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Thread: Minimum Wage

  1. #1
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    Minimum Wage

    Before I speak about my opposition to minimum wage laws, I would like to see what others think.

    Does anyone have a rational reason to support them? Does anyone understand how they cause unemployment and should be anathema to anyone who supports human progress?

    Basically let's have a new minimum wage debate...
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

  2. #2
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    Re: Minimum Wage

    They need to be in place. If you believe the economy is prospering, it shouldn't make a difference if wages increase. I don't trust the market to increase minimum wages voluntarily. I'd rather be unemployed than work for peanuts - that would be bad for the economy.
    While laughing at others stupidity, you may want to contemplate your own comedic talents. (link)
    Disclaimer: This information is being provided for informational, educational, and entertainment purposes only.

  3. #3
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    Re: Minimum Wage

    Quote Originally Posted by Snoop View Post
    They need to be in place. If you believe the economy is prospering, it shouldn't make a difference if wages increase.
    Wages increase when the marginal productivity of the workers increase, i.e. when they become more productive due to either capital investment or specialization. If you look at the industrial revolution, you will find that wage rates SOARED in comparison to the past, and this happened WITHOUT minimum wage laws. In fact, not only did wages increase, but the amount of people employed increased as well.

    Secondly fixing the wage rate above it's equilibrium price set by the market causes unemployment. It is the immutable law of supply and demand at action. The higher the price for a good, i.e. labor, the less of a demand there is for it.

    Minimum wage laws cause unemployment to those low-skilled workers on the margin.

    Businesses can only afford to pay so much for labor, and when they are coercively forced to pay a higher price, then they will have to either fire people, or cut back production.
    I don't trust the market to increase minimum wages voluntarily. I'd rather be unemployed than work for peanuts - that would be bad for the economy.
    See this is showing your value scale in comparison to others.

    Some people ARE willing to work for peanuts, and if there are enough, then the wage will be set like that. But this is not what occurs. Do you really think that if McDonald's hired people for 10 cents people would work for them? Certainly not.

    Because heterogenous labor exists, a pricing system, i.e. homogenous measure of value, needs to exist. This pricing system is what objectively determines the "value" of labor. As with any price floor and ceiling, government interventionism causes either shortages or surpluses. In this cause because there is a price floor, a surplus of labor will result which is the definition of unemployment.
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

  4. #4
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    Re: Minimum Wage

    From Wikipedia:

    Supporters of the minimum wage claim it has these effects:
    • Helps some people pay their bills and live better. Regardless of the macro-economic effects, some very poor, very needy people will have their salaries raised with the introduction or heightening of the minimum wage.
    • Reduces exploitation (see wage slave).
    • Forces employers to pay at least the wage society thinks human labor is worth, rather than low-balling potential first time employees with salary offers below their true worth. Employers know that first time employees don't really know how much they're worth and have little bargaining power because if they try to negotiate for a higher wage, the employer can just find another person who doesn't know how much he's worth and give him the job instead (with a caveat below).
    • Stimulates consumption, and thus economic growth, by putting more money in the hands of poor people who spend their entire paychecks (with a caveat below).
    • Stimulates economic growth by discouraging labor-intensive industries, thereby encouraging more investment in capital and training (with caveat below).
    • Encourages some of those who would normally take low-wage jobs to stay in or return to school and thus accumulate human capital (with a caveat below).
    • Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees. This may increase productivity at the macro level and the individual level.
    • Discourages illegal immigration. A minimum wage increases the desirability of low-wage jobs, which allows those positions to be filled by legal citizens instead of illegal immigrants, thus discouraging illegal immigration. Note that it is also argued that a minimum wage encourages illegal immigration (see below).
    Opponents of the minimum wage claim it has these effects:
    • Reduces profits for employers of minimum wage workers.
    • Increases prices for customers of employers of minimum wage workers.
    • Reduces the number of hours worked at minimum wage.
    • Destroys those jobs that are naturally worth less than the minimum wage, thereby increasing unemployment and underemployment.
    • Curbs economic growth by decreasing the supply of affordable labor.
    • Discourages economic growth by decreasing research expenditures by decreasing income to investor and forcing them to allocate research monies toward new ways of eliminating human workers to lower costs.
    • Increases inflation by making low-skill jobs more expensive to employers, thereby making goods produced more expensive to consumers.
    • Decreases total consumption. With an increase in the minimum wage comes an increase in prices of good produced by workers which inevitably decreaes the actual value of the worker's paycheck, thereby not increasing consumption by those still working, but decreasing it by those now unemployeed.
    • Decreases opportunities for low-skilled workers to gain the training and responsibility they need to move up the wage ladder. Many successful people have worked their first jobs at McDonald's, and may have gained important skills.
    • Increases the cost of government social programs due to assistance programs aiding the laid-off workers.
    • Encourages more illegal immigrants from poorer places to enter the country because the pay differential between low-skill jobs in the two countries rises. This problem is particularly pronounced in the US, because the US-Mexico border is the longest developed/developing border in the world and is not well guarded.
    • Reduces the quality of jobs near the margin as well as the quantity - with less room to negotiate on salary, employers will necessarily cut other key areas such as job training.
    • Is less effective at reducing social exclusion than some other alternatives, for example training programs.
    • Is less effective than the Earned Income Tax Credit at targeting the truly needy, and is more damaging to businesses.
    • Forces employers to pay more for employees than what they are really worth
    • Decreases human capital by discourages people who would have stayed in school and attained higher education because they can earn enough without the extra cost (in time and money) of schooling.
    • Increases outsourcing to other countries because the work is not viable due to the high cost of labor
    http://en.wikipedia.org/wiki/Minimum_wage
    While laughing at others stupidity, you may want to contemplate your own comedic talents. (link)
    Disclaimer: This information is being provided for informational, educational, and entertainment purposes only.

