No, the minimum wage prices unskilled workers out of jobs, and thus, reduces competition from those whose compensation - which is based on their productivity - already exceeds the minimum wage.
There are reasons why people aren't paid $100 for flipping burgers. If a higher min. wage caused no harm, then we could just set it to $3000 per hour and then.. POOF, no one would be poor! Of course, if that were to happen, the economy would collapse immediately.
People are paid according to the value they produce to their employers, and the minimum wage simply does not affect those calculations.
There are reasons why people aren't paid $100 for flipping burgers.
1: Strawman. The issue isn't "make a mint doing unskilled labor", it's "be paid enough to survive".
2: There are circumstances in which pay for mundane tasks (or goods) can be quite high. The all-in cost of a gallon of gasoline delivered to an FOB in Afghanistan is about $400 (among the reasons the military are so interested in alternative energy and efficiency measures). A chef in an extreme environment might similarly make considerably more than market wages elsewhere, though that's not on the basis of cooking skills alone (thin market, risk premium, etc.).
3: Direct wealth transfers to the poor have been tried, and, in at least some cases, the results have been encouraging:
Try to imagine a town where the government paid each of the residents a living income, regardless of who they were and what they did, and a Soviet hamlet in the early 1980s may come to mind.
But this experiment happened much closer to home. For a four-year period in the ’70s, the poorest families in Dauphin, Manitoba, were granted a guaranteed minimum income by the federal and provincial governments. Thirty-five years later all that remains of the experiment are 2,000 boxes of documents that have gathered dust in the Canadian archives building in Winnipeg.
Cash transfers to the poor in India, Indonesia, and Ghana, Africa:
People are paid according to the value they produce to their employers, and the minimum wage simply does not affect those calculations.
No: People are paid the SUBSET of they value they produce for their employers they can claim under prevailing market conditions. Which, again as my citations from Smith note, favor employers and almost always will.
1: Strawman. The issue isn't "make a mint doing unskilled labor", it's "be paid enough to survive".
I never said anything about "making a mint" flipping burgers, so .. "strawman" right back at you, I guess.
But you need to understand that no one else is obligated to pay you "enough to survive", regardless of what you're capable of. Have you ever run a business? If you did, you'd find yourself paying your employees roughly market salaries, because that's what their productivity is "worth" (to you and your business).
You could be greedy (and/or a scumbag), and pay them below market, or you might be smart and long-term oriented and pay them above market rates (because it's in your personal interest to keep good employees around - they're not easily replaceable after all).
But the bottom line is that business are not charities, and they can't just pay people whatever people want - especially when people's desires are infinite - they have to live within their financial constraints, placed on them primarily by their customers.
McDonald's doesn't pay minimum wage just because they're mean. They do it because anyone off the street can flip burgers and cook fries. The productivity of an entry level employee flipping burgers is just not that valuable.
2: There are circumstances in which pay for mundane tasks (or goods) can be quite high
Sure, but that doesn't mean that all mundane tasks are valued as highly.
Value is subjective, by the way. Which means, among other things, that you can't tell someone what they should be willing to pay for Person X's labour - that's up to the potential employer to determine for himself, based on his subjective preferences, valuations and prioritizations of his means and ends.
Based on the exact same principle, no one can "correctly" tell you what you should be willing to pay for a fruit smoothie tomorrow at noon.
People are paid the SUBSET of they value they produce for their employers they can claim under prevailing market conditions
Again, businesses are not charities. They need profits, and their owners want profits - that's why they're in business to begin with. What they deem an acceptable level of profit for their own businesses is subjective, and up to them.
The same works both ways. Employees decide under what conditions they're willing to accept Job X.
I never said anything about "making a mint" flipping burgers
ORLY? "There are reasons why people aren't paid $100 for flipping burgers."
But you need to understand that no one else is obligated to pay you "enough to survive"
Re-read Smith's argument. The obligation is from the economy itself, in order to sustain itself. If it's not able to do so, it's on the way to inevitable decline. Though couched in moral terms, the argument's really an empirical one as I see it.
