98 replies to this topic

[Darkademic]

First off, it's a form of price fixing (which you would be jailed for, had you done it, but the government gets away with it).

Second, it is an initiation of force for the government to dictate what a company does or does not pay its workers.

Thirdly, it interferes with the market and causes more harm than good. If the minimum wage was above the natural market amount, then costs go up as a result, and thus products go up in price, putting the workers back where they started. The minimum wage causes artificial inflation in this case. Conversely, the minumum wage may in fact cause workers to be paid less than they otherwise would have.

Fourth, minimum wages actually destroy low paid jobs and create extra unemployment.

Lastly, the minimum wage rests on flawed Marxist economic premises. What does he think the minimum wage should be? £20? Why not a million £, so we can all be millionaires?

[Twilight]

Inflation is the increase of prices on a nationwide scale -- and can only be caused by an agency that has the power to act on a national scale, I.e. the government. Inflation is caused by the government 'inflating' the money supply with fiat dollars. Inflation is like a secret tax that robs you of the value of your money before you have a chance to spend it, and increasing the minimum wage is one cause of inflation.

Your points are spot on Reaver, and there isn't that much you can add to them. People these days act as if people worked for a penny an hour before the minimum wage came along.

[Darkademic]

Your points are spot on Reaver, and there isn't that much you can add to them. People these days act as if people worked for a penny an hour before the minimum wage came along.

Thanks.

Totally true that. That is why it may prove difficult to ever retract such law. People have to understand that is actually of no benefit, and that it is actually harmful.

[LordSilly]

Did you know that theres no minimum wage in China? Did you also know that thousands of people over there work full time jobs for months and get paid nothing... just for the work experience and the hope that they might eventually get paid?

Just a thought. I don't really have an opinion on the subject.

[Donkzy]

can you master the phrase 'Do you want fries with that' enough said

[ReaverMage]

First off, it's a form of price fixing (which you would be jailed for, had you done it, but the government gets away with it).

Second, it is an initiation of force for the government to dictate what your company does or does not pay it's workers.

Thirdly, it interferes with the market and causes more harm than good. If the minimum wage was above the natural market amount, then costs go up as a result, and thus products go up in price, putting the workers back where they started. The minimum wage causes artificial inflation in this case. Conversely, the minumum wage may in fact cause workers to be paid less than they otherwise would have.

Fourth, minimum wages actually destroy low paid jobs and create extra unemployment.

Lastly, the minimum wages rest on flawed Marxist economic premises. What does he think the minimum wage should be? £20? Why not a million £, so we can all be millionaires?

The problem with no minimum wage is that people can be exploited- as we all know, when lots of people want a job, the employer can lower the wage without worry. This means the job is not enough to live on- if there were no minimum wage, many many people would not earn enough to live. This means, without raising taxes, either the government goes virtually bankrupt paying 'benefits' or stops paying benefits. This means many people have to rely on charities, but there are simply not enough charities to support all these people, so a large proportion would die.
If the Government did raise taxes on the rich, this would be a form of communism- which I know you are avidly against, and this would be anti-capitalist. As the old argument goes, "I earned this money, why should I pay for some lazy benefit cheat."

I'm not really sure where you found unbiased statistics that minimum wage destroys low paid jobs and creates extra unemployment.

I'm pretty sure minimum wage should be the minimum people can earn and still survive with food, shelter, clothes, and basic necessities.

Minimum wage doesn't really rest on flawed Marxist policies- I mean, it is a way of stopping thousands of needless deaths while maintaining as free a market as possible.

[Matre]

First off, it's a form of price fixing (which you would be jailed for, had you done it, but the government gets away with it).

Second, it is an initiation of force for the government to dictate what your company does or does not pay it's workers.

Thirdly, it interferes with the market and causes more harm than good. If the minimum wage was above the natural market amount, then costs go up as a result, and thus products go up in price, putting the workers back where they started. The minimum wage causes artificial inflation in this case. Conversely, the minumum wage may in fact cause workers to be paid less than they otherwise would have.

Fourth, minimum wages actually destroy low paid jobs and create extra unemployment.

Lastly, the minimum wages rest on flawed Marxist economic premises. What does he think the minimum wage should be? £20? Why not a million £, so we can all be millionaires?

1. Yes, it's a form of price fixing: that in and of itself isn't necessarily a bad thing if you don't provide context. The price fixing you're talking about doesn't even keep people above the poverty line over here (US side), so I feel don't quite understand how the existence of price fixing has inherent negative connotations.

2. Yes, the government is taking part in dictating the rules by which employers treat their employees. Are you attempting to say that people will be treated better in a system without government interference? Or are you inferring that the welfare of the country's citizens fall second to a company? I can understand the argument that companies can't work most efficiently with the government breathing down your neck, but lets be realistic here: no one is making bucko bucks with minimum wage. Yes, it makes companies less efficient, but arguing about how poorly the government is treating the business when the employees are literally in poverty seems like a question of values to me.

