Double The Minimum Wage

[Hellbound]

You're not looking at both sides of the transaction. You say "it's in the company's best interest to pay their labor the minimum amount they can get away with". This is true, if by saying 'the minimum they can get away with' you are considering the costs of turnover and so forth in your analysis.

But, it is also in the best interest of companies to charge as much as they can for their products. So, using a similar analysis as yours, if we don't legislate a "maximum cellphone price", cellphones will keep getting more and more expensive. One company starts charging their customers a bit more so their profit margin is a bit higher, or so they can sell for a bit more and outperform the competition. The competition follows suit. Customers grumble a bit at the higher process, but it ends up as the norm. Repeat until prices are unaffordable for everyone.

You've got to look at both sides in a voluntary transaction.

If one company raises their cell phone price to make more profit, unless they can offer some additional feature or service to justify that, then they make make more margin per unit but lose in the number of units they cell. You say it yourself, prices increase until no one can afford a cell phone. Not to mention that manufacturing costs there go down with new technology, so they can maintain the price while producing cheaper units.

ETA:
[Just to clarify a bit, you're ignoring differences between the situations. There are more unskilled laborers than are are jobs for them, and this has been true pretty much forever. The supply of these jobs is limited, and the demand high. So you can offer a lower wage and still find people who will take it. Turnover tends to be high in these types of jobs anyway, and retraining is a matter of a current emplyee talking them through the first day, and having them fill out some paperwork. It's minimal turnover cost.

In the cell phone analogy, you've reveresed the roles. The cell phones are abundant, the number of customers is limited. The customers have a choice to find a cheaper phone, just like the companies have a choice to find a cheaper employee. There's no incentive for the company to pay more, when they can get the same work for less. Likewise, in your example, tehre's no reason for the customer to pay more, when they can get the same phone for less. The company won't gain a profit, bnecause sales go down. But that isn't true in the case of labor. There will be a minima that the lowest wages will reach, but it will be well below the current minimum wage.]

So tell me what I've left out that will keep wages from going below the minimum wage?

Again, where's your evidence?

Now, Balrog666 has a decent point: the minimal income for welfare will set a "low point", if you will.

However, many of our welfare and benefit programs don't kick in fully until well below minimum wage. So that welfare cut-off is quit a bit lower than a full-time minimum wage job. I'm not sure what effect that will have, but I still would expect minimum wage to drop, and people on those partial benefits to increase. In fact, I would expect this to cause more peopel to look for jobs that are just below the cutoff for benefits, as that could provide a better effective income than a job at the current minimum wage. A company could basically let the government subsidize their unskilled labor. Again, I'd want to see some data on this.

IN your favor, though, the abuses seen in the past regarding wages were before many of the welfane programs started, so it is worth looking into.


ETA:[Just had to say I was incorrect, here.

The poverty line is $22,500.
Minimum wage, for a full-time job (40 hours a week, 52 weeks a year) comes out to $15,080. So minimum wage now means, assuming no other income, you are already getting those welfare benefits. This seems to suggest that the wefare benefits aren't really a stop or competition for wages.]

And employees are not treated as commodities in all situations. To be clear, I was discussing the overall view, not specifics. Yes, in some cases you treat them as commodities, specifically in cost analyses and similar things. But they are NOT treated the same as raw materials, real estate, consumables, or equipment.

 

[MikeMangum]

Tony wasn't responding to you.

And you are right. As the kids say nowadays, "My bad".

 

[MikeMangum]

Just out of curiosity, how many minimum wage or below minimum wage workers do? Not theoretically/idealogically, but practically?

I did. My first job was minimum wage. After I had a few months of work experience under my belt, I was able to find a new job that paid better. Which is pretty much how it works for the vast majority of people.

Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents.

 

[Tony]

Really?

Yes

Then why is there a single person anywhere making more than minimum wage right now?

Two reasons:

1. We have a government mandated training program in the form of evil, godless, liberal and anti-American public education, which is funded by money taken from heroic job creators and which conservatives are currently looking to dismantle. This serves to provide training for people so they can further develop marketable skills.

2. We have rich people who can independently fund education for their own kids and provide them with connections and access to powerful people who can employ them.

Why don't employers just pay everyone minimum wage?

Because the training those people have, which was provided by an evil, godless, big-government program, have priced them out of minimum wage positions.

Maybe you're the ideologue.

And maybe I'm the son of Cleopatra. Both are equally unlikely.

 

[sir drinks-a-lot]

We've seen in the past that free market conditions for labor result in absolutely horrible conditions and wages.

