Always a hot button issue, let's see what HubPages has to say:
Should the Minimum Wage be:
C) Done away with immediately
D) Phased out over the next 10 years.
E) None of the above.
Here's another issue that the federal government needs to stay out of. Workers are paid what they are worth/what the employer can afford. If government would stay out, maybe competition would drive wages up.
Why do you think the minimum wage was introduced?
Because group A (workers) had enough political clout to force control of group B (employers) without having any form of ownership. A classical case of "might makes right" - far more so than the equivalent business practice of finding employees willing to accept low wages that is often touted as evil and wrong.
No, because government saw itself more and more having to subsidise unscrupulous employers,
How odd. The unions have taken credit for forcing the minimum wage for as long as I can remember.
Perhaps it was different in Europe.
We have politicians like that in the UK.
Not much difference between a politician and a VIP union "member". In fact, there is zero difference; neither one produces anything of any value when compared to the workers of the world.
Not union members, union officials!
Otherwise that was exactly my point.
a.k.a. "I see no problem with America's crippling poverty issue! In fact, I think we should have more crippling poverty!"
Then I feel sorry for you if that is true. OR if you somehow believe that sharing the wealth by force will increase the average wealth of a people - somehow forced sharing nearly always seems to have the opposite effect in the long run. Probably because it removes incentive to produce, but for whatever reason it does have the wrong result.
I see you share Thatchers thesis that to motivate the rich you need to give them more money but to motivate the poor you need to give them less money!
Don't know about the UK, but the US does not write checks to the rich without receiving something in return. Yes, they need more money to be motivated.
Don't know about the UK, but the US writes checks (figuratively) to the poor for nothing in return. Yes, they need less money to be motivated to support themselves (in some cases, certainly not all) rather than spend their life on the dole. Shades of Andy Capp.
What exactly do the rich give in return for their billions?
The poor certainly give plenty and if you don't think somebody on a minimum wage will be motivated by more money then you just demonstrate how far the machine has taken you over.
It is not the government that gives the rich billions. Nevertheless, one answer is "jobs". As the poor cannot, it must be the rich providing all the jobs. Do you need more?
Giving the poor more money, without requiring anything in return will not motivate a single one of them to work harder to support themselves. Anyone that thinks otherwise has a lot to learn about human psychology.
Giving the poor a decent amount of money for working reasonable hours under reasonable conditions, however....
"decent amount of money"? "reasonable hours"? "reasonable conditions"?
Seems to me that very few will disagree with your request...until, that is, it comes time to define these terms in the form of cold cash tendered, actual work produced and a real place to work. At that point there seems to be a wee difference of opinion on what is "decent" or "reasonable".
It is MHO that government is not competent to define those terms. That only the employee and employer, working together, have either the right OR the ability to make such determinations. Government can and has provided some help, but is completely unable to make the final determination in any one of those questions. Minimum wage, OT pay, OSHA all come to mind.
Maybe the rich provide the jobs but the poor fulfil that need.
It should be a partnership each helping the other, not a master-slave relationship.
Who said anything about the poor giving nothing in return? You do realise that the real poor are not those on welfare but those in employment at or below minimum wage.
I rather think you need to learn about human psychology and much more.
I specifically spoke of the poor without a job, but lets mention what the working poor provide for what they get.
They work, and receive fair compensation for their labor (if they think it's not fair, go somewhere else). Then we give them tens of thousands of dollars more, each year, for which the country receives...what? A request for even more? Fair trade, that!
Sounds as if we have, as a nation, decided to buy a car. We shop around and find one we like for $20,000. We buy it, pay the money and then, driving off the lot, throw the salesman another $40,000 because...because...because he says he needs it but doesn't want to earn it? Really got a lot of return for that $40,000 didn't we?
You do realise that the real poor are not those on benefits but those in work?
Quite often very true. Does that mean that, after being paid for their work, the govt. hands them additional monies and gets something for it? What might that be?
Whenever people are in poverty and Government doesn't hand out freebies, a.k.a, the Great Depression, families come closer together and we start having a generation of people who learn to appreciate what they have again. All we have now is a society of spoiled Americans who believe they are entitled to everything. If someone else earned it and they didn't, they still think they should be entitled to it with no effort put forth.
(Society as a whole, not everybody)
It should be raised. Corporations are earning ridiculous billions every year. One reason is because they pay out as little as possible, even when they keep raising their prices. If they can get away with greed on their end with no restraint, then they should at least compensate the people who help them receive the billions of dollars. The consumer is the victim. Business and governments show them no mercy with high prices and taxes. Unless you twist their arms, giving up some of their ridiculous profits is not even on the radar! Nobody wants to give away more money no matter how great their profits.
