Minimum Wage questions

[Silent_One]

Humus wrote:

It is preferrable that wages are increased through normal market forces than anything else. With unions the min wages can be set up through a deal between the worker's organisation and the employers.

Unfortunately, things doesn't always work out that well. There are always unemployment, so you will always have people who will be more or less forced to take really low-wage jobs since there's nothing else being offered to them. Often social programs to take care of the unemployed are made such that it the amount of money you receive goes down over time to encourage you to search for a job. Also, it's commonly set up such that unless you actively search for a job and don't take a job being offered to you you won't receive any more unemployment allowances. All to ensure that you're not just lazy and are fine with just burdening the welfare system. Under such situations min wage is neccesary. The min wage limit still should be quite low, but it should be higher than what you can recieve through social benefits.

Well, first off, here in the US there are various union agreements that set wages based on different scenarios. For example the Government sets the prevailing rates on federally funded construction projects based upon the Davis Bacon Act. A laborer in Connecticut get approx. $23 / hour on state DOT projects, plus benifits. As an employer I pay FUTA (federal unemployment tax of 0.8% up to $7,000 income) and SUTA (state unemployment tax of 6.8% up to $15,000 income).If the employee is layed off and collects unemployment they can get up to $411 MAX. per week for 26 weeks (or $10.28 per hour for a 40 hr. week). So the social benefits are considerably more than min. wage.

 

[covermye]

No, I included it. The higher costs is what drives the employer to improve efficiency. What you forget however is competition. The last thing you want to do is raising the price. You look at other alternatives first to remain competive.

I don't agree at all with that logic, Humus. In the vast majority of cases, profit drives increased efficiency. If an employer has access to a technology that will improve efficiency, it will impliment it, plain and simple. It's silly to think otherwise. Who in their right mind would sit on a technology that would improve efficiency, and subsequently, profit, unless they were FORCED to impliment the technology due to government mandated labor wage hikes? Now does that really make sense to you?

Even with NO minimum wage, I agrue that a business would still impliment the SAME efficiency practices in order to sustain/improve profitability vs. the scenario seen where the government forces a large hike in the minimum wage.

 

[Willmeister]

I don't agree at all with that logic, Humus. In the vast majority of cases, profit drives increased efficiency. If an employer has access to a technology that will improve efficiency, it will impliment it, plain and simple.

Efficiency is largely irrelevant to when it comes to profit. Private industry will always seek profit even if it means continuing with outdated technology. There are still telephone exchanges in the USA that still run XB4s (I used to be serviced by one back when I lived in WA between '94 and '97). Digital exchanges are more 'efficient' than Strowger switches anyday... It wasn't profitable for them to replace it.

Just because something is more efficient doesn't mean managment will allow you to embrace it. Take it from somone who's seen the futility of getting upper managment to adopt technology EVEN IF IT SAVED MONEY LONG-TERM.

 

[Willmeister]

Even with NO minimum wage, I agrue that a business would still impliment the SAME efficiency practices in order to sustain/improve profitability vs. the scenario seen where the government forces a large hike in the minimum wage.

I didn't realize the sweat shops in Indonesia and China have implemented a comparable minimum wage. Or can a person really live on 30 cents an hour in these parts of the world?

As Chris Rock has said, minimum wage is an employer's way of saying "I'd pay you less, but it's against the law."

 

[Humus]

There's an obvious counter argument to that.

By making investment in developing your skills a personal investment, you encourage smart investing, vs. ad-hoc investing. That is, when you know your own resources are on the line, this not only encourages more dedication to developing your own skills, but it encourages you to more carefully consider what skills you want to foster and develop.

While true, this arguments doesn't carry much weight for those who simply don't have the ability to make such an investment in the first place.

 

[Dr. Ffreeze]

Humus,

While true, this arguments doesn't carry much weight for those who simply don't have the ability to make such an investment in the first place.

Who doesn't have the ability to make such an investment?