Phrases like "absolutely horrible conditions and wages" are not very quantifiable. I'm sure that even with minimum wage laws in place today, many would say they work in absolutely horrible conditions and for absolutely horrible wages. But no-one has to take any of these jobs. They choose to because they feel they are better than the alternatives.

I just don't see what force is going to stop the downward trend of wages for unskilled labor, at least at any reasonable level.

The market force of the employees wanting to earn more. This is the half of the transaction you are overlooking, and it does matter. Do you think with a lack of minimum wage laws you could hire someone to load trucks for 40 hours a week for a paycheck of five dollars? Of course not. These laborers would go elsewhere.

I also fail to see how paying people enough money to have a place to live, food to eat, and some minimal level of medical care is preventing them from veing productive members of society.

Well, it would lessen the incentive for being productive, which is often earning enough money to have a place to live, food to eat, and some minimal level of medical care.

Considering we're talking about people that are working, are you saying that we should do away with those mimnimum wage jobs entirely? After all, they aren't productive, apparently. What should they be doing? We abolish minimum wages, their poay goes down. THey already can't afford to go to school and re-train for a new job. How are they supposed to become productive members of society?

Do you really think there is a large percentage of ambitious, hard working, capable people who spend their entire lives working minimum wage jobs? There is not.

 

[sir drinks-a-lot]

I did. My first job was minimum wage. After I had a few months of work experience under my belt, I was able to find a new job that paid better. Which is pretty much how it works for the vast majority of people.

Who Earns the Minimum Wage? Suburban Teenagers, Not Single Parents.

I would expect most of us, myself included, once worked for minimum wage. I've washed dishes, worked cash registers, bussed tables, etc.

I'd expect a lot of recent immigrants also work at or near minimum wage. Here in SF, there are a lot of Chinese and other asian immigrants who do not speak English yet working for minimum wage trying to learn...

 

[sir drinks-a-lot]

Yes



Two reasons:

1. We have a government mandated training program in the form of evil, godless, liberal and anti-American public education, which is funded by money taken from heroic job creators and which conservatives are currently looking to dismantle. This serves to provide training for people so they can further develop marketable skills.

2. We have rich people who can independently fund education for their own kids and provide them with connections and access to powerful people who can employ them.



Because the training those people have, which was provided by an evil, godless, big-government program, have priced them out of minimum wage positions.



And maybe I'm the son of Cleopatra. Both are equally unlikely.

Looks like we've settled who the ideologue is.

 

[Tony]

Well, it would lessen the incentive for being productive,

This sounds like nanny-statism to me. I thought conservatives were against this kind of social engineering.

 

[Tony]

Looks like we've settled who the ideologue is.

Dodge noted.

 

[lobosrul]

In other words, while I believe some minimum wage is probably necessary, until I know what goal we hope to accomplish with our minimum wage, any number I advocate for would be completely arbitrary.

I think some sort of reasonable formula could be worked out that would give a single person a basic standard of living.

For example: take the mean (not average) national values of the following:

(Rent for a 1 bedroom apt + food costs + bills for basic services + cost of health insurance + public transport) / 160 (hours in a work month at full time) * 1.20 (for clothes incidentals etc).

That of course wouldn't be enough in some expensive locations, its up to localities to set their minimum wage higher if they so choose.

Also, I'd be very much for setting 2 different minimum wages. A lower wage if healthcare is provided with no premium to the employee, and a higher with no healthcare benefits. Somewhere in between if the employee pays part of the premium. That way large businesses that can negotiate good rates for their employees can offer healthcare, and smaller business that don't want to fool with it can opt out.

 

[MikeMangum]

What gets me is that we tried to have no minimum wage laws.

That led to massive exploitation of workers. Across the board wages for unskilled and minimally-skilled labor dropped to nothing. Look at wages and working conditions at the beginning of the twentieth century, for example. In some cases, wages actually went down from 1910 to 1930.

The massive exploitation of workers happened during and shortly after a time when there was an enormous flood of immigrants increasing the labor pool. During the 1880s, there were new immigrants equal to roughly 1% of the existing population arriving per year. It slowed down some in the 1890s, then shot back up until WWI started. There was a flood of people being added to the labor pool, the vast majority were low skilled or semi skilled laborers. Quite simply, supply outstripped demand. But the economy grew like gangbusters!

Not to mention, according to supply and demand, this also means that when the ecomony is worst (unemplyment high and jobs scarce), the wages can drop even more, because there will always be someone else willing to do it for a little bit less, or someone who simply can't "quit and look for other work" because any income is better than none, and there isn't any other work to be had (unless you want even lower wages).

