Minimum Wage Thought Experiment

reply to post by DISRAELI


Did it occur to you that the cost of food, medicine, shelter, and other essentials is between 300-500% higher in the US then it is in India or China?

I'm not well versed in tax law, or any law, so my post will reflect that...

Joe's new employee, I will call him Francis, could work as a self-employed contractor. He is not a direct employee of Joe, so can accept any rate of payment. With this work agreement, the tax burden falls on Francis. He must file as a private contractor.

Originally posted by JohnnyTHSeed
I'm not well versed in tax law, or any law, so my post will reflect that...

Joe's new employee, I will call him Francis, could work as a self-employed contractor. He is not a direct employee of Joe, so can accept any rate of payment. With this work agreement, the tax burden falls on Francis. He must file as a private contractor.

That would work.

Except for the fact that the government will tax Francis's pay at 15% payroll, so he would be making 9% less than he would working for Joe directly since he would have to pay the employers part of the payroll tax himself.

Francis might agree to this, but obviously he would rather be working directly for Joe.

Alternatively, Joe might agree to hire Francis at the full cost he would have had to absorb anyways, but then Francis wouldn't be making 5 an hour, he would be making more. - which is pointless in this argument since it is about minimum wage.

reply to post by mnemeth1


That wasn't my point, my point was that you were seemingly trying to justify earning below minimum wage, by using your experience as an example that it can work. The amount of the wage has nothing to do with it- the far greater value of expenses is the issue.

Additionally, if you read the article, which states on average over 70 people apply per graduate job, you'll see that's an indicator that we don't necessarily live in a meritocracy. Plenty of people with degrees are having to go into very poor jobs, and are actually ending up in a worse position than those who left school aged 16- it seems to be becoming more about pot luck, as opposed to those who put effort in, and those who don't. Maybe that isn't the case in the USA, I realise- but here, it's a big problem.

You seem to also be operating on the assumption that we don't live in a society whereby the ones in power will exploit ones in need? Do you really think it will just stop at employers having a fair negotiation with future employees, with the outcome being a fair wage? Like I referenced, it was only 100 years ago we had work houses, and we still have sweat shops in the developing world- I'd rather they not be resurrected in the supposed civilised west!

reply to post by ScepticalBeliever


I don't see voluntary contracts as being exploitative.

If someone agrees to work for a wage, then there is no exploitation.

Exploitation is when you use the government to do violence on your behalf to get what you want.

In the end, the violence doesn't even get you want you want anyways, because employers will simply not create jobs if the wage is higher than they can afford to pay.

Originally posted by mnemeth1

Joe has made $15,000 in profits that he can afford to re-invest in his business.

Seems to me that if Joe can't even pay an employee the minimum wage required by law then he's not ready to re-invest in his business.

However, getting a degree in history, liberal arts, English, psychology, or whatever other totally worthless programs they are offering these days doesn't count.

It doesn't count if the point of college = megacorporation employee training program. Some would disagree.

Originally posted by mnemeth1
Joe is an employer, he runs a flower shop.

Joe wants to expand his operations and hire another worker to move pots around and water the plants.

Joe has made $15,000 in profits that he can afford to re-invest in his business.

So Joe puts out a want ad for help offering a wage of $5.00 an hour.

This amounts to an untaxed annual wage of about $10,500 a year.

Joe gets a response from Larry, who is willing to work for $5.00 an hour.

Why $5.00? Why not $4.50? Why not $0.25?

After about two weeks of this arrangement, DHS storm troopers break down Joe’s door with a battering ram and hold Joe at gun point while they seize all of his property and haul Joe off to a dungeon.

Joe’s crime?

Not paying federal minimum wage.

I really can't laugh hard enough at this.

Of course this is an extreme example of what we can ultimately expect to occur when the State is involved in setting wages, but I think it highlights the fact that the State has no business involving itself in voluntary contracts.

That's not an example. it's an internet moonbat engaging in very poor fantasy-comedy writing. Terry Prachett you're not.

The entire purpose of minimum wage laws are to keep non-union shops from hiring workers at a wage that undercuts the union shops. We have minimum wage laws today strictly because they were heavily lobbied for by labor unions.

If someone wants to work for a lower wage, that is between them and the person they chose to work for. The idea that someone can not decide to work on their own for a lower wage is preposterous to me.

The problem is, this is coercive. No one wants to work at $3 an hour. People who do so, do so because they have no other options. The employer then takes advantage of the need of this other person, exploiting them for cheap labor. You either work for me for far less than your labor is worth, or you starve. The intervention of unions is necessary to prevent abuses like this and to support the value of ALL workers.

Originally posted by Boreas
Seems to me that if Joe can't even pay an employee the minimum wage required by law then he's not ready to re-invest in his business.


It doesn't count if the point of college = megacorporation employee training program. Some would disagree.

Obviously people like you know what Joe's business needs more than he himself does.

As for college being a corporate training program - that is the freaking entire point of going to school!

Of course, businesses heavily favor college subsidies by the State because it reduces their initial training costs.

Prior to the State involving itself in college education, college was not as necessary because employers had to pick up the tab for training their employees, so it didn't matter as much.

But now that the State is involved, businesses demand you have a degree for good paying jobs because they can't afford to pay for a total training package on their own.

reply to post by mnemeth1



If its a choice between slave wages or starving to death it isn't a voluntary contract any more than a slave has a voluntery contract

starvation is just a more elegant gun to your head

reply to post by mnemeth1


Your government currently has a six month time limit for unemployment benefit, I believe? If so, then after that time period, those suckers with no income are fair game! Okay, so they're not going to be offered/accept $1 ph, because that wouldn't cover travel expenses- but say $2.50, they'd have no choice. That's exploitation.

