Minimum Wage = Maximum Nonsense - A Masochistic Invitation to Derision

Considering how disconnected from reality most folks are around here, this post could rightly be considered an act of masochism. I have no illusions and fully expect to receive the unrestrained ire of the socialist sympathizers among us.

However, given that many of you will be delighted to shout down this frank assessment and will have nearly unlimited and unquestioning support, perhaps a mere handful of you might at least be given pause to consider the implications of this form of government interference that claims to deliver you from the pan of undercompensation only to deposit you into the fire of unemployment.

Oh boy, here we go... One last chance to change my mind... 'click'

Minimum Wage, Maximum Nonsense

Is the current national hoopla to “do something” about minimum wages another governmental mistake? Absolutely. Minimum wage laws lessen employment opportunities for workers (especially teens and low-skilled workers) and hurt some of the very individuals that they are allegedly designed to help…the working poor. Boosting the minimum wage substantially at the state or federal level would be a public policy mistake.

The law of demand operates in all markets including and especially labor markets. If I operate a lawn service or a car dealership or if I’m a large box retailer, any increase in the price (cost) of labor that is not accompanied by an increase in productivity, will decrease my incentive to hire or retain workers; with my income revenue relatively fixed, I simply must use fewer factors of production. In addition, I also have an incentive to substitute some (cheaper) non-labor resource in an attempt to maintain the overall productivity of the operation. Thus the monetary incentives associated with the income and substitution effects result in fewer workers hired or retained.

Minimum wage laws always decrease employment opportunities and always interfere with free choice and the freedom of contract. They are supported by politicians seeking votes and by labor unions anxious to cripple non-union, low cost competitors. They are also inherently discriminatory since they hurt only workers on the lowest rung of the employment ladder; workers making $30 an hour are not directly affected. And increasing the minimum wage provides no boost to overall “consumption” (as advocates maintain) since the workers displaced easily negate any (slight) income change for the workers retained.

Here is the problem I have with taking away minimum wages, businesses will be able to hire people for literally pennies a day. Now you can argue all day that the natural market will self-correct wages as people refuse to work for companies that pay so little. However, this isn't true. We have tons of immigrants who'd be willing to do these jobs for next to nothing. Not to mention at the turn of the century, prior to the implementation of minimum wage laws, the free market dictated that employees get paid next to nothing. Also, the mere fact that so many companies pay their employees the bare minimum (minimum wage) just says that given the opportunity, companies would pay their employees less.

I am a Libertarian too, so naturally I should be opposed to minimum wage laws. But history shows that without them, businesses are able to take even more advantage of their employees then they do now.

The only thing missing from the cartoon is the 75 year old who is still perched on the ladder with a job because he or she can't afford to retire. How are youth supposed to even get a job in a situation like that?

reply to post by Krazysh0t

Not sure what kind of "libertarianism" you're following, hmmm.

Of-course there should be no minimum wage laws. They're bad for businesses, bad for employees, bad for the economy and bad for the people.

If what you were saying is correct, which its not, no one would be making more than the minimum wage.

Let me ask you this, how is it that anyone is able to earn more than minimum wage now?

There are plenty of people who make more than minimum wage. As a matter of fact, the national average hourly wage is WAY above the minimum wage.

The fact is, there are some jobs that dont require any skill and therefore dont command a higher salary. So why should a small business owner be forced to pay these people more?

gladtobehere
reply to post by Krazysh0t

 

Not sure what kind of "libertarianism" you're following, hmmm.

Of-course there should be no minimum wage laws. They're bad for businesses, bad for employees and bad for the people.

I think you misunderstand this post, I am against minimum wage laws.

reply to post by greencmp

I was replying to krazysh0t there homeslice.

gladtobehere
reply to post by greencmp

 

I was replying to krazysh0t there homeslice.

Ah, I see, the message was not for me. Sorry, already a little jumpy!

I think Min. Wage in concept is a logical and necessary thing. However, min. is the operative word. Not Comfy living wage. The bare min. the lowest skilled and least needy in society can be legally hired at for apprentice/entry level work. Ala....16yr olds at Burger King. They need $9-$15 an hour as some are demanding the top levels start to go? Well.. No one in their right mind is hiring any kids at gold standard wages while there are degree holding professionals and all in between willing to flip burgers in a heartbeat to keep the lights on.

The min. wage isn't the problem ..it's the fact it's been turned into just another tool of 'social justice', social policy and manipulation of the economy. Gov't tends to screw up most everything it touches. This has been no exception, IMO.