The minimum wage should increase with inflation so people have money to pay rent, bills, groceries, and have money just to live; for transportation, amenities, unexpected expenses. This would also help ween people Of government aid.
The minimum wage will become 10$ which I am happy about (even thought I don't work for minimum wage) but what I'm not happy about is that they have completely left out the service industry. In states like California service industry workers, workers working for tips, get paid about 8-10$ per hour, due to the higher cost if living. I live in New Orleans, Louisiana where I get paid 2.13$ per hour. I don't make hourly wage, it all goes to taxes. I work and make money solely off tips. When the minimum wage goes up I think that the service industry minimum wage should also increase.
How does maintaining the status quo (keeping people just at the edge of starvation) wean anyone off of welfare?
Seems like either making minimum wage $20 and stopping welfare OR making minimum wage + welfare insufficient to live on will stop welfare. Not keeping it just enough to get by, as it is now.
Best suggestion you've come up with so far.
Yes,get rid of that capitalist tool of oppression and watch the hungry crowds hunt down the wealthy robbers and steal back that which is theirs.
Absolutely! Everyone that doesn't give me whatever I want is a robber baron and has stolen from me (as long as I ignore the fact I went to them and accepted their proposal). I shall take "back" what was never mine!
I shall triumph, using high-falutin' words instead of truth and honesty, to get what I want - I shall call them "robber barons" and "capitalist tool of oppression" and thus know that it is OK to steal from them!
I think what people don't realize is every time minimum wage goes up, it increases inflation even more, then when the prices go up to pay for the "new minimum wage" they want more again to catch up, and it's an endless cycle. Besides, "most" minimum wage jobs are taken by college and high school students. If you're making your main living on minimum wage, you need to earn your money by getting some skills. I know it's not possible for everyone to learn skills because their mental capacity is as such, but the truth is, life isn't fair. It never has been, never will be.
No, it doesn't cause inflation. When govt. requires that wages be raised the companies involved realize just how evil they are and suck it up by accepting lower profits. Just as they do when any other cost - raw materials, rent, utilities, whatever - rises.
Just ask any socialist or liberal - the unlimited profits that all companies enjoy will always have room to give more to employees (that have agreed to work for less), no matter how high they are paid or how bad business is. We know this because CEO's make lots of money each year.
Of course it can cause inflation, but then so can so many other things.
It's just that the easiest (but not the only) way of controlling inflation is to keep people (sorry, wages) down.
And aren't you rather confused? Liberals believe in the free market!
In another post you mention truth and honesty, don't you think that extends to those who have the power to keep people in poverty or lift them out of it?
I don't recall conservatives as a group ever promoting the idea of govt. price controls much. A very few isolated circumstances, plus of course monopolistic companies, but that's about all.
Yes, it would be nice to get truth and honesty out of our government, but it isn't going to happen in my lifetime. Just as you won't get either truth OR honesty from liberals continually increasing govt. handouts (that keep people in grinding poverty) while claiming they are necessary for people to stay alive.
Let me rephrase that - capitalists continually increasing government handouts that keep people in grinding poverty while secretly rubbing their hands in glee at their increased profits.
Actually, I don't see profits even entering the picture.
Business owners aren't the ones handing out the money; politicians buying votes from those receiving the money are. Smart people - they've somehow convinced a generous and caring public that giving free money away will reduce poverty - but not very honest as it only encourages more poverty than ever. And they know that, too.
Of course business owners aren't handing out their own money, Why should they when they can hand out your money?
As a business owner I'm curious, would you kindly tell me exactly where I'm "handing out" other people's money?
You know, all these "government" benefits that are paid out to the benefit of business owners.
Really? What benefits are those and where does one sign up for them? Where do I go to get my "government benefits" that are seemingly being given out to business owners, because I must have missed that memo?
What about the exemption form taxes that large companies seem to get. I pay more tax than the average multinational.
No, you don't. You've been told you do by politicians trying to get your vote, The truth is the United States has one of the highest effective corporate tax rates in the world.
Do you open a manufacturing plant in the depressed heart of the city?
Do you hire the handicapped?
Do you install extra CO2 scrubbers in your smokestack? Or burn nothing but low sulfur coal?
Did you suddenly expand your workforce by 1,000 or so, and in just the state that wanted you to?
