Minimum wage

Should we abolish the miminum wage?

  • Yes

    Votes: 7 38.9%

  • No

    Votes: 10 55.6%

  • I don't know or I don't care

    Votes: 1 5.6%
  • Total voters
    18
I think there should be a maximum wage...I'm tired of people earning enough for 27 generations and getting a big parachute in their severence. THEY are the ones throwing everything out of balance, not the little guy...
 
That's an interesting concept, but unfortunatly in a free market society, it won't work any better than abolishing the minimum wage. I'd really like to hear the answer to the previous question.

Jerrek, do you know WHY there is a minimum wage?
 
Yes I do. I'd love to reply to all the responses and points brought up on the previous page, but I'm actually doing math homework and don't have time right now for a long debate.

For now, I will just type a short message. The concept of the minimum wage was that it would force employers to pay workers a minimum rate to prevent them from exploiting the workers. It also assumes that it will put more money back into the consumer's hands and acknowledges that while fewer people might be hired, overall the economy would benefit because more money is put into the hands of consumers. It is also a way to put laborers on a more equal stand with employers because unions typically believe that employers are there to cheat any worker as much as possible. Hence, the minimum wage.
 
A minimum-wage law is simply a form of price control: it prevents anyone from selling his labor below a certain price. Whenever a minimum price is established, some portion of the good or service involved will not find a buyer. Just as the European Community's establishment of a minimum price for butter has resulted in a huge surplus (the "mountain of butter" that the EC buys from its dairy farmers), the establishment of a minimum wage inevitably creates a surplus of labor, called "unemployment."

Politicians and some economists claim that a minimum wage raises wages for all workers at the lower end of the pay scale, but all the evidence is to the contrary. Every country with minimum-wage laws also has high and persistent levels of unem-ployment. Only in countries with no minimum-wage laws is there little or no unemployment. The reason is simple: an employer will only offer someone a job when the value of his work exceeds the amount of his salary. When a minimum wage is set at, say, $4 an hour, only those people whose value to a company is greater than $4 an hour will find employment.

But without minimum wage laws wouldn't the workers be "exploited"? Wouldn't they be at the employers' mercy? Not necessarily. In fact, when there are no minimum-wage laws, employees actually have far greater job security - a security provided by the market. This was demonstrated by the job market in Hong Kong, where there were no minimum wage laws and where "everybody has a job."

http://www.isil.org/resources/lit/jobs-min-wage.html
 
i like the idea that there is a minimum requirement to be paid as ash said its not much in and of itself but think of a company paying maybe 1.00 an hour. thats shit money. companies only care about one thing and it isnt their workers. its the money. thats all that matters to them so theyll pay as little to save more.
 
Just as the European Community's establishment of a minimum price for butter has resulted in a huge surplus (the "mountain of butter" that the EC buys from its dairy farmers), the establishment of a minimum wage inevitably creates a surplus of labor, called "unemployment."
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that's not really correct...the mountain of butter is a result of over production by the EU farmers.
the amount of people who can work isn't a result of production in such sense.

Politicians and some economists claim that a minimum wage raises wages for all workers at the lower end of the pay scale, but all the evidence is to the contrary. Every country with minimum-wage laws also has high and persistent levels of unem-ployment. Only in countries with no minimum-wage laws is there little or no unemployment
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what we should realize is the way of living we're discussing here. you say there is little or no unemployment in countries with no minimum wages.
for example: third world countries. yey! they have little unemployment. but yey! they have no minimum wages, and those people work their ass off for 2 dollars a week.
would you work for that amount of money? pretty sure you wouldn't.
now, if there could be a guarantee that the employers wouldn't make deals among eachother to set fixed low wages themselves, and the free market system would work perfectly, then the idea of no minimum wages would work.
unfortunately we don't live in such a world. the first thing would never happen in the first place due to one human factor: greed. perhaps not everybody would be that way, but there would be a few, disturbing the balance.

But without minimum wage laws wouldn't the workers be "exploited"? Wouldn't they be at the employers' mercy? Not necessarily. In fact, when there are no minimum-wage laws, employees actually have far greater job security - a security provided by the market. This was demonstrated by the job market in Hong Kong, where there were no minimum wage laws and where "everybody has a job."
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that's seriously a nice example. but then again, the whole attitude of the employees over there is significantly different from those in the US, Canada or The Netherlands.
most of them get a job, and stay loyal to their boss the rest of their lives.
around here, people are job hopping, and demand a lot more than the people do out there.
the attitude on that job market is completely different from here. it has shown to be succesful over there, but the arrogance around here would in my opinion prevent it from being succesful here.
 
