ATAR Notes: Forum
General Discussion => General Discussion Boards => News and Politics => Topic started by: brendan on December 27, 2007, 06:38:53 pm
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Should there be a minimum wage? Why?
In 152 pages David Neumark and William Wasche discusses over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia. Their conclusions:
"Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research" by David Neumark, William Wascher http://papers.nber.org/papers/w12663
"We review the burgeoning literature on the employment effects of minimum wages - in the United States and other countries - that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups."
There is also good evidence that higher minimum wages raise the high school dropout rate.
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LOL! This is funny because at work yesterday I was talking to an american girl that is now working with us (previously working at Burger King in America) and she said that yesterday (boxing day) she made 100 dollars less than she would have made in 2 weeks in the states. (exchange rates are pretty close at the moment)
Apparently the minimum wage over there us really crap which is why there is compulsory tipping in many states for waitresses.
My view is that if someone has to move countries because the minimum wage is too low and as result they are living in poverty then the system has failed society.
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the system
what system?
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My view is that if someone has to move countries because the minimum wage is too low and as result they are living in poverty then the system has failed society.
Economics shows us that if we set a minimum price on wages, then we could reduce the amount of workers. Hence, minimum wage increases are often associated with increases in unemployment, and also an increase in inequity (the few who become employed under a minimum wage regime get paid more, while the ones who don't make the cut will earn nothing).
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Should an 20 year old receive $5.15 an hour in a developed country such as America?
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Should an 20 year old receive $5.15 an hour in a developed country such as America?
Wouldn't it be better if he or she could have more... but at what price?
Does it make sense to give a 20 year old a wage of $13 an hour, but possibly lose jobs for other 20 year olds? Installing a minimum wage causes employers to lay off some workers, or potential employers to hire less than they would have, since their costs will now outweigh their benefits in some cases.
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Should an 20 year old receive $5.15 an hour in a developed country such as America?
Why does the answer to that question even matter? Should they receive $100/hr? Would not $200/hr be even better?
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Should an 20 year old receive $5.15 an hour in a developed country such as America?
Why does the answer to that question even matter? Should they receive $100/hr? Would not $200/hr be even better?
Of course it matters because it determines their ability to live above the poverty line
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But what about those who lose their jobs? Unemployment is below the poverty line as well! The market does not guarantee perfection, but the question is: can government intervention do a better job?
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Minimum wages aren't exactly high. In the example of America, the point being made is that whether the market is determining the crap wage, or the government, it is still a crap wage.
Wages have been going up for the past century yet our unemployment is at record lows...
A few cents doesn't determine employment. Demand for employees due to booming economies does.
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Should an 20 year old receive $5.15 an hour in a developed country such as America?
Why does the answer to that question even matter? Should they receive $100/hr? Would not $200/hr be even better?
Of course it matters because it determines their ability to live above the poverty line
What makes you so sure that If I was an employer I will hire just as many people as I did in the absence of a minimum wage? I don't have any obligation to hire anyone. I don't have to hire people if I don't like the price. As long as that is the case, the evidence is clear, minimum wages increase unemployment.
Wages have been going up for the past century yet our unemployment is at record lows...
So what? Who is to say that unemployment would not have been even lower in the absence of minimum wages? In fact that is the reality:
In 152 pages David Neumark and William Wasche discusses over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia. Their conclusions:
"Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research" by David Neumark, William Wascher http://papers.nber.org/papers/w12663
"We review the burgeoning literature on the employment effects of minimum wages - in the United States and other countries - that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups."
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But the point being made is that the minimum wage is not unreasonable.
A lot of employers choose to pay more than the minimum wage seen under enterprise bargaining agreements or individual workplace agreements. Is that not an example of employers choosing to pay their employees more?
The fact is that not everyone is on a minimum wage and thinking of the minimum wage so statistically is practically inconvenient while still being theoretically correct.
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But the point being made is that the minimum wage is not unreasonable.
A lot of employers choose to pay more than the minimum wage seen under enterprise bargaining agreements or individual workplace agreements. Is that not an example of employers choosing to pay their employees more?
The fact is that not everyone is on a minimum wage and thinking of the minimum wage so statistically is practically inconvenient while still being theoretically correct.
Let's get this straight:
1. There exists a minimum wage
2. A lot of employers choose to pay more than the minimum wage seen under enterprise bargaining agreements or individual workplace agreements. This is an example of employers choosing to pay their employees more than the minimum wage
3. Therefore there ought to exist a minimum wage.
Does that make sense to anyone?
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Give me a figure or estimate from that data of what the unemployment levels would be at without minimum wages. I can say with a great deal of certainty (based on common sense) that it would not be a significant difference.
Like I said above, the fact that so many people are not on a minimum wage (ie. being paid higher) indicates that minimum wages are not seen as such a big problem for employers due to their relatively low minimum.
If the minimum was high than it would be differnt.
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I see it as a 'safety net' to prevent slave labor occurring.
I think it should be higher but I don't know to what degree it should be higher.
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Just a theory here, but isn't it possible that minimum wage increases are linked with a higher percentage of unemployed people because working becomes more attractive and the participation rate rises?
I believe in the minimum wage, there has to be some kind of safety net. The situation in America is not right: there are people there working 8 hour days who still don't have enough to pay rent and medical bills (granted, they do have a minimum wage which is probably fine if you're a teenager working part-time, but next to nothing for someone trying to run a household) and some have no hope of getting out of their situation (being educated and having better job prospects will put you even more in debt). There's also other issues such as outsourcing and overworking. The market mechanism can be pretty cruel to the individual who's essentially just trying to make ends meet.
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Wages have been going up for the past century yet our unemployment is at record lows...
A few cents doesn't determine employment. Demand for employees due to booming economies does.
Wages can go up, while unemployment stays low, no-one has said that is impossible. This is simply possible by an increase in demand for workers (as you have explained is caused by booming economies). The market will naturally do this, because a high demand for workers represents a need for more workers. In order to get more workers, employers need to pay more in order to get them.
To artificially increase wages is a different story. If the market wage is lower than the proposed minimum wage, then the government-enforced price floor will lead to cuts in employment because the government has ramped up wages beyond what the current level of demand commands. Just let the market do its thing. Government intervention costs money (the costs of enforcing), and it costs liberties - people cannot freely negotiate wage contracts.
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Give me a figure or estimate from that data of what the unemployment levels would be at without minimum wages. I can say with a great deal of certainty (based on common sense) that it would not be a significant difference.
If it is so obvious, then provide the hard evidence for your claim.
In 152 pages David Neumark and William Wasche discusses over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research" by David Neumark, William Wascher http://papers.nber.org/papers/w12663
Their conclusions:
1. among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries.
2. very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
3. the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.
There's also other issues such as outsourcing
why is that even an issue? what about the poor people in poor countries who now have jobs where before they did not?
The market mechanism can be pretty cruel to the individual who's essentially just trying to make ends meet.
how can the market mechanism be cruel when the market clearing price is not the result of a deliberate and intentional human action? only individual people can be cruel.
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Just a theory here, but isn't it possible that minimum wage increases are linked with a higher percentage of unemployed people because working becomes more attractive and the participation rate rises?
I don't get the point of this. You might have to clarify.
I believe in the minimum wage, there has to be some kind of safety net. The situation in America is not right: there are people there working 8 hour days who still don't have enough to pay rent and medical bills (granted, they do have a minimum wage which is probably fine if you're a teenager working part-time, but next to nothing for someone trying to run a household) and some have no hope of getting out of their situation (being educated and having better job prospects will put you even more in debt). There's also other issues such as outsourcing and overworking. The market mechanism can be pretty cruel to the individual who's essentially just trying to make ends meet.
An increase in the minimum wage is nothing but a band-aid solution. It will better off the employees that manage to survive job losses, but it will cut-off those who were living on at least some wage onto unemployment: a worse situation.
I have no problems with outsourcing or overworking. The minimum wage actually worsens overworking problems, because those who are not competitive will be sacked, while the minimum wage already applies pressure on employers to sack uncompetitive employees currently working at the minimum wage.
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Just a theory here, but isn't it possible that minimum wage increases are linked with a higher percentage of unemployed people because working becomes more attractive and the participation rate rises?
I believe in the minimum wage, there has to be some kind of safety net. The situation in America is not right: there are people there working 8 hour days who still don't have enough to pay rent and medical bills (granted, they do have a minimum wage which is probably fine if you're a teenager working part-time, but next to nothing for someone trying to run a household) and some have no hope of getting out of their situation (being educated and having better job prospects will put you even more in debt). There's also other issues such as outsourcing and overworking. The market mechanism can be pretty cruel to the individual who's essentially just trying to make ends meet.
I agree with you 100%.
Its a more humane approach to the issue.
That is why I brought up the example of the girl at my work who has moved from America because she couldn't live off the money she was making over their.
Their should be a minimum wage as a safety net but it has to also be practically implemented. (ie. Not just be $1 an hour and say that that is the safety net).
Wages have been going up for the past century yet our unemployment is at record lows...
A few cents doesn't determine employment. Demand for employees due to booming economies does.
To artificially increase wages is a different story. If the market wage is lower than the proposed minimum wage, then the government-enforced price floor will lead to cuts in employment because the government has ramped up wages beyond what the current level of demand commands.
But the minimum wage is already so low that that is not a problem. Economic theory is a lot different to its practical implementation. At my work over the last 2 years, over 100 employees have left most citing "crap wages". Thus their is always a high demand for workers at my workplace, yet the wage that they offer has not increased (probably increased in-line with inflation). Even though we are currently 20 people underemployed we have not increased wages that we are offering.
Unemployment is just a statistic.
If one person is employed with a company for 2 years (citing reasonable wages), they will naturally become effective and efficient at their job which will help the company succeed.
If you have one person who been in 4 jobs in the last 2 years (always changing to try and increase wages) then none of the companies are benefiting because of the constant staff chaning resulting in constant rehiring, unskilled employees (in terms of real life training) and ineffecticve and inefficient workplaces. Yet the unemployment rate may still say for both scenarios that unemployment is at 4%.
My point is that workers who are content with their minimum wage are more willing to stay in their job resulting in less staff turnover and an increase in company efficiency and effectiveness.
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Economic theory is a lot different to its practical implementation.
What coblin said IS the practical implication:
In 152 pages David Neumark and William Wasche discusses over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research" by David Neumark, William Wascher http://papers.nber.org/papers/w12663
Their conclusions:
1. among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries.
2. very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
3. the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.
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Economic theory is a lot different to its practical implementation.
In 152 pages David Neumark and William Wasche discusses over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research" by David Neumark, William Wascher http://papers.nber.org/papers/w12663
Their conclusions:
1. among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries.
2. very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
3. the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.
Why don't you make it your sig
You've posted the bottom part twice now
and the top bit 4 times.
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Its a more humane approach to the issue.
Unemployment is just a statistic.
How is it ever humane to say that "unemployment is just a statistic" as if to ignore or discount the real human and tragic effects of being unemployed?
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Why don't you make it your sig
I should because you keep ignoring the hard facts when they are inconvenient to your argument.
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I never denied that it may raise unemployment, I just said to what degree would it have changed unemployment rates.
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Its a more humane approach to the issue.
Unemployment is just a statistic.
How is it ever humane to say that "unemployment is just a statistic" as if to ignore or discount the real human and tragic effects of being unemployed?
But it is true.
If you only have to work 1 hour a week to be considered employed then a person who is 'employed' for 1 hour and a person who is 'unemployed' are almost on level terms
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No, it is not just unemployment, minimum wages also create disemployment effects: http://papers.nber.org/papers/w12663
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Maybe you have misinterpreted my statement that
"Unemployment is just a statistic"
It fails to recognise that people who are employed may very well be in a similar position to people who are theoretically considered employed.
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But the minimum wage is already so low that that is not a problem.
If it is not a problem, then why can't we let the market deal with it? You would admit that it does have an effect. The effect is negative, that is my argument.
Even though we are currently 20 people underemployed we have not increased wages that we are offering.
So what? This is because your employer believes the benefits do not outweigh the costs (that is, if he offered a higher wage).