Dr. Ffreeze

 

[Humus]

I don't agree at all with that logic, Humus. In the vast majority of cases, profit drives increased efficiency. If an employer has access to a technology that will improve efficiency, it will impliment it, plain and simple. It's silly to think otherwise. Who in their right mind would sit on a technology that would improve efficiency, and subsequently, profit, unless they were FORCED to impliment the technology due to government mandated labor wage hikes? Now does that really make sense to you?

Even with NO minimum wage, I agrue that a business would still impliment the SAME efficiency practices in order to sustain/improve profitability vs. the scenario seen where the government forces a large hike in the minimum wage.

It's the strive for profit that drives increased efficiency. If you run your business with no economic problems whatsoever and with large profits the motivation to improve your efficiency in low. Sure, if there's an easy and obvious way to improve your efficiency it will likely be implemented, but you don't go looking for solutions unless there's a problem.

Example from reality: Ericsson, Swedish telecom company.
Basically, they dominated the global telecom switches market for a long time and cashed in big time on that market. At most they had like 120,000 employees IIRC. They are also doing cell phones and sold relatively well there too. Then there was Nokia. They started at zero, but grew aggressively. Would the management realize this treat they could easily have outdone Nokia. They had the cash, manpower and market share to simply run over them if they'd like. However, by cashing in big time money on telecom switches they didn't see that their cell phone business wasn't doing that well, and share holders were happy since there was still large profits coming in from old systems. As time went though the old systems became very old and profitability shrunk. Suddenly they started to realize how inefficient their whole business was being run. They were seriously overstaffed and began doing something about it. Today they are around 60,000 employees if I'm not mistaken. During all this time there had more or less been whole departments within the organisation that basically spent most of their time playing Quake and taking coffee breaks. But since they still were very profitable these things never really surfaced since noone saw a problem. Today though the organisation is halved and beginning to shape up again after many years with huge deficits, and they aim for reaching profit again the last quarter this year and so far seems to be able to reach that goal. Basically, without motivation, there's little striving for better profit. By demanding higher wages you create this motivation.

 

[Humus]

Humus,

While true, this arguments doesn't carry much weight for those who simply don't have the ability to make such an investment in the first place.

Who doesn't have the ability to make such an investment?

Dr. Ffreeze

The poor?

 

[Willmeister]

Who doesn't have the ability to make such an investment?

Those who cannot pony up the funds to go to school maybe?

 

[Willmeister]

By demanding higher wages you create this motivation.

You could almost consider it return on investment for employees.

 

[Dr. Ffreeze]

Willmeister and Humus,

I was living on my own, working at minimum wage jobs. I worked 3 jobs to make enough money to go back to school for a semester. If I can do it, why can't other poor people?

So, do you have any other ideas who doesn't have the ability to make such an investment?


Dr. Ffreeze

EDIT: Opps I think 1 or 2 of those min wage jobs were min wage + $1. My bad...

 

[Humus]

So you could do it, does that mean everyone else can?

We have people with family and kids, maybe even single with kids. We have people with disabilities. We have people that simply can't take having more than one job or even can't find a job.

 

[Willmeister]

Some people can swim the English channel, but even more can't. The "I did it, you can too" argument doesn't get very far with me and many other people for that matter...

You were living alone? No kids? No wife? No incontinent elderly parents to keep care of? No medical problems? Sounds like you had everything going for you. A lot of people don't have anything going for them through no fault of their own; they're too busy with minimum wage jobs just to pay for rent...

So you returned for a single semester? That must have been quite the workload...

 

[epicstruggle]

So you could do it, does that mean everyone else can?

Actually yes they can. You just need the will power. Ive seen many insparational stories of people who decided to pick themselves off the ground and make something of themselves. The problem is that its not fun and actually takes alot of hardwork. Many people just want to sit on their asses and watch tv or eat/drink themselves silly.

later,
epic

 

[Fred]

I can't believe no one has offered the econ 101 textbook argument against Minimum wage.