The point is that all those tax breaks come about as responses to what congress wants to see. Our wondrous politicians are using the tax code as a tool for social engineering, to convince business to do what the politician thinks will help the country (or state or whatever). That companies follow those guidelines, getting tax breaks as a result, isn't surprising. Stop using the code to encourage business to do what congress would like to see (pass laws requiring it instead?) and business will find their tax burden rising rapidly.
It's easy, you just pay your workers less than they need to live on and the government will step right in and give them the rest of their wages with no cost to you.
If the Government is "giving them the rest of their wages" (a ridiculous notion in and of itself), then how exactly is that "no cost to me"? Where exactly do you think the Government is getting the money that they're giving to those workers?
I'm still failing to see the benefit to me.
I didn't say the benefit was to everybody, I did point out in another post that it was the tax payers subsidizing low paying businesses.
Right, but you're saying that the Government is giving out benefits to business owners, I want to know where I can go sign up for that.
You say that tax payers are "subsidizing low paying businesses", how exactly are they doing that?
That's not "subsidizing low paying businesses" though; one has nothing to do with the other. If a person doesn't make enough money from a job to support themselves, then they can go out and get a second job, like my parents did.
Both of my parents worked, and for most of my childhood, my dad worked 2 jobs. Now could he have gone to the Government and gotten benefits? Probably, but he chose to work to support his family, instead of asking the Government to do it for him.
I'm still waiting for you to tell me where I can get these Government benefits for business owners.
Are you blind! I've already told you. Pay your workers the minimum wage, pocket the difference and let the government (us) make up their wages.
Are you learning impaired? I've already told you that's not a "benefit to business owners" since: A) It doesn't work that way, and B) I still wouldn't be gaining anything.
This is why your brand of Socialism doesn't work John, it requires people to not be able to handle simple logic and reasoning.
You raise an interesting point there. If a businessman can not make enough money without gouging his employees, why doesn't he go out and get a second job?
Paying wages for labor is not "gouging his employees"; if they feel ill compensated they can quit. They chose to accept the wage when they took the job, and they continue to choose it every day when they show up for work. How exactly is that "gouging"?
What's the unemployment rate in the US these days?
So not being able to get another job has nothing to do with not wanting to give up the job you already have!
If a person feels that they're being exploited and "gouged" by their employer, why would they say?
Maybe they don't want labelling as scroungers!
So you're saying that staying with a "bad" wage is preferable to no wage at all?
So then why not do away with the minimum wage altogether? Sure wages would fall in the short run, but once the excess supply of available labor was exhausted due to the increase in employment, the power would shift from employer to employee. Companies can pay low wages now because there is a near endless supply of labor, if you dry up that supply, then companies will be forced to compete for every employee they have.
Are you really so naive as to believe that a fall in wages would lead to increased employment!
There's only so many big macs that a person can eat and with lower wages that number would fall, not increase.
Tablets must be working again John as I agree.
Wow John, you don't understand economics even a little do you?
Wages would fall, prices would follow. Companies could afford to charge less for products since they would be benefiting from lower labor costs. The most conservative estimates are that it would take 18 - 24 months for things to equalize, then you get an unprecedented shift in the way wages and labor work in this country.
Employers would no longer be in the "driver's seat" when it came to wages, since their power now is dependent on an endless supply of labor. Right now, if someone isn't willing to work for minimum wage, then they can be replaced by a dozen that are. When that supply of excess labor is no longer available; forget competing for the "best" employees, employers will be forced to increase wages in order to keep any employees at all. It will essentially turn the entire labor force into one large Union.
As a business owner, personally I like the system we have now. I can get cheap unskilled labor to do unskilled jobs, and I can compete for better skilled employees.
Really? I understand reality.
Wages would fall and with them the ability to spend. Companies would have to charge more to try to maintain profits from a shrinking market and then fail putting more people out of work.
Why would that supply of labour dry up? There would be fewer jobs, not more. markets would be a lot smaller, not larger. There would be less house building, fewer cars bought, fewer meals out, the list of things that would be less used is endless.
And yet you argue that the corporations don't fight to preserve the status quo and their profits!
I wouldn't be so sure on that one...
Maybe in Fantasy Land, but here in the real world, when demand falls, so do prices. The people that lose jobs initially would gain employment once we reached equilibrium.
