Minimum Wage Laws

[dairygirl4u2c]

from another thread in case anyone wants to chip in.
[quote]Nihil Obstat, on 26 October 2009 - 11:50 PM, said:
Minimum wage laws are a joke because they increase unemployment and are rejected by every sane economist in the world. [/quote]


my view-
they cause some unemployment that otherwise woldn't exist. but that's a necessary evil considering the benefits they give. everyone who worked closer to minimum would be making beans. there's pros and cons, but in this case, the pros outweight the cons, decent living v. poverty for more. plus most business that must pay minimum, can afford it. the mcdonalidization of america, the norm is that they can, by far. again an indictor that the pros outweight the cons. and a few 'under the table' or those exceptions to minimum wage laws exist anyway, like the local dairy shack hires kids at 3 something an hour etc.

that it causes wages to fall is empiracally proven. in germany wages were lower like they were here, until they made wage laws. the employers paid only what the laws required. in the US, in the 80s mcdonalds etc paid only that 3 something an hour that was required, and then 5 when requried and so on. it's not just the starters who get affected by it... even those a little above the wages get more or less depending on the laws. eg, 'gee im making 4 dollars an hour when the laws require 3, aren't i lucky?', there's a larger population here being serviced than most people realize. sure, there's those like mechanics and such that are not affected by it, but the laws are not made for them. there's still a large population that gets the benefit.

inflation might go up but only marginally. ie true inflation is where everyoen's wages are increased. when just a few at the bottom's are increased, itd cause overall inflation to go up slightly, proportioal to who's wages are increased. it by defiition couldnt cause overall inflatio to go up given true inflation as i defined hasnt occurred. the benefit of having a living wage for those at the bottom outweighs the cost of a little extra prices for everyone cause of marginal inflation.

you can get more employment without requiring cuts in the wages laws. it goes back to 'we'll find a way to survive as a people... the answer isn't by getting people to live on beans and in boxes'. people are not living in beans and in boxes, and yet we're still surviving, even though the minimum age laws exist.

also, it's easy to say "work at 1 dolalr an hour, get some skills then you can move up". but hat's not being realistic. first you have to work up in that already lowered arena. then you have practical problems of being able to have means to pull yourself up, eg education or whatever- 1 dollar an hour isn't enough to do that an survive. and expecting 30 years just to get decent place isn't fair. im exagerating a little, but the point is made. and when it comes down to it, a person should have fair access, it's not just about being able to pull oneself up. that's the whole point to begin with.

really, the minimum wage laws are not complicated. the idea is as basic as it seems. you have people who have an effectively infinite pool of applicants, eg employers and the masses of unskilled labor. and then you have people who are paid too low, given all the equitale arguments given by me and Al in this thread about being abel to survive etc. and then ou have a law that says 'pay better'. all those counter arguments are rather silly, counterintiutive- inflation, 'too much unemployment' etc. these are all rationalizataions. these are arguments that the rich or greedy etc brainwash people with. you start with that trickle down nonsense and then start talking about cutting the minimum wage. common sense has gone out the window... people who buy into it are being played like hamstrings and they dont even know it. they're ending up defying what's clear and simple "ensure fair access to all" doesn't mean that we have to have a "between a rock and a hard place" attitude about it all.

sure, the wages laws shouldn't be too high, everyone can agree on that. but they must exist, at least at some level that's reasonable.

Edited October 27, 2009 by dairygirl4u2c

[Nihil Obstat]

A theoretical unemployment of zero (unemployment using the definition accepted by economists) is not possible unless the minimum wage is below the market equilibrium. This is just pure supply and demand. Simple to model, simple to understand, and reality supports the models.

I'm not going to address the moral aspect in this because honestly, I'm just a business student, not a moral theologian. I do what the Church says and I do my best at it.
[img]http://dqydj.net/wp-content/uploads/2009/06/Wage_labour.jpg[/img]

[Nihil Obstat]

By this exact same modeling are rent controls, for instance, rejected by the overwhelming majority of economists, as labour and rent are considered normal goods.

