Myth Pro and Con about the Minimum Wage

[Ziggurat]

Not when I'm dealing with selfish scum, no.

What a great example of the Fundamental Attribution Error: the idea that behavior is determined simply by character, not by context. Since BPSCG disagrees with you, it must be because his character is flawed (he's "selfish scum"), not because he has arrived at his conclusions in a different context than you have.

That's quite pathetic of you.

 

[HeavyAaron]

You could even be right here, but I know for a fact that there are some terribly unscrupulous employers around and many could not be entrusted not to pay slave labour wages.

I don't believe there is such a thing as "slave labour wages." In a free market economy, by definition all transactions are agreed upon by all parties. If the wage rate is too low then they would find no one to employ. If there are people willing to work for a given wage, then they are better off working at that wage than not. Again, the employee is made better off, or they would not have accepted the position. In fact, it's probably the best wage he/she could get, or he/she would change jobs to the better available wage. (This discounts the reality that some jobs are more appealing to given individuals than others.)

Aaron

 

[slingblade]

Since I was making a broad claim, reasonlyably recent anecdotes that don't include extraodrinary circumstances certainly would count.

And who is arbiter of "extraordinary?" My anecdote might count as extraordinary on several points.

As for age, poeple who are below a certain age are unlikely to have a high school diploma, but almost certain to have certain support structures, and above a certain age, they can draw social security, which isn't a lot, but better than minimum wage. A similar principle applies to the disabled. If I'm so wrong an uninformed, inform me.

No, you're not wrong about those three things: kids still in school usually have parents who support them; people over 65 can usually draw Social Security retirement; those who can prove disability can usually draw SS disability "income." (Not sure just what that's called.)

But I'm not sure what all that is supposed to say about someone who is 20 to 60 years old, doesn't get support from the parents anymore, but isn't old enough yet to get SS retirement, or disabled enough to get SSI, and who still makes minimum wage, has always made minimum wage or a little more, and the reasons why this is so. And I'm not sure what all that has to do with the issue of raising the minimum wage a few dollars.

I'll try this again, shall I?

You stated that there are only four reasons why anyone would work for years at minimum wage jobs: lazy, stupid, criminal, and/or personality defects.

I am telling you there are more reasons than those four, and that when you maintain these are the only four reasons for the entire issue, you are limiting, deliberately, it seems, your own opportunity to educate yourself and learn more.

If you're okay with that, then I guess I have to be okay with it, as well.
But I think it's lazy, stupid, a crime against critical thought, and shows a definite personality defect.

 

[The Atheist]

I'm proposing you get minimum physical needs provided for REGARDLESS of income. Then let wages float naturally.

There is no natural tie between wages and costs of physical needs. Why try to create one?

Aaron

The reason I differentiate is simply because welfare dependence isn't usually helpful to anyone, so there needs to be an incentive to work as opposed to being a beneficiary.

 

[The Atheist]

I don't believe there is such a thing as "slave labour wages."

The bad news is that I know there are people who pay slave labour wages. Usually to illegal immigrants, but not always. I have been involved in a couple of cases where employers have cut wages illegally below the minimum at the threat of losing the job.

 

[Ace_of_Sevens]

And who is arbiter of "extraordinary?" My anecdote might count as extraordinary on several points.

Extraordinary circumstances woudl be somethign like working for less than your worth because of blackmail. People who have had a lot of bad publicity (for soemthing like criminal charges for instance) fall under this category as well, because while massively unfair, both situation are quite rare and really dealwith societal faults entirely seperate from minimum wage.

 

[HeavyAaron]

The reason I differentiate is simply because welfare dependence isn't usually helpful to anyone, so there needs to be an incentive to work as opposed to being a beneficiary.

And you are absolutely right that there needs to be... and under my system there would be.

Let's use the simplist example of my system. Everyone gets a check for say, $10,000/year regardless of income. That money is designed to keep you from starving or begging on the streets. (I've already noted that in such a simple system stupidity can still kill... just trust that there are more complex systems that have the same effects here.)

So in our thought experiment let's suppose that an unskilled, unemployed person living in this society has only one possible job offer. And it pays a measely $3/hour for 40 hours/week.

He's already eating and he has a safe place to sleep. Why work?

Well, under this system working won't cost him any of his benifits. His choices are:

1) don't work for an annual income of $10,000.
2) work for an annual income of $16,240.