If you have one person who been in 4 jobs in the last 2 years (always changing to try and increase wages) then none of the companies are benefiting because of the constant staff chaning resulting in constant rehiring, unskilled employees (in terms of real life training) and ineffecticve and inefficient workplaces. Yet the unemployment rate may still say for both scenarios that unemployment is at 4%.
Smart companies would fix this by offering wage increases (they would do this because as time goes on, the benefits justify the costs). If they do not, it is to their own detriment. The market solves this, because smart companies will sustain profits in this way, and thus these companies will survive and thrive.
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No, it is not just unemployment, minimum wages also create disemployment effects: http://papers.nber.org/papers/w12663
I haven't denied that... why have you posted that link for the 5th time...
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Maybe you have misinterpreted my statement that
"Unemployment is just a statistic"
It fails to recognise that people who are employed may very well be in a similar position to people who are theoretically considered employed.
Then what's your point? How does that even come close to justifying a minimum wage? If there are efficiency gains to a firm from paying above market wages, then what need is there for a minimum wage?
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To act as a safety net.
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Just a theory here, but isn't it possible that minimum wage increases are linked with a higher percentage of unemployed people because working becomes more attractive and the participation rate rises?
I don't get the point of this. You might have to clarify.
Well, unemployment rate = people actively looking for a job divided by people looking for a job plus people who have a job. Therefore, if more people are looking for a job but the same amount of people have a job, there will be a rise in the percentage of people recorded to be unemployed. And I imagine that more people would be looking for a job if the minimum wage was higher because there is the extra incentive of bringing home more money for doing the same work.
I still think that government intervention works. Obviously it can't go too far overboard but I don't think it is at the moment. People can still negotiate wages quite freely whilst not being in danger of exploitation. I'll explain more about this later if the mood strikes me, I'm not thinking very clearly ATM :|
Somehow I feel though, that debating the point is absolutely futile, lol. It's just different perspectives, neither is really right or wrong, but I'm personally glad that I live in a society that instills the minimum wage, showing that empathy for all individuals is valued, even those with no marketable skills to speak of (for whater reason that may be).
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employers need employees just as employees need to get paid
if you are an important resource to the employer, he/she will do everything within their reasonable power to keep you, that is why you get pay rise from bargaining
if you are just another mindless procedural worker, then so be it, u can only work to your potential, and you dont deserve any more than what you get offered, if you dont like it, then jump the boat and get a better job (and if you cant, that's really your problem)
that is my view, however unfair and cruel it is, such is life
there is no need to raise the "safety net" any higher than it is now, how is it fair on the skilled workers to be paid little more on those who arent as skilled?
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No, it is not just unemployment, minimum wages also create disemployment effects: http://papers.nber.org/papers/w12663
I haven't denied that... why have you posted that link for the 5th time...
1. Why not?
2. Here is why:
Give me a figure or estimate from that data of what the unemployment levels would be at without minimum wages. I can say with a great deal of certainty (based on common sense) that it would not be a significant difference.
To artificially increase wages is a different story. If the market wage is lower than the proposed minimum wage, then the government-enforced price floor will lead to cuts in employment because the government has ramped up wages beyond what the current level of demand commands.
But the minimum wage is already so low that that is not a problem. Economic theory is a lot different to its practical implementation.
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but I'm personally glad that I live in a society that instills the minimum wage, showing that empathy for all individuals is valued, even those with no marketable skills to speak of (for whater reason that may be).
Agree
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Unemployment rates increasing as a result of minimum wage are a bad thing, aren't they?
Eriny, it's not as simple as you believe. Those who have no marketable skills to speak of, will simply not be offered a job. The minimum wage does not act as a safety net for these individuals, they merely lock them out of jobs!
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To act as a safety net.
That's the thing, you well-intentioned - I will give you that. But good intentions aren't good enough. The fact is that the minimum wage hurts the poor and most disadvantaged in our society - the very people it was intended to benefit.
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employers need employees just as employees need to get paid
if you are an important resource to the employer, he/she will do everything within their reasonable power to keep you, that is why you get pay rise from bargaining
if you are just another mindless procedural worker, then so be it, u can only work to your potential, and you dont deserve any more than what you get offered, if you dont like it, then jump the boat and get a better job (and if you cant, that's really your problem)
that is my view, however unfair and cruel it is, such is life
there is no need to raise the "safety net" any higher than it is now, how is it fair on the skilled workers to be paid little more on those who arent as skilled?
Wow, I never would have suspected: Mao the Communist doesn't agree with minimum wages. :D just kidding mate.
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No, it is not just unemployment, minimum wages also create disemployment effects: http://papers.nber.org/papers/w12663
I haven't denied that... why have you posted that link for the 5th time...
1. Why not?
2. Here is why:
Give me a figure or estimate from that data of what the unemployment levels would be at without minimum wages. I can say with a great deal of certainty (based on common sense) that it would not be a significant difference.
To artificially increase wages is a different story. If the market wage is lower than the proposed minimum wage, then the government-enforced price floor will lead to cuts in employment because the government has ramped up wages beyond what the current level of demand commands.
But the minimum wage is already so low that that is not a problem. Economic theory is a lot different to its practical implementation.
I said give me a figure not give me a website in which you expect me to crawl through and find some information which you can't guarentee is actually there.
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but I'm personally glad that I live in a society that instills the minimum wage, showing that empathy for all individuals is valued, even those with no marketable skills to speak of (for whater reason that may be).
If i was an employer, who is to say that I would still hire that very person after you institute a minimum wage? I am not obliged to hire people if I don't think it is worth it.
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To act as a safety net.
That's the thing, you well-intentioned - I will give you that. But good intentions aren't good enough. The fact is that the minimum wage hurts the poor and most disadvantaged in our society - the very people it was intended to benefit.
This is crucial, and I was going to state this, but I forgot.
Good intentions will not save this world. Compassion and empathy are great, but it should be done voluntarily. There are perverse and unintended consequences with government intervention, regardless of their good intentions.
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I said give me a figure not give me a website in which you expect me to crawl through and find some information which you can't guarentee is actually there.
i'm sorry costa, but i sense a strawman here....
and @ coblin: ;D i'm not as communist as u think !!! :P
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I said give me a figure not give me a website in which you expect me to crawl through and find some information which you can't guarentee is actually there.
i'm sorry costa, but i sense a strawman here....
Tsk tsk tsk, I haven't taught you anything. That's not a straw-man, although it is laziness. Well actually, I'm not sure who should be picking out the information for who, but I say this debate is getting too hostile between brendan and costargh. If costargh wanted that, he should have plainly stated that from the beginning, or just calmly said so.
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I said give me a figure not give me a website in which you expect me to crawl through and find some information which you can't guarentee is actually there.
Like you said i've give you the link like 4 times or more. The conclusions of the study were:
1. among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries.
2. very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
3. the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.
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To act as a safety net.
That's the thing, you well-intentioned - I will give you that. But good intentions aren't good enough. The fact is that the minimum wage hurts the poor and most disadvantaged in our society - the very people it was intended to benefit.
This is crucial, and I was going to state this, but I forgot.
Good intentions will not save this world. Compassion and empathy are great, but it should be done voluntarily. There are perverse and unintended consequences with government intervention, regardless of their good intentions.
But if governments did not set a minimum wage then the public claim that they aren't doing enough to protect individuals.
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So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
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I said give me a figure not give me a website in which you expect me to crawl through and find some information which you can't guarentee is actually there.
Like you said i've give you the link like 4 times or more. The conclusions of the study were:
1. among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries.
2. very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
3. the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.
But I am asking to what degree were those findings related to negative employment figures. If their is no figure then just say that.
To me point 1 means nothing without an indication to what degree it has resulted in negative employment because if it is 1% then I would consider it a big deal, if it was 0.1% then I would say that ensuring a safety net in expense of a 0.1% higher unemployment figure would be worth it.
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So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
If minimum wages were a problem to employers we would have heard uproar about them by now.
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But I am asking to what degree were those findings related to negative employment figures. If their is no figure then just say that.
To me point 1 means nothing without an indication to what degree it has resulted in negative employment because if it is 1% then I would consider it a big deal, if it was 0.1% then I would say that ensuring a safety net in expense of a 0.1% higher unemployment figure would be worth it.
no it's not ABS style unemployment. negative employment effects does not necessitate increase in unemployment. the are two different things. disemployment is not the same as unemployment.
So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
If minimum wages were a problem to employers we would have heard uproar about them by now.
So you are saying:
1. There has been no uproar by employers about minimum wages.
2. Therefore minimum wages are not a problem.
There doesn't need to be an uproar for it to actually be harmful to society.
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But I am asking to what degree were those findings related to negative employment figures. If their is no figure then just say that.
To me point 1 means nothing without an indication to what degree it has resulted in negative employment because if it is 1% then I would consider it a big deal, if it was 0.1% then I would say that ensuring a safety net in expense of a 0.1% higher unemployment figure would be worth it.
no it's not ABS style unemployment. negative employment effects does not necessitate increase in unemployment. the are two different things. disemployment is not the same as unemployment.
So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
If minimum wages were a problem to employers we would have heard uproar about them by now.
So you are saying:
There has been no uproar by employers about minimum wages.
Therefore minimum wages are not a problem.
ellaborate
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So you are saying:
1. There has been no uproar by employers about minimum wages.
2. Therefore minimum wages are not a problem.
There doesn't need to be an uproar for it to actually be harmful to society.
can i assume that because there are no uproar by employees the minimum wages dont need to be raised?? :P
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If minimum wages were a problem to employers we would have heard uproar about them by now.
Why do you assume that? Employers can still make money, they will do it by employing less, and overworking the few workers that they have. They will be able to overwork them because the minimum wage makes jobs harder to get into. The employers often aren't too fussed. The biggest losers are the potential employees, because they lose their jobs.
The employers will lose out a little bit, but if the costs (including the costs of protest, or any other form of government conversion) do not outweigh the benefits, then there will be no uproar.
Oh, and where did I say they were a problem to employers? I don't see how this was a reply to my post (senses a failed straw-man).
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But I am asking to what degree were those findings related to negative employment figures. If their is no figure then just say that.
To me point 1 means nothing without an indication to what degree it has resulted in negative employment because if it is 1% then I would consider it a big deal, if it was 0.1% then I would say that ensuring a safety net in expense of a 0.1% higher unemployment figure would be worth it.
no it's not ABS style unemployment. negative employment effects does not necessitate increase in unemployment. the are two different things. disemployment is not the same as unemployment.
So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
If minimum wages were a problem to employers we would have heard uproar about them by now.
So you are saying:
1. There has been no uproar by employers about minimum wages.
2. Therefore minimum wages are not a problem.
There doesn't need to be an uproar for it to actually be harmful to society.
But if the harm is not noticed then it could be said that that harm is so insignificant that it is worth it for the safety net provided by it.
So you are saying:
1. There has been no uproar by employers about minimum wages.
2. Therefore minimum wages are not a problem.
There doesn't need to be an uproar for it to actually be harmful to society.
can i assume that because there are no uproar by employees the minimum wages dont need to be raised?? :P
Not in Australia, but in other countries like America is apparently is sorta a big problem.
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But if the harm is not noticed then it could be said that that harm is so insignificant that it is worth it for the safety net provided by it.
Wrong, the harm only needs to be less in magnitude than the costs it requires to overthrow the minimum wage. Governments have a lot of authority, the costs to persuade them, avoid them, or lobby against them are high. The harm will still be noticed, but whatever party may choose not to rebel because the costs do not outweigh the benefits.
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But if the harm is not noticed then it could be said that that harm is so insignificant that it is worth it for the safety net provided by it.
That doesn't make any sense. First your claim that it is not noticed is questionable of itself. Secondly, just because some might not notice it, doesn't mean it isn't there.
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If minimum wages were a problem to employers we would have heard uproar about them by now.
Why do you assume that? Employers can still make money, they will do it by employing less, and overworking the few workers that they have. They will be able to overwork them because the minimum wage makes jobs harder to get into. The employers often aren't too fussed. The biggest losers are the potential employees, because they lose their jobs.
