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| Thread: Minimum wages |  This thread is pages long: 1 2 3 4 5 6 7 8 · NEXT» |
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xerox
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posted February 18, 2013 11:48 PM |
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Minimum wages
Yes, no, maybe?
Increases unemployment =/= decreases poverty?
Only possible if combined with wellfare checks?
Is it better to have a large amount of unemployed people living on wellfare rather than having lots of employed low-wage people?
I can't make up my mind.
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- John Stuart Mill
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JoonasTo
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What if Elvin was female?
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posted February 19, 2013 12:02 AM |
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Minimum wages are an artificial creation to keep people from working. In a system where unemployment benefits exist, they serve no purpose.
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mvassilev
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posted February 19, 2013 06:24 AM |
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Minimum wage laws set a price floor on wages. If the price floor is effective (i.e. the equilibrium level of wages is lower than the price floor) then there is a surplus of workers. In layman's terms, minimum wage laws prevent some workers from being hired for wages lower than those set by the laws, so there are some people who would be willing to work, and employers willing to hire them, but both are prevented from making a mutually beneficial voluntary exchange because the wages that they would agree to are below the level set by the law.
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Zenofex
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posted February 19, 2013 08:07 AM |
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... on the other hand, if the minimum wage is close to or below the existence minimum, it serves no practical purpose. Any payment below that (and below the existence minimum in general) helps only the employer, not the employee because the latter simply can not cover his expenses with what the employer offers.
By the way the myth that the minimum wages tend to reduce employment is yet another libertarian fairy-tale (depending on the actual size though). If the wage is so low that you can barely survive, you're likely to resort to other ways to "fund" yourself, mostly illegal but usually much more profitable. If it's too hight for most employers to bear, the unemployment will rise to a level where the very workers will support the reduction of such an artificial limit.
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Ghost
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posted February 19, 2013 08:10 AM |
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Quote:
Minimum wages are an artificial creation to keep people from working. In a system where unemployment benefits exist, they serve no purpose.
What? Are you some moral rightist?
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JollyJoker
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posted February 19, 2013 08:42 AM |
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One thing should be clear: a business that can exist only when it pays people less than they need for the bare survival minimum, has no right to exist anyway, since it thrives on desperation and probably illegal emigration.
Basically, THE WELFARE, is the minimum wage anyway, since it makes no sense to work under welfare wage level, because what you get there you get for nothing.
This is the wrong thing with welfare - you get something for nothing, but people who get welfare should also generally (there are of course exxceptions) sacrifice the same time for getting it than a worker. The government employs people anyway (think of the office jobs), so instead of handing out welfare, the government should create low-wage jobs for unprofitable, but necessary stuff: redevelopment, cleaning, basic services in the health and geriatric businessess, for example. (I also think, the government should take control of prostitution, drugs and gambling, after legalizing it, but that would take qualified personell and has nothing to do with this question here.)
This way, there is no need for an official minimum wage, since the government would set it, and that minimum wage should be the survival minimum.
You have to consider that a society so riddled with nonsense moral rules (the above mentioned three pillars of crime) does itself no service when it lets things run their course and allow "poorer than poor" conditions to exist. Having shark attitudes in the economy, but having bible-morale laws will necessarily create class A job-opportunities in the illegal sector, and when you've grown up in some poor neighborhood with abysmal schooling, the choice between grabbing a below-survival minimum job and a career in the crime business is a fairly easy one.
Which means, that all the economy rules some conservatives and eco-liberals want to sell, don't work, since there is always the option of going rogue on the system.
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Doomforge
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posted February 19, 2013 09:19 AM |
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Look at this from this perspective:
Poorland: minimal wage is something lke 450 dollars, give or take.
You cannot survive on your own in Warsaw for this. The apartment itself costs 400$, even the worst one, whether you rent or pay the monthly loan when buying on credit. For 50$, you WILL starve. Which forces people to marry, or never leave their parents' place, because they cannot live on their own.
On the same time, there's massive unemployment. Meaning, the employers would likely reduce the payment, since they have 10 people interested for 1 workplace anyway.