[Nihil Obstat]

Double post.

Edited October 27, 2009 by Nihil Obstat

[rachael]

dairy, are you a guy or a girl?

serious question here.

[Formosus]

A minimum wage law, I think, is morally fine so long as its set within reason (not so high that it harms the economy as a whole). Personally the moral responsibility for fair wages, I think, lies more with the corporations and CEO. I think this is probably why I couldn't be a business major lol...

[Nihil Obstat]

[quote name='Formosus' date='27 October 2009 - 03:30 PM' timestamp='1256675446' post='1992281']
A minimum wage law, I think, is morally fine so long as its set within reason (not so high that it harms the economy as a whole). Personally the moral responsibility for fair wages, I think, lies more with the corporations and CEO. I think this is probably why I couldn't be a business major lol...
[/quote]
I've got no problem with something that objectively hurts the economy if it's morally just. I'm just commenting from the economist's perspective.
Business majors these days by and large focus very heavily on professional ethics and social responsibility. It's the economists (social science major, usually a B.A.) and then the finance majors you want to keep an eye on.
I'm looking into finance, but more on that in a year or two.

[JimR-OCDS]

Well in today's global economy, its businesses who set the minimum wages by relocating to where
they can get the cheapest labor.

So, if the US minimum wage is $7.25 per hour, and China is .025 per hour, which rate actually gets to
be the true minimum wage?



Jim

[Nihil Obstat]

[quote name='JimR-OCDS' date='27 October 2009 - 03:43 PM' timestamp='1256676228' post='1992292']
Well in today's global economy, its businesses who set the minimum wages by relocating to where
they can get the cheapest labor.

So, if the US minimum wage is $7.25 per hour, and China is .025 per hour, which rate actually gets to
be the true minimum wage?



Jim
[/quote]
I'm not saying that it's right, but what's the cost of living and the consumer price index in China?

[King's Rook's Pawn]

Minimum wage laws are immoral and destructive, hurting the very people they're intended to help. First of all, a wage is a voluntary agreement between an employer and an employee. When a third party steps in to prevent this agreement with the threat of imprisonment, this third party is a violent aggressor. For example, if John chooses to work for Jim for a dollar a day, George has no right to step in to prevent this agreement at the point of a gun. It's important to remember that minimum wage not only forcibly prevents the employer from paying a wage below some arbitrary amount; it also prevents the employee from charging a price for his labor below that arbitrary amount. Effectually, it forces John to charge a higher amount for his labor than he would otherwise choose. Imagine forcing a shopkeeper to charge a higher amount for his goods and services than he would choose. You are forcibly crippling his ability to compete in the labor market.

From an economic standpoint, it is clearly destructive, as are all price controls. It prices those workers who's work is worth less to the employer than the minimum wage out of the market. These workers are disproportionately young and working class, people who don't need to support whole families, but who are looking for supplementary income and job experience to put on their resumes. Forcibly unemployed, they are now denied that income. More importantly, they are denied the job experience necessary to help them find better jobs in the future. The minimum wage effectually removes the first few rungs on the ladder of success. This is horribly destructive to young people in working class communities, who are not able to afford a gold-plated degree. It destroys their jobs, miring them in a never-ending cycle of poverty.

The minimum wage also hurts consumers by hurting the businesses from which they purchase goods and services and raising prices. Why do think there are no more porters in the airports? Why do you always get push-button robots instead of real human beings when you call a business? Why are gas station attendants beings replaced by self-service and cashiers are being replaced by automatic checkout machines? All these jobs are valued by employers and consumers as below the minimum wage, and so they have been destroyed or are in the process of being destroyed by the minimum wage. Again, the people who perform these jobs usually do not have a wife and four children. Usually they are part-time jobs for young people looking for summer jobs to put on their resumes. They are denied that through the coercive interference of the state-imposed wage floor.