The employers will lose out a little bit, but if the costs (including the costs of protest, or any other form of government conversion) do not outweigh the benefits, then there will be no uproar.
Oh, and where did I say they were a problem to employers? I don't see how this was a reply to my post (senses a failed straw-man).
Soz accidently quoted you and then replied to something else lol
But then if demand for work is so high that people are jumping at any opportunity to find work then who is to say that the market can't lead to a more detrimental effect on individuals (demand for work is so high that the market pushes wages so low that it is inhumane, people are working and still living below the poverty line). That is why their needs to be a minimum wage. To prevent extreme market situations such as that where society will no doubt be the loser.
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But if the harm is not noticed then it could be said that that harm is so insignificant that it is worth it for the safety net provided by it.
That doesn't make any sense. First your claim that it is not noticed is questionable of itself. Secondly, just because some might not notice it, doesn't mean it isn't there.
I never said it wasn't there.
I just said that if its impact is not significant, (which can not be proven or disproven by the link that Brendan has posted 5 times), then the safety net provided by the minimum wage MAY be worth the harm caused.
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society will no doubt be the loser.
but who is to say that society will be better off with a minimum wage? The fact is that the minimum wage hurts the poor and most disadvantaged in our society the most - the very people it was intended to benefit.
"the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups." http://www.nber.org/papers/w12663
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All the link you have provided says is that it has a negative impact on employment.
It could be an extremely small negative impact which would therefore make your claim that The fact is that the minimum wage hurts the poor and most disadvantaged in our society the most - the very people it was intended to benefit.
fairly misguiding as it MAY disadvantage some, but if the disadvantage is so small, it may be worth it for the safety net.
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The workers who keep their jobs will win, but that is only a special interest group being protected by the government. Those who do not keep their jobs will lose, because they will go to unemployment.
If there is an extreme demand for work (large supply of workers), like in your example, then a minimum wage will only exacerbate an excess of supply (of workers). This will either cause an increase in unemployment, because employers simply do not value many of the employees as high as the minimum wage, or it will cause an increase in labour competition. This increase in competition will lead to overworking so that employees can justify their work placement to the employer. Overworking simply offsets the benefit provided by the minimum wage in the first place, and it restricts the market from flexibility (in a free market, you could choose to overwork and be paid more, or you could choose to work normally and be paid at market prices - under a minimum wage regime, overworking is the only option).
If you are suggesting that neither of these effects will happen, then you believe that the employer is exploiting the employee in more cases than none, and would happily increase wages (hence why you continue repeating this "safety net"). This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
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This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
But see that is where economic theory and practical implementation do not see eye to eye.
In theory that is what should happen but in practise potential employees will be looking at their kids starving and saying, I either do no work or I do some work and get paid crap wages. Economic theory sometimes seems to be so *snap your fingers and it happens* when in practise human emotions come into play.
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But then you are suggesting the above case, where market equilibrium has occurred, but instead there is the problem with an excess supply of labour. A minimum wage will not fix that, because there will be either unemployment problems, or overworking issues.
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This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
But see that is where economic theory and practical implementation do not see eye to eye.
In theory that is what should happen but in practise potential employees will be looking at their kids starving and saying, I either do no work or I do some work and get paid crap wages. Economic theory sometimes seems to be so *snap your fingers and it happens* when in practise human emotions come into play.
This is where intentions and reality do not see eye to eye. The fact is that the minimum wage laws are labeled as being for the poor, for the needy, yet have effects exactly the opposite of those which their well-intentioned sponsors intended them to have. The sponsors believe that a law saying that nobody shall get less than say $10 an hour, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure that people whose skills are not sufficient to justify $10/hr will be unemployed.
The minimum wage law says to employers that they must discriminate against people who have low skills. Let's say there is a man who has a skill set which would justify a wage rate of $6, $7 an hour. The law says you can't, you may not employ him. Because if you employ him, you have to pay him $10. Well, what's the result? Why engage in activities where the costs ($10) exceed the benefits ($7)? The firm will simply not employ him. So what now for his starving kids? Their father is now unemployed because it is illegal for him to work for $7/hr. Moreover, these disemployment effects have been concentrated on the least-skilled and most disadvantaged groups that the sponsors would most like to help: see David Neumark and William Wascher (2007)
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What if you're unskilled and you work in a peach factory or something (for the sake of the argument)? Without a minimum wage, you could say that the market mechanism will work things out. Obviously nobody will work for free. However, if you're suited to a job in peach canning, you probably aren't very qualified (this could be your own fault, or it could be due to other unavoidable problems), and you certainly aren't in a very good bargaining position. If you run a household you will need some source of income (assuming that this economy has limited/no welfare scheme). So, your employee essentially has the power to determine your working conditions. You essentially agree to them out of obligation to your family. And still, what you're paid is barely enough to get by, and if an emergency happens you're put in a very precarious condition indeed. There is also a risk that there will be a lack of investment in your children's education, which may end up leading to future generations having to live the same standard of living as well. At least with the minimum wage, there isn't a threat that your wage could go any lower, assuming the company still needs the same amount of workers regardless of what they are being paid, and there is enough to give younger generations of unskilled workers a chance.
Ordinarily, I think that the market mechanism is essentially quite good at allocating prices and resources. I don't agree with supporting price fixing or uncompetitive industries. But I think labour is different to other resources because even though both the employer and the employee technically "need" each other in order to work, oftentimes the employee is in a position where they don't have equal power as the employer. When it comes to consumers and producers, there will usually be an "equality" of sorts (unless the good is technically a necessity such as education or health - which is probably why these things are greatly subsidised by the government), but that's not always true when it comes to labour, especially unskilled labour.
When I think about no social safety nets such as the minimum wage and workers rights, I usually think of England during the Industrial Revolution. The working poor, the unsafe conditions, huge divides between rich and the poor, little opportunities to "lower classes". Some governemnt intervention is good, it smooths business cycle fluctuations (Keynesian policies technically helped to get us out of the depression), it doesn't necessarily bring equality (which is good), but it does at least give everyone a certain amount of opportunity. Obviously if it's excessive, it's bad, for example, I think centralised wage fixing is a horrible idea, but again, there's a balance. Both extremes are flawed, I believe.
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I suggest you look at brendan's rational analysis above. The so-called "safety net" will just cut people out. People won't be ensured that their wages won't decrease, but they will instead gamble with either the minimum wage, or nothing. I have explained how "bargaining" is not required because for situations where employers are offering less than the "market value" of labour, the system will self-correct:
This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
If workers are accepting low wages, the benefits outweigh their costs (the forgone hours and effort put into their labour is worth the money they require). This is the market price. It might be a "cruel" fact, but unfortunately, government intervention will not do any better, because as explained above, a price floor will cut employment or cause overworking (which would be the only way to justify the higher wages they must now be paid, to the employer).
Cutting employment destroys the concept of a safety net, because unemployment is far from safe, while overworking is an option that is already available in the free-market. Government intervention simply just stops those who do not wish to overwork from becoming employed. If one is earning below the poverty line, as suggested, then they could similarly negotiate to earn higher wages by accepting overtime. Similarly, all safety nets and "fairness" laws add to the cost of employment, and ultimately reduce employment. These costs are passed onto the labourers. Government intervention does not work.
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But when it comes to low skilled industries, there isn't much scope in what these people's skills are worth in value. If everyone has the same level of skills, the person who will be employed is the one willing to work for the least amount of money. And if you are low skilled, you may be very desperate.
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But when it comes to low skilled industries, there isn't much scope in what these people's skills are worth in value. If everyone has the same level of skills, the person who will be employed is the one willing to work for the least amount of money. And if you are low skilled, you may be very desperate.
Even assuming this is all true - how does it justify a minimum wage law? If anything it is another argument against it. The minimum wage law says to employers that they must discriminate against people who have low skills. If there is a man who has a skill set which would justify a wage rate of $6, $7 an hour. The law says you can't, you may not employ him for $7/hr. Because if you employ him, you have to pay him $10. Why would any firm engage in an activity where the costs ($10) exceed the benefits ($7)? That is a loss-making proposition. The firm will simply choose not employ him. This man is now unemployed because it is illegal for him to work for $7/hr. Moreover, these disemployment effects have been concentrated on the least-skilled and most disadvantaged groups that the sponsors of a minimum wage law would most like to help: see David Neumark and William Wascher (2007)
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I undertand what you're saying, but how do you value that kind of labour? Even with the minimum wage, most large firms (such as factories and so on) would profit from the workers anyway. I can see definitely that it may cause higher unemployemnt in small businesses where your work is easily valued by the profits you bring in, but can you really calculate the profits brought by a peach canner or a check-out chick?
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This is off-topic, but it is a necessary economic face-off :D
Some government intervention is good, it smooths business cycle fluctuations (Keynesian policies technically helped to get us out of the depression).
Depressions corrected by Keynesian policy will increase inflation. There is a new business cycle theory in line with Friedman's ideas on the free market that suggests government interventions spark recessions by creating malinvestment. Recessions are essentially "clean-ups" of the economy. Malinvestment begins the road to a recession, because whenever governments distort prices (particularly subsidies), by causing unwise investment or spending into an unnecessary good. It also fuels the growth of industry that would have been otherwise commercially unsustainable, and eventually an expectation will arise that this cannot continue, and a market shock occurs. In a free market, these occurrences would be minimised. Keynesian policy is not taken very seriously by economic advisers today.
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I undertand what you're saying, but how do you value that kind of labour? Even with the minimum wage, most large firms (such as factories and so on) would profit from the workers anyway. I can see definitely that it may cause higher unemployemnt in small businesses where your work is easily valued by the profits you bring in, but can you really calculate the profits brought by a peach canner or a check-out chick?
If I was an employer, and you had skills that was worth say $5/hr to my business, why would I bother hiring you if the government said it was illegal? If the government said that the minimum wage is $10 why would I bother? I simply won't hire you. I'm not going to incur a $10 cost to get a $5 benefit. That's a loss-making proposition. So what good has the minimum wage law done? None. It's made us both worse off.
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Some governemnt intervention is good
Well it depends what government intervention you are talking about.
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If minimum wages, why not price caps? Poor people don't have much "bargaining power" when it comes to buying milk either.
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
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Well, yeah, like I said. Too much intervention is bad. Also, unwise intervention (like the Two Airline Policy) is also bad.
I suppose the main thing with the minimum wage is that there is a lower limit on how much a worker will be worth to a company. If you underperform, you'll still be fired, but you won't be undervalued. And also, employees will have to employ somebody to do the work, otherwise they won't be able to produce anything. Given that a factory produces nothing without workers, it's unlikely that they could be overvalued by a safety net. The work they do should at least entitle them to/be worth a decent standard of living, no?
And I don't agree with price caps necessarily. As long as everyone has access to the necessities, I'm happy with that. If competition puts the price of milk up to a million dollars (which I doubt, lol), then poor people will just have to switch to water (and maybe supplement it with additional health care due to a lack of calcium).
This is off-topic, but it is a necessary economic face-off :D
Some government intervention is good, it smooths business cycle fluctuations (Keynesian policies technically helped to get us out of the depression).
Depressions corrected by Keynesian policy will increase inflation. There is a new business cycle theory in line with Friedman's ideas on the free market that suggests government interventions spark recessions by creating malinvestment. Recessions are essentially "clean-ups" of the economy. Malinvestment begins the road to a recession, because whenever governments distort prices (particularly subsidies), by causing unwise investment or spending into an unnecessary good. It also fuels the growth of industry that would have been otherwise commercially unsustainable, and eventually an expectation will arise that this cannot continue, and a market shock occurs. In a free market, these occurrences would be minimised. Keynesian policy is not taken very seriously by economic advisers today.