  5. #5
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    Re: Minimum Wage

    Quote Originally Posted by Snoop View Post
    Supporters of the minimum wage claim it has these effects:
    • Helps some people pay their bills and live better. Regardless of the macro-economic effects, some very poor, very needy people will have their salaries raised with the introduction or heightening of the minimum wage.
    • This is sheer economic ignorance. As Henry Hazlitt would be quick to point out, "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." And by this token, we might as well raise the minimum wage to $1,000 dollars a person because for that one person, he would be rich. You argument says "regardless of the macro-economic effects", well, so then you support raising the minimum wage to $1,000?
    • Reduces exploitation (see wage slave).
    There is no exploitation if the exchange is voluntary. Slavery is what the government seeks to do by preventing a voluntary exchange, i.e. labor for money, that takes place. We are all slaves to the government because WE are FORCED to abide by this law, i.e. involuntary action.
  6. Forces employers to pay at least the wage society thinks human labor is worth, rather than low-balling potential first time employees with salary offers below their true worth. Employers know that first time employees don't really know how much they're worth and have little bargaining power because if they try to negotiate for a higher wage, the employer can just find another person who doesn't know how much he's worth and give him the job instead (with a caveat below).
This is just stupid. Basically this argument is saying that by fiat government can determine the objective value of labor, whereas the whole FUNCTION of supply and demand is to do this. What government does is ignore supply and demand and instead impose its own fiat interventionist scheme that leads to a surplus of labor (read: unemployment).
  • Stimulates consumption, and thus economic growth, by putting more money in the hands of poor people who spend their entire paychecks (with a caveat below).
  • So then give everyone a billion dollars. If you really want me to critique this, I will, but this is the worst argument...probably ever written.

  • Stimulates economic growth by discouraging labor-intensive industries, thereby encouraging more investment in capital and training (with caveat below).
  • Once again the problem with this argument is that the market decides whether or not something is profitable. Obviously there is economic growth if people are working there and things are being produced. If there was no economic benefit to this, then it wouldn't take place.
  • Encourages some of those who would normally take low-wage jobs to stay in or return to school and thus accumulate human capital (with a caveat below).
  • So they are advocating unemployment...brilliant.
  • Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees. This may increase productivity at the macro level and the individual level.
  • THIS more than anything creates "wage slavery". You are FORCING people to be more productive and firing those who work on the margin...this is just retarded.

  • Discourages illegal immigration. A minimum wage increases the desirability of low-wage jobs, which allows those positions to be filled by legal citizens instead of illegal immigrants, thus discouraging illegal immigration. Note that it is also argued that a minimum wage encourages illegal immigration (see below).
  • Opponents of the minimum wage claim it has these effects:
    Of course unions want this...the illegals are the ones who compete with them. Illegal immigration is good for the economy...but this is another debate...I will concede that this does encourage illegals, but that this is in fact a good thing.
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

  • #6
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    Re: Minimum Wage

    I worked several Jobs growing up. One was in a local grocery store. When they raised minimum wage, the store cut Jobs, and raised prices.
    Later the next time they raised minimum wage, my wife was working in a day care. Before the min wage took effect, the day care raised it's rates. *about 2 months before* There were several people sending their children to the day care, who had their cost raised before they got the raise to pay for it.

    Finally, I am no long getting paid min wage. So every time they raise min wage, my costs go up, and I don't get a rise.

    So I am against min wage. Jobs that pay min wage, are not supposed to support a family, nor should they. I can't Imagen what would make people think that working as a bag boy should get paid enough to raise a family.
    I apologize to anyone waiting on a response from me. I am experiencing a time warp, suddenly their are not enough hours in a day. As soon as I find a replacement part to my flux capacitor regulator, time should resume it's normal flow.

  • #7
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    Re: Minimum Wage

    Stimulates consumption, and thus economic growth, by putting more money in the hands of poor people who spend their entire paychecks (with a caveat below).
    People who have less money are more likely to spend their entire paycheck, which does less for the economy because it is a one time spending. People who have more have a lower consumption rate which allows them to save more which does more for the economy by allowing banks to hand out loans which are turned into capital investment and growth.

  • #8
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    Re: Minimum Wage

    Quote Originally Posted by mskurnic View Post
    People who have less money are more likely to spend their entire paycheck, which does less for the economy because it is a one time spending. People who have more have a lower consumption rate which allows them to save more which does more for the economy by allowing banks to hand out loans which are turned into capital investment and growth.
    Another good point.

    Savings and investment increase employment...so by the logic of this severely flawed argument, we may as well just steal all poor peoples' money so we can give it to people who can invest and create more jobs.
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

  • #9
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    Re: Minimum Wage

    Savings and investment increase employment...so by the logic of this severely flawed argument, we may as well just steal all poor peoples' money so we can give it to people who can invest and create more jobs.
    It doesnt mean that you should steal poor peoples money, it means that by saving as opposed to spending you are creating capital growth which equals economic growth. Creating capital growth is good for everyone. It raises the standard of living and creates new jobs. With a growing economy comes product growth which leads to wage rates being highered voluntarily.

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