I think there should be a minimum wage, but
I think it should be lower in some cases and higher in some
cases, depending on the skill level of the job.
For instance I don't think the minimum for a job in a
chicken plant, stacking boxes, should have as high of a
min. as it is now, But a machine shop postions with someone
programming a 6+axis machine should be higher.
It was my experience though that noone will now work
the higher skilled jobs for anything near the min.,
and some of the people working the lower skilled jobs
would still work that job for $1/hr less.

I think this would promote education too probably.:confuse3:
 
I haven't heard of a job paying minimum wage in many years. So I think its kind of a moot point. But nevertheless, i say that its best to let the market sort it out. It does now, and wages are significantly higher than the minimum even at the worst jobs. Ok, unless maybe we are talking about the mississippi delta or WV in which case, the cost of living, and prices are causing wages to be low, and forcing wages higher than the market wage in these areas is inefficent. Remember the old supply and demand curves? You are increasing unemployment when the minimum wage is in effect. In fact, it has an effect even currently, because more industries would be profitable, and therefore possible in the in the absence of the minimum wage. All it does ultimately is reduce employment, and send all industries that cannot compete or make a profit wages at paid at the minimum level abroad. Almost ANY rational economist would not want minimum wages. This is purely a political issue. You are only trading one problem for another. You trade lower employment levels for higher wages for the fewer people who continue to have jobs. And btw, the major cost in producing that happy meal is LABOR, thus price levels would fall, and those people earning less than the current minimum wage in theory could live better than they do now at minimum wage. This is one case where the answer is clear, but the political spin sounds real nice for the poor so we continue to do it, and people continue to vote for the democrats who favor it, ok, not really favor it, but claim to to get a vote.
 
Btw, the market mechanism works quite well, which is exactly why there are very few if any jobs that pay the minimum. They were all driven out of business and the work was sent abroad. All we have left is firms that can compete and make a profit while paying well over the minimum wage.

I don't buy this argument that markets don't work. They work quite well. Granted, they work a hell of a lot BETTER in the US, when they are less restricted by gov't intervention. I remember arguing with my wife about market mechanisms and economic theories. She said they are all theories, and don't work in practice (remind you, she IS an economist) but of course she is also a European (a central european from a former communist country). Sure, market mechanisms dont' work when they are overridden by the gov't, but in a truly free market they work quite close to how theory would predict. A simple example I had to illustrate last year is airline ticket prices. In the fall, I can fly to Europe for under $400, but if I make the same flight in July (when demand is high, like I did last summer) it costs me over $2000. I think this is a perfect example of supply and demand working. Demand drove prices incredibly high, and when demand fell in the fall, prices fell dramatically in turn. The same mechanism works for wages, and abolishing the minimum wage (at least in the US) would have little or no impact on those already working. It would however increase the number of firms doing business here, and the types of firms doing busness here, thus increasing employment. McDonalds isn't gonna pay the burger flipper less cuz the minimum wage goes away! Actually, last I checked, they pay about $6-9 an hour depending on what city you are in, and to my knowledge minimum wage is around $5. So is it even having an effect? I don't think there are too many lower paying jobs than this STILL IN THIS COUNTRY, but maybe I'm wrong. And if there are, there are very few, and even fewer working at these pay levels. Lets look at actual numbers. I can't remember the numbers, but I challege someone to show that more than 1% of workers is making minimum wage!!! And don't forget waiters and waitresses because they don't declare tips and after tips they generally make well over $10 (total compensation) so it should be quite misleading. Even counting them, its still gonna be less than 1% working at minimum wage. I can't speak for other countries, because as my wife once told me, economics doesn't work there. And it shouldn't, they aren't "free markets." At least they don't show much resembelence to them compared to the US. Ours are far from 'free,' but its the closest approximation in the 'real world.'
 
You apparently don't live in a very poor area of the country. In rural areas, there are plenty of people working for minimum wage, and would be working for much less than minimum were it legal.
 
