Minimum wage

[Zavoi]

I understand that Ron Paul opposes the minimum wage as an interference with the free market. Leaving aside the constitutionality issue, what do I say to liberals who argue in favor of the minimum wage (at any level of government)? The usual arguments put forth are:

• Without the minimum wage, employers would pay workers unliveably low wages, as happened in the "Robber Baron" era.
• Studies have shown that the minimum wage does not cause unemployment, only a decrease in the number of hours worked, or no effect at all.

You may say "There is no inherent right to employment" or "The government has no business regulating voluntary contracts between individuals", and while I agree with these premises, it is easier to convince someone who doesn't with a consequentialist point than an ideological one.

 

[Malakai0]

Well we don't want to get rid of the minimum wage specifically, we want to get rid of the inflationary monetary system that makes these token minimum wage increases necessary.

Even 30 years ago you brought home a lot more then you do today. It actually increases on average as you go back with true inflation factored in. Yet the min wage keeps going up. Because it doesn't matter of course, inflation is rising far faster than minimum wage increases.

Here in florida the minimum wage (7 an hour methinks) is ridiculous. I make 8 working 3/4 time and it's almost impossible to keep up with bills which have been rising sharply the last 5 months.

 

[gaazn]

minimum wage should be a state issue. having a minimum wage does make unemployment higher for young people without obligations who might be willing to work for less.

 

[NaT805]

Minimum wage is violation of liberty, it should not be a state issue. It is the issue of the employer and the person they hire. It is a voluntary contract and the government has no business telling someone how to run their life (business).

Without minimum wage (in a free society) if the employer didn't pay reasonable wages people would simply not work there, and the business either pays higher wages, or goes out of business because the people choose to work somewhere else. And the free market applies to wages too. The market will have it's own wages set through competition, supply and demand. There would be "standard wages" set by the market, some jobs paying more than others based on skills, versus all of them being the same. So it would be known that job X earns Y amount.

With the internet and cell phones there's no way a business would get away with paying unreasonable wages nowadays anyway. The market always works things out, trust in the market!

And I bet those studies didn't account for inflation. Wages never keep up with inflation. In 2006 dollars the minimum wage was $9.50 an hour in 1971 before we went off the gold standard... So just because you earn more an hour doesn't mean you have the same purchasing power.

 

[RochesterRyan]

If you think minimum wage is a good idea, consider the following:

Why don’t we just guarantee everyone $40,000 a year as a minimum salary that way no one is poor?

If you did this, prices would just go up to reflect the demand of the consumers. The people who are poor now, would still be poor. Instead of having $3 gas, we’d have $15-20 gas.

 

[MoneyWhereMyMouthIs2]

I understand that Ron Paul opposes the minimum wage as an interference with the free market. Leaving aside the constitutionality issue, what do I say to liberals who argue in favor of the minimum wage (at any level of government)? The usual arguments put forth are:

• Without the minimum wage, employers would pay workers unliveably low wages, as happened in the "Robber Baron" era.
• Studies have shown that the minimum wage does not cause unemployment, only a decrease in the number of hours worked, or no effect at all.

You may say "There is no inherent right to employment" or "The government has no business regulating voluntary contracts between individuals", and while I agree with these premises, it is easier to convince someone who doesn't with a consequentialist point than an ideological one.

Look up the effects of a "price floor." Apply that to prices in a "labor market" or "market for labor."

Minimum wage laws adversely affect the poor and uneducated the most, because it's illegal for them to work at a price someone is willing to pay them. Consequently, they wind up unemployed, instead of being able to get a job where they're trained and can make themselves more valuable.

Politicians can say that minimum wage laws help the poor all they like, but it doesn't change evidence to the contrary. Ignoring the evidence will get you some votes, because the people voting for such characters don't understand it either and can be easily made to believe it's helping them. (or others less fortunate than them.)