You're right, it's not, I just thought it was an appropriate point to make, lol. But I think that the government is an okay regulating force on the economy. I mean, if there is a skills shortage or something there may be some unwanted fluctuations that restrict growth and really put us in a tight spot. So, the government can invest more in education or whatever and that can be effective in promoting growth and even freeing up the market mechanism (e.g. providing more choice of skilled labour). I guess the free market will sort that out by itself eventually (higher wages in skill shortage industries make more people go out and learn the skill - if they are able to), but that's off topic, lol. (I probably didn't choose the best example there)
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I mean, if there is a skills shortage or something there may be some unwanted fluctuations that restrict growth and really put us in a tight spot. So, the government can invest more in education or whatever and that can be effective in promoting growth and even freeing up the market mechanism (e.g. providing more choice of skilled labour). I guess the free market will sort that out by itself eventually (higher wages in skill shortage industries make more people go out and learn the skill - if they are able to), but that's off topic, lol. (I probably didn't choose the best example there)
What? Government exacerbated the skills shortage by its policy on universities. It is a government created problem.
And on price caps - why not? If you are going to use the "bargaining power" argument, then you should be in favor of price caps as well to be consistent.
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I mean, if there is a skills shortage or something there may be some unwanted fluctuations that restrict growth and really put us in a tight spot. So, the government can invest more in education or whatever and that can be effective in promoting growth and even freeing up the market mechanism (e.g. providing more choice of skilled labour). I guess the free market will sort that out by itself eventually (higher wages in skill shortage industries make more people go out and learn the skill - if they are able to), but that's off topic, lol. (I probably didn't choose the best example there)
What? Government exacerbated the skills shortage by its policy on universities. It is a government created problem.
And on price caps - why not? If you are going to use the "bargaining power" argument, then you should be in favor of price caps as well to be consistent.
Agree about the policy on universites making skills shortage problem.
She explained why she is not in favour of price caps. She can choose to form her argument any way that she wants to
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
And it was a good example. Basically we have this scenario where apparently unemployment is higher due to minimum wages (many of whom are living in poverty) yet Eriny has clearly demonstrated a scenario where without minimum wages poverty may be even more prevalent with unemployment being lower.
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And on price caps - why not? If you are going to use the "bargaining power" argument, then you should be in favor of price caps as well to be consistent.
I don't think that's inconsistent. I'm interested in creating society where everyone can work hard enough to gain equitable opportunities by ensuring that their needs are catered for completely (i.e. avoiding poverty wherever possible). I'm not interested with making sure that people have immediate access to their wants.
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
But what gives the government the right to prevent them from that choice?
A minimum wage regime would force workers to differentiate themselves by offering insanely harsh work conditions, such as overtime without pay, and no bonuses as well as no unfair dismissal. What is to say that these concessions are more humane then working under the 'poverty line'?
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
And it was a good example. Basically we have this scenario where apparently unemployment is higher due to minimum wages (many of whom are living in poverty) yet Eriny has clearly demonstrated a scenario where without minimum wages poverty may be even more prevalent with unemployment being lower.
but if a minimum wage makes you unemployed what good is it?
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I'm interested in creating society where everyone can work hard enough to gain equitable opportunities by ensuring that their needs are catered for completely (i.e. avoiding poverty wherever possible).
In that case, you should be against the minimum wage.
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
And it was a good example. Basically we have this scenario where apparently unemployment is higher due to minimum wages (many of whom are living in poverty) yet Eriny has clearly demonstrated a scenario where without minimum wages poverty may be even more prevalent with unemployment being lower.
but if it makes you unemployed what's good is it?
Safety net? :laugh:
Gone around in a circle lol
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I'm interested in creating society where everyone can work hard enough to gain equitable opportunities by ensuring that their needs are catered for completely (i.e. avoiding poverty wherever possible).
In that case, you should be against the minimum wage.
LOL If her proceeding posts weren't enough to indicate why she thinks that minimum wages will create a society where peoples needs are catered for then I advise you to re-read her posts.
Although I am very sure it was a tactical post =P
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
And it was a good example. Basically we have this scenario where apparently unemployment is higher due to minimum wages (many of whom are living in poverty) yet Eriny has clearly demonstrated a scenario where without minimum wages poverty may be even more prevalent with unemployment being lower.
but if it makes you unemployed what's good is it?
Safety net?
The "safety net" is not universal, you only get it if you are employed. What good is "safety net" if you are bloody unemployed?
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Safety net? :laugh:
Gone around in a circle lol
No! A safety net, as brendan and I have proclaimed from the very beginning, is a false idea, because it will simply lead to people being unemployed at the cost of others. Even if the gain (with respect to how much money is being paid out by employers) is an overall gain (an empirical study is required), the 'consequentialist' gains are unjustified in violation of economic liberty because the gains come at a cost of another. Consequentialists believe that the ends justify the means.
The reason why I believe economic liberty is valuable is because a safety net only protects your wage, it doesn't protect anything else:
A minimum wage regime would force workers to differentiate themselves by offering insanely harsh work conditions, such as overtime without pay, and no bonuses as well as no unfair dismissal. What is to say that these concessions are more humane then working under the 'poverty line'?
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There seems to be this ridiculous assumption being made, that if you institute a minimum wage law, employers will simply hire just as many workers, on just as many hours as before without the minimum wage, and that all that is different now is that those receiving a low wage before will have a job and their wages will be raised.
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Well, that's why there are laws that govern under what conditions a person will be employed.
I'm interested in creating society where everyone can work hard enough to gain equitable opportunities by ensuring that their needs are catered for completely (i.e. avoiding poverty wherever possible).
In that case, you should be against the minimum wage.
But I just explained earlier how there can just be a perpetuation of poverty when there are no safeguards in place. If you are stuck in a low paid job that's around poverty-level and have no means to pay for education, you will continue to be stuck in that job, potentially until you retire/die. Either that or you'll decide that working isn't worth what little you get, quit and someone else who is just as desperate will take your place for roughly the same wage (because there is no shortage of low skilled people). However, if your salary puts the food on the table, you have the opportunity to do what you need to go further in life. You could afford to go to uni part-time or something that will mean that you can get better skills. I know everyone loves the cliche that you can do whatever you like as long as you work hard, that's simply not true. Some people need a boost in order to have opportunities open to them.
And I think safety nets also provide some degree of welfare payments, re-training schemes and the like. It's not just about the minimum wage. But that's probably another debate ;)
Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
Anyway, I'm tired now. I'm going to log off.
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
Pretty much. If it had some detremental effects as you claim, it would have been changed by all those countries that currently have it.
There are people who know more about this then we do you know.
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
If it had some detremental effects as you claim, it would have been changed by all those countries that currently have it.
That doesn't make any sense. Just because they have it, doesn't necessarily mean they should have it, or that it doesn't have detrimental effects. The paper I linked to was a review of 90 recent studies on the minimum wage including 4 from Australia. The conclusions of which i have posted over and over again.
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You could afford to go to uni part-time or something that will mean that you can get better skills. I know everyone loves the cliche that you can do whatever you like as long as you work hard, that's simply not true. Some people need a boost in order to have opportunities open to them.
Minimum wages only give some people a boost: those that can differentiate themselves over the other unskilled workers by showing more desirable traits (including overtime work without pay). The rest who cannot justify the higher wage will become unemployed. Why should the ability to differentiate yourself by wages be blocked? What gives the government this power?
As I have said before: what is to say that these concessions (such as overtime work) are more humane then working under the 'poverty line'? The minimum wage only focuses on wage differentiation, leading to an unintended consequence: it directly threatens working conditions in order to offset the monetary gain.
If you suggest that factories can still make profits under increased minimum wages, then new factories would simply open up to exploit the profitable labour force. The increased demand for labour will help to drive up the price of labour, or improve conditions somewhat. There is no need to worry that the markets are undervaluing employees. If they are being paid under the 'poverty line,' the "cruel" fact is that their labour is simply not worth more than the poverty line.
If you want to destroy poverty, minimum wages are not the way. There are much better ways, whether they be collectivist, or individualist. If you are an individualist, like me, you believe that individuals should donate voluntarily, and those who do not should not be subject to coercion from the government: instead you may only choose to persuade him or her to do so.
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
If it had some detremental effects as you claim, it would have been changed by all those countries that currently have it.
That doesn't make any sense. Just because they have it, doesn't necessarily mean they should have it, or that it doesn't have detrimental effects. The paper I linked to was a review of 90 recent studies on the minimum wage including 4 from Australia. The conclusions of which i have posted over and over again.
Yes, this idea is false. It is an argumentum ad populum, a logical fallacy.
I can name another policy that many countries support, but has come under fierce opposition by rational thinkers lately: the War on Drugs.
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http://en.wikipedia.org/wiki/Minimum_wage#Standard_theory_criticism
If you aren't a fan of wikipedia than please refer to the citations provided
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http://en.wikipedia.org/wiki/Minimum_wage#Standard_theory_criticism
If you aren't a fan of wikipedia than please refer to the citations provided
You use wikipedia like a drunk uses a lampost - for support rather than illumination.
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http://en.wikipedia.org/wiki/Minimum_wage#Standard_theory_criticism
If you aren't a fan of wikipedia than please refer to the citations provided
Would you like to explain that in your own words? I don't understand it. It is too technical.
From what I can make of it:
* I do not understand Gary Fields' argument at all.
* I don't understand why people would alternatively view the low-wage labour market as a monopsonistic market (one employer, millions of employees). The low-wage labour market has plenty of industries with many employers who would like to utilise unskilled labour.
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Don't be a smartass.
Heres another reference
OECD Employment Outlook 2006 Report
Minimum wages have no clear impact on unemployment...
To study the impact of minimum wages in unemployment, the baseline model is augmented by including the ratio of gross statutory minimum wages to median wages, following the most frequent approach to literature (see eg. OECD, 1998; Elmeskov et al.; 1998). Consistent with previous OECD work using this approach no significant direct impact of the level of the minimum wage on unemployment is identified.
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Don't be a smartass.
Heres another reference
OECD Employment Outlook 2006 Report
Minimum wages have no clear impact on unemployment...
To study the impact of minimum wages in unemployment, the baseline model is augmented by including the ratio of gross statutory minimum wages to median wages, following the most frequent approach to literature (see eg. OECD, 1998; Elmeskov et al.; 1998). Consistent with previous OECD work using this approach no significant direct impact of the level of the minimum wage on unemployment is identified.
I'm not being a smartass. Do you have a link? I would like to read how this study was done.
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Although the OECD study includes a few variables to account for institutional differences across countries, critics of the cross-country approach stress the difficulty of distinguishing the impact of minimum wages from other labor market policies and institutions and stress the importance of considering how the latter may influence the impact of the minimum wage.
I believe the paper brendan linked to had around 90 studies, compared to 1, and they did not use a cross-country approach (which is harder to control various factors).
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LOL sorry I thought you were Brendan and in that case I apologize because I wouldnt be used to seeing Brendan say he doesnt understand something therefore leading me to believe it was sarcastic. My apologies.
http://www.oecdbookshop.org/oecd/get-it.asp?REF=8106071E.PDF&TYPE=browse
It's a very interesting read. I advise you to use your search tool though because its 281 pages long =) lol
Also from further reading it seems that there are also many studies indicating no relation between minimum wages and unemployment (page 87)
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So now its basically a matter of determining which study/s are more credible?
I don't advise anyone say either study/s are better because none of us are experts. We can merely look at both sides and determine from that their may very well be two very well-supported arguments
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"we have highlighted in the tables 33 studies (or entries) that we view as providing the most credible evidence; 28 (85 percent) of these point to negative employment effects (Note that we have left out of this calculation some of our studies that use similar specifications and data to other studies we have done, and which instead explore other issues). Moreover, when researchers focus on the least-skilled groups most likely to be adversely affected by minimum wages, the evidence for disemployment effects seems especially strong. In contrast, we see very few—if any—cases where a study provides convincing evidence of positive employment effects of minimum wages, especially among the studies that focus on broader groups for which the competitive model predicts disemployment effects."
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Coblin have you read page 87? I like the unbiased view of the report. Presents studies to support both arguments and all that one can deduce from it is that the evidence is "ambiguous".
Another website.
Has views on both sides
http://www.raiseminwage.org/id14.html
Interesting read. More and more ambiguity and disagreement is emerging with respect to how these "studies" are actually performed. From that, all I can deduce is that their is disagreement between experts on the matter and there is no overall consensus on the issue.