Shadowfax,

People bitching about prices IS an example of the market mechanism. Ok, I'd like a new AthlonXP 2800+ but I'm too cheap to buy it, so I buy a 1700+ instead. Well, there are only so many 2800+ chips in the world so my willingness to pay determines if I will have one or not. Its a very good mechanism to sort these things out. Nobody said a free market lead to Utopia. They only said its an efficent way to distribute goods. Those who have the most marginal benefit from something are willing to pay the most, and those with lower marginal benefits will choose a less expensive product to subsistitute for it. The market mechanism works just fine. Nobody said it was 'fair' but nobody can argue its efficency in most cases. I'm sure a lot of gamers out there would like as much power as one of the supercomputers running at los alamos, but I don't think people would argue that its more efficent that that its being used to solve the mysteries of the universe rather than to play Unreal tournement 2 at the highest possible frame rate. Ok, maybe not a wonderful example, but it states the point. Those who can make the most use of something get it. Of course, that means the rich get more than the poor, and ok maybe its an inefficency that some idle rich person buys the newest 3ghz p4 and lets it set while some unemployed college student who doesn't go to class or study might play ut2 all day with it and dervive the most benefit, but this is just one example. In most case, prices work as a good mechanism to make decsions based on how much you 'need' something. There are only so many 3ghz P4s, and intel can only make so many. WE can't all have one, at least not today, thats just the way it is. The market is just one mechanism to decide who gets what. We could go the socialist route and decide based on need, but then we would have to listen to how much each person deserves it, and have a committe to decide who gets it etc etc. Its not really efficent. And in truth, we see how gov'ts work, not like they should in theory. In truth, if I'm the guy on the 3ghz P4 distribution committee and I know you, and like you better than say ol' man (he likes celerons more so lets pick on him) I'll give it to you, and not to ol' man, not because you will use it more, but only because I'd rather give it to you. There are inperfections everywhere, but nevertheless the market works most efficently, and arguably, maybe even the most fairly.

Sorry, i didn't mean to pick on ya shadowfax, I just disagree in this case. I'm not taking sides, I didn't even read the whole thread yet, its just that you guys are exaggerating the effects of the minimum wage, and underestimating the efficentcy of markets to such an extent that its utterly ridiculous. Markets work, and eliminating minimum wages would have almost NO EFFECT on the US economy at least. Look at studies, or some professional journals if you don't believe me.
 
well many people work for less than minimum wage everywhere, all summer long. Of course they aren't citizens, thats why they do it.

I think I live in a relatively poor part of the country. I live in Kentucy now. I'm shocked at the difference in wages. In Ann Arbor McDonalds had signs up offering $10 an hour to start. Down here, I think they pay only $6.50 to start. Still, its above minimum wage.
 
As far as "poor part of the countr" goes though, there is a such thing as labor mobility. I lived in michigan my whole life, I couldn't find a job there when i left school so I moved here. I could stay there an be unemployed or I could move and have a job. The same is true for low wages. If people move from an area of low wages to a place where they are higher they will recieve higher wages, as will the people who remain. Supply of workers falls in the poor rural area pushing up wages, and wages fall much less in the more densly populated area because the affect of an increase in labor supply is dramatically smaller in the densely populated urban area than in the sparsely populated rural area. Thus there is an increase in wages in the rural area, and an inperceptible decline in the uraban area.

Ultimately, wages are determined by the worker, not the employer. If everyone refuses to work for a certain amount the employer must pay more. That is why labor unions strike, and that is exactly why strikes work. If people weren't willing to work for such low wages they would pay more. Wages are a function of the workers willingness to work. Employers don't set wages. Maybe in extremely poor places this is different, but generally MOST of the US doesn't live in a poor area. Now, the statements about pay in the 3rd world are really misleading because it has nothing to do with the absence of minimum wage laws, and is entirely to do with price levels and the workers willingness to accept whatever pay they can get.
 
Ultimately, wages are determined by the worker, not the employer. If everyone refuses to work for a certain amount the employer must pay more. That is why labor unions strike, and that is exactly why strikes work. If people weren't willing to work for such low wages they would pay more. Wages are a function of the workers willingness to work. Employers don't set wages. Maybe in extremely poor places this is different, but generally MOST of the US doesn't live in a poor area. Now, the statements about pay in the 3rd world are really misleading because it has nothing to do with the absence of minimum wage laws, and is entirely to do with price levels and the workers willingness to accept whatever pay they can get.
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Workers faced with the choice of getting $1.50 an hor or nothing will probably pick the $1.50 whether it is in the 3rd world or Michigan.

As for "Labor Mobility", how are you supposed to move yourself or you're family IF YOU DON"T HAVE ANY MONEY?

You're arguement is fairly ridiculous.
 
Haven't had time to read all the posts so if this is already said-sue me.

Ultimately, wages are determined by the market. If employer A pays everybody x per hour & Employer B does the same job at the same cost, it's the market. If Employer A see's worker B :rolleyes: is outstanding at the job, employer A may offer Worker B more money to work for him. On & On it goes. Do a good job & you're worth more, to a point.
 
True Gonz, but there are also people out there that will look for the cheapest possible labor they can find, to do menial or repetitive tasks that require little skill. This is the reason for the minimum wage to begin with, to keep factory owners from exploiting their employess.
 
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