 

[FireofLiberty]

Something I wrote awhile back:

The minimum wage is one of the most economically harmful government mandates in existence and hurts far more people than it helps. Those who support it are either, to use the kindest words possible, intellectually dishonest or ignorant. Those who support it because they're being intellectually dishonest support it on the false claim that it "helps the working class." Those who support it because they are ignorant support it because they have bought into that false claim, but only because that's what's been fed to them by those being intellectually dishonest. When it comes to this claim that the minimum wage "helps the working class" nothing could be further from the truth and, in fact, the opposite is true.

First off, less than 1% of Americans actually make minimum wage and the majority of that less than 1% work part time jobs, are under the age of 18 or both.

Second, the minimum wage costs jobs and therefore raises unemployment, especially when it's increased. To understand why this is let me give you an example: Let's say I own a company that fixes computers for people and I hire you to deliver fixed computers back to customers. Let's also say I can only afford to pay you the current minimum wage of $5.85 an hour to do this job. What happens if the minimum wage is raised to $6.00 an hour? I have to fire you because I was already paying you the maximum I could afford and I can't afford to pay you $6.00 an hour. So I have to cut your job and cut the job of everyone who I can no longer afford to pay the rate the government is mandating me to pay with the minimum wage. This is what happens with a minimum wage, only on a much larger scale. If the minimum wage mandated is over the maximum wage a company can afford to pay an employee they're going to have to have to let that employee go and eliminate that position. The working class is certainly not "helped" by the minimum wage when it costs them their job and they go from making a low wage to no wage.

Third, the minimum wage raises the job market entrance level. If all jobs start at a minimum wage than those jobs are worth that minimum wage and are therefore higher positions. This means that the job entrance level is raised and it's harder to get started in the job market and harder to get a job altogether for that matter. A poor person with few or no skills isn't going to be able to find an entry level position that he or she can be hired for because companies can't afford to pay the minimum wage to people to fill such positions. Therefore, that person won't be able to find a job. Here's an example: Let's say that "Johnny" graduates high school and immediately enters the work force. He only has a high school education and few skills. For this reason he's not going to be able to get high paying, high skills job so he needs to find an entry level position so he can be able to enter the work force and have somewhere to start working up from. He looks high and low but can't find a job that he has the skills for. Why? Because those jobs have had to be cut because business owners have to pay minimum wage to the people who hold those positions and they can't afford it. So how can "Johnny," or anyone else for that matter, then even get their foot in the door? Ever wonder why people don't pump our gas for us at gas stations anymore? Because gas stations can't afford to pay someone $5.85 an hour to do that so they eliminated that position! This political cartoon sums it up nicely:

The bottom line is this: people get paid what they're worth in the market. If you want high pay you better have high skills and you better have a good education. There's no such thing as a free lunch.

 

[angelatc]

IN the short conversation, I'd concede that a minimum wage is acceptable, because it really does no harm. It is almost always set far below the actual market wage anyway.

Wiki has a pretty good section on it. Those tricky liberals tend to lump everybody who ended up as rich as a robber baron. In actuality, the only people who deserve the moniker got rich through illegal activites, like violence, with the complicity of the government, who were on the take.

The only time I make an exception for the necessity of a minimum wage is in locations where there is only one industrial employer - like coal mining. But that's an issue better handled by unions than the government.

You can point out to your friends that with the current open borders situation, wages in trades like construction have actually fallen by 50%. DIluting the labor market is the real reason that our labor market is messed up. Letting the illegals in just undermines the working poor, and lines the pockets of the upper level capitalists.

But they're socialists, so they want their cake.

 

[Kludge]

• [1]Without the minimum wage, employers would pay workers unliveably low wages, as happened in the "Robber Baron" era.
• [2]Studies have shown that the minimum wage does not cause unemployment, only a decrease in the number of hours worked, or no effect at all.

• [1]What's your point? If employment is in demand enough to make the low wages that THEY AGREE on, this is how economy works. They could also join unions to protest low wages.
• [2] So... Basically they're making the same amount of income annually while being less productive and hurting the company (owned by people, believe it or not).

 

[forsmant]

How can you argue that the minimum wage is acceptable but price controls are not? Wage is just another way of saying price, the price for time worked. Price controls are detrimental to the well being of society at large.