Also, what would happen if companies in set fields decided to collude? It's not that far out- as an example, cigarette companies in the UK have been found guilty of doing it with their prices, during the last few years. No doubt it happens a lot more, in instances that we aren't publicly aware of. It wouldn't take much effort for a few companies to make a deal proposing a secret wage ceiling- especially for entry level jobs.

I'm just trying to understand where you're coming from. I've seen you raise some good points, in my short time here, and you're clearly much more intelligent than I am, but I can't see any real possible benefits of removing any wage floor- at least none which would/could come close to countering the negatives which would arise.

Originally posted by monkofmimir
reply to post by mnemeth1

 

If its a choice between slave wages or starving to death it isn't a voluntary contract any more than a slave has a voluntery contract

Slavery involves violence.

Voluntary contracts are always mutually beneficial to all parties involved, otherwise the person engaging in it would not have accepted the deal.

Minimum wage laws are not designed for the head of a household to make a comfortable living, they are designed to prevent young unskilled workers from getting jobs that compete with labor unions.

No minimum wage has ever been set that would allow a person to make a comfortable living - if that was the case, minimum wage would be at around 30,00 an hour.

reply to post by ScepticalBeliever


Why shouldn't employers be allowed to offer jobs for 1.00 an hour?

If someone wants to work for that, why not let them?

Further, how many applicants do you think the position would get?

Employers would have to offer a competitive wage if they want to hire someone. If that wage happens to be below the minimum, what's the big deal?

Should the State engage in violence against a man who voluntarily works for less than the minimum wage?

Further, why should the State only engage in violence against the employer?

Isn't the man who accepts the job equally as guilty?

Obviously people like you know what Joe's business needs more than he himself does.

People like me, eh? Nice to meet you! Someone who knows how to size up someone's economical/philosophical/social beliefs instantly must be really awesome. But anyways, no, sorry but if Joe can't afford to pay someone a fair wage to move/water pots then he's not ready economically to hire additional staff and needs to suck it up/work harder until he can.

As for college being a corporate training program - that is the freaking entire point of going to school!

No, it is not. Just an opinion but carry on.

reply to post by Boreas


LOL

I guess you are a professional florist.

You should run for office, because business owners are too stupid to run their own businesses.

They need people like you to direct them.

Originally posted by mnemeth1

Originally posted by monkofmimir
reply to post by mnemeth1

 

If its a choice between slave wages or starving to death it isn't a voluntary contract any more than a slave has a voluntery contract

Slavery involves violence.

And so does wage coersion. It's a passive violence, but it's still violence.

Voluntary contracts are always mutually beneficial to all parties involved, otherwise the person engaging in it would not have accepted the deal.

Minimum wage laws are not designed for the head of a household to make a comfortable living, they are designed to prevent young unskilled workers from getting jobs that compete with labor unions.

Except the competition you speak of doesn't exist. Unions aren't trying to keep "young unskilled workers" out. They are attempting to protect those workers. See, the unions don't handle hiring. That's the management. The unions simply tell management, "people who work at this job deserve that wage and these benefits for those hours."

There is only competition if the employer is trying to violate a voluntary contract between himself and the union.

No minimum wage has ever been set that would allow a person to make a comfortable living - if that was the case, minimum wage would be at around 30,00 an hour.

Depends on the definition of "comfortable."

However, you're right, minimum wage has been abysmally low for the last three decades. Why? 'Cause of people like you, mostly.

reply to post by mnemeth1


If I was offered a job at £1 an hour and refused (assuming this bill is passed), I would loose my jobseekers and be forced to either commit crime (theft or begging) or die.

if I accepted I would be forced to live at a third world quality of life (no running water, electricity, living off rice etc.)

Also given the amount of unelployed in my area, employers would have little incentive to increase my wage (to a comfortable level) as I gained experiance.

reply to post by mnemeth1


It's basic economic sense. If you can't afford something, don't buy it. It doesn't matter if you're a florist or not, making a purchase that your wallet can't cover is economically unsound.

reply to post by mnemeth1


It's not a question of wanting to working, is it? People HAVE to work- unless they have large savings, of course- but then they shouldn't be too worried about working.

Like I adressed with the collusion possibility, a competitive wage is wholely subjective- if all companies in a field agree to cap wages at $4, their parameters for a competitive wage are drastically reduced, and they have totally re-defined what competitive is.

As I said, the $1 was an example, I even dismissed it in the same sentence as I suggested it.

Do you really think it's feasible to live off $2-3-4 per hour? People could be forced to, primarily to prevent acts of violence against them by the state (In the UK, we have bailiffs- they're quite happy to march in your house and take your property, if you don't pay your housing tax, utility bills, etc).

Life is not always about choices, or whether you want to do something- sometimes it's about having to do something. Especially if you want a roof above your head, running water, and food on your table. I wonder how many of those would become luxuries to an even larger %, if minimum wage was removed.

Slavery does not necessarily involve violence, it can involve threats. We are slaves to capitalism.

reply to post by TheWalkingFox


You'll have to explain "passive violence" to me.

Does that mean the employer threatens to shoot his employees family if he doesn't agree to work for below minimum wage?

The State is the only one engaging in violence here.

Voluntary contracts are just that - voluntary.

Originally posted by mnemeth1
reply to post by Boreas

 

LOL

I guess you are a professional florist.

You should run for office, because business owners are too stupid to run their own businesses.

They need people like you to direct them.

I don't understand your logic. If our fictional florist cannot afford to hire an employee under the confines of the law then he can't afford to hire an employee. I'd like someone to do everything I want for free but apparently slavery's illegal . . . go figure.