Minimum Wage

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I decided to post this topic because I didn't see it here. Pretty much the question here is what people think of the minimum wage. For the poll pretty much the terms high, moderate and low are subjective but given the relative absolutes on both ends I think it will be easy to grasp where you stand. I am mostly curious what people think and of the reasoning.

I'm not an economist so I'm not sure. Their is some school of thought that raising
the minium wage would increase the cost to consumers and reduce the number of low end jobs. Other than work study at college I made alot more than minium wage most my life.

Remove it

The Minimum Wage is detromental to society

Well, so far 3 people have posted but none of those 3 are the people who sought the living wage. Should I conclude that living wage people use mostly the moral argument of helping the poor? Or is there some other idea they seek to advance?

Interesting, I'd say that such is compatible with the centrist argument on the minimum wage.

Is yours a moral argument against the minimum wage or what is it? I am just curious because I think you prefer philosophy to economics so would tend more towards the former.
Can you please justify that claim with a reference to a theory or fact or something of that nature? I am just curious what ideas brought you to that conclusion, I am not poking at it.

Wow, what a complicated question.

I am inclined to answer with "they should get a living wage," but then I also feel that there should be a revision to the (American) welfare system and the public educational system as well, so I don't think I could put in an answer at all. This thread would also serve as a critique of various economic systems and thus would be vastly more complicated than a simple "what should the minimum wage be?"

I know that this might not be directly related to the original poster's intent when this thread was started, but I would think that the level of minimum wage is strongly dependent on, among other things, the economic structure, and the level of resources present to maintain such structure. The United States is of course capitalist, with long traditions of fair competition and some laissez-faire policies, focus on provision of goods and services and consumption, and a relatively low level of welfare and minimum wage. Consistent with the spirit of competition, theoretically only the fit would survive, and fitness is largely determined by how smart or strong or versatile you are.

However this can only continue if the public education system is very strong; that way everybody has access to the resources required to become smart or strong or versatile. Otherwise there isn't much hope at all that the person will be fit to survive in this economy, and will end up falling to poverty. The economic system would have considerable problems with a poor educational system that could not output the appropriate workforce.

High welfare/minimum wage is good for those people who are not able to compete through no fault of their own. This would include the handicapped, the elderly, etc.. Unfortunately, high welfare/minimum wage can result in abuse of the system, i.e. people taking advantage of it, which would result in laziness and reduced productivity, if given to those people who are actually fit enough to compete but make a decision not to do so. In other words, they take the system for granted and in essence become leeches. Problems with productivity are extensively noted in communist/socialist structures. I've also seen this in high-welfare states like Norway. And reduction in productivity leads to a whole host of other societal problems.

Low welfare/minimum wage is good to maintain an incentive for people to work, to continue to compete and not abuse the system as I described earlier. However, those people who are unable to work will not be able to survive, or will have a very low standard of living. Case in point: the American elderly who need to rely on Social Security and Medicare for their needs. Also, very low standards of living tend to result in higher crime rates, since the person pretty much is forced to commit crime or starve or die. This is regardless of whether the person is actually fit for work (and therefore lazy) or not. If the American public education system were better, though, it's probable that some of the lazy people would actually feel more inclined to work.

IMPROVE PUBLIC EDUCATION!! ! Thank you.

I can agree with improving public education.

Really though, improving the minimum wage isn't a complicated question, it just requires looking at multiple variables and aspects to the issue, and I am glad that you saw this as a somewhat complicated issue. Frankly, a lot of economics deals with complicated issues so I would not even look at it as that far out. You might consider it complex though as even with the level to which you went on the minimum wage there are still aspects of it that have been left out in your analysis.

I decided not to have an overall critique of economic systems though because I found it would not really be good or necessary in relation to the question as we can decide whether or not a minimum wage is good based upon the studies we have seen, the theories we have heard, the ideas behind it, etc, and can come to out own conclusions on whether it is the ideal policy or whether it is inferior to other policies. The nature of the labor market is dependent on the development of the nation, but I don't think that the minimum wage in a nation as really dependent upon the economic structure so much as how capitalism is viewed as I see that as the variable that interventions such as a minimum wage really correspond to.