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LOL sorry I thought you were Brendan and in that case I apologize because I wouldnt be used to seeing Brendan say he doesnt understand something therefore leading me to believe it was sarcastic. My apologies.
http://www.oecdbookshop.org/oecd/get-it.asp?REF=8106071E.PDF&TYPE=browse
It's a very interesting read. I advise you to use your search tool though because its 281 pages long =) lol
Also from further reading it seems that there are also many studies indicating no relation between minimum wages and unemployment (page 87)
Although the OECD study includes a few variables to account for institutional differences across countries, critics of the cross-country approach stress the difficulty of distinguishing the impact of minimum wages from other labor market policies and institutions and stress the importance of considering how the latter may influence the impact of the minimum wage.
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Coblin have you read page 87? I like the unbiased view of the report. Presents studies to support both arguments and all that one can deduce from it is that the evidence is "ambiguous".
Please.
http://www.nber.org/papers/w12663
"we have highlighted in the tables 33 studies (or entries) that we view as providing the most credible evidence; 28 (85 percent) of these point to negative employment effects (Note that we have left out of this calculation some of our studies that use similar specifications and data to other studies we have done, and which instead explore other issues). Moreover, when researchers focus on the least-skilled groups most likely to be adversely affected by minimum wages, the evidence for disemployment effects seems especially strong. In contrast, we see very few—if any—cases where a study provides convincing evidence of positive employment effects of minimum wages, especially among the studies that focus on broader groups for which the competitive model predicts disemployment effects."
Puts your comment into the proper context.
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
Lol, I don't remember saying that exactly. You're exaggerating my sentiment. Which logical fallacy was that again? Straw man? But that probably doesn't matter. I put in that sentence in order to throw into the mix that other people (many, in fact) come from a different mindset on this issue. They have their own reasons for believing what they do, their own studies, an explicit look through idustrial relations throughout the history of the world. The majority of developed nations are democratic ones so I don't think instilling the minimum wage is a "government thing" as such, it's a "people thing" and if enough people thought it inappropriate, the government would be replaced. Remembering also that there is a wealth of information - economic or otherwise - available to governemnts
Further, if something is cited from a paper (or several papers), does that make it true as well? Findings are merely findings and as costargh has pointed out, there have been conflicting findings. There really is no point in having a debate about credible sources.
This debate has been quite a challenging one, I definitely understand where you're coming from, you have certainly tested my opinion on the issue, but ultimately his has just reinforced my stance. I just hope you can hold my opinions in as high esteeem as I do yours, even if they are somewhat conflicting :)
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Also, if the minimum wage is so economically terrible, why is it that every developed country I can think of has one? It can't possibly be as evil as you guys make it out to be.
So you say:
Everyone other developed country has one.
Therefore it must be good.
Lol, I don't remember saying that exactly. You're exaggerating my sentiment.
Actually you are right, the logic was more like this:
Everyone other developed country has one.
Therefore it is has no negative effect.
There really is no point in having a debate about credible sources.
yeah there is - to determine what is credible.
enough people thought it inappropriate, the government would be replaced.
It doesn't matter what people think. People could think that minimum wages create fairies. That still doesn't make it true or valid. Secondly, you do not take into account the highly imperfect political market.
I put in that sentence in order to throw into the mix that other people (many, in fact) come from a different mindset on this issue. They have their own reasons for believing what they do, their own studies, an explicit look through idustrial relations throughout the history of the world.
That might be the case, but that doesn't mean their reasons are correct or valid.
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OECD Employment Outlook 2006 Report Minimum wages have no clear impact on unemployment...
To study the impact of minimum wages in unemployment, the baseline model is augmented by including the ratio of gross statutory minimum wages to median wages, following the most frequent approach to literature (see eg. OECD, 1998; Elmeskov et al.; 1998). Consistent with previous OECD work using this approach no significant direct impact of the level of the minimum wage on unemployment is identified.
That is misleading. "no significant direct impact of the level of the minimum wage on unemployment is identified." - that was only the case for adults in the study. OECD (1998) generally showed negative and statistically significant disemployment effects for teenagers, and negative but only marginally significant or insignificant effects for 20-24 year-olds. The estimated employment elasticities for teenagers range from −.07 to −.41, with the larger estimates evident in the sample that excludes Portugal and Spain. For 20-24 year-olds, the elasticities range from −.03 to −.10, with only the latter estimate statistically significant at conventional levels. The more negative the elasticity, the greater the disemployment effect.
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I continue to wonder why Eriny has received 3 applauds (karma) on her posts supporting the minimum wage: all of which have been responded to. Nearly none of my posts have been responded to: why?
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They have been responded to but we don't necessarily agree with them. Like Eriny has said, she understand where you're coming from and I do to, it's just that I don't agree with it and you haven't persuaded me to think otherwise. Eriny's post has been responded to but I don't interpret the responses as being better than her initial post, therefore I applauded her on it.
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They have been responded to
Where? I am trying to highlight that the argument has been between you two and brendan, and my arguments have been largely ignored. If you choose to ignore the consequences of the logical thinking that I have displayed, then I cannot take it seriously that there is a case for the minimum wage.
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Oh sorry I misunderstood you. Can you refer me to some of your posts?
I was making the point though that if Eriny makes a post and you respond to it and I find Eriny's post to be more compelling then I will obviously agree with her argument more than yours.
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My view is that if someone has to move countries because the minimum wage is too low and as result they are living in poverty then the system has failed society.
Economics shows us that if we set a minimum price on wages, then we could reduce the amount of workers. Hence, minimum wage increases are often associated with increases in unemployment, and also an increase in inequity (the few who become employed under a minimum wage regime get paid more, while the ones who don't make the cut will earn nothing).
Should an 20 year old receive $5.15 an hour in a developed country such as America?
Wouldn't it be better if he or she could have more... but at what price?
Does it make sense to give a 20 year old a wage of $13 an hour, but possibly lose jobs for other 20 year olds? Installing a minimum wage causes employers to lay off some workers, or potential employers to hire less than they would have, since their costs will now outweigh their benefits in some cases.
But what about those who lose their jobs? Unemployment is below the poverty line as well! The market does not guarantee perfection, but the question is: can government intervention do a better job?
Wages have been going up for the past century yet our unemployment is at record lows...
A few cents doesn't determine employment. Demand for employees due to booming economies does.
Wages can go up, while unemployment stays low, no-one has said that is impossible. This is simply possible by an increase in demand for workers (as you have explained is caused by booming economies). The market will naturally do this, because a high demand for workers represents a need for more workers. In order to get more workers, employers need to pay more in order to get them.
To artificially increase wages is a different story. If the market wage is lower than the proposed minimum wage, then the government-enforced price floor will lead to cuts in employment because the government has ramped up wages beyond what the current level of demand commands. Just let the market do its thing. Government intervention costs money (the costs of enforcing), and it costs liberties - people cannot freely negotiate wage contracts.
Your response:
But the minimum wage is already so low that that is not a problem. Economic theory is a lot different to its practical implementation. At my work over the last 2 years, over 100 employees have left most citing "crap wages". Thus their is always a high demand for workers at my workplace, yet the wage that they offer has not increased (probably increased in-line with inflation). Even though we are currently 20 people underemployed we have not increased wages that we are offering.
But the minimum wage is already so low that that is not a problem.
If it is not a problem, then why can't we let the market deal with it? You would admit that it does have an effect. The effect is negative, that is my argument.
Even though we are currently 20 people underemployed we have not increased wages that we are offering.
So what? This is because your employer believes the benefits do not outweigh the costs (that is, if he offered a higher wage).
If you have one person who been in 4 jobs in the last 2 years (always changing to try and increase wages) then none of the companies are benefiting because of the constant staff chaning resulting in constant rehiring, unskilled employees (in terms of real life training) and ineffecticve and inefficient workplaces. Yet the unemployment rate may still say for both scenarios that unemployment is at 4%.
Smart companies would fix this by offering wage increases (they would do this because as time goes on, the benefits justify the costs). If they do not, it is to their own detriment. The market solves this, because smart companies will sustain profits in this way, and thus these companies will survive and thrive.
To act as a safety net.
That's the thing, you well-intentioned - I will give you that. But good intentions aren't good enough. The fact is that the minimum wage hurts the poor and most disadvantaged in our society - the very people it was intended to benefit.
This is crucial, and I was going to state this, but I forgot.
Good intentions will not save this world. Compassion and empathy are great, but it should be done voluntarily. There are perverse and unintended consequences with government intervention, regardless of their good intentions.
Your response
To act as a safety net.
That's the thing, you well-intentioned - I will give you that. But good intentions aren't good enough. The fact is that the minimum wage hurts the poor and most disadvantaged in our society - the very people it was intended to benefit.
This is crucial, and I was going to state this, but I forgot.
Good intentions will not save this world. Compassion and empathy are great, but it should be done voluntarily. There are perverse and unintended consequences with government intervention, regardless of their good intentions.
But if governments did not set a minimum wage then the public claim that they aren't doing enough to protect individuals.
So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
Then, you did this:
So, you are arguing a point just to represent the uninformed electorate, or are you arguing this point because you believe it will do good things for us?
Defeat them (by which I mean, inform them :P), don't join them.
It merely appears noble for a government official to take action. The public ought to be educated that government intervention won't solve these problems.
If minimum wages were a problem to employers we would have heard uproar about them by now.
If minimum wages were a problem to employers we would have heard uproar about them by now.
Why do you assume that? Employers can still make money, they will do it by employing less, and overworking the few workers that they have. They will be able to overwork them because the minimum wage makes jobs harder to get into. The employers often aren't too fussed. The biggest losers are the potential employees, because they lose their jobs.
The employers will lose out a little bit, but if the costs (including the costs of protest, or any other form of government conversion) do not outweigh the benefits, then there will be no uproar.
Oh, and where did I say they were a problem to employers? I don't see how this was a reply to my post (senses a failed straw-man).
..to which you said: Soz accidently quoted you and then replied to something else lol
But then if demand for work is so high that people are jumping at any opportunity to find work then who is to say that the market can't lead to a more detrimental effect on individuals (demand for work is so high that the market pushes wages so low that it is inhumane, people are working and still living below the poverty line). That is why their needs to be a minimum wage. To prevent extreme market situations such as that where society will no doubt be the loser.
But if the harm is not noticed then it could be said that that harm is so insignificant that it is worth it for the safety net provided by it.
Wrong, the harm only needs to be less in magnitude than the costs it requires to overthrow the minimum wage. Governments have a lot of authority, the costs to persuade them, avoid them, or lobby against them are high. The harm will still be noticed, but whatever party may choose not to rebel because the costs do not outweigh the benefits.
The workers who keep their jobs will win, but that is only a special interest group being protected by the government. Those who do not keep their jobs will lose, because they will go to unemployment.
If there is an extreme demand for work (large supply of workers), like in your example, then a minimum wage will only exacerbate an excess of supply (of workers). This will either cause an increase in unemployment, because employers simply do not value many of the employees as high as the minimum wage, or it will cause an increase in labour competition. This increase in competition will lead to overworking so that employees can justify their work placement to the employer. Overworking simply offsets the benefit provided by the minimum wage in the first place, and it restricts the market from flexibility (in a free market, you could choose to overwork and be paid more, or you could choose to work normally and be paid at market prices - under a minimum wage regime, overworking is the only option).
If you are suggesting that neither of these effects will happen, then you believe that the employer is exploiting the employee in more cases than none, and would happily increase wages (hence why you continue repeating this "safety net"). This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
Your response:
This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
But see that is where economic theory and practical implementation do not see eye to eye.
In theory that is what should happen but in practise potential employees will be looking at their kids starving and saying, I either do no work or I do some work and get paid crap wages. Economic theory sometimes seems to be so *snap your fingers and it happens* when in practise human emotions come into play.
But then you are suggesting the above case, where market equilibrium has occurred, but instead there is the problem with an excess supply of labour. A minimum wage will not fix that, because there will be either unemployment problems, or overworking issues.