Yes, and no. Wages do go down. For a period. If wages are low enough that employers are making very high profit off the labor, they are going to hire more and more people - they are greedy remember? Absent a flood of new labor entering the market, the pool of available (unemployed) labor shrinks, causing upward pressure on wages. An equilibrium is eventually reached. All of those unemployed people are now employed and wages are rising again.

I have issues with treating humans as commodities, completely at the whim of supply and demand, regardless of the cost. While I have doubts and concerns about where the minimum wage line should be drawn, I much happier there is one, and I don't think the free market can handle that without an unacceptable human cost.

Whether you want to view human labor as a commodity or not doesn't change the fact that it is a commodity. Simply acknowledging that fact doesn't mean you can't approach a policy question regarding labor with compassion. But we damn well better do our best to determine what the actual effects of any policy might be, including second and third order effects.

Intentions don't mean **** when the rubber hits the road.

 

[mgidm86]

Minimum wage will always be just that.

If you raise the minimum wage, the price of production goes up, which means the price of buying goods goes up, which means everything else will eventually follow suit.

Other wages will rise proportionately - do you think everyone elses wages will stay the same if we raise the minimum?

There will always be people making less money than others. There will always be businesses willing to pay more, as they do now.

 

[MikeMangum]

I think some sort of reasonable formula could be worked out that would give a single person a basic standard of living.

For example: take the mean (not average) national values of the following:

(Rent for a 1 bedroom apt + food costs + bills for basic services + cost of health insurance + public transport) / 160 (hours in a work month at full time) * 1.20 (for clothes incidentals etc).

That of course wouldn't be enough in some expensive locations, its up to localities to set their minimum wage higher if they so choose.

Also, I'd be very much for setting 2 different minimum wages. A lower wage if healthcare is provided with no premium to the employee, and a higher with no healthcare benefits. Somewhere in between if the employee pays part of the premium. That way large businesses that can negotiate good rates for their employees can offer healthcare, and smaller business that don't want to fool with it can opt out.

So you think that everyone who can't convince an employer that they are worth this minimum wage should not be able to work? Or do you think that employers will hire people out of the kindness of their hearts?

 

[MikeMangum]

This sounds like nanny-statism to me. I thought conservatives were against this kind of social engineering.

So NOT telling people what to do is now called nanny-statism? Allowing people the freedom to make their own choices, for two parties to decide between themselves what wage they will pay/accept is now nanny-statism?

 

[Tony]

So NOT telling people what to do is now called nanny-statism? Allowing people the freedom to make their own choices, for two parties to decide between themselves what wage they will pay/accept is now nanny-statism?

No. I don't see how you're getting this. Did you read the context in which I made that comment? Hellbound said that he/she didn't see how paying people enough money to have a place to live, food to eat, and some minimal level of medical care prevented them from being productive members of society. Drinks-a-lot says that would lessen the incentive for being productive. His implication being that paying people less and denying them healthcare will increase the incentive for productivity.

My point was that having a situation created by the state where people are incentivized to be productive by denying them basic necessities for living sounds like nanny-statism. Grated, a dark, perverse and quasi-fascist form of it. But nanny-statism nonetheless.

On second thought, maybe this is exactly the kind of social engineering conservatives want: "work for a pittance or starve".

 

[sir drinks-a-lot]

My point was that having a situation created by the state where people are incentivized to be productive by denying them basic necessities for living sounds like nanny-statism. Grated, a dark, perverse and quasi-fascist form of it. But nanny-statism nonetheless.

No-on is talking about having the state actively working to deny workers from basic necessities. Where on Earth do you come up with this stuff?

 

[Tony]

No-on is talking about having the state actively working to deny workers from basic necessities.

They're not? So you do support a minimum wage and paying people enough money to have a place to live, food to eat, and some minimal level of medical care?

 

[lobosrul]

So you think that everyone who can't convince an employer that they are worth this minimum wage should not be able to work? Or do you think that employers will hire people out of the kindness of their hearts?

If you can't afford to pay someone a basic living wage, then don't hire them.

 

[sir drinks-a-lot]

They're not? So you do support a minimum wage and paying people enough money to have a place to live, food to eat, and some minimal level of medical care?

No. You're committing a false dilemma fallacy.

I neither support the minimum wage nor do I support the government denying people a place to live, food to eat, and medical care.

 

[maxpower1227]

Yikes. If I ever started to doubt that modern conservatives have a cruel and inhumane ideology, this thread has put a stop to that.