And of course: you can argue causality either way. Is sub-sustinence wage a cause or effect of decline? Most likely, either, depending on circumstances.
businesses are not charities.
And economies and labor supplies aren't bottomless extraction wells. There's a reason it's called enlightened self-interest. Which counters your "What they deem an acceptable level of profit for their own businesses is subjective, and up to them".
ORLY? "There are reasons why people aren't paid $100 for flipping burgers."
OK. I didn't know what you were referring to. Either way, my claim was that there are (good) reasons why people aren't paid $100/h to flip burgers, and your claim is that people must be paid "enough to survive". I'm not sure there's a strawman there to begin with.
Re-read Smith's argument. The obligation is from the economy itself, in order to sustain itself. If it's not able to do so, it's on the way to inevitable decline. Though couched in moral terms, the argument's really an empirical one as I see it.
Care to make a clear claim about this? Something like "People must be paid 'enough to survive' because otherwise the economy will inevitably decline".. ? Or something? :P
That does sound like something "couched in moral terms", and I don't see how it's an "empirical" argument. Has intentionally not paying people "enough to survive" been tried somewhere, and has it then demonstrably lead to an economy's decline? :P
And economies and labor supplies aren't bottomless extraction wells. There's a reason it's called enlightened self-interest. Which counters your "What they deem an acceptable level of profit for their own businesses is subjective, and up to them".
Nope, it doesn't. That's like saying I'm not allowed to decide what business I want to run, for how long, and under what conditions. The alternative, of course, is forcing me to keep running a business I don't want to run. Can you see a problem with that?
Not only that, but your demand for everyone being paid at least "enough to survive" amounts to demanding that people be forced to pay others salaries that someone other than the employer deems acceptable. Can you see a problem with that?
We haven't even discussed what "enough to survive" means. That sounds awfully subjective. What if I like to spend $2500 a month on hookers and cocaine, and don't have enough left over to survive? I guess I need to be paid $2500 + "enough to survive" per month, then? Does that make sense? Or perhaps you think there should be some limits to how much people are paid, regardless of how much they claim they need to survive? Who would determine what's enough though? How would he know? Why would he be in a position to decide things for other people?
Comments
No, the minimum wage prices unskilled workers out of jobs, and thus, reduces competition from those whose compensation - which is based on their productivity - already exceeds the minimum wage.
There are reasons why people aren't paid $100 for flipping burgers. If a higher min. wage caused no harm, then we could just set it to $3000 per hour and then.. POOF, no one would be poor! Of course, if that were to happen, the economy would collapse immediately.
People are paid according to the value they produce to their employers, and the minimum wage simply does not affect those calculations.
There are reasons why people aren't paid $100 for flipping burgers.
1: Strawman. The issue isn't "make a mint doing unskilled labor", it's "be paid enough to survive".
2: There are circumstances in which pay for mundane tasks (or goods) can be quite high. The all-in cost of a gallon of gasoline delivered to an FOB in Afghanistan is about $400 (among the reasons the military are so interested in alternative energy and efficiency measures). A chef in an extreme environment might similarly make considerably more than market wages elsewhere, though that's not on the basis of cooking skills alone (thin market, risk premium, etc.).
3: Direct wealth transfers to the poor have been tried, and, in at least some cases, the results have been encouraging:
http://beforeitsnews.com/alternative/2011/10/canadas-experim...
Try to imagine a town where the government paid each of the residents a living income, regardless of who they were and what they did, and a Soviet hamlet in the early 1980s may come to mind.
But this experiment happened much closer to home. For a four-year period in the ’70s, the poorest families in Dauphin, Manitoba, were granted a guaranteed minimum income by the federal and provincial governments. Thirty-five years later all that remains of the experiment are 2,000 boxes of documents that have gathered dust in the Canadian archives building in Winnipeg.