I suggest you look at brendan's rational analysis above. The so-called "safety net" will just cut people out. People won't be ensured that their wages won't decrease, but they will instead gamble with either the minimum wage, or nothing. I have explained how "bargaining" is not required because for situations where employers are offering less than the "market value" of labour, the system will self-correct:
This is unlikely, because if wages are "undervalued", then there would be an excess demand for workers (since workers would not accept low wages), and a new employer would step in and offer a higher wage in order to capture some of the untapped labour market, while still making a profit (the profit is crucial in determining whether an employee is "undervalued" or not, not the minimum wage).
If workers are accepting low wages, the benefits outweigh their costs (the forgone hours and effort put into their labour is worth the money they require). This is the market price. It might be a "cruel" fact, but unfortunately, government intervention will not do any better, because as explained above, a price floor will cut employment or cause overworking (which would be the only way to justify the higher wages they must now be paid, to the employer).
Cutting employment destroys the concept of a safety net, because unemployment is far from safe, while overworking is an option that is already available in the free-market. Government intervention simply just stops those who do not wish to overwork from becoming employed. If one is earning below the poverty line, as suggested, then they could similarly negotiate to earn higher wages by accepting overtime. Similarly, all safety nets and "fairness" laws add to the cost of employment, and ultimately reduce employment. These costs are passed onto the labourers. Government intervention does not work.
Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
But what gives the government the right to prevent them from that choice?
A minimum wage regime would force workers to differentiate themselves by offering insanely harsh work conditions, such as overtime without pay, and no bonuses as well as no unfair dismissal. What is to say that these concessions are more humane then working under the 'poverty line'?
Oh, these are just some of the posts that haven't been responded to. In the glimpses where my arguments have been paid attention, I've often had the last word, with no response afterwards.
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I don't have time to go through all of that right now because I have to get ready for work but I'll try later. Ill do two of them now.
My view is that if someone has to move countries because the minimum wage is too low and as result they are living in poverty then the system has failed society.
Economics shows us that if we set a minimum price on wages, then we could reduce the amount of workers. Hence, minimum wage increases are often associated with increases in unemployment, and also an increase in inequity (the few who become employed under a minimum wage regime get paid more, while the ones who don't make the cut will earn nothing).
Should an 20 year old receive $5.15 an hour in a developed country such as America?
Wouldn't it be better if he or she could have more... but at what price?
Does it make sense to give a 20 year old a wage of $13 an hour, but possibly lose jobs for other 20 year olds? Installing a minimum wage causes employers to lay off some workers, or potential employers to hire less than they would have, since their costs will now outweigh their benefits in some cases.
To post 1.
As I have shown, various studies have shown conflicting findings relating to minimum wages and unemployment. The findings are ambiguous, hence I have now responded (and had previously responded through other posts).
To post 2.
I have never mentioned what I think I the minimum wage should be at. I just said there should be one. To me it would not make sense for someone to be working for $1 an hour because their is no minimum wage. The point is that if you don't have a minimum wage employed people as well as unemployed people are going to be living in poverty, not just the unemployed (which Brendan and possibly you (cant remember) say is less without a minimum wage).
Findings on this are conflicting resulting in ambiguity, therefore I can not just presume that the link Brendan has provided should be taken as gospel and the links I have found are not. I will not claim that the links I have found are gospel, but merely say that their is ambiguity woven throughout the findings of various research.
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The findings are ambiguous
I disagree. I favour brendan's research, which compiles around 90 sources, and also mentions a significant decrease in employment in the low-wage sector: so it hurts exactly who is intended to benefit. Your source, as pointed out in previous posts, uses cross-country studies that encounter difficulties in comparison due to differences in labour policy (other than the minimum wage).
Regardless of the empirical findings, let me show you how I have criticised the idea of the minimum wage:
A minimum wage regime would force workers to differentiate themselves by offering insanely harsh work conditions, such as overtime without pay, and no bonuses as well as no unfair dismissal. What is to say that these concessions are more humane then working under the 'poverty line'?
These concessions would be necessary, to offset the higher wage they are now getting. If we assume the same level of low-wage worker supply (no reason why it would change, all the unskilled workers would still be here before minimum wage, and after), then there will be a fiercer competition for jobs. Now that the worker cannot bargain with his wage (cannot offer a lower wage), he or she must compensate for his lack of skills by having other desirable qualities, such as previous experience, and/or working overtime.
My point is: there is an ugly side to the minimum wage that does not show up in the statistics. Even if more wages are being paid out by employers (questionable), it still comes at the price of those who are at the lower end.
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Minimum wages actually destroy "bargaining power," because it destroys the ability for workers to offer the services at a lower price. What is wrong with that?
Because if they offer it at a price too low, then they could still be living in virtual poverty. I had an example above of how being too desperate to work can mean that you have an insufficient income for a good standard of living.
But what gives the government the right to prevent them from that choice?
A minimum wage regime would force workers to differentiate themselves by offering insanely harsh work conditions, such as overtime without pay, and no bonuses as well as no unfair dismissal. What is to say that these concessions are more humane then working under the 'poverty line'?
I responded to that
Well, that's why there are laws that govern under what conditions a person will be employed.
And in that I was referring to health and safety laws, unfair dismissal laws, etc. Unfair working conditions do not spring up as a result of the minimum wage being implemented. People may work harder, but they won't be subjected to slavery. The idea is somewhat absurd.
And brendan, I don't think I would argue that "just because all these contries have it, it means that the minimum wage isn't 'wrong'", I'm saying that there are clearly educated people around the world who see virtue in the minimum wage. If you've noticed, I never argued that the minimum wage is "right" or "wrong", I don't have access to ultimate truths - I'm inclined to say that there is no such thing as one definitive "right" or "wrong" for all people to discover. What I have been arguing is that I believe the minimum wage to be right from what I value, and it makes sense to me.
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I'm saying that there are clearly educated people around the world who see virtue in the minimum wage.
So what? Even assuming that what you said is true - that doesn't prove the point that the minimum wage actually does have virtue, and it achieves the things that you claim.
They have been responded to but we don't necessarily agree with them. Like Eriny has said, she understand where you're coming from and I do to, it's just that I don't agree with it and you haven't persuaded me to think otherwise. Eriny's post has been responded to but I don't interpret the responses as being better than her initial post, therefore I applauded her on it.
Well you don't have to agree with the hard evidence. No one is forcing you to accept the truth.
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And in that I was referring to health and safety laws, unfair dismissal laws, etc. Unfair working conditions do not spring up as a result of the minimum wage being implemented. People may work harder, but they won't be subjected to slavery. The idea is somewhat absurd.
That is unfair. Even in a world where minimum wage causes no losses to welfare, there will still be competition in the low-wage sector (as a worker). They won't be able to distinguish themselves by offering a lower wage, they won't be able to choose to overwork so this is how they will be judged:
* previous experience: this damages entry-level opportunities, and clearly protects those who have experience, and neglect new entrants to the low-wage workforce (i.e.: dropouts, which is a compounded concern with brendan's study that suggests the minimum wage increases dropout rate).
* other trivial factors: good looks, racial discrimination, etc.
The free market usually rewards those who place these predispositions aside, but since there is no reward for people who work harder, or people who agree to a more competitive wage (because it is outlawed), then employers will pick out of prejudice. To block any form of "bargaining power" for the low-wage workers means that employers will have little choice, and will choose from their trivial predispositions instead. Instead of meriting hard work, it merits the roll of a die: this is analogous to how some schools use a lottery system to pick kids, rather than an entrance exam - an ethically questionable idea.
And this is all assuming there are no welfare losses due to the minimum wage. It is actually likely that the number of employed people will actually drop down, as suggested by the compilation of 90 studies (see brendan's link).
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I'm saying that there are clearly educated people around the world who see virtue in the minimum wage.
So what? Even assuming that what you said is true - that doesn't prove the point that the minimum wage actually does have virtue, and it achieves the things that you claim.
No, it doesn't. But there's nothing you've said that has definitively proven to me that no minimum wage is "correct" either.
Coblin, it's not as though those factors wouldn't come into play if there were no minimum wage either. Granted, you have a good point, however, it's a better alternative than having people work 8 hours a day and still not have enough money to get out of poverty. At least welfare and retraining schemes can still make individuals differentiate themselves so that they can find employment, perhaps even above the minimum wage if they are willing to. That's why I think a "safety-net" is multi-faceted.
Also, I think it's misleading to say that you've had the last say on every point. Often it's just a case that the argument has already been said, and therefore disputing your rebuttal would just be moving around in circles and repeating what's already said. And I think in a few instances, I've had "the last say" on a few points myself. It happens quite often on forums where there are several trains of thought going at the same time.
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Coblin, it's not as though those factors wouldn't come into play if there were no minimum wage either.
Do you really think an employer would pick a more attractive employee at the minimum wage, over someone who will work for less than that, with pretty much the same skills (especially if it's not customer service)? I'm saying a minimum wage will magnify these trivial factors, because you have limited flexibility in the market. It is ethically compromised to say that we shouldn't allow people who will offer to work at lower wages, or to work harder and longer hours, and instead we should favour a system (where we have a limited number of jobs for an excess supply of labourers) that will ultimately magnify discrimination in trivial matters (since these are the only degrees of freedom the employer has left to choose from).
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Coblin, it's not as though those factors wouldn't come into play if there were no minimum wage either.
Do you really think an employer would pick a more attractive employee at the minimum wage, over someone who will work for less than that, with pretty much the same skills (especially if it's not customer service)? I'm saying a minimum wage will magnify these trivial factors, because you have limited flexibility in the market. It is ethically compromised to say that we shouldn't allow people who will offer to work at lower wages, or to work harder and longer hours, and instead we should favour a system (where we have a limited number of jobs for an excess supply of labourers) that will ultimately magnify discrimination in trivial matters (since these are the only degrees of freedom the employer has left to choose from).
I meant that discrimination will happen anyway to some extent. Also, there are other ways low skilled people can differentiate themselves if the proper safe guards (e.g. the welfare and retraining schemes I mentioned earlier) are in place.
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I meant that discrimination will happen anyway to some extent. Also, there are other ways low skilled people can differentiate themselves if the proper safe guards (e.g. the welfare and retraining schemes I mentioned earlier) are in place.
and how are you going to fund welfare and these retraining schemes? money doesn't grow on trees. are you gonna pay for it yourself?
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I meant that discrimination will happen anyway to some extent. Also, there are other ways low skilled people can differentiate themselves if the proper safe guards (e.g. the welfare and retraining schemes I mentioned earlier) are in place.
I said that the minimum wage magnifies it, I never denied it would not take place. It would be magnified because in a free market, employers would be rewarded by abstaining from discrimination because there is an incentive: cheaper or harder workers.
The more labour laws you install to "protect" workers, the less people will become employed. If an employer knows that unfair dismissal may make it nearly impossible to sack a sub-standard worker, then he or she will naturally be averse from employing. The unemployment figure becomes even worse with minimum wage plus these extra labour laws.
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Regardless of whether unfair dismissal exists or not, if people aren't doing their job properly, they will get fired. Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
And brendan, taxpayer money pays for welfare and retraining. The biggest percentage of government expenditure is on welfare payments and education makes up another significant slice also. The money doesn't grow on trees, but it's there.
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Regardless of whether unfair dismissal exists or not, if people aren't doing their job properly, they will get fired. Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
I don't trust the bureaucracy to do its job efficiently here. I believe that if an employer has unfairly sacked a perfectly good worker, he or she will return to the workplace because his or her traits are desirable. It doesn't make sense for an employer to sack a good worker: but we should let the businesses decide that, not the government (which has no care in the world about the welfare of the business or the employee).
I'm not going to argue for or against welfare payments or retraining programmes, but if they exist, it is irrelevant to the case of the minimum wage. Retraining programmes may eliminate the entry-level problem, but it still makes no difference to the employer, who will continue to pick based on prejudice, rather than significant traits (such as the wage and the hours, where competition has been outlawed). Retraining programmes will just add more to the supply of low-wage workers, which would mean the worker wage would be even more overvalued, so the employer would feel even more justified in trying to pick his employees to suit the best characteristics possible (which will be limited to attractiveness, race and gender, after labour reform), or the employer may just decide it is no longer worth hiring as many workers as he or she once did.