That's $6,240 in incentive to work. Maybe it won't be enough. If it weren't enough for the local employer to fill his/her positions then they'll raise the pay to more than $3/hour. But even at $3/hour there IS incentive. (Incentive enough that MANY people on this planet are willing to work for those wages.)

Aaron

 

[American]

What a typically arrogant and ignorant comment. I'd be very surprised if anyone on the minimum wage was even on the internet, let alone in here.

What are you the Lorax? You think you speak for those without tongues?

Nobody nominated you to cry in place of people who are supposedly too busy or otherwise incapable of complaint due to their lowly job or other constraints placed unfairly upon them by The Man.

"Advocate"... Speak for yourself, worry about yourself, and let others speak and worry about their own affairs. You are not their surrogate whiner.

 

[HeavyAaron]

The bad news is that I know there are people who pay slave labour wages. Usually to illegal immigrants, but not always. I have been involved in a couple of cases where employers have cut wages illegally below the minimum at the threat of losing the job.

Maybe I wasn't clear. I don't believe any wage is inheriently immoral. If the employee is willing to work for $0.30/hour then he should be allowed to. It is not a slave labor wage because he is not a slave. He is not obligated to take the job.

Aaron

 

[Ziggurat]

What a typically arrogant and ignorant comment. I'd be very surprised if anyone on the minimum wage was even on the internet, let alone in here. Maybe, if you ever manage to pull your head of its self-rectal examination you'd understand that.

Understand that you'd be surprised if someone on minimum wage figured out how to use the public library? Well, maybe that would surprise you.

Wouldn't surprise me, though.

 

[slingblade]

I don't believe there is such a thing as "slave labour wages." In a free market economy, by definition all transactions are agreed upon by all parties. If the wage rate is too low then they would find no one to employ.

"Federal minimum wage" is the wage rate under discussion, and it does qualify as "too low" under several criteria. Here is one:

Minimum wage is $5.15/hr. At 40 hr/wk that equals $206.00 before deductions (FICA, etc.). For a 4-week month, it equals $824. Gross, not net.
If rent where you live is $500 and up, how do you pay for transportation, food, utilities, medical, dental, clothing, hygiene, and emergencies with less than $300 each month?

If there are people willing to work for a given wage, then they are better off working at that wage than not.

How so?

Again, the employee is made better off, or they would not have accepted the position. In fact, it's probably the best wage he/she could get, or he/she would change jobs to the better available wage. (This discounts the reality that some jobs are more appealing to given individuals than others.)

Not everyone lives in an urban area in which jobs are plentiful and competition favors higher wages. If, just for instance, you live in an area in which there are 15 restaurants, and you wait tables, it is possible to work at every one of those restaurants in turn and make the same wages in each. No one pays better, because no one has to pay better. The labor pool is limited, as are the opportunities.

New people move into the community, and are willing to accept the low wages because they need a job now. They don't have much choice, and no real choice is offered. People who are fed up with the system leave town. The newcomers merely take their places. Nothing changes. Nothing has to change.

It becomes a system in which the profitable business owners never change, but the unskilled minimum wage employees change constantly.

How would the "free market" operate in such a place to make the wages go up instead of remaining at minimum wage as they have always done?

 

[The Atheist]

What a great example of the Fundamental Attribution Error: the idea that behavior is determined simply by character, not by context. Since BPSCG disagrees with you, it must be because his character is flawed (he's "selfish scum"), not because he has arrived at his conclusions in a different context than you have.

That's quite pathetic of you.

People are welcome to disagree with me and I'm perfectly capable of holding a nice, abuse-free, rational discussion with them. Those people don't come out with this BS:

how many people get paid the minimum wage who don't deserve even that?

Someone explain to me why this pimply-faced, slack-jawed knuckle dragger deserves to be paid minimum wage to do something I can do just as well and twice as fast, despite my complete lack of formal training in the lucrative field of gas pumping.

Hmmm... I wonder if NJ has some statute that requires a human being actually pump your gas for you...

Uh, yeah, right. Learning how to pump gas takes months of training. It's a grueling education, and a lot of people can't handle it. That's why they change careers to something not as taxing on the brain - like being a New Jersey State Assemblyman.

To which I ask, if having three kids puts your finances so close to the edge, why did they have three kids to begin with? Why didn't they improve your job skills and marketability before deciding they needed to repopulate the earth?