 

[NMCB3]

There are so many fallacies associated with minimum wage I don't know where to begin. Regardless, you will have a tough time convincing those who subscribe to "emotional economics" with mere facts. The "unconscience disciples" of Carl Marks can be tough nuts to crack.

 

[jclay2]

Look up the effects of a "price floor." Apply that to prices in a "labor market" or "market for labor."

Minimum wage laws adversely affect the poor and uneducated the most, because it's illegal for them to work at a price someone is willing to pay them. Consequently, they wind up unemployed, instead of being able to get a job where they're trained and can make themselves more valuable.

Politicians can say that minimum wage laws help the poor all they like, but it doesn't change evidence to the contrary. Ignoring the evidence will get you some votes, because the people voting for such characters don't understand it either and can be easily made to believe it's helping them. (or others less fortunate than them.)

+100 to this guy. Very sound comment. If you ever take economics, you will see that there are basically two different cases that can happen from a minimum wage. Case 1 is a price floor when minimum wage is set below what supply and demand dictate. This doesn't effect the wage that the employer ends up paying. Case 2 is when you have a price cieling and the wage is set above the market value. Because the employers are forced to pay more than what a job is worth more people will want to take up that job and thus a surplus of workers is created.

 

[davver]

I understand that Ron Paul opposes the minimum wage as an interference with the free market. Leaving aside the constitutionality issue, what do I say to liberals who argue in favor of the minimum wage (at any level of government)? The usual arguments put forth are:

• Without the minimum wage, employers would pay workers unliveably low wages, as happened in the "Robber Baron" era.
• Studies have shown that the minimum wage does not cause unemployment, only a decrease in the number of hours worked, or no effect at all.

You may say "There is no inherent right to employment" or "The government has no business regulating voluntary contracts between individuals", and while I agree with these premises, it is easier to convince someone who doesn't with a consequentialist point than an ideological one.

For the first point why is that? When I worked my shitty part time job at the local mall in high school I got paid 7/hour, even though minimum was lower. Why did they do that? Because the value of labor was higher then minimum wage. If the value of labor is higher then or equal to minimum wage then it doesn't mean anything. If the value of labor is below the minimum wage then the minimum wage will force that person into unemployment. Classic Eco 101.

As to the second issue those studies are bogus. The economy is far too complex for one to measure the effects of minimum wage accurately through econometrics.

Here is a simple way to win this argument. If he thinks the minimum wage is great ask him why we don't set it to a million dollars per hour. When he objects ask him why. Furthermore, ask him to explain how to determine the "correct" minimum wage.

 

[jonahtrainer]

+100 to this guy. Very sound comment. If you ever take economics, you will see that there are basically two different cases that can happen from a minimum wage. Case 1 is a price floor when minimum wage is set below what supply and demand dictate. This doesn't effect the wage that the employer ends up paying. Case 2 is when you have a price cieling and the wage is set above the market value. Because the employers are forced to pay more than what a job is worth more people will want to take up that job and thus a surplus of workers is created.

Yes, that is a sound comment.

Inflation leads to shortages and shortages lead to rationing. Minimum wage laws are a form of rationing resulting from a shortage of employers. The employers don't create the jobs because of the inflation. Having economic substantive due process (Lochner v. NY is what started all this in 1905) is extremely important for the good of society.

The starvation issue was solved by freedom of contract through economic substantive due process. Because of inflation we are beginning to have food shortages. These food shortages are leading to rationing. Worldwide wheat stocks are at 60 year lows. People in Haiti are eating mud before they die of starvation.

This is the result of well-meaning but poorly implemented policy. It is sad to see what terrible damage results from the policies implemented by these murderers, both bleeding heart liberals and war mongering conservatives. The Welfare/Warfare state causes so much suffering.

 

[AceNZ]

Declaring a minimum wage is another way of saying that it's better to be unemployed than to work if you can't earn above a certain amount.

The minimum wage also drives employers towards hiring illegal immigrants at low wages. If we didn't have a minimum wage in the US, we would have far fewer illegals, on economic grounds alone.

Also, the minimum wage provides an incentive to stay on welfare. If someone on welfare doesn't quite have the experience needed for a minimum wage job, they are forbidden from working for less to gain the experience they need.