[quote name='Nihil Obstat']I've got no problem with something that objectively hurts the economy if it's morally just.[/quote]

I would suggest that any aggressive action that deliberately hurt the economy is morally unjust. Firstly, its aggressive. Secondly, the economy is not simply an abstraction; it represents individual human beings. When you hurt the economy, you hurt individuals within the economy. Forcibly impoverishing people is clearly unjust.

[rkwright]

[quote name='King's Rook's Pawn' date='27 October 2009 - 08:01 PM' timestamp='1256691711' post='1992453']
Minimum wage laws are immoral and destructive, hurting the very people they're intended to help. First of all, a wage is a voluntary agreement between an employer and an employee. When a third party steps in to prevent this agreement with the threat of imprisonment, this third party is a violent aggressor. For example, if John chooses to work for Jim for a dollar a day, George has no right to step in to prevent this agreement at the point of a gun. It's important to remember that minimum wage not only forcibly prevents the employer from paying a wage below some arbitrary amount; it also prevents the employee from charging a price for his labor below that arbitrary amount. Effectually, it forces John to charge a higher amount for his labor than he would otherwise choose. Imagine forcing a shopkeeper to charge a higher amount for his goods and services than he would choose. You are forcibly crippling his ability to compete in the labor market.
[/quote]

I have to disagree.

If you understand the flimsy law that Roe v. Wade was based on, it was this principle. For a time the Supreme Court held that minimum wage laws, acceptable working hours standards, ect. were unconstitutional because these are all voluntary agreements between an employer and employee. Substitute employer with woman and employee with doctor/her body and you have the exact principle that Roe v. Wade stands on.

The logic works with abortion but also euthanasia, gay marriage, ect. All of these are voluntary agreements between two people which the state is preventing with threat of imprisonment.

[King's Rook's Pawn]

[quote name='rkwright' date='27 October 2009 - 10:41 PM' timestamp='1256694109' post='1992478']
Substitute employer with woman and employee with doctor/her body and you have the exact principle that Roe v. Wade stands on.[/quote]

Not if the fetus is a human being with rights of its own. That's why the idea that abortion is just something between the woman and her doctor is fallacious. There is another party involved: the fetus. So abortion is an act of aggression. However, this does not apply the employer and the employee because there is no third party who's rights are being infringed upon.

Only actions that violate other peoples' rights should be [i]legal[/i] offenses. Otherwise, they are matters for the confessional booth, not the jail cell.

[Nihil Obstat]

[quote name='King's Rook's Pawn' date='27 October 2009 - 08:01 PM' timestamp='1256691711' post='1992453']

I would suggest that any aggressive action that deliberately hurt the economy is morally unjust. Firstly, its aggressive. Secondly, the economy is not simply an abstraction; it represents individual human beings. When you hurt the economy, you hurt individuals within the economy. Forcibly impoverishing people is clearly unjust.
[/quote]
I should have been more clear. In theory, if there were something that were clearly moral and would hurt the economy is what I was referring to. I'm not going to approach specifics. Just adding the caveat that I assume it's possible.

[King's Rook's Pawn]

[quote name='Nihil Obstat' date='28 October 2009 - 12:42 AM' timestamp='1256701332' post='1992532']
I should have been more clear. In theory, if there were something that were clearly moral and would hurt the economy is what I was referring to. I'm not going to approach specifics. Just adding the caveat that I assume it's possible.
[/quote]

OK. I suppose I agree, though I can't think of a real-life situation in which that would actually apply.

[Nihil Obstat]

[quote name='King's Rook's Pawn' date='27 October 2009 - 11:52 PM' timestamp='1256705535' post='1992584']
OK. I suppose I agree, though I can't think of a real-life situation in which that would actually apply.
[/quote]
Killing all homeless and disabled people might be good for the economy. We could consider *not* killing all homeless and disabled people as bad for the economy but morally required of us.

I kind of feel bad even thinking that. Wow.