their hours. My friend at a financial consultancy regularly works 80-90 hour weeks, and frequently points out the hourly wage that this entails for him. He does it of his own choice, however, and is perfectly capable of getting a job that pays the same hourly wage, with fewer hours. Needless to say, we frequently point out to him that his hours are normatively undesirable (well, we actually tell him to “come to the effing pub already, it’s 10.30”, but same diff).
Basically, if anti-social hours are indeed a problem in society, the minimum wage seems like a particularly ineffective way to tackle it. It simply limits the amount of hours that employers can afford to fund, and those hours will be apportioned to the most valuable jobs, not to those worth $2.25 an hour; the job does not become more valuable because its price is suddenly illegal. I also don’t see any compelling reason why it should only be at the bottom end of the market that people are prevented from working excessive hours; after all, they might want to. I’ve certainly been in the position of taking every (underpaid) hour of work I could get, and would have been very unhappy had government intervention forced a 4-day week on me, as it has done in France in the past.
You’re comparing apples and hyenas in ballgowns. India is a relatively poor economy, and as such is of course going to have a high incidence of what appears to you, as an American, to be insufferable poverty (and indeed it is, by any reasonable standard). However, to assume as you do that labour regulations are somehow the overriding factor in the disparity between the two nations is just far, far too simplistic. Do you think instituting a minimum wage in India is going to make all these beggars and street urchins suddenly employable? Is it somehow going to make their houses better, or is it going to push up the cost of housing, making still more homeless? Let’s say there were a law insisting that all the rickshaw drivers must make $5.50 (or whatever) take-home pay per hour. Do you think they’d all be magically paid it, or would they all be out of a job, their business suddenly illegal for the crime of being too cheap? And if you asked them, which do you think they would prefer?
Remnant? Even in these conservative ages, we have more government control of the economy than we ever had before (outside of WWII). Look at the federal reserve system. You may be for or against it, but we have lots of it and it ain’t going away soon (too many benefits to facilitate trade, banking, etc.).
Regarding the issue of not understanding markets. The idea that only people who understand markets like them is …well…wrong. People often seem to think that perfect markets will help. Well, what about perfect government intervention? Neither is likely. It’s always a matter a repairing this harm with that policy and that policy with this one, etc. (even allowing market systems is a policy, ya know).
People earning money at that level either have sources of money (spouse, welfare, relatives) or in-kind assistance (food stamps, rental help, etc.). I think the idea of living wage means being able to afford some standard (hold that definition) of living while not relying on direct government assistance or charity, etc.
As to the level, well of course this is subjective. There is no objective definition of poverty. In the US it is roughly base on a formula (outdated some say) of what a basket of certain foods cost and a multiplier. That was when food was the big ticket item in USA households. Now it is housing. Some living wage people say the wage should be above the federal poverty line for a household of four. Others say the local housing market should be considered or some other local/regional peg.
Finally, not related to the above, but related to the thread and the OP question. States and some localities if their state allows it, can have a higher wage than the national minimum. For instance, many places peg their minimum at one dollar above the federal min. wage. So their isn’t a federal requirement on the min. wage, just a federal floor on it. If that makes sense, not sure I put that well, but hope you see what I mean.