Let me Schoolhouse Rock this for you so that you'll understand:
People want to work, they want jobs so that they can pay for things. The reason unemployment is as high as it is now, is because the quality of the labor available is not equal to the price being demanded for it. It's the same as with any other commodity. When the price of an item exceeds its perceived value, then demand drops; when demand drops, so do prices. This is why stores have "clearance sales", where they stimulate demand with lower prices.
Right now, in America, there is an abundance of "clearance sale" quality labor that no one wants because the minimum wage would require them to pay full price for it. Buy lowering (or eliminating) the minimum wage, you put that labor "on sale", which will stimulate demand. Since more and more people would have jobs, low paying though they may be, the supply of available labor would fall.
Now let's recap class: what happens when demand increases, and supply decreases? That's right, prices rise; the "price" in this case being wages.
First of all, I've never argued that. Second, I'm not "fighting to preserve" anything, I'm simply saying that I like things the way they are now.
OK, so explain to me why in the sixties and seventies when we had full employment in the UK we still had people working for abysmal wages?
That's simple: they didn't.
In 1955 when the UK had 1% unemployment, the average median salary was 729£, adjusted for average earnings (using 2012 numbers), that's the equivalent of 41,000£ today, roughly 150% of the average median income today.
If you assume everyone is independently wealthy, sure.
Living in a country without minimum wage laws, i would like to share my observations:
1. Wages are only low in service sector jobs.
2. In producing industry there is virtually nobody earning less twice the US minimum wage.
3. It may be amazing, but low wages are attached to jobs with little chance for mechanization, for automation. (Hairdressers for example). As soon as the job can be automated, the remaining employees receive their share of increased productivity and thus receive higher wages.
C) Done away with
To quote Walter Block "the minimum wage is the one of most stupid laws out there" - it is "compulsory unemployment, period" (Rothbard).
Why? Well, it's not hard to see that if you made minimum wage $1000 an hour, it would cause unemployment. Of course minimum wage supporters don't support it being that high. But if our aim is to raise poor people's income, what sense does it make to make low-paying jobs illegal? The logic is still sound if minimum wage is $7 an hour. Low-paying jobs are usually taken up by young people, or others just entering the workforce, as a chance to get experience. Individuals are usually not on that wage for more than 6 months as by then they have achieved the skills and experience necessary to move on. By that time, they are far better off than the individual who did not take the low-paying job because it was made illegal. $3 an hour is better than $0.
Those currently in employment may see their wage rise, but the cut in profit margin will force the business to rise prices of their products, cut production or make other cuts that inhibit its ability to generate capital and offer more jobs at higher wages. Otherwise, they are discouraged from hiring people and replace workers with automation (been to a supermarket lately?). Minimum wage cannot result in NET higher wages for workers.
How do you get rising wages? By raising employment! When everybody is employed, businesses have to work harder to attract the best talent, and usually that means offering higher pay. Minimum wage, being compulsory unemployment, obstructs the market from that goal.
Rothbard on minimum wage:
Walter Block on minimum wage:
What a display of lack of experience!
My friend is assistant manager of a shop and in her late forties. For this she is paid the minimum wage. Without a minimum wage she would be paid even less.
I said 'usually'. But how do you know she would pay less? Her boss might not want to lose her. There exists motivations for paying people more other than minimum wage law.
Her bosses complains of crippling wage bills. Don't sound very likely that he'd pay more does it?
He'll pay more if her labour's value to the company increases. He'll pay less when it decreases. Simple enough.
All other things being equal of course.
If employers are just slave-traders in the closet to you: why would any of them pay anybody at all? Clearly, people pay other people when their labour provides value for them - there is nothing sinister about that.
I hope your illusions are not shattered too soon.
Let me put it to you this way: when are you more likely to buy a more expensive product? When it provides more value or less value?
At this level people are to be viewed as commodities rather than products and who pays more for a commodity than they have to?
Look at it this way, there are twenty companies offering you the same electricity, are you going to use the most expensive or the cheapest supplier?
It makes no difference. If you find an electricity company that will give you a much better service but at a higher price, you may go for that one. You're saying the exact same thing as me: people buy things, whether it be consumer products or labour, in a balance between the price and the value it provides.
If the potential value A provides is the same as B, but B is cheaper, you will go for B. If A is more expensive but provides considerably more value than B, you may go for A.
If it were legal, employers may be tempted to hire people at 1p an hour, but this is obviously not a wage that is going to attract a skill of worker that they require. There is no incentive to pay the worker less than they're valued to the company.
If they acknowledge that their labour provides "value", why are they unable to "value" that employee?
Which is exactly why employers don't want full employment.
