Why is minimum wage bad?

LibertyEagle said:
No.

Government has no business determining the wages that private industry should pay THEIR employees. It should be left up to the market to decide.

What you are describing is government central planning. Beyond the obvious reasons to be against this, government has not been ordained with the knowledge of where each individual business can set their lowest wages and still make it profitable for said businesses to offer those jobs.
Click to expand...

I didn't even mention anything about government control. That's how it works regardless of government control or on the free market.
 
Raditude said:
I didn't even mention anything about government control. That's how it works regardless of government control or on the free market.
Click to expand...

Nope. The free market does not establish some mythical "minimum wage" across all jobs and areas of the country. If the free market was deciding wages, as they should, wages would differ depending upon job, locale, etc. If a person is unwilling to work for the amount of money offered them, they are free to go look elsewhere. If the business owner wants to hire someone to do that job and keeps being turned down, they will be required by the market to increase the pay. When government arbitrarily sticks their big nose into it, they screw up supply and demand. Amazingly, they think they can set some stupid floor for minimum wage and business will just pay it. If it's that easy, why don't they just set it at $100/hour; heck, let's make it $1000/hour. If you say no, then think about WHY you are saying NO. Because that very same reason is applicable to what the federal government is doing now.

What I think you may be missing is the fact that minimum wages made a number of entry level jobs that once upon a time used to exist, totally evaporate. Because the business-owner could no longer afford to offer those jobs at what the government was requiring them to pay.
 
Last edited:
LibertyEagle said:
Nope. The free market does not establish some mythical "minimum wage" across all jobs and areas of the country. If the free market was deciding wages, as they should, wages would differ depending upon job, locale, etc. If a person is unwilling to work for the amount of money offered them, they are free to go look elsewhere. If the business owner wants to hire someone to do that job and keeps being turned down, they will be required by the market to increase the pay. When government arbitrarily sticks their big nose into it, they screw up supply and demand. Amazingly, they think they can set some stupid floor for minimum wage and business will just pay it. If it's that easy, why don't they just set it at $100/hour; heck, let's make it $1000/hour. If you say no, then think about WHY you are saying NO. Because that very same reason is applicable to what the federal government is doing now.

What I think you may be missing is the fact that minimum wages made a number of entry level jobs that once upon a time used to exist, totally evaporate. Because the business-owner could no longer afford to offer those jobs at what the government was requiring them to pay.
Click to expand...

I was just talking about wages in general. Wages are determined by cost of living. If it costs a lot to live, and someone doesn't offer enough pay, then the person can turn down the job, exactly as you said. There's nothing to argue here.
 
Raditude said:
I was just talking about wages in general. Wages are determined by cost of living. If it costs a lot to live, and someone doesn't offer enough pay, then the person can turn down the job, exactly as you said. There's nothing to argue here.
Click to expand...

No, wages are not determined by the cost of living. That may be a factor in a potential employees motivation to find a job with a base level of pay, but that is nowhere near the sole determinator. Wages are determined by what a business is willing to pay to get a certain job done and their ability to find someone willing to work for that amount. If people, or government, demand more than the job is worth to the business, then the job may go away entirely.
 
Minimum wage acts as a barrier to work for unskilled workers.

minwage.gif


min1.gif


Case closed.
 
brandonyates said:
Those graphs are completely meaningless to me without labels.

L? Q? D? S?

quantity of what?
Click to expand...

L = labor

Q = Quantity (labor)

D = Demand

S = Supply

W = Wages

(so then, labor supplied, labor demanded, wages supplies, wages demanded)

In the "perfect"chart it shows there being some line where the wage is minimum, I'm guessing that's where the creator declared the standard of living, where working there wouldn't allow for them to survive and thus wouldn't be worth working there.
 
Last edited:
Quantity of labor. Never seen a supply and demand curves before, I assume?

In written fashion:

The minimum wage sets a price control above the market wage for some workers. A higher price means less demand, which means that employers will employ less workers and that the workers they do employ will be the most skilled (because only their labor will be worth the higher-than-market wage). Hence, like other price controls that are too high, you will have a "surplus of labor" (unemployment).
 
Hong Kong does not have a minimum wage. Last time I checked they have one of the freest economies and are one of the most wealthiest nations.

A little thought experiment: if the United States abandoned all minimum wages, do you think everyone would be working for pennies? Why are there currently so many jobs that pay above the minimum wage?