So, you get rid of minimal wage, and they offer 300$ now, or 200$. What happens in a country where you already cannot survive on minimal wage?
Let me tell you what happens: not even getting married allows you to live anymore, because two combined payments cannot support your costs of living.
As a result, people are forced to live as collective, big families, 2-3 generations in the same tiny ****ing flat, just to survive. If you don't have a family to support you, you die.
Fun, eh?
If work cannot cover your basic needs, there's no point to work - you'll die of starvation anyway. Better to start doing something illegal or emigrate.
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mvassilev
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posted February 19, 2013 09:43 AM |
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There are two problems with that analysis, DF.
First, if you're currently being paid $450 a month, you would have nothing to worry about unless you can be replaced by two people working for $225 a month. For many jobs, employers don't want to offer wages that low because they don't want suspicious and untrustworthy people working for them. And respectability costs money, even if it's a relatively low-end job, so they have to pay respectable people more. Then there are jobs in which you use certain skills that the employer can't profitably teach to two new people who don't know them - your job is safe then too.
Second, even if you can be replaced, consider what happens - there's a reason your employer would rather hire two cheaper workers. Presumably, the two of them are more efficient (in terms of how much they cost vs how much they produce). At first, the employer has more money to reinvest into the business or pay himself. In the long run, as businesses compete, they have to cut prices to remain competencies, and consumers are made better off.
Also, there is something off about the disproportionate concern for people making minimum wage. Why do they matter more than employers and people who are currently unemployed because of the minimum wage? Why are low-productivity workers the master race?
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Zenofex
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posted February 19, 2013 10:14 AM |
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Do you actually read other people's posts? People who are "unemployed" due to minimal wage are quite unlikely to be employed even if that limit is removed. In most countries this wage is set so low that you need to a number of prerequisites already in place to survive on such an income - like having your own place to live and preferably someone to borrow money from on regular basis (that's not the bank). Even if you have somewhere to live, you still have to cover the most basic expenses like food and water (you can even drop the heating and the electricity, although that will hardly make you feel happier with your life, especially during the winter) and even if you are very modest, the minimal wage is barely sufficient to survive. So like Doomforge said, you either start stealing/doing other illegal stuff, or move abroad. This has nothing to do with how hard-working you are.
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Doomforge
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posted February 19, 2013 10:35 AM |
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Quote:
There are two problems with that analysis, DF.
First, if you're currently being paid $450 a month, you would have nothing to worry about unless you can be replaced by two people working for $225 a month.
Which part of I cannot live on my own did you miss?
I have everything to worry about - because I need a family or a partner to even survive a month.
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For many jobs, employers don't want to offer wages that low because they don't want suspicious and untrustworthy people working for them.
America only.
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Second, even if you can be replaced, consider what happens - there's a reason your employer would rather hire two cheaper workers. Presumably, the two of them are more efficient (in terms of how much they cost vs how much they produce). At first, the employer has more money to reinvest into the business or pay himself. In the long run, as businesses compete, they have to cut prices to remain competencies, and consumers are made better off.
And the guy fired starves. Then the two serfs working for 225$ die too, because they cannot live longer than a month.
Everyone's happy, including coffin makers. Three new coffins = profit.
You're kinda missing our point, mvass - our point is that in our ridiculously poor countries, minimal wage is a method of ensuring you can AT LEAST buy enough food to survive, and get a flat if you have a partner. If you allow employers to pay less, they will - people don't have much of a choice. And the result will be: young couples unable to even rent a flat together. Minimal wage of 2 people is what you need to rent a flat and get enough food/water/electricity to survive a month. Make it lower and it no longer suffices. Which leads to a social catastrophe.
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Also, there is something off about the disproportionate concern for people making minimum wage. Why do they matter more than employers and people who are currently unemployed because of the minimum wage? Why are low-productivity workers the master race?
This is not really related to the topic, as we're talking about the benefits (or cons) of minimum wage, and not the ethics of caring for poor instead of caring for rich. But, since you brought that up: why would I want to care for five-digit-per-month sales manager in his armani suit which you consider homo superior? As a guy that earns 200$ per month, I don't think I really care if he can afford a new Ferrari or not.
