What price minimum wage?

[costargh]

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.

[brendan]

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.

[Collin Li]

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.

[Collin Li]

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.

[costargh]

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

[brendan]

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.

[Collin Li]

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.

[costargh]

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.

[Collin Li]

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.

[Collin Li]

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).

[costargh]

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)

[costargh]

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

[brendan]

"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."

[costargh]

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.
 

[brendan]

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.