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Regardless of whether unfair dismissal exists or not, if people aren't doing their job properly, they will get fired. Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
I don't trust the bureaucracy to do its job efficiently here. I believe that if an employer has unfairly sacked a perfectly good worker, he or she will return to the workplace because his or her traits are desirable. It doesn't make sense for an employer to sack a good worker: but we should let the businesses decide that, not the government (which has no care in the world about the welfare of the business or the employee).
I'm not going to argue for or against welfare payments or retraining programmes, but if they exist, it is irrelevant to the case of the minimum wage. Retraining programmes may eliminate the entry-level problem, but it still makes no difference to the employer, who will continue to pick based on prejudice, rather than significant traits (such as the wage and the hours, where competition has been outlawed). Retraining programmes will just add more to the supply of low-wage workers, which would mean the worker wage would be even more overvalued, so the employer would feel even more justified in trying to pick his employees to suit the best characteristics possible (which will be limited to attractiveness, race and gender, after labour reform), or the employer may just decide it is no longer worth hiring as many workers as he or she once did.
The government ought to care about the business and employee, because it's these groups that elect them in the first place! In a way, they are the business and the employee. And it's quite true that a good worker should find a good job again, but it's a bit more difficult in rural areas where many branches of businesses have closed. It's also potentially quite difficult for single parents as well. That's probably off topic though.
And I don't exactly understand your line of thinking in your second paragraph. How does educating people make the economy worse off exactly?
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It doesn't, but it makes it harder for all the low-wage workers competing for a spot. Since the minimum wage sets a price floor on wages, the spots become more exclusive, and to justify it, you need to have good traits. Like I have explained, the traits are limited by restrictive labour laws, so it will just increase the degree of discrimination.
For employers it's great. They get a wider choice of applicants. They can hire an array of hot chicks for their checkouts, or a white team for the racist employer, since there can be no difference in terms of wages and working hours. Meanwhile, those who may not be white, or hot, will suffer. They don't even get the choice to offer their services at a lower price!
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And brendan, taxpayer money pays for welfare and retraining.
It's taxpayer money? How are taxes collected? Can i not pay taxes and not receive anything?
Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
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Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
Technically, yeah. Many people have contracts or have to give ample notice if they decide to leave.
And brendan, taxpayer money pays for welfare and retraining.
It's taxpayer money? How are taxes collected? Can i choose to not pay it and not receive anything?
Do you propose not receiving street lights? Or a defence or police force? Do you propose letting people go homeless? Do you propose not paying for prision facilities for the increase in criminals due to homelessness?
It doesn't, but it makes it harder for all the low-wage workers competing for a spot. Since the minimum wage sets a price floor on wages, the spots become more exclusive, and to justify it, you need to have good traits. Like I have explained, the traits are limited by restrictive labour laws, so it will just increase the degree of discrimination.
For employers it's great. They get a wider choice of applicants. They can hire an array of hot chicks for their checkouts, or a white team for the racist employer, since there can be no difference in terms of wages and working hours. Meanwhile, those who may not be white, or hot, will suffer. They don't even get the choice to offer their services at a lower price!
Yes, but if people are given the opportunity to make there skills better and more catered towards their personal interests, differentiation will happen. The people who can't be bothered accepting the opportunity to have government funded retraining will be those who will compete for the minimum wage jobs.
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I misinterpreted what you meant by retraining. Instead, I modelled a situation where there would be an increased number of low-wage workers. The opposite is true. Okay, the retraining will be beneficial, and will ease the discrimination (as there is now less choice of low-wage workers for the employer), but there is still a fundamental loss of freedom to bargain.
I continue to maintain that it is not any more justified to maintain a minimum wage regime, because all it does is prevents an unemployed unskilled citizen from offering his or her service for a lower wage in order to compete. If you removed the minimum wage, a retraining program would still be effective: it is irrelevant to the minimum wage. The only difference is that the low-wage worker has a choice: whether he or she wants to stay in the low-paid job, or seek retraining - this would be decided on an individual basis.
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Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
Technically, yeah. Many people have contracts or have to give ample notice if they decide to leave.
That's private contracts. They don't have an unfair resignation law imposed on them.
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Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
Technically, yeah. Many people have contracts or have to give ample notice if they decide to leave.
That's private contracts. They don't have an unfair resignation law imposed on them.
Actually you're wrong. I am on an award and as part of my award I am required to give 2 weeks written notice before I resign. If I choose not to then I will forfeit my annual leave (which is currently about 900 bucks worth)... slightly off topic though
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Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
Technically, yeah. Many people have contracts or have to give ample notice if they decide to leave.
That's private contracts. They don't have an unfair resignation law imposed on them.
Actually you're wrong. I am on an award and as part of my award I am required to give 2 weeks written notice before I resign. If I choose not to then I will forfeit my annual leave (which is currently about 900 bucks worth)... slightly off topic though
But that's notice. I'm talking about unfair resignation laws analogous to unfair dismissal laws.
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Well thats what is deemed to be "fair resignation". 2 weeks notice gives the employer ample time to start a hiring process to compensate for any inconvenience that arises from resignations in my example.
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Unfair dismissal laws do not allow anything of that nature: a 2 week notice before you're sacked.
They're about providing reasons that must be checked by slow bureaucracy.
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Well thats what is deemed to be "fair resignation". 2 weeks notice gives the employer ample time to start a hiring process to compensate for any inconvenience that arises from resignations in my example.
yeah but unfair dismissal laws don't just allow employers to sack whomever they want for whatever reason as long as there is 2 weeks notice. i'm talking unfair resignation laws analogous to unfair dismissal laws.
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Unfair dismissal is when someone is fired without a good cause, such as being dismissed for leaving work early because their child was taken into hospital or something.
Why the hell not? If i have a business and I want to fire someone why the heck not? It's my god damn business. If you have unfair dismissal then to be fair you have to have unfair resignation as well?
Technically, yeah. Many people have contracts or have to give ample notice if they decide to leave.
And brendan, taxpayer money pays for welfare and retraining.
It's taxpayer money? How are taxes collected? Can i choose to not pay it and not receive anything?
Do you propose not receiving street lights? Or a defence or police force? Do you propose letting people go homeless? Do you propose not paying for prision facilities for the increase in criminals due to homelessness?
I have proposed no such thing. Where have I have made such proposals? Furthermore, why do you not highlight how taxes are collected? Why do not tell us all?
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Look, I really don't see your point. We all know how taxes are collected, I don't see how that's relevant.
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Look, I really don't see your point. We all know how taxes are collected, I don't see how that's relevant.
It very much is so. There is no money fairy. There is no process by which any government can give something for nothing, but through the forced and involuntary confiscation of the fruits of an individual’s labour using the coercive powers of government. Is that so irrelevant? Is it so irrelevant that inherent in any government intervention is the involuntary confiscation of a person's property required to fund such intervention? Or is it inconvenient for the sponsors of government intervention to mention it?
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Clearly, this is an ideological battle between those who believe the government grants us our property rights (i.e.: they tell us how much of our income we can earn, to what extent we can utilise our capital, and how we employ) versus those who believe the individual grants the government the right to help protect our property rights.
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Look, I really don't see your point. We all know how taxes are collected, I don't see how that's relevant.
It very much is so. There is no money fairy. There is no process by which any government can give something for nothing, but through the forced and involuntary confiscation of the fruits of an individual’s labour using the coercive powers of government. Is that so irrelevant? Is it so irrelevant that inherent in any government intervention is the involuntary confiscation of a person's property required to fund such intervention? Or is it inconvenient for the sponsors of government intervention to mention it?
But you essentially benefit from this so called confiscation. If you were given the choice, would you pay taxes? I would, I imagine most people would. But as soon as the government starts to fund non-excludables, it means that everybody has to pay or else they'd benefit from somebody elses stuff. And technically we do have some choice. As in, if the electrorate didn't want to pay taxes, they'd vote in a government that wouldn't make them pay. Also, if the electorate doesn't like what the government is buying, they'll be voted out too. I guess the idea is essentially community-spirited, I don't see it as confiscation or a way to strip me of my basic freedoms, I see it as a way in which we can all pool our money together for something we'll all own/use/need. It's practical.
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As in, if the electrorate didn't want to pay taxes, they'd vote in a government that wouldn't make them pay.
I see this as an attack on individual liberties. If the electorate wanted a national religion, the government should not allowed to install one. The constitution is supposed to shield us from the tyranny of the majority.
For the purpose of social welfare, it is not a non-excludable, so it should be voluntary. I believe that national defence has a case for taxes at the federal level, while most public goods like roads should be funded at the state level.
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I don't really think social welfare is truly non-excludable though. Everyone is affected by poverty through crime rates and so on.
And I agree that the majority isn't necessarily right, but if a suggestion isn't constitutional, it's probably not going to happen.
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If you were given the choice, would you pay taxes? I would, I imagine most people would.
Good, then give people that choice.
It is probably true that poverty is related to crime, and so I agree that there is a positive externality involved with helping poor people. However, it is unlikely a government can bring a more efficient outcome than a free market does. There will be misdirected funds: it will be hard to capture the groups that will decrease the crime rate the most, so the policy may not actually decrease the crime rate very much. The dead-weight losses of taxation and redistribution may very well outweigh the benefits of this policy. The better alternative is to enforce the law more strictly.
If you think about it emotionally, your policy of redistribution essentially subdues potential thieves. This is practically appeasement: "we will pay you so that you don't have an incentive to steal" - that is like sacrificing liberties at home to defend our liberties in a War on Terror :P (*ahem* Patriot Act). A stronger enforcement of the law should be used instead. Both options will cost money, so empirical evidence may be required. However, the option that respects individual liberty the most is to enforce the law more strongly (or effectively).
If you believe that the majority are compassionate, that is great. Let it be voluntary. We can persuade and appeal to the conscience of those who do not donate, but we should not coerce them.
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I see this as an attack on individual liberties. If the electorate wanted a national religion, the government should not allowed to install one. The constitution is supposed to shield us from the tyranny of the majority.
Haha I wouldn't say our constitution protects us from tyranny of the majority, though I would agree that it should. It protects certain things, like freedom of religion, but not much else. Most of our rights are upheld through statutes and the common law, which can be changed at any time by parliament and are therefore at the whim really of this 'majority'.
baha a little off topic sorrry /ignore
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But you essentially benefit from this so called confiscation.
If people really benefited then give then make it voluntary, and we will see what they decide.
If you were given the choice, would you pay taxes? I would, I imagine most people would.
Good. Then give them that choice.
But as soon as the government starts to fund non-excludables, it means that everybody has to pay or else they'd benefit from somebody elses stuff.
That's the free-rider problem with non-excludable goods. That may justify government intervention. Not all non-excludable goods are worth the costs inherent in government intervention (government failure, dead weight costs of taxation estimated to be 20 cents in the dollar, corruption, imperfect information). Some non-excludable goods are worth it e.g. national defense.
And technically we do have some choice.
No, if they had a choice, then you wouldn't need to coerce them.
As in, if the electrorate didn't want to pay taxes, they'd vote in a government that wouldn't make them pay.
But by using the political process the majority must by necessity impose conformity upon all including the minority. How is that more desirable that giving each individual the freedom of choice to decide for himself? Secondly you don't take into account the imperfections of the political market. There are two major parties, and their policies are bundled. You cannot pick and choice the economic policies of Liberal and the social policies of Labor. It's a take-it-or-leave it bundle.
Also, if the electorate doesn't like what the government is buying, they'll be voted out too.
Again, there is bundling. What if both parties propose buying things that the people do not like? You also didn't take into account the fact that in political market, it is rational for individuals to be ignorant of the policies due to the significant information costs and the small chance that their one vote will make a difference.
I see it as a way in which we can all pool our money together for something we'll all own/use/need. It's practical.
There is nothing wrong with that, that's completely fine and i would support that, but it ought to be voluntary and without coercion.