These statistics were true as of 2006:
Sixty percent of minimum-wage earners, two-thirds of them women, work in restaurants and bars; seventy-three percent are white, and seventy percent have high-school diplomas. Almost sixty percent of these people work part time.
It's pretty difficult to tell what sixty percent of minimum-wage workers truly earn, because these people work in restaurants or bars and receive tips; then again, the minimum wage is substantially lower for people in that situation. Neither side of this debate truly knows how much money most minimum-wage earners gross.
Milton Freedman was a Nobel economist. The Economist described Freedman as "the most influential economist of the second half of the 20th century...possibly of all of it." Milton Friedman said that “the substitution of contract arrangements for status arrangements was the first step toward the freeing of the serfs in the Middle Ages.” He clearly cautioned against set prices by stating, “The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum-wage laws.” Further, he said that minimum-wage laws are “one of the most, if not the most, anti-black laws on the statute books.” Echoing this sentiment, another notable economist, Arthur Laffer, said, "The minimum wage is the black teenage unemployment act. It is the guaranteed way of holding the poor, the minorities and the disenfranchised out of the mainstream is if you price their original services too high."
The fact that there are exceptions in the law, in some state, for teenagers proves that the law-makers understand the inherent logical fallacy of the minimum wage. If all a minimum wage does is raise wages, with no tangible unemployment effect, why do you need to make an exception for teenagers?
The point that these two economists made is that minimum wage works against black people, among other people. They weren't advocating special rules for black teenagers. They were advocating the abolishment of minimum-wage.
I know, I was simply adding to the point.
Surely if you remove the minimum wage requirements then employers are free to pay what they please. Here in the UK there are different rates for different ages, 21 and over £6.19 ($9.78), 18-20 is £4.98 ($7.87), under 18 is £3.68 ($5.82) and apprentices under 19 £2.65 ($4.19).
I wonder if Freedman calculated the effect the black economy has on the employment market? Here in the UK there have been plenty of reports that some are working for as low as £2 an hour, in one raid the UKBA found 30 people working illegally for just £1 an hour.
Its not perfect but every adult knows that if they start a job they will (should) get at least £6.19 an hour, in reality many get more.
Interesting. Are young adults (US thinking) of 18-20 years old then considered to be children, and still supported by their parents?
Unless of course you are lucky enough to be employed on a zero hour contract in which case you can sit around at work all day and not earn a penny!
Everybody I know John who is on the zero hours contract (and there a few) usually end up doing more hours than they want, but I do get your point. Both my nephews are on zero hours contracts and they don't sit around work waiting, they are at home and are usually phoned when needed. I don't suppose this is how they all work though.
Had to think before weighing in on this.
I'm not an economist, so I honestly am not going to speculate too much on whether abolishing the minimum wage would increase or decrease poverty.
The thing is that any alterations to minimum wage are a bandaid on a bleeding wound. They don't solve the basic problem.
The basic problem is this:
The number of people in this country is increasing. The amount of available labor is decreasing. The amount of available labor is decreasing at its fastest rate at the "bottom end." There's a drug store two blocks away from me that has one cashier on duty. That cashier is only allowed to sell cigarettes. She is only there because they have to have somebody do age checks. If not, there would be zero cashiers on duty: It's fully automated.
I fully expect to see this in supermarkets...I'd be intrigued to know if it's already happening in states where supermarkets are not allowed to sell alcohol.
Where are the cashiers who were working there five years ago?
Some right wingers would say "Work or starve." Work at what? Somebody's already designed a burrito-making robot. It's a prototype, but automation of fast food is on the horizon.
Adjusting the minimum wage is a bandaid.
What I'm going to say now will get me flamed: Capitalism is breaking down. Our technology has moved past the point where capitalism, as it is currently implemented, can work.
Instead of faffing about whether raising, lowering, or eliminating the minimum wage will result in fewer people starving to death, we need to start working on *replacing our entire economic system*.
Okay. Back on topic now...here's a couple of thoughts:
1. Do you really think anyone CHOOSES to work for minimum wage? As somebody else said: Bad wages are better than no wages.
2. What do we do about genuinely surplus labor? Not people who refuse to work, but people like those cashiers I mentioned. I know one answer is to get those people more skills, but they do have to survive while they learn the skills to maybe get employed.
3. How do you deal with situations where the low end wages are LESS than the rent on the cheapest accommodation available? And before you say "work two jobs" remember that the number of "jobs" is going down, and for every person who has two jobs, there's a person on welfare.
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