Is it desirable to have mandatory minimum wage?
Re: Minimum Wage
keep a wage in mind, the bare minimum below which there's a no go area.
Re: Minimum Wage
The minimum wage is horrible. It destroys jobs and hurts people that it is supposed to help. What happens with a minimum wage is that the market is not allowed to clear at the natural market equilibrium. It is an artificial floor and creates a surplus of labor or more unemployment than the natural level in the economy. The unskilled and uneducated workers get hurt the most. Why hire the unskilled and uneducated when you can hire the skilled and educated? Why hire someone you have to train or teach the language when you can hire someone you do not have to train and knows the language? The one advantage they had over the skilled and educated of selling their labor for cheaper is taken away via force and coercion of the state.
Labor is bought and sold like anything else. There are two parties, a buyer and seller like with anything else. If the wages are too low then the worker will not want to work and if too high then the employer will not want to hire. Money is not the only thing valued when working. Learning a skill or trade is valued. Doing something you enjoy is valued. Many countries make it so hard for the unskilled, uneducated and students to get jobs because of the minimum wage. The employer hires to make money. If the employee becomes too expensive then the employee will be let go. The employer might decided to invest in technology and automation to save on labor costs. The minimum wage makes this option more attractive as labor gets more expensive. The employer might start using cheaper products and services to save money. The employer might raise prices or take a loss (shares would be worth less).
Re: Minimum Wage
Always look up for something better....
Re: Minimum Wage
Employers that pay a decent wage do well. Look at Costco. It doesn't make it's employees go on food stamp, unlike Walmart.
California recently increased taxes. And is doing well. Canada is doing just fine. The disparity between haves and have nots in the US has grown. The CEO pay is at all time highs compared to median employee salary.
There needs to be balance between greed and fairness. A reasonable Minimum wage and increasing it to keep up with cost of living is the way to go.
One only has to look at subcontinent where there is no min wage.
Wages are between the worker and employer. You might think that the wages are unfair while both the employee and employer might think they are fair. Costco has a different business model, you cannot force that model on another businesses like Walmart. If you were to raise the minimum wage high enough even Costco would have a problem with it.
California has 418 billion dollars of debt. It has high taxes and regulations. A lot of businesses have left California. The income gap between the poor and the rich is due to massive monetary expansion, high debt, bailouts, subsides and special favors by government to the rich.
The U.S. did not have a minimum wage in the start. Only when it was wealthy enough did it have it. If the subcontinent was to have a minimum wage right now things would be a lot worse. Look at what happened to Guam when the U.S. made the minimum wage mandatory for its territory.
Re: Minimum Wage
Pashtun Warrior,
First let me acknowledge I am not an economist. And clearly you know the subject. Allow me to gently disagree. Here is why.
A famous person has said " do unto others what you would have them do unto you". I bet a person at the bottom of the ladder who is trying his hardest would appreciate a liveable wage.
Indeed there will he instances when both employer and employee agree wrt wage. But there also are times they don't. In the early days of unions, as Noam Chomsky has written, the police was the arm of the govt. To enforce brutalnworking conditions. But folks woke up. And improved the lot of the worker. Society at large has a role in setting fair liveable wages.
I agree subsidies, bailouts and favors to corporations helped the rich get richer. However, monetary expansion has happened only in last say 5 years. The wealth gap preceded that by several years. And has grown worse. As for high debt being cause of the wealth gap, not sure how that conclusion can be drawn.
In1980, the top 1 pct held way less compared to now. Part of the reason is CEOS and top executives increasing their take home pay at the expense of the workers. Humans are greedy by nature. Leaving it to employers to give fair wage withiut some minimum standards wont work. Economic problems are nit caused by those at bottom making minimum wage.
CA under the new governor Jerry Brown has been doing well, tax increase noteithstanding.
Yes, we all want higher wages. The same way employers want lower wages. Supply and demand sorts this out. Only if the employee wants to work a certain wage and the employer wants to pay that wage is there a job. Force and coercion of the state just messes things up. It hurts people more than help them. Sure some people might benefit but more will be hurt.
If the employer and employee did not agree on a wage then there would be no job. If the wages get too low then employees will leave. If wages get too high then employers will let the employees go.
Look at the fed data. They have been expanding the money supply since it was created in 1913. This is one of the reasons why back in the day you could buy a gallon of gas for a dime and now for $3.50. As the money supply increases you see price inflation where the excess money flows into.
Employers cannot force people to work for them. The employees have to voluntarily agree. As long as the workers agree to their wage they will keep on working. Wages are paid out according to your productivity. People on the top are more productive this is why they are on the top.
There are different business models. Usually employees always get paid while the employer might have taken a loss. Now if the workers and employees are OK with a profit sharing model then it is fine. The thing is that most employees don't want to take a loss. They want a steady paycheck.
Re: Minimum Wage
Yes, employees need work but that does not mean put a gun to employers head via force and coercion of the state and say pay more. Just like people need food, shelter and clothing and if people cannot afford it they still have no to right to steal it. Not having any other options means that the company you are currently working for is your best option. Rather than being thankful you want to force your employer to pay more?
Services are hard to outsource. This does not mean there are no consequences of the minimum wage. Companies can have cheaper and lower quality products. They can raise the price or automate parts of their business. They can let less productive employees go.
Minimum wage helps increase price inflation. The fed and the government policies also lead to price inflation.
Corporations are a creation of government. It is government that gives corporations the handouts from the taxpayers.
Government benefits are for the poor. Walmart employees make some money. The real people who benefit from government benefits are the ones who do not work at all yet no one talks about them even if they are able to work.
Re: Minimum Wage
Granted in an ideal world, free market should work. As you have correctly pointed out, the playing field is not level. Corporations get handouts. The AIG bailout with Goldman Sachs et al getting 100 cents on the dollar being prime example.The no bargaining under Medicare where Big Pharma gets to sell its wares without govt negotiating the price down.
IFF such practices are stopped, bring on the free market. Can you name one functioning govt where this is so? Where the big corporations don't unduly influence govt policy?
Govt makes laws that may appear unfair to some. If a company cant pay a living wage, it should go out of business. Other companies with a better business model and long term forward thinking will readily take their place.
At present govt is cutting down on education. Cutting down on free lunches in public school. Now add a low min wage, that is brutal.
As for those who can work and don't, the article above States even if one worked full time on min wage, one would be below poverty level. Address theroot cause. Level the playing field. Strip away handouts to corporations. Allocate more to public schools. Stop racial profiling in urban areas. stop war on drrugs. Spend more on treatment. Stop putting people in jails when they can be treated - mental issues, drugs. Stop looking at prisons as a growth industry.
Then let us talk about removing min wage.
The solution is to limit the power of government and fed to the point they cannot give out subsides, bailouts, special favors and devalue the currency. The supply is power. It is government who has the power. Absent of the government corporations have to provide a product and service people want or they would be out of business. Without supply there is nothing. We all want to live forever and be young but until we find a way to it means nothing. You kill the power of government to give special favors and there would be nothing to buy. Corporations would then stick to their business.
I agree with you that a lot of money is being wasted by government. What I disagree with is that more government is certain areas is the solution. You said that any business that can't pay the minimum wage should go out of business. What about all of the people who will be out of work because of that? If lesser people are working doesn't this put more pressure on government programs? What about charities that do not pay the minimum wage? Should these charities be out of business too?