Minimum Wage Thought Experiment

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.

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.

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.

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.

reply to post by mnemeth1

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.

Ummm...today if you hire someone at minimum wage...you are still undercutting union shops since their rates are almost always higher than minimum wage.


So...I don't get your reasoning.

Fair point and I agree with you...

...in a libertarian state, which doesn't tax its citizens and companies to the point of absurdity.


In the case of the wage training bill (thats being talk about in the uk) it could easily be $2 an hour not five meaning I would have to work 80 + hours a week just to keep a roof over my head and BASIC food on the table (please note this doesn't include such luxuries as electricity).
Thats not employment thats slavery.

reply to post by OutKast Searcher


That's right, the unions are haven't been able to muster the strength to get it raised in a while.

Typically we see it increase during periods of strong economic growth.

That doesn't change its intended purpose though.

Also, unions, other than in the public sector, have lost a good amount of power over the years.

Public sector unions don't have an incentive to lobby for a raise in the wage because they don't compete in the production of any goods or services that benefit the economy.

Does it occur to anybody that "minimum wage" is a reason for jobs to be moved to countries where the labour is cheaper?
it's called "pricing yourself out of the market".

Originally posted by monkofmimir
Fair point and I agree with you...

...in a libertarian state, which doesn't tax its citizens and companies to the point of absurdity.


In the case of the wage training bill (thats being talk about in the uk) it could easily be $2 an hour not five meaning I would have to work 80 + hours a week just to keep a roof over my head and BASIC food on the table (please note this doesn't include such luxuries as electricity).
Thats not employment thats slavery.

Well, this is how real business works:

I have a set amount of money I can spend on employee wages as a business owner.

Therefore, if the minimum wage is higher than the amount of money I can afford to spend, including my share of his payroll taxes - I will not hire him.

I will not create the job even if someone is willing to work for that wage.

If you think you deserve more, then go find a job that will pay more.

If you can't find someone who will pay more, then your job skills are not worth someone paying you more.

All jacking up the minimum wage does is prevent someone from getting a job at all.

Is it better to have someone working or on welfare?

reply to post by DISRAELI


In a tightly regulated, highly taxed society like the uk you need the minimum wage as citizens loose their economic abilities (like begging or setting up their own buisness.) in free (libertarian) societies it isn't as necisery.


please note this is an argument against high taxes and regulations not libertarianism

Originally posted by monkofmimir
reply to post by DISRAELI

 

In a tightly regulated, highly taxed society like the uk you need the minimum wage as citizens loose their economic abilities (like begging or setting up their own buisness.) in free (libertarian) societies it isn't as necisery.


please note this is an argument against high taxes and regulations not libertarianism

I would say eliminating the minimum wage is more important in those situations.

Businesses are under enormous stress to survive when taxes and regulations are so high.

reply to post by DISRAELI


Do you really want people that are handling your food at restaurants to be making under the current min. wage..(which most waitresses make 3.01/hr+tips)...but still...like people are going to take # customers under min wage.

I don't work for under 12.00/hr..sorry...I won't...I would quit and get on the dole before making less...fortunately, I do my own thing and make much more than that...but if something was to happen I would rather go on dole than make a BUCK a day.

Originally posted by mnemeth1
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.

Don't tell me let me guess.

You've not spent much time at minimum wage jobs have you?

The majority of those jobs should pay at least double for the work and general aggravation that's involved but there's no negotiation. You take what you get and make the best of it as long as you have to.

Originally posted by msfitte

Originally posted by mnemeth1
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.

Don't tell me let me guess.

You've not spent much time at minimum wage jobs have you?

The majority of those jobs should pay at least double for the work and general aggravation that's involved but there's no negotiation. You take what you get and make the best of it as long as you have to.

I've worked for under minimum wage from the time I was 13 to the time I was 18.

Then I got a degree and - wait for it - made more money.

Why did I make more money?

Because at this point my job skills were high enough that I could demand a higher salary.

There are no free lunches.