Yep, I'm pathetic for thinking that someone coming out with all that - and more - could possibly be selfish.

 

[The Atheist]

Understand that you'd be surprised if someone on minimum wage figured out how to use the public library? Well, maybe that would surprise you.

Wouldn't surprise me, though.

Sure they use internet at libraries. I just think it's incredibly unlikely that they'd be spending time in here talking to a bunch of rednecks who are telling them they aren't even worth $5 an hour.

 

[WildCat]

"Federal minimum wage" is the wage rate under discussion, and it does qualify as "too low" under several criteria. Here is one:

Minimum wage is $5.15/hr. At 40 hr/wk that equals $206.00 before deductions (FICA, etc.). For a 4-week month, it equals $824. Gross, not net.
If rent where you live is $500 and up, how do you pay for transportation, food, utilities, medical, dental, clothing, hygiene, and emergencies with less than $300 each month?

You can't, which is why minimum wage jobs are not career jobs. Best left to teenagers and retired folks looking to supplement their income.

Now, why people have kids they can't aford to feed or clothe is a question for another thread.

How would the "free market" operate in such a place to make the wages go up instead of remaining at minimum wage as they have always done?

The free market around here is already well above the minimum wage. Even McDonald's starts you at $7.50/hr, unskilled illegal aliens on construction sites even start at $10/hr or more. Reason is no one will take the job if it doesn't pay more than that.

 

[HeavyAaron]

"Federal minimum wage" is the wage rate under discussion, and it does qualify as "too low" under several criteria. Here is one:

Minimum wage is $5.15/hr. At 40 hr/wk that equals $206.00 before deductions (FICA, etc.). For a 4-week month, it equals $824. Gross, not net.
If rent where you live is $500 and up, how do you pay for transportation, food, utilities, medical, dental, clothing, hygiene, and emergencies with less than $300 each month?

I'm getting tired of refuting this. There is no connection between what a person might minimally need and wage rates. Trying to connect the two makes no sense. You've call this a "criteria." It's a dumb one as it's founded on a bad assumption.

Me: "If there are people willing to work for a given wage, then they are better off working at that wage than not."

How so?

Because if they weren't then they wouldn't have taken the job. All transactions in a free market economy are agreed upon by all parties by definition. Therefore at the end of any given transaction all parties are better off than had the transaction not occured or otherwise they would have not agreed to the transaction.

Not everyone lives in an urban area in which jobs are plentiful and competition favors higher wages. If, just for instance, you live in an area in which there are 15 restaurants, and you wait tables, it is possible to work at every one of those restaurants in turn and make the same wages in each. No one pays better, because no one has to pay better. The labor pool is limited, as are the opportunities.

This is an argument AGAINST minimum wage law. The number of jobs (especially low wage jobs) would RISE if the minimum wage law were repealed. Besides, this is the information age. Don't tell me your geography limits your job oppertunities. A large portion of the population telecommutes.

New people move into the community, and are willing to accept the low wages because they need a job now. They don't have much choice, and no real choice is offered. People who are fed up with the system leave town. The newcomers merely take their places. Nothing changes. Nothing has to change.

You've got part of the model correct. You seem to realize that the liklihood of a person moving away is impacted by the job oppertunities. Has it not occurred to you that low job oppertunities discourage people from moving in?

It becomes a system in which the profitable business owners never change, but the unskilled minimum wage employees change constantly.

Oh, of course. The US economy is one of the most stagnant in the world .

How would the "free market" operate in such a place to make the wages go up instead of remaining at minimum wage as they have always done?

I'll assume you mean "real wages" not "nominal wages".

Formula for raising wages:

Short term:
1) Increase demand for labor. This would happen if industry output increased. (Firm expansion or new firm entries.)
2) Decrease of labor supply. People die, retire, move away and are not replaced.

Needless to say the opposite of those two things would lower wages.

Long term:
Increase productivity. This is done through one of two things: increased capital (new plant and equipment) or increased human capital (better educated work force) **** this has a secondary effect of lowering the costs of goods at the same time as raising wages i.e. SUPER GOOD

Super long term:
Increase in the savings rate. This allows for more investment in capital which leads to increased productivity which leads to increased real wages.

Aaron

 

[slingblade]

The free market around here is already well above the minimum wage. Even McDonald's starts you at $7.50/hr, unskilled illegal aliens on construction sites even start at $10/hr or more. Reason is no one will take the job if it doesn't pay more than that.