3. There is some inflation over what the market might have in a completely government intervention-free set up, but I feel like arguing that the costs should be pushed to these people seems a little unfair. Class disparity is a very real thing, and by lowering the already meager earnings of this group, I feel like you're kind of missing the point of why the government interferes in markets at all.

4. You're arguing that more people employed at below poverty line is a better alternative? These are not super competitive jobs: If I want to go out and find a minimum wage job, it won't be very hard, and while it is true that employers will hire more people at sub-minimum wage, the quality of life for people shifting from minimum wage to sub-minimum wage in that situation will go down. There is no guarantee that reduced cost of goods as a result of lower costs will make these people's lives better.

5. I feel like the argument "Marx was a proponent of things like this, and Marx was wrong about a lot of things" isn't a very sound argument. That's like saying "Adam Smith was wrong about a lot of things, and therefore capitalism is impossible."

[Darkademic]

[...]

I'll try to reply properly a bit later, but in the mean-time:

http://mises.org/dai...nimumWage-Rates

http://www.youtube.com/watch?v=M10ufvIcrO8

http://www.youtube.com/watch?v=R9yqnypMYXc

[Matre]

The link is very clearly a rather biased source: I'll await your response, as apposed to refuting that whole website.

Also, to be clear: I'm at college majoring in economics: I understand the basics of unemployment, so the videos aren't particularly necessary. I could get into economies of scale, and how that further drives down the value of unskilled labor relative to other countries in this global economy of ours, but I'd still rather wait for your actual response.

[Darkademic]

The link is very clearly a rather biased source: I'll await your response, as apposed to refuting that whole website.

Also, to be clear: I'm at college majoring in economics: I understand the basics of unemployment, so the videos aren't particularly necessary. I could get into economies of scale, and how that further drives down the value of unskilled labor relative to other countries in this global economy of ours, but I'd still rather wait for your actual response.

It depends what you mean by biased - the site is a simply a library of economic literature based on the Austrian school (which I assume you're familiar with). "Biased" is too often used as a way of attacking consistency, whereas it should be used to describe argumentation based on emotion or external interests rather than on evidence. You cannot dismiss an entire school of economics with a history spanning more than a century by labelling it biased.

I've studied economics, politics and philosophy for something like ten years now (mostly through reading books and exploring the issues myself), and I'm also a former socialist. I later shifted towards a more centrist/liberal position similar to what you seem to be advocating, until finally I began to consider myself a full on free-market capitalist in around 2004. DarkWinter (my co-leader) is also studying economics at the moment and he'd agree with me that universities are part of the problem, as they tend to heavily favour a very middle-of-the-road perspective. You have to be very critical and not just accept everything as "obviously objective" due to it being espoused in academia; the humanities in general are very left-leaning in universities - which is actually why I was originally a Marxist.

This video (that I also posted in the Communism vs Capitalism thread) is equally relevant here: http://www.youtube.c...d&v=T6fg5IV6KD8

1. Yes, it's a form of price fixing: that in and of itself isn't necessarily a bad thing if you don't provide context. The price fixing you're talking about doesn't even keep people above the poverty line over here (US side), so I feel don't quite understand how the existence of price fixing has inherent negative connotations.

2. Yes, the government is taking part in dictating the rules by which employers treat their employees. Are you attempting to say that people will be treated better in a system without government interference? Or are you inferring that the welfare of the country's citizens fall second to a company? I can understand the argument that companies can't work most efficiently with the government breathing down your neck, but lets be realistic here: no one is making bucko bucks with minimum wage. Yes, it makes companies less efficient, but arguing about how poorly the government is treating the business when the employees are literally in poverty seems like a question of values to me.

I notice that your points are tending towards philosophy and morality rather than economics - you are arguing for specific goals and outcomes. Economics does not deal with whether it's right or wrong for some people to be unable to afford certain things, or whether it's right or wrong for companies to make vast profits by paying their workers very low wages, or whether class disparity is a bad thing, or how best to make people's lives better - it is simply a way of explaining and predicting why and how people trade goods and services. If you want to debate in terms of morality then that's fine, as long as we're clear on the difference between the two disciplines.

In terms of points 1 and 2, my argument is essentially that the government has no right to dictate how much I can pay an employee. What if the government put a minimum price on shoes - so that shoe shop owners were unable to charge lower than say $50 for a pair of shoes? It sounds ridiculous, but it's exactly the same thing; a shoe shop owner sells shoes in exactly the same way that an employee sells their labour. Moreover, I run a business myself - who are you to tell me what I can or can't do with my own money?

3. There is some inflation over what the market might have in a completely government intervention-free set up, but I feel like arguing that the costs should be pushed to these people seems a little unfair. Class disparity is a very real thing, and by lowering the already meager earnings of this group, I feel like you're kind of missing the point of why the government interferes in markets at all.