If you want a better job you need to improve yourself, not vote in politicians that will use violence to give you want you want.

That's what looters do.

Further, such actions totally destroy the productive capacity of an economy.

reply to post by mnemeth1


in my area there are 16-20 thousand unemployed and in a good year maybe 4 thousand jobs.

if the wage fell too low only those who have family, charity or goverment support will be able to afford going off jobseekers benifits.

The employer will still find enough employees as there are plenty of unemployed people who have financial support from one of the aforementioned sources.
Unfortunatly those who don't have outside support will be unable to afford to work and because the laws mean that it is too expensive for them to start up a buisness, travel abroad for work or persue any other alternative meathod of financial support.

It is the crazy catch 22 that is fast aproaching.

people sitting their on goverment paychecks because they can't afford to work.

reply to post by mnemeth1



And proof of someone that doesn't see the

"Get a degree" scam that exists.

Originally posted by mnemeth1

Because at this point my job skills were high enough that I could demand a higher salary.

There are no free lunches.

Maybe things are better where you are but round here no one recognises skills anymore only qualifications.

Unfortunatly qualifications cost money.

without a job you cant get enough money to get qualifications.

without qualifications you can't get a job

without a job you can't get money...

Originally posted by DISRAELI
Does it occur to anybody that "minimum wage" is a reason for jobs to be moved to countries where the labour is cheaper?
it's called "pricing yourself out of the market".

Well remove a minimum wage and work for the same amount as those in China or India.

Originally posted by Miraj
reply to post by mnemeth1

 

And proof of someone that doesn't see the

"Get a degree" scam that exists.

I see it just fine.

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

When I say "go to school" - I'm not just talking about college in general - I am saying you need to learn a job skill that actually has some real value.

Unemployment among college graduates is low.

Unemployment among people with real degrees like engineering, computer science, business administration, and the like is even lower.

reply to post by mnemeth1


Well, I have to say there's a bit of difference between earning under minimum wage when you're 13-18, than there is earning it when you're "financially independant", and are having to pay all of your own living costs. I know in the UK, it would not be feasible to live off $5 an hour wages. The only way that would work, would be, as someone previously stated, if they removed the max. hours per week- so you've have people working 65 hours a week+. Seems to me like that'd just be regressing back into the Victorian work house times.

Also, it's not always as simple as furthering yourself nowadays, either. This link demonstrates a real problem we're having in the UK, at the minute. So many people are "furthering themselves", that there are next to no opportunities available, and these same people are having to settle for minimum paid jobs. I know a couple of people myself, who have 2:1 degrees and are in this exact same situation- earning just over minimum wage, doing jobs which a school leaver would be more than qualified for. A situation which is similiar in Tunisia- they've pushed degrees so much, so many youngsters have now got them, they aren't worth the paper they're written on. Not only that, but now in the UK, these same individuals have mountains of debts.

reply to post by ScepticalBeliever


heh 70 applicant per job

last summer where I am living most jobs were topping 200 applicants each.

there predicting its going to be alot worse this year.

Originally posted by woodwardjnr

Originally posted by DISRAELI
Does it occur to anybody that "minimum wage" is a reason for jobs to be moved to countries where the labour is cheaper?
it's called "pricing yourself out of the market".

Well remove a minimum wage and work for the same amount as those in China or India.

Labor wages in one country are not dictated by labor wages in another country.

Comparative advantage ensures that each country will only produce those products it is most efficient at producing, and the real wages paid will be set by the productive capacity of the economy.

en.wikipedia.org...

Originally posted by ScepticalBeliever
reply to post by mnemeth1

 

Well, I have to say there's a bit of difference between earning under minimum wage when you're 13-18, than there is earning it when you're "financially independant",

No, there is no difference.

If my productive capacity at 16 was as high as it is now, I would have made what I make now back then.

If I had a degree and 10 years of work experience at the age of 16, I could command an enormously higher salary than I did back then.

Of course, the younger you are, the less experience and training you have, thus the less you will be paid.