As for why minimum wages are bad... Well, they are good for some people, and not good for others. Kaju has already shown how it's not good for some people (such as unskilled workers, who happen to be the poorest ironically, since minimum wages are supposed to help the poor). I'll leave to figure out for whom minimum wages are good.

And as an aside, it's also not about wages/prices and how much money you have, it's about purchasing power.
 
Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?
 
"Income Inequality"

we are not talking communistic wages here....

each job should pay a different wage

Knighted said:
Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?
Click to expand...
 
The only thing I can say on this issues is real life experience that I have seen myself. I just graduated High School this summer and didn't have a job. I badly wanted some type of experience so I could apply for an internship particular to my industry next summer. Eventually I settled with my sister to be an intern for her company. She did not offer me an hourly wage or even a biweekly paycheck. Instead, we aggreed that I would be paid a base of $2000 for the entire summer with the option to be doubled to $4000 given good performance. Even though I had a decent possibility to make an average of 3.50 an hour, I took the job. WHY ON EARTH WOULD I WORK WITH THE POSSIBILITY OF MAKING 3.50 an hour and not getting paid until the end of the summer. Well the reason I did so is because I wanted experience badly. Why should the government tell me I can't work for 3.50 an hour if I want too? Well to finish the story off, I ended up doing a great job and learning more excel functions and VBA code than my brain can hold. I helped the company eliminate data entry significantly and my sister eventually ended up paying me $5000, 20% above the highest value that was promissed. With the experienced that I learned from my internship, I feel that I will be one of the most competitive candidates when I send out resumes to insurance companies this fall for an actuarial internship. And the thing is the experience I gained was worth way over what I actually got paid. If I was paid $0 dollars for the internship, I would still be ok because of the sheer amount of learning and experience that I got. F*** you minimum wage, let the people work.
 
Well when the government has excessive taxes, inflates the currency, and has all sorts of programs that drive the cost of living up- that's why the minimum wage sounds like a good idea. What needs to be fixed is the high cost of living- not how much you get paid- that's the fundamental problem.
 
No where does the Constitution mandate a minimum rate of pay for anyone. In a free market, minimum wages will be a NATURAL occurrence due to competition. In a free market, it wouldn't be called a minimum wage, rather, the lowest wage one could find in the marketplace. Most likely the lowest available wage would be higher than today's minimum wage due to less government interference in the free market which raises the cost of doing business. If companies have more money to attract new employees with, then wages go up for anyone willing to work due to competitive bidding for employees. Also, a companies reputation would be on the line in a free market, keeping most companies from lowering their pay too much.
 
Knighted said:
Regarding Hong Kong, a quick look at the statistics show it has a poverty rate a bit higher than the US and an unemployment rate that is similar to the US. It's also in roughly top quartile for having highest income inequality as well, higher than the US.

If the absence of minimum wage is thought to improve any of these, Hong Kong doesn't appear to be a very good example. It looks pretty similar to the US in those categories, but slightly worse.

What other countries have no minimum wage?
Click to expand...

Hong Kong has a 4.2% unemployment rate and 2% inflation. The United States has a 5.7% unemployment rate and inflation close or even in the double digits.
 
krazy kaju said:
Hong Kong has a 4.2% unemployment rate and 2% inflation. The United States has a 5.7% unemployment rate and inflation close or even in the double digits.
Click to expand...

Not to mention Hong Kong 20 years ago was third world conditions where as we have been top dog for how many decades?
 
^ Exactly. Hong Kong used to be a rock with a fishing village on top of it. Practically no natural resources and no farmland.
 
You must log in or register to reply here.

Similar threads

PAF
Josh Hawley Proves That Republicans Still Don’t Understand Economics
2 3 4
Replies
69
Views
917
ClaytonB
ClaytonB
Swordsmyth
Americans Will 'Do the Jobs Americans Won't Do' If You Pay Them a Fair Wage
Replies
2
Views
78
Swordsmyth
Swordsmyth
Occam's Banana
Did Newsom protect campaign donor from minimum wage hike?
Replies
6
Views
956
susano
susano
PAF
Who Ultimately Pays the Cost of Protective Tariffs?
Replies
2
Views
3K
Swordsmyth
Swordsmyth
tebowlives
Back when Kansas Cut Spending and Taxes - UE Rate?
Replies
0
Views
482
tebowlives
tebowlives
Back
Top