Cash transfers to the poor in India, Indonesia, and Ghana, Africa:
http://www.welfareacademy.org/pubs/international/policy_exch...
http://www.globalpost.com/dispatch/news/regions/asia-pacific...
http://www.cpc.unc.edu/projects/transfer/countries/ghana
People are paid according to the value they produce to their employers, and the minimum wage simply does not affect those calculations.
No: People are paid the SUBSET of they value they produce for their employers they can claim under prevailing market conditions. Which, again as my citations from Smith note, favor employers and almost always will.
I never said anything about "making a mint" flipping burgers, so .. "strawman" right back at you, I guess.
But you need to understand that no one else is obligated to pay you "enough to survive", regardless of what you're capable of. Have you ever run a business? If you did, you'd find yourself paying your employees roughly market salaries, because that's what their productivity is "worth" (to you and your business).
You could be greedy (and/or a scumbag), and pay them below market, or you might be smart and long-term oriented and pay them above market rates (because it's in your personal interest to keep good employees around - they're not easily replaceable after all).
But the bottom line is that business are not charities, and they can't just pay people whatever people want - especially when people's desires are infinite - they have to live within their financial constraints, placed on them primarily by their customers.
McDonald's doesn't pay minimum wage just because they're mean. They do it because anyone off the street can flip burgers and cook fries. The productivity of an entry level employee flipping burgers is just not that valuable.
Sure, but that doesn't mean that all mundane tasks are valued as highly.
Value is subjective, by the way. Which means, among other things, that you can't tell someone what they should be willing to pay for Person X's labour - that's up to the potential employer to determine for himself, based on his subjective preferences, valuations and prioritizations of his means and ends.
Based on the exact same principle, no one can "correctly" tell you what you should be willing to pay for a fruit smoothie tomorrow at noon.
Again, businesses are not charities. They need profits, and their owners want profits - that's why they're in business to begin with. What they deem an acceptable level of profit for their own businesses is subjective, and up to them.
The same works both ways. Employees decide under what conditions they're willing to accept Job X.
I never said anything about "making a mint" flipping burgers
ORLY? "There are reasons why people aren't paid $100 for flipping burgers."
But you need to understand that no one else is obligated to pay you "enough to survive"
Re-read Smith's argument. The obligation is from the economy itself, in order to sustain itself. If it's not able to do so, it's on the way to inevitable decline. Though couched in moral terms, the argument's really an empirical one as I see it.
And of course: you can argue causality either way. Is sub-sustinence wage a cause or effect of decline? Most likely, either, depending on circumstances.
businesses are not charities.
And economies and labor supplies aren't bottomless extraction wells. There's a reason it's called enlightened self-interest. Which counters your "What they deem an acceptable level of profit for their own businesses is subjective, and up to them".
OK. I didn't know what you were referring to. Either way, my claim was that there are (good) reasons why people aren't paid $100/h to flip burgers, and your claim is that people must be paid "enough to survive". I'm not sure there's a strawman there to begin with.
Care to make a clear claim about this? Something like "People must be paid 'enough to survive' because otherwise the economy will inevitably decline".. ? Or something? :P
That does sound like something "couched in moral terms", and I don't see how it's an "empirical" argument. Has intentionally not paying people "enough to survive" been tried somewhere, and has it then demonstrably lead to an economy's decline? :P
Nope, it doesn't. That's like saying I'm not allowed to decide what business I want to run, for how long, and under what conditions. The alternative, of course, is forcing me to keep running a business I don't want to run. Can you see a problem with that?
Not only that, but your demand for everyone being paid at least "enough to survive" amounts to demanding that people be forced to pay others salaries that someone other than the employer deems acceptable. Can you see a problem with that?
We haven't even discussed what "enough to survive" means. That sounds awfully subjective. What if I like to spend $2500 a month on hookers and cocaine, and don't have enough left over to survive? I guess I need to be paid $2500 + "enough to survive" per month, then? Does that make sense? Or perhaps you think there should be some limits to how much people are paid, regardless of how much they claim they need to survive? Who would determine what's enough though? How would he know? Why would he be in a position to decide things for other people?
Can you see a problem with that?