When is minimum wage too much?

[Tchocky]

Usually better to put in an earned income tax credit, but I can understand minumum wage systems. It's been cut at home recently, which is only logical.

I guess I see it as a compromise between what a perfectly competitive market would charge for an hours labour, and what the current system of monopolistic competition dictates through structure.

[UnderseaLcpl]

The minimum wage is always too much, regardless of the level it is set at. People tend to think of the minimum wage as being a safeguard against exploitation of workers by corporate interests, and it is not difficult to understand why this is so. Political interests that platform upon improving the lot of the common worker often claim to help people by raising the minimum wage, or intending to.

However, as with most things where there is any vested interest, the opposite is true. Raising the minimum wage does not improve the lot of the skill-less multitudes; It actually worsens it, which makes perfect sense in every way one might consider.

Some are die-hard fans of minimum-wage statues, often claiming that they improve the lot of the common worker. This is understandable, as they are told to believe this. Ironically, the same people who champion the minimum wage are blind to its obvious inefficacy. They think that they are standing against domineering corporate interests, but they are willfully being domineered by political interests. Evidence can be found in the fairly steady rate of minimum wage increase without a corresponding increase in middle-class wage-earners.

The truth is that minimum wage statutes, more often than not, reduce the income of the unskilled worker to zero. Businesses don't give a flying **** about social equality; they're too busy trying to make a profit in a very competitive environment. Raising the minimum wage simply causes them to hire fewer workers and be more picky about the ones they do hire, which obviously means that they hire fewer people. Where they can't do that, they simply move elsewhere, cut benefits, lobby for tax exemptions, and otherwise do everything they can to avoid the significant increase in overhead brought about by paying unskilled workers more, more-so when one's profit margin is as narrow as those typical of industries that employ unskilled workers.

[CCIP]

I think there still needs to be a reasonable minimum, though. Sure there is a big difference between zero and a very low wage, but let's consider the fact that if minimum wage is artificial and set by politics, then the poverty line and a bare survival minimum are set by the economy. If somewhere you have actual wage-earning, independent workers who put in the hours but can't meet that minimum, there's a problem - which is then naturally solved only by social welfare and tax relief programs, again a political move. Which at the end of the day I think are far less efficient ways to deal with the problem.

The author does make a few good points about minimum wage not being intended for workers feeding families, but you can't generalize that either.

I think the issue needs to be less about potential for abuse and mistreatment of workers, and more about the fact that if you can't ensure that all working people get more than a reasonable amount needed to survive, then your economy is well and truly broken.

[gimpy117]

minimum wage is about making sure that workers make a decent wage enough to live on. especially in a economy like this one that would allow employers to pay desperate workers comically low wages.

[Anthony W.]

Well when you're getting payed it - it's never too much, haha

I get 7.25 an hour

Not enough to finance my car obsession - which is why I'm starting my own business this summer.

[Armistead]

They should set min wage to at least $12's an hour and cut entitlements.

Most that make min wage as adults use about every entitlement government program there is. The majority that make min wage are called part time, work 30 hours per week and thus don't qualify for company benefits.

Both sides of the debate are poor using such a low pay rate, it really has no effect or changed incentive in the past. Basically the same people would do these same jobs regardless.

As for business raising prices, cutting jobs or cost....let them, a competitive market would correct things, someone will seek to make a fortune by keeping prices lower.

Most studies show the top managment and CEO's could give up 2% of their income to provide a $10.00 min wage with no change to bonuses.

It would also increase taxes paid in..

Sure, many working teens out of high school and college students do this work, but the numbers are growing fast for adults now fighting for these jobs...If students make a mere $12 per hour for working like slaves they could better pay for college and government again should cut student entitlements.

[TorpX]

Raising the minimum wage sounds good but has negative side effects. Companies will hire fewer workers, or move somewhere with a lower wage, if not overseas. People with low skills will not be employable; who would pay an unqualified 17 or 18 yr old 12+ dollars/ hr.? A better plan would be for the Gov't to cut taxes, so people could keep more of what they earn.


Missed the post; UnderseaLcpl said it better than I did.

[UnderseaLcpl]

Originally Posted by gimpy117

minimum wage is about making sure that workers make a decent wage enough to live on. especially in a economy like this one that would allow employers to pay desperate workers comically low wages.

No it isn't. It's never been about that, though we tell ourselves it is so we can feel good about it. Try living on minimum wage for a while - if you're single and don't have any kids, you can make it work, albeit somewhat uncomfortably. If you're married or have kids, you're screwed.

The minimum wage is nothing more than a political tool. Wages, prices, and living standards are all things governed by the economy, which answers to no-one. The reason minimum-wage workers don't make enough to live on is simple economic reality. Nobody is going to pay for unskilled services that cost extra due to the fact that workers must be paid a wage they can live on. You can try to make it so, but you'll ultimately end up with no industry at all, or a subsidized industry, which is even worse. Washington knows this, which is precisely why the minimum wage always seems too low, but remains popular.