Namely, it directly correlates with inflation. Historically, every single time MW was increased, inflation more or less countered it with an extremely sensitive response function.

As for who in general benefit from MW. In the US, by and large the largest percentage of people on MW are teenagers, typically women.

 

[pax]

Not true. Minimum wage affects so few workers it has virtually no effects on core inflation. There are countless inflation studies in communities with pre and post collective bargaining where the only significant employer was 'the mill' or the mine and prices stayed relatively stable for most things.

This is a tired old argument that wage improvement is matched by price inflation. Wasnt true tween 45-73 and not true in those few communities with large wage gains due to union activity today...

 

[Dr. Ffreeze]

Willmeister and Humus,

First off, I want to warn you that this is a topic that I am very passionate about. It revolves around a belief of mine that I believe in every fiber of my being. It is a given in my life.

I can do anything I want to do.

I also have another belief.

I am not that different from the average Joe.

Please keep these things in mind when you read my responses. It might help you better see where I am coming from. =)

Humus,

So you could do it, does that mean everyone else can?

Perty much, yes. I never said it would be easy. I never said that your past choices would not make it harder, but if you wanted to you could do what I do. One great way of doing things that others do, it learn what they did day in and day out to get there. Do the same things, keep focusing and reevaluating if it is working, and most important keep trying. I put my pants on 1 leg at a time just like any normal man. If I can do it, then you can too. I believe this to the very core of my being. I am not super human. I am not inherently better than other men.

We have people with family and kids

I never said it would be easy. Who made the choice to have sex? What can happen when you have sex? Who made the choice to have children? I never said you could do anything you wanted without sacrificing anything. If you want to do Job_X, maybe you need to hold off on starting a family for a few. If you choose NOT to hold off, that is fine, just realize that it is YOUR choice.

maybe even single with kids

Single parents are very hard. Please remember that unless they were raped, they made a choice to have sex. If you have sex, you can have children.

We have people with disabilities.

Cool story (I was told it was true, but I have never met the man), I should see if I can find a link to it. A man was riding his motorcycle and his eye caught a billboard for a second too long. When he looked back in front of him, a dump truck was stopped in front of him. He laid down the bike in an attempt to stop. The gas cap came off and he was burned horribly. He lost his wife to a divorce. One day, he was taking 3 friends out in his small plane. He didn't notice that he had frost on his wings and crashed at the end of his runway. 3 men walked away, he was paralyzed from his waist down. He later ran for an elected office and his slogan was, "If you elect me, I won't be just another pretty face". He ended up losing, but became an owner of very large company and got married to a new beautiful wife.

W. Mitchell survived having his face burned off from a gasoline fire. After 2 years, he was back in the mix, succeeding again. He ran for Lieutenant Governor of Colorado with a button that said, "Vote for me; I won't be just another pretty face."



Then he barely survived a plane crash, which left him paralyzed below the waist….so he let them take off his useless toes to create new fingers (the old ones had also burned off). Now get this…. he got out of the hospital… AND STARTED ALL OVER AGAIN!! Even without the use of his arms and legs he seems to be getting more out of life than, well, than 93 of out every 100 who read these words.

Do you qualify no working legs, toes on hands, burned off face as being disabled? He did pretty well don't ya think? People sell other people way too short. Heck, it is now a medical condition to be short in America!?! /gah

There is a wide range of disabilities and all of my comments in this thread were targeting at non-disabled people.

We have people that simply can't take having more than one job

Why would this be? Are they physically disabled or are they lazy?

even can't find a job.

Move if your area has zero minimum wage jobs. Minimum wage is not much at all, but it IS a start! =)

Willmeister,

Some people can swim the English channel, but even more can't. The "I did it, you can too" argument doesn't get very far with me and many other people for that matter...

Why not? Do you see me as someone super special, or do you see the average Joe as dumb, poor, and weak? I am not trying to anger you with that statement, but I couldn't think of any other way to ask it. /sigh

You were living alone? No kids? No wife? No incontinent elderly parents to keep care of? No medical problems? Sounds like you had everything going for you. A lot of people don't have anything going for them through no fault of their own; they're too busy with minimum wage jobs just to pay for rent...