I'm not sure I understand you here. The minimum wage only came into effect in the UK in 1997 - and it's not like people starved in the streets or found it near impossible to survive before that. The gap between rich and poor (although I don't consider it to be a meaningful measurement) has actually increased since then, as has unemployment.

Companies can easily maintain their profits by either passing on their costs to consumers (by increasing prices - which harms the poor the most), or to employees (by hiring fewer people - which also harms the poor the most).

4. You're arguing that more people employed at below poverty line is a better alternative? These are not super competitive jobs: If I want to go out and find a minimum wage job, it won't be very hard, and while it is true that employers will hire more people at sub-minimum wage, the quality of life for people shifting from minimum wage to sub-minimum wage in that situation will go down. There is no guarantee that reduced cost of goods as a result of lower costs will make these people's lives better.

First define what you mean by poverty line. Like I said above, people were not starving in the streets before the minimum wage.

It is of course better for people to be employed on a low wage than to be unemployed.

5. I feel like the argument "Marx was a proponent of things like this, and Marx was wrong about a lot of things" isn't a very sound argument. That's like saying "Adam Smith was wrong about a lot of things, and therefore capitalism is impossible."

True, I tend to take it for granted that people know how deeply incorrect Marx's theories were. I don't mind discussing Marxist economic theory in more detail if that's what you asking for. I've actually recently had a lengthy debate on the subject so I could just copy some of my responses from there. It basically comes down to Marx's complete misunderstanding of the concept of value. Value is not a function of labour as Marx argued, it is tied to supply and demand (which presumably is one of the first things you learnt about studying economics). Actually it'd be more accurate to say that value is demand (or rather, that demand is the sum of the value that people place in a particular good or service), and price is determined by supply and demand.

[Bibidiboo]

I disagree! If everybody shared everything and everyone would be happy because they love sharing and being happy, communism would totally work out.. !

[Dodger]

In terms of points 1 and 2, my argument is essentially that the government has no right to dictate how much I can pay an employee. What if the government put a minimum price on shoes - so that shoe shop owners were unable to charge lower than say $50 for a pair of shoes? It sounds ridiculous, but it's exactly the same thing; a shoe shop owner sells shoes in exactly the same way that an employee sells their labour. Moreover, I run a business myself - who are you to tell me what I can or can't do with my own money?

I'm not sure I understand you here. The minimum wage only came into effect in the UK in 1997 - and it's not like people starved in the streets or found it near impossible to survive before that. The gap between rich and poor (although I don't consider it to be a meaningful measurement) has actually increased since then, as has unemployment.

What I feel you are missing from your argument is that the Government sets a minimum level of income for each family in the UK. When people are in low paid work and earning less than this minimum level the government offers them a list of benefits - i.e. Tax Credits, Housing Benefit, to increase their income so that they can maintain a minimum standard of living and not starve. These benefits are paid for through taxes and national insurance.

You argue that the government has no right to tell you what to pay your employee. I would ask why should you be allowed to pay your employee so little that they claim benefits and you get your companies profits increased at a cost to every tax payer?

[Darkademic]

What I feel you are missing from your argument is that the Government sets a minimum level of income for each family in the UK. When people are in low paid work and earning less than this minimum level the government offers them a list of benefits - i.e. Tax Credits, Housing Benefit, to increase their income so that they can maintain a minimum standard of living and not starve. These benefits are paid for through taxes and national insurance.

You argue that the government has no right to tell you what to pay your employee. I would ask why should you be allowed to pay your employee so little that they claim benefits and you get your companies profits increased at a cost to every tax payer?

Well I'm also opposed to all forms of taxation, so ideally that wouldn't be an issue.

My fundamental principle in terms of politics/economics is that nobody has the right to force anyone else to do anything, all interactions between people should be voluntary.

[mixe]

my view is min wage is good not having a max wage cap is bad maybe the japs have the right idea and that is max wage cannot be higher than 20x min wage

[Insathius]

Any "cap" on wages is bad mate, any restriction on a companies ability to alter it's own wages is bad since it restricts their ability to maximise profits. For example, if wages were set at a minimum of X but due to market conditions the company needs to have extra hour of labour then in a free market scenario they would lower/raise the wage rate to compensate for the extra hours of labour needed. If there is a 'minimum' wage rate, then they need to pay extra to attract the labour supply thus, lowering profit potential.

Think of it as a restriction on freedom for the companies involved, if they are not free to alter their own wages (max or min) then they cannot by definition reach their full potential as companies.

[mixe]

there would be no labour shortage for people as the profit would go back into company /shareholders dividend and would prevent directors/execs asset stripping a company.for their own gain .

Edited by mixe, 03 May 2012 - 09:59 pm.