You have an inclination towards a living wage? Interesting.

I personally think that a high minimum wage is needed. That way, people will actually be able to make a living.

This is the kind of thing the government in the UK plays on: the belief that education is going to make people "smarter", and being made "smarter" will lead to a more fulfilling and satisfying career. So, they make exams the kids take at 16 and 18 easier, year on year, and water down degrees to the point where they hope to be able to get 50% of 18 year olds into university. This is just one huge piece of deception that serves only the careers of politicians. It's currently evolved to the point where they want to make all kids stay on at school to 18 (they can currently leave at 16).

You don't need A levels to lay bricks, drive a dumptruck, or wire a house, yet these skilled vocations are the ones that provide the bread and butter of employment and ones for which kids can start training for at 16. The whole system denigrates such vocations, and the people who work in them, despite the fact that they are essential to the economy. Of course, the rats who run the country don't need to worry on that score because they get a continual supply of cheap labour from immigration to fill these positions.

Beyond a certain extent, education is a wasted. That extent depends, naturally, on the individual. However, a good part of our economy's employment requirements can be met with the relatively low standard of education to 16. Forcing people to stay on in education only causes unnecessary stress and anxiety, and achieves nothing other than making politicians look good in the eyes of the gullible masses. In fact, the unnecessary competition over exam results it generates probably makes this country a marginally less pleasant place to live for those forced to compete. We'd be better off as we were 20 years ago where most people left school somewhere between 14 and 18, and only the top 10% went off to uni. The state could then actually afford to finance the degrees these people were doing, rather than leaving them in debt, as they are now.

So, this leads on to the minimum wage. We've had one over here for a while. Something like £6ph, currently, I think. You won't get far on that with the average house price at £200k, and where even some dump in an inner city slum will set you back £100k. Yet millions of people are forced to survive on that. What can they do? Hasn't capitalism given us all the opportunity to better ourselves? Couldn't any 18 year old leaving school be the next Richard Branson (or Bill Gates if you're a Yank) given hard work and a measure of luck?

Well, no. Again, all part of the big lie. It's funny, there's a huge political and cultural will to be inclusive of foreigners, and not to discriminate against the obviously physically disabled, yet cognitive differences are ignored. They are, however, very similar in that they are something an individual with the problem can do nothing about. They are innate differences that fate dishes out at birth, or rather the genes of our parents decide. 10% of the population have an IQ less than 80. Even the US military won't employ people with an IQ less than 85 because they are so hard to train. Many of these people will never earn more than the minimum wage; our society treats them like s**t because they were born a certain way, just like some are born black. In fact, there's a body of opinion that argues there is a correlation between the two (low average IQ of those from certain parts of Africa).

Anyway, I'm not saying I've got answers to those problems; just that they need to be recognised when discussing things like minimimum or living wages. If you go to an extreme to find a solution, I suppose you end up with communism, and that has far more pitfalls than our current system. The other extreme the US seem to have, I don't think is particularly desireable. Their guilt complex over the way they used to treat blacks, the political correctness that pervades their culture, and the big lie about opportunity I discussed in a UK context above prevents them doing anything about the problem. We aren't any better in the UK, though.

It is detromental, because people shouldn't work to the minumum: I am 18 years old and work above minimum wage, and I don't pay taxes (strange) but businesses should pay them what they deserve, they shouldn't pay them the amount that everyone else in that field of business is getting paid; This is a socialist method.

You are right ascan to some extent, you don't need college-education to do many important jobs. Improving education does not mean focusing it solely on getting people to college either and wiring a house does require some education in order to do so. It can mean putting in more vocational classes to allow for people who will not get to college in order for them to improve. Really though, a big question does come down to a person's ability, not everyone has the capability to be the best, education can only help people with talent go further and possible increase upward social mobility, it does not solve the problem of people who cannot make above a certain level. Really though, a lot of attention in the US goes towards the fact that our school system generally does not do its job.