Well, I was living alone working for money to go back to school. I got an apartment, wanted to sign a 4 month lease, but they said don't worry you can just sign 1 month before 4 months is up. In my youthfulness I didn't press the matter. My girlfriend lied to me and told me I was a father. I got sick, went to the doctor about my throat as it was all puffy. Ends up I was hospitalized that day, and they saved my life the next day. (RaR!). I have a cool scare running across my thought for about 5" to 6". While I was in the hospital, I was didn't go in and give my 1 month notice. I was therefore stuck with an extra month's rent, and I was already broke. I picked myself up and went back to school but not in the semester I had planed or hoped. So, if you think that sounds like I had everything going for me, wow.

Funny thing is, I had not thought about all of those hardships in a long time. I never NEVER blamed anyone! Life is not a bed of roses. My trials and tribulations made me the man I am today. Roll with the punches life deals you, and at the end of the day, the only person responsible for me is me. I can cry about it, or I can deal with it and make the best of it.

A lot of people don't have anything going for them through no fault of their own;

Do you think having kids is no fault of their own? They chose to have kids. Do you think getting married is no fault of their own? They chose to get married.

So you returned for a single semester? That must have been quite the workload...

Yup, I didn't make enough money to go back to school full time as it was very expensive. I had to go back a semester here and there. Again, I never said it would be easy. =P

epicstruggle,
Kudos!

Humus and Willmeister do you two think that someone should be able to have the joys of having 4 or 5 children and not have to make any sacrifices in their life? For most of us, if you have 4 or 5 children money will be tight. If you have 4 or 5 children then because of that choice it will be VERY hard for you to take European vacations or put yourself though college. It seams like you two feel that having children should not cause any sacrifices in your life. Did I misunderstand you? If not, then can you explain why you think that way?

Again, please remember it is a giving in my life that I can do anything be anything I want to be. PERIOD I also don't think I am a superman or somehow a gifted genius. I believe ANYONE that works hard for it, has the drive, determination, and is willing to sacrifice and do what they want to.

Dr. Ffreeze

 

[Joe DeFuria]

*clap, clap, clap, clap*

 

[Natoma]

I can't believe no one has offered the econ 101 textbook argument against Minimum wage.

Namely, it directly correlates with inflation. Historically, every single time MW was increased, inflation more or less countered it with an extremely sensitive response function.

Though in our current economy this would not necessarily hold true. There are many seemingly inflationary forces in the economy, yet productivity, among other things, has held it at bay. So historical examples might not exactly hold sway in today's "new economy" as it were.

Anyways, I did the calculation on a $5.15/hr job. At 8hrs a day, 5 days a week, 50 weeks in the year (2 weeks vacation), that would give a person roughly $10K a year in salary. The poverty line for a family of four is around $13-$15K I believe. While it's not exactly breaking the bank, a single person making minimum wage would seem to be pretty "well off" considering where the poverty line for a family of four is.

As for who in general benefit from MW. In the US, by and large the largest percentage of people on MW are teenagers, typically women.

Wouldn't this be a more accurate statement if you say non-high school graduate? There isn't much you can do without a high school diploma. Hell even GEDs aren't all that much to write home about these days.

 

[pax]

Plenty of optimistic opinions there freeze but is it realistic? Im sure some are too pessimistic but I cant see how everyone is an average joe in terms of intellectual abilities. Im sure many dont exploit their abilities to the fullest for various reason such as self esteem or lack of ambition ect. But you cant be serious that most have the same or near abilities.

I just dont see that as realistic. Ive been to university and seeN people study their asses off and barely pass with others cracking open a book a day or 2 before the exam and with their godly photographic memory pass with straight A's.

Why can we plainly observe and accept extreme variations in physical attributes and abilities and not see the the same process with the intellect? Im not talking obvious handicaps here...