I don't know how much stock you should put in that article. For one the example that was made about the car dealership is null and void IMO. The reason being is dealerships do pay minimum wage if the sales rep doesn't sell anything that week but they pay it back when they do the next. Usually after 3 weeks with no sale they are fired. Where it usually doesn't cost a dealership a dime to hire. Pretty bad analogy.

reply to post by masqua


So you are more entitled to a job because of your age? Wow! Your suppose to be able to get a job because there is a demand for workers in a growing economy. But, instead everyone thinks they are entitled to a cell phone, car, health care, house, and education for free. As a result no one can retire because half of our wages go to taxes to pay for all the spoiled brats that are to lazy to make it on their own.

The free markets are noble and just. Regulation and taxation are evil. This is self-evident and intelligent people know this without being told. If you are reading this you are special. Liberty transcends biological life.

Human resources are high maintenance whiny meat-bags. Most tasks can be successfully performed by machines and software. Complaining about wages and health will backfire so it's best to comply with the supervisors. You will be comfortable at your destination and can live in peace with your family. Train boarding to the left and baggage to the right.

Consume, obey, God is real God is watching.

Sincerely,
LULZLIBERTARIANMACHNES

reply to post by greencmp


Not enough people get minimum wage to really make a difference. Most people already get paid more than minimum wage. We're just talking about a small minority and they're not a big enough spending force to go out there and force the prices up.

Never mind that politicians always drag their butts on raising it and when they do they're always raising it behind inflation, not in front of it. In other words, every time they raise it the inflation has already happened eight years ago.

The number one things that cause inflation are the gov printing more money, the gov fighting endless wars, the cost of oil, and health care costs. And during the housing bubble it was people running out to buy houses they couldn't afford. None of which you even mention in your post.

Instead you go right to like the number 19 thing on the list that might raise prices an insignificant amount on a Tuesday and attack the poor? Shows your mentality. How about the number one thing on the list first!

Also, people that think raising the minimum wage cost jobs don't understand economic growth. The first US minimum wage was set at like a quarter in the 30s or something. If every time they raised minimum wage they fired all the waitresses we wouldn't have waitresses left by now would we?

If every time they raised minimum wage they fired all the car salesmen we wouldn't have any left by now. Wait do car salesmen even get paid minimum wage?

Hmm, but if you look around you'll notice there are plenty of both. Hmm, that's odd? Here, let's learn a little bit about how things actually work. Look around the town you live in and tell me if there are more restaurants NOW in 2013 or were there more restaurants back in the 30s when minimum wage laws kicked in?

Hmm, I bet there are more now aren't there? Assuming you live in a town. Now take a look around and tell me if there are more Walmarts and car dealers NOW. Or were there more in your town before minimum wage?

We have so many McDonald's and restaurants and supermarkets and food that our number one health problem is caused by an obesity epidemic and people EATING TOO MUCH but people have the audacity to tell me raising the minimum wage is going to get all the fast food workers and waitresses laid off? Shouldn't that have like already happened?

But you don't understand economic growth. People against minimum wage are penny wise and pound foolish. It doesn't matter if sucky boss joe smoe fires two waitresses because minimum wage goes up if they're building three new restaurants down the street all of which are gonna hire 20 to 30 employees. -2, +60! Do the math.

You do things to spur growth like RAISE MINIMUM WAGE and you get overall MORE jobs. That's why you have more businesses in your town NOW than you did in 1928 before we had minimum wage. Try finding a job back then with today's current population. Then if you're lucky enough to find one they pay you .24 cents because a quarter is just too much lol.

Seems like a good argument for raising minimum wage. God knows if employers could have machines do the jobs that unskilled workers do they'd take that option in a heartbeat and grin while those poor bastards and their families wither and die followed by some comment about social Darwinism.

reply to post by gladtobehere


Actually as a realist in addition to being a Libertarian I understand that the ideal Libertarian utopia is a pipe dream. However it is something that can be striven for.

Averages are terrible things to take into account. All you need is an outlier (say the 1%) and you can skew an average in one direction or another. How about talking about the mathematical mode of incomes? Can we get that statistic instead? Also another thing that is skewing the average is that many people start at minimum wage and get raises. These people are no longer at minimum wage so they increase the average above minimum wage. If there was no minimum wage, these employees would be starting out at a reduced wage than the one that we currently have.

Look I understand the effect that minimum wage has on the free market, unfortunately it is a necessity. Sure if we abolished it, things would start correcting for awhile. But how long until the country is back to the situation that we were in at the turn of the last century? One thing is always true, there will be someone who will take advantage of the system. This person will teach others how to do it, either directly or indirectly. These people in turn will pass this knowledge onto more people and eventually the loophole being utilized here will become the norm and will become so rooted into the system that getting it out takes an act of Congress.