Last edited by Awesomelyglorious on 14 Jan 2007, 9:16 pm, edited 1 time in total.

I think I get what you are saying, the government does not know what labor is really worth and as such should not interfere with how businesses pay for labor seeing the businessman and the laborer as knowing better.

I think the less you do the less money you should get... hence sociologists should actually be billed for what they do because they are a detriment to society.

Well, that much is obvious, the only question is how do we judge who does less? Is it simply less hours? Or is it less value given? The crack about sociologists implies the latter. If that latter is accepted then what organization can determine the value given? Does the market work or does it fail in terms of valuing work?

I strongly disagree with you, and the basis of the disagreement lies in the fact that I think that formal education does a lot more than provide direct employment skills. It also provides the student with a more rounded and complete perspective of the world around you. Don't forget that you are not just a worker in the United Kingdom or the United States or Australia or anywhere else; you are also a voter and a citizen of the country as a player on the world stage. You are a worker but your economy is just one of a number of different economies on the planet, and if you are simply unaware and naive of how your work fits into your economy which fits into the global economy, then you won't have a complete understanding of your role on this planet. In essence, education, along with a diverse life/practical experience, will give you an understanding of the big picture, as opposed to just concentrating on the little details, e.g. just one person's life.

The "watering down" of the degrees and standards is not an improvement of education. That's pretty obvious. The defining goal of education is the conveying of knowledge, regardless of the degrees and standards arbitrarily placed on the educational system. Your right, that A levels are not required to lay bricks or drive a dumptruck, but the training that workers undergo to do such vocations is included as part of "education." However, I would argue that it is important for every worker to understand just how their job fits into the economy, and I believe that most people do not think about the large scale, big picture scheme of what they do.... they just think simply about getting the paycheck and then using the money as they see fit.

Perhaps people shouldn't be forced to be educated, but if that is so, they should realize at some point the virtues of getting such education. In fact, they would realize it because they would realize that they aren't qualified for jobs without such education. Otherwise there would be no incentive at all for people to get educated at all, and obviously this would lead to the collapse of all industries requiring a high level of education and technical knowledge. It would also lead to a lack of understanding of people and societies and cultures unlike your own, which results in a tremendous horde of problems on its own.

Please note that although I adhere strongly to the education standard, that does not mean that I look down on anybody who does blue-collar work. Some people make a connection between vocation and social status, thinking that people who do blue-collar work are "inferior" socially than others. This is a connection that you refer to, but I do not make and do not believe in. Instead I am making a connection between vocation and economic status (how much they are paid for the work). Why? For example, if it takes 10 years of education (either formal classroom or on-the-job specialized, or mixture, doesn't matter) to do job A, and just 2 years to do job B, then why shouldn't job A pay more than job B, assuming appropriate numbers of unemployed? Otherwise there would be a loss of incentive to pursue job A. More difficult job to do (specialized training) + difficulty recruiting qualified workers to do the job = higher pay.

Wow, more tough questions (I saw the response you gave earlier about minimum wage not being so complex... and yet very complex, so I dunno heh)!

Kinda hard to say, as the value is bound to fluctuate, depending on the state of local/regional/country/world affairs, and on the number of unemployed workers qualified to fill the specific vacant position. We have no central body in the United States that does such a thing as establish a "value" for a vocation; companies currently offer positions with a "fair market salary," and basically will try to obtain the most productivity with the least amount of expenditure (salary) possible. And I don't know if doing things like this necessarily works. Theoretically, if people were paid less, than they would have less purchasing power and therefore the prices of things would be expected to fall. This is after all, one of the reasons the Federal Reserve adjusts interest rates to control inflation. But that's government playing a role. Would the market work without such intervention? I don't know...