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This talk that a minimum wage law is a "safety net" simply makes no sense. It is not a safety net at all. The minimum wage only applies if you are EMPLOYED. What good is a minimum wage if you are put out of a job and earning nothing, because employers are no longer willing to hire you are the minimum wage? The minimum wage laws are labeled as being for the poor, for the needy, yet have effects exactly the opposite of those which their well-intentioned sponsors intended them to have. The sponsors believe that a law saying that nobody shall get less than say $10 an hour, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure that people whose skills are not sufficient to justify $10/hr will be unemployed. The hard evidence shows that a minimum wage law reduces the number of jobs available. The greater the minimum wage the greater the negative employment effects. Moreover, these disemployment effects have been concentrated on the least-skilled and most disadvantaged groups that the sponsors would most like to help. Everyone wants to see economic well-being of the working poor rise, but why on earth would you want to throw the poor, the unskilled, and the young out of work?
To understand why the evidence shows the a minimum wage has negative employment effects take this example: The minimum wage is $10/hr. Let's say there is a man who has a skill set which would justify a wage rate of $6, $7 an hour. The minimum wage law says to employers that they must discriminate against people who have low skills. The law says you can't, you may not employ him. Because if you employ him, you have to pay him $10. Well, what's the result? Why engage in activities where the costs ($10) exceed the benefits ($7)? The firm will simply not employ him. This man is now unemployed because it is illegal for him to work for $7/hr. This raises question of freedom. What right does a the government to dictate to us what price we can sell our labour? If he wishes to sell his labour at $7/hr - why are we in any position to force him not to? The minimum wage law is just another example of government arrogantly controlling our actions and destroying personal choice.
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What is the point of a minimum wage while we still have youth rates.
Any argument about 'providing employment opportunties' (in the unskilled market, particularly) is moot.
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The hard evidence shows that a minimum wage law reduces the number of jobs available.
The "hard evidence" says nothing of the sort! There may well be a correlation between enstating the minimum wage and a rise in unemployemnt, I'm not going to dispute that. I will dispute the inference drawn from that information though. As I alluded to earlier, statistics do not show the whole picture. If the amount of people employed stays the same but the amount of people joining the workforce rises, there is going to be an artifical rise in the unemployment rate also. This can be seen currently - the unemployemnt rate has moved from 4.2% to 4.3%, but more people are employed now than what they were a year ago. This is because the participation rate has risen.
And don't you think that instilling the minimum wage could potentially attract more workers to the workforce if it means that they can make a living from doing so? And so that they don't have to value their worth as a worker to be below the poverty line? Admittedly, the minimum wage can have a number of effects, just like almost everything in real-world economics - but my suggestion is just as valid as yours.
And also, while the research is apparently there, we have no reason to think that no minimum wage is best. Few societies have no minimum wage at all, the majority of those who do have things such as child slavery and sweatshops and so on - this violates basic human rights which is ethically reprehensible. How do you know for sure how not having a minimum wage will affect our entire society? I'm not convinced that it would be for the best. Theoretically, your agument is viable, but there's no real world examples to back it up. I just keep thinking back to Britain during the Industrial Revolution. What's to say that society won't go back there?
And technically we do have some choice.
No, if they had a choice, then you wouldn't need to coerce them.
As in, if the electrorate didn't want to pay taxes, they'd vote in a government that wouldn't make them pay.
But by using the political process the majority must by necessity impose conformity upon all including the minority. How is that more desirable that giving each individual the freedom of choice to decide for himself? Secondly you don't take into account the imperfections of the political market. There are two major parties, and their policies are bundled. You cannot pick and choice the economic policies of Liberal and the social policies of Labor. It's a take-it-or-leave it bundle.
Also, if the electorate doesn't like what the government is buying, they'll be voted out too.
Again, there is bundling. What if both parties propose buying things that the people do not like? You also didn't take into account the fact that in political market, it is rational for individuals to be ignorant of the policies due to the significant information costs and the small chance that their one vote will make a difference.
I see it as a way in which we can all pool our money together for something we'll all own/use/need. It's practical.
There is nothing wrong with that, that's completely fine and i would support that, but it ought to be voluntary and without coercion.
It is not coercion, that's an exaggerated label. If enough people really hated taxes, either one of the two major parties would adjust their policies in the hope of being elected, or a new political party would rise to power. Part of democracy is that the majority does guide most of the decision-making that goes on. Is it ideal? Probably not, but I think that we must acknowledge that we're essentially a society. Everything we do in life impacts on someone else in some way, sometimes to the extent that free will can't overcome the choices of others. It pays to recognise this, in politics as well as life.
If you believe that the majority are compassionate, that is great. Let it be voluntary. We can persuade and appeal to the conscience of those who do not donate, but we should not coerce them.
I'm not going to dispute that donations could be effective. They could be. However, what I know of psychology would suggest otherwise. If there is somebody dying of poverty and many people are in a position to help them, most will have the tendency to leave it up to somebody else to do. The attitude is "Why should I help them, when there are other people who are richer than I am around to help out?". I believe that a better solution is to all help out equally, and in turn we all benefit.
If you think about it emotionally, your policy of redistribution essentially subdues potential thieves. This is practically appeasement: "we will pay you so that you don't have an incentive to steal" - that is like sacrificing liberties at home to defend our liberties in a War on Terror :P (*ahem* Patriot Act). A stronger enforcement of the law should be used instead. Both options will cost money, so empirical evidence may be required. However, the option that respects individual liberty the most is to enforce the law more strongly (or effectively).
I think it's more "We pay you so that you can buy food, be healthy, think more clearly, get educated, and lead a life where you won't feel the need to resort to desperate acts". We'll ultimately have to pay for it anyway, the police force is a public good, jails might be considered to be a public good. Personally, I'd prefer to pay them before they get to prison. Also, the money would probably be used for education, which has many positive externalities to the whole economy/society. It helps all of us.
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It is not coercion, that's an exaggerated label. If enough people really hated taxes, either one of the two major parties would adjust their policies in the hope of being elected, or a new political party would rise to power. Part of democracy is that the majority does guide most of the decision-making that goes on. Is it ideal? Probably not, but I think that we must acknowledge that we're essentially a society. Everything we do in life impacts on someone else in some way, sometimes to the extent that free will can't overcome the choices of others. It pays to recognise this, in politics as well as life.
It is coercion, by definition taxes are coercive. If they weren't coercive, and they were voluntary then they wouldn't be called taxes, it would just be called donations. You just do not want to acknowledge it because it is inconvenient to your argument.
If enough people really hated taxes, either one of the two major parties would adjust their policies in the hope of being elected, or a new political party would rise to power.
If people really wanted to pay taxes, then give them a choice, and we will see who pays. Secondly you don't take into account the imperfections of the political market. There are two major parties, and their policies are bundled. You cannot pick and choice the economic policies of Liberal and the social policies of Labor. It's a take-it-or-leave it bundle. Second, you also didn't take into account the fact that in political market, it is rational for individuals to be ignorant of the policies due to the significant information costs and the small chance that their one vote will make a difference.
Part of democracy is that the majority does guide most of the decision-making that goes on. Is it ideal? Probably not, but I think that we must acknowledge that we're essentially a society.
How does acknowledging that we are "society" justify the forced and involuntary confiscation of the fruits of an individual’s labour using the coercive powers of government? Society is simply a collection of individuals. I will acknowledge that. But it doesn't follow from that positive statement that therefore the government should coercively confiscate of the fruits of an individual’s labour. Your argument doesn't logically follow.
The hard evidence shows that a minimum wage law reduces the number of jobs available.
The "hard evidence" says nothing of the sort! There may well be a correlation between enstating the minimum wage and a rise in unemployemnt, I'm not going to dispute that.
No, the study found disemployment effects.
As I alluded to earlier, statistics do not show the whole picture. If the amount of people employed stays the same but the amount of people joining the workforce rises, there is going to be an artifical rise in the unemployment rate also. This can be seen currently - the unemployemnt rate has moved from 4.2% to 4.3%, but more people are employed now than what they were a year ago. This is because the participation rate has risen.
So what? How does that even address the findings of the 28 credible studies that have found negative employment effects associated with a minimum wage. You are just saying how the unemployment rate can increase. How does that show a positive employment effect associated with minimum wages?
And don't you think that instilling the minimum wage could potentially attract more workers to the workforce if it means that they can make a living from doing so? And so that they don't have to value their worth as a worker to be below the poverty line? Admittedly, the minimum wage can have a number of effects, just like almost everything in real-world economics - but my suggestion is just as valid as yours.
If you suggestion as just as valid then why did you feel the need to point it out? It's validity will do its own work. Secondly, you haven't provided any credible or objective evidence to support your claims that a minimum wage law will have a positive employment effect. David Neumark and William Wasche's paper discussing over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia found that:
very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects.
And also, while the research is apparently there, we have no reason to think that no minimum wage is best.
That's conveniently shifting the onus of proof. What evidence is there to support the contention that a minimum wage law is best?
I'm not convinced that it would be for the best.
You do not need to be convinced either.
Theoretically, your agument is viable, but there's no real world examples to back it up.
That's intellectual dishonesty. My argument isn't simply theoritical, I have provided again and again empirical evidence to counter the claim that a minimum wage law benefits society. The most substantial piece of research being David Neumark and William Wasche's paper discussing over 90 recent studies on the effect of minimum wages on employment, including 4 studies from Australia.
I just keep thinking back to Britain during the Industrial Revolution. What's to say that society won't go back there?
That's an hyperbole. What credible evidence do you have to support the claim that Australia will go back to being like "Britain during the Industrial Revolution" if the minimum wage laws were abolished?
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I think the fact that we're a society means more than what you credit it, but I understand that's you come from a different ideology than me. Also, I don't think I'm alarmist enough to suggest that if there was no minimum wage, Australia would definitely end up like the Industrial Revolution days, but it could well be a possibility unless we watched it.
I've already said what I think really, so I'm not going to bore you with the same arguments re-worded time after time.
I'm happy to agree to disagree though :)
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I think the fact that we're a society means more than what you credit it,
No, I acknowledged that we are a society (collection of individuals), but how does it follow from that fact, your policy proposal? It is a giant leap in logic. You jumped from a positive (what is) factual statement to a normative (what ought to be) statement, which defies logic and common sense. It's not about ideology (collection of ideas) but about logic, sound arguments and common sense.
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If you think about it emotionally, your policy of redistribution essentially subdues potential thieves. This is practically appeasement: "we will pay you so that you don't have an incentive to steal" - that is like sacrificing liberties at home to defend our liberties in a War on Terror :P (*ahem* Patriot Act). A stronger enforcement of the law should be used instead. Both options will cost money, so empirical evidence may be required. However, the option that respects individual liberty the most is to enforce the law more strongly (or effectively).
I think it's more "We pay you so that you can buy food, be healthy, think more clearly, get educated, and lead a life where you won't feel the need to resort to desperate acts". We'll ultimately have to pay for it anyway, the police force is a public good, jails might be considered to be a public good. Personally, I'd prefer to pay them before they get to prison. Also, the money would probably be used for education, which has many positive externalities to the whole economy/society. It helps all of us.
That's only one side of the story. There are disincentives created by redistribution, because of the impracticability of distributing income to where it will reduce crime the most. A lot of the money will end up in the hands of people who would not have committed crimes anyway, so the end benefit becomes very thinned out. Instead, we end up with a system where people have the means to live without working. This is the disincentive that hurts the workers (who get a cut of their benefits removed) and also makes the poorer more averse from finding a job (because they don't need to!).
The economic benefits are ambiguous. In such a case, I prefer to respect individual liberties, rather than entrust the optimisation to a few wise men in power.
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There is an unintended benefit (to the poor) that happens from the minimum wage:
Employers illegally employ workers that work under the minimum wage. This is under the table and will not be reported on tax, and hence the unskilled (and usually poor) worker benefits from not having to pay tax on his earnings.
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Hahah thats a very good point Coblin haha i love it
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Greg Mankiw is a professor of economics at Harvard University
http://gregmankiw.blogspot.com/2006/06/sperling-on-minimum-wage.html
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Peter Schiff on minimum wage policy. How its destroying jobs!
http://www.youtube.com/watch?v=snDmfsPJWW4