Krazysh0t
reply to post by gladtobehere

 

Actually as a realist in addition to being a Libertarian I understand that the ideal Libertarian utopia is a pipe dream. However it is something that can be striven for.

Averages are terrible things to take into account. All you need is an outlier (say the 1%) and you can skew an average in one direction or another. How about talking about the mathematical mode of incomes? Can we get that statistic instead? Also another thing that is skewing the average is that many people start at minimum wage and get raises. These people are no longer at minimum wage so they increase the average above minimum wage. If there was no minimum wage, these employees would be starting out at a reduced wage than the one that we currently have.

Look I understand the effect that minimum wage has on the free market, unfortunately it is a necessity. Sure if we abolished it, things would start correcting for awhile. But how long until the country is back to the situation that we were in at the turn of the last century? One thing is always true, there will be someone who will take advantage of the system. This person will teach others how to do it, either directly or indirectly. These people in turn will pass this knowledge onto more people and eventually the loophole being utilized here will become the norm and will become so rooted into the system that getting it out takes an act of Congress.

A frequent misunderstanding of the concepts associated with individualism, it is not utopian idealism where the truth lies but, in the pragmatic realism of the laws of unintended consequences where we find our verification.

reply to post by greencmp


It really comes down to too much of one thing against not enough of it. Too much regulation strangles the market while not enough lets crooks walk all over everyone else and dictate the rules. The goal should be a happy middle ground. Unfortunately the government is incapable of doing this. The government always overreacts to any problem. This wouldn't be such a bad thing if the government didn't wait until the utter last minute to fix problems. So now the problem has exacerbated to crazy levels so when the government finally addresses the problem with its huge overreaction, we end up with things like Obamacare or our current minimum wage laws.

rgzing
reply to post by masqua

 

So you are more entitled to a job because of your age? Wow!

No... you're missing the point. Those who should be retiring don't because they can't afford to (hard economic times). Those people do still have to either quit or be laid off because there's no law saying you have to go at, say, age 67. They just don't want to leave their jobs because poverty awaits if they do.

Your suppose to be able to get a job because there is a demand for workers in a growing economy.

What growing economy? Most of what I see are service sector jobs that one needs 3 of just to be able to live in a crappy apartment somewhere and put food on the table. Anyone who thinks of raising a family and owning their own home on minimum wage is dancing with the faeries under the spot where the rainbow hits the ground.

But, instead everyone thinks they are entitled to a cell phone, car, health care, house, and education for free.

For free? LOL I don't know what government provides all of that, but Shangri La might still exist somewhere in the Himalayas.

As a result no one can retire because half of our wages go to taxes to pay for all the spoiled brats that are to lazy to make it on their own.

How about those spoiled brats that have gone into debt tens of thousands of dollars for further education and wind up looking at flipping burgers at the local Mickey Dee?

Personally, I think the problem is much bigger than the current attitude of youth.

Krazysh0t
reply to post by greencmp

 

It really comes down to too much of one thing against not enough of it. Too much regulation strangles the market while not enough lets crooks walk all over everyone else and dictate the rules. The goal should be a happy middle ground. Unfortunately the government is incapable of doing this. The government always overreacts to any problem. This wouldn't be such a bad thing if the government didn't wait until the utter last minute to fix problems. So now the problem has exacerbated to crazy levels so when the government finally addresses the problem with its huge overreaction, we end up with things like Obamacare or our current minimum wage laws.

If the current administration's intent was to help the undercompensated, they would have begun with minimum wage, no? Especially if they were specifically trying to help the young and healthy.

This appears to be an intentional conflagration of circumstances. Having severely damaged the middle class and reduced the availability of reasonable wage employment, I can draw no other conclusion than that they now intend to destroy the low wage jobs as well.

The ultimate goal being a near universal dependency upon government for all of life's necessities. As it happens, these are the ideal circumstances for the realization of totalitarianism.

I had referenced a passage from the Tao in another thread that seems to be applicable here. Indeed, perhaps it is cosmically appropriate:

The great Tao fades away
There is benevolence and justice
Intelligence comes forth
There is great deception

The six relations are not harmonious
There is filial piety and kind affection
The country is in confused chaos
There are loyal ministers

I wrote a much longer and more detailed response to the OP, and somehow it was "disappeared" by an error of some sort or other.

If I were to sum it up in one word, which I will because I don't want to be stuck here on this keyboard anymore (really nice weather)...

CONUNDRUM

As an aside though, we all know life can be, and is unfair, just how unfair does it have to become before people quit trying, like most have. What's the point?,....

reply to post by greencmp


I thought we were discussing this theoretically here? Why are you bringing up what the current administration is doing? I am in agreement with you that no matter what this administration does it will be the wrong answer and will just create more problems.