Not that any of this is a problem. Minimum-wage jobs are minimum-wage because they aren't supposed to be jobs you can live on. They are intended to be entry-level jobs that give a new worker the chance to accumulate experience and earn good references for another job. The companies that provide such jobs are aware of this fact, and anticipate high turnover rates, as evidenced by the lack of benefits provided and high turnover rates.

Somehow, likely due to political machinations, people have turned this simple economic reality into a concept that minimum wage should be a wage people, and even families, can live on. As if that would ever f-ing work. It's as though people have somehow developed the attitude that because employers are "rich", they somehow owe unskilled people a living, notwithstanding narrow profit margins, quarterly performance reports, and a competitive business environment. I'd tell them to go to the Soviet Union, where such thinking was dominant, but it doesn't exist anymore.

Not that there's any need to worry. If the minimum wage were abolished, there would be more entry-level jobs for people who need entry-level jobs, not to mention reasonably-priced goods and excellent investment opportunities, all of which generate economic growth. Some of them probably would pay "comically" low wages, but then, people won't work for comically low wages unless they are comically stupid or unskilled, but there's no reason to worry about that. The market takes care of that all by itself, as evidenced by the abundance of cheap goods and services we already have, and the largely upwards trend in socio-economic mobility.

Whether you buy that or not in the logical sense (and you will actually buy it next time you obtain goods or services from a minimum-wage earner, whether you like it or not), there is also the inevitable economic truth that we are functioning in an increasingly globalized economy. This means that there is more competition to deal with, and therefore, less time and money to waste upon idiotic fantasy dreams of providing living wages to burger-flippers or shelf-stackers everywhere. This ain't the worker's paradise, it's the real world, and it demands efficient progress for any venture to be viable. Keep that in mind the next time somebody talks about minimum wage, no matter what their rationale is.

That said, you have my apologies for the tone of this post. This is a subject I feel strongly about. I'm not implying that you are an idiot or anything like that, nor would I know. It just pushes my buttons when someone even suggests that the idea of minimum wage is a good thing, and I think this message needs to be conveyed.

[gimpy117]

"aren't supposed to be jobs you can live on"

are you supposed to eat food "you're not supposed to be able to live on" while you're gaining experience?

listen, there was a period where congress raised their own wages 10 times for inflation but never for the minimum. I can see where you have a point where nobody wants to work a minimum wage job...but it's the reality for some in this country, and I find you "let them eat cake" attitude a little insensitive. We need to ensure all Americans have a living standard worthy of the USA

[UnderseaLcpl]

Originally Posted by gimpy117

"aren't supposed to be jobs you can live on"

are you supposed to eat food "you're not supposed to be able to live on" while you're gaining experience?

Well, my first question would be how one managed to get oneself in such a situation in the first place. Minimum-wage jobs aren't supposed to be support mechanisms. They're supposed to be entry-level jobs, meant for people who typically need entry-level jobs, which is to say that they are meant for young adults or teens with parental support or minimal financial ability. If you're trying to live on one, you've obviously made some kind of mistake, one which any number of government tuition and subsidy programs are ready to address and fix.

listen, there was a period where congress raised their own wages 10 times for inflation but never for the minimum. I can see where you have a point where nobody wants to work a minimum wage job...but it's the reality for some in this country, and I find you "let them eat cake" attitude a little insensitive. We need to ensure all Americans have a living standard worthy of the USA

And what? Congress raised their wages 10 times and that somehow translates into a mandated wage-increase for minimum-wage workers? As much as I hate the idea of congress raising their own pay, that doesn't really make a case for raising the minimum wage, as it would be economically unfeasible. Off the top of my head, given a 40-hour work week, it would cost this country roughly five-hundred trillion dollars to match such a pay raise when it comes to minimum wage, and that's not factoring in the economic costs applied over time, tax inefficiencies, or anything like that. That's a very conservative estimate.

Of course this attitude is a little insensitive, but then, that's how the world is. People are only sensitive when they aren't overly concerned about providing for themselves or their families. Given that, the obvious solution is to create more jobs by doing something sensible, like encouraging business. More business= more jobs=higher wages. Minimum wage does the opposite of that. It effectively penalizes business for utilizing unskilled employees. Business won't stand for that. They have profits to make, orders to fill, products to make, and employees to pay. Forcing them to pay more for employees is largely counterproductive, for reasons mentioned in my original post. Championing minimum wage does nothing more than eliminate jobs, eliminate means by which people can get a start in the business world, and ultimately eliminate cheap products the rest of us can utilize to save money and get ahead. Sheer folly, no matter how you slice it.