That doesn't answer my question, though.

The free market in the place I described keeps wages at minimum, becasue there is no reason to raise them. Rent, food, and all that keep going up, but the wages don't. They don't have to. The residents work the jobs at minimum wage because they can't afford to leave town yet, and can't afford not to work. As soon as they can afford to leave, they do, but their places are just filled by newcomers who will also work for minimum as it's the only wage paid, and they, too, have to have a job or two.

There is no reason for employers in this town to increase wages, so they don't. "Going elsewhere" in this place means either working for someone else who pays the same wage (no choice), or leaving town. From what I can tell, the "free market" doesn't, or can't, apply there.

 

[slingblade]

This is an argument AGAINST minimum wage law. The number of jobs (especially low wage jobs) would RISE if the minimum wage law were repealed. Besides, this is the information age. Don't tell me your geography limits your job oppertunities. A large portion of the population telecommutes.



You've got part of the model correct. You seem to realize that the liklihood of a person moving away is impacted by the job oppertunities. Has it not occurred to you that low job oppertunities discourage people from moving in?

Okay, let me think about this some more. I think I'm understanding what you're saying, and I'm getting dangerously close to changing my mind.

Oh, of course. The US economy is one of the most stagnant in the world .

No, I didn't mean the U.S.; just that particular town. But it's moot now.

Give me some time to do my own research and give this more thought. Some of my opinions are changing (yes, it hurts ), but I'm not sure all of them are.

I still worry that removing the minimum wage would do some damage to real people in real time. I worry that not raising it is hurting people now who are doing the best they can. And I realize we're all looking at one aspect of a multi-faceted issue.

But some of what you've said really has me thinking and re-thinking.

Thanks.

 

[HeavyAaron]

The free market in the place I described keeps wages at minimum, becasue there is no reason to raise them. Rent, food, and all that keep going up, but the wages don't. They don't have to. The residents work the jobs at minimum wage because they can't afford to leave town yet, and can't afford not to work. As soon as they can afford to leave, they do, but their places are just filled by newcomers who will also work for minimum as it's the only wage paid, and they, too, have to have a job or two.

There is no reason for employers in this town to increase wages, so they don't. "Going elsewhere" in this place means either working for someone else who pays the same wage (no choice), or leaving town. From what I can tell, the "free market" doesn't, or can't, apply there.

Ah, I see. You're simply mistaken. Wages rise FASTER than costs.... not slower.

As for minimum wage jobs I described this earlier in the thread.

Suppose that a job SHOULD pay $3/hour one year. But it's covered under minimum wage so it pays (assuming that it still exists) $5.15/hour. Next year it SHOULD pay maybe $3.05/hour, but it's still covered under minimum wage law. So it stays at $5.15/hour. Minimum wage law isn't the solution to the fixed wage... IT'S THE CAUSE.

Aaron

 

[Ace_of_Sevens]

There is no reason for employers in this town to increase wages, so they don't. "Going elsewhere" in this place means either working for someone else who pays the same wage (no choice), or leaving town. From what I can tell, the "free market" doesn't, or can't, apply there.

You're assumign some sort of monopolistic cooperation among employers. Some employees, even unskilled ones, are better than others. One employer will raise wages to get the better unskilled workers. Also, they're competing against the societal safety net. Someone who pays too little will find the jobs they have impossible to fill.

 

[HeavyAaron]

I still worry that removing the minimum wage would do some damage to real people in real time.

It would. I don't deny that. Minimum wage laws absolutely benifit some people. Don't let anyone tell you otherwise, myself included. The problem is that they hurt other people, some directly by depriving them of job oppertunities, and everyone a little by raising costs and inflation (as well as even more trivial concerns which I won't go into.)

Please don't misunderstand me on this. A number of people would be directly hurt by a repeal of the minimum wage law(s). But I sincerely believe that on balance people, especially the impoverished, would be better off without it.

I worry that not raising it is hurting people now who are doing the best they can. And I realize we're all looking at one aspect of a multi-faceted issue.

Again you're right. Undoubtably some people would benifit by a raise in the minimum wage law... unfortunately at the expense of others, and not just others that can afford to take a hit.

But some of what you've said really has me thinking and re-thinking.

Thanks.

I'm glad to hear it.

Aaron