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Mytical
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posted February 19, 2013 11:01 AM |
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What companies, and many people, miss is this. When you have no minimum wage, like say China, companies pay little to nothing.and most people lives are heck. They have to work 12-16 hour days just to survive, and if they don't..they get fired and somebody who will is hired. Employers have all the power, because yeah the workers can quit, but if every employer does the same..what is the point? Also, less money to the average person equals less money to spend..less money to spend means that people buy less. People buy less, so companies do not make as much profit. It is a dangerous cycle. Yes this drives prices lower and lower..which is called deflation..and that is bad.
When nobody has any money left..who is going to buy the goods?
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mvassilev
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posted February 19, 2013 11:07 AM |
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I forgot, the OSM has no understanding of basic economics.
DF:
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Which part of I cannot live on my own did you miss?
It's not a response to anything I said.
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America only.
So, are you saying that in Poland, employers don't care if someone they hire steals from them? Somehow, I doubt it.
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You're kinda missing our point, mvass - our point is that in our ridiculously poor countries, minimal wage is a method of ensuring you can AT LEAST buy enough food to survive, and get a flat if you have a partner.
Most people would not lose their jobs to people who are willing to work for less than minimum wage. Most people's wages wouldn't change at all, and in many cases would increase in real terms (as people who are currently unemployed would be put to some productive use).
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This is not really related to the topic, as we're talking about the benefits (or cons) of minimum wage, and not the ethics of caring for poor instead of caring for rich. But, since you brought that up: why would I want to care for five-digit-per-month sales manager in his armani suit which you consider homo superior?
I don't necessarily consider them superior. I consider them moral equals - and if they're equals, the law should not restrict the freedoms of one to benefit the other (even though in this case the other doesn't even benefit). What you're saying is that we should restrict people's freedom of association so some low-skilled workers can keep their jobs. What's so special about them that benefiting them justifies restricting voluntary association?
Mytical:
People's wages are fundamentally set by how productive they are. Chinese workers are poor because they're not as productive as workers in Western countries, not because of minimum wage laws.
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JoonasTo
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posted February 19, 2013 12:02 PM |
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Summarisation of the topic so far:
People in backward countries are stupid enough to work for wages that cannot sustain their life and thus need minimum wages to tell them their value.
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JollyJoker
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posted February 19, 2013 12:05 PM |
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Mv, it's not an economical question (no matter who may be wrong or right), but a SOCIAL one. The system must be stable enough to ensure social peace (that is, everyone except a small minimum playing by the rules), because otherwise all bets are off.
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Zenofex
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posted February 19, 2013 12:39 PM |
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Edited by Zenofex at 12:41, 19 Feb 2013.
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as people who are currently unemployed would be put to some productive use
Is this some kind of a mantra? You keep repeating the same thing while you've been told several times already that this is not how the whole thing works. Go check the real life evidences if you are so unwilling to listen to other people.
All in all, it's rather obvious that you've soaked way too many one-sided university theories and have zero interaction with the RL. I guess your professors forgot to tell you that the economy is not an encapsulated system and is certainly not governed by wishful thinking. In general, any theory that prescribes how the people should behave in order to meet some requirements and does not take into account how the people do behave is a failure a priori and has zero scientific value.
And by the way I've studied economy.
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Doomforge
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posted February 19, 2013 05:26 PM |
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It's not a response to anything I said.
I said the same thing, only in different words 
You threw some theories at me, missing my point. Minimal wage allows people to survive in Poorland in pairs, with a poor, but possible life. Make that lower and we'll socially move 200 years backwards, to huge mutli-generation families living in tiny flats or poor houses, because young people can't afford even a room together. That's not something anyone sane would want.
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So, are you saying that in Poland, employers don't care if someone they hire steals from them? Somehow, I doubt it.
How's stealing related to the company having a bad image because of paying low wage?
In Poorland, every company pays terrible money, so there's no such thing as having a bad image because of treating employees like idiots.
Hence I said: America only.
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Most people would not lose their jobs to people who are willing to work for less than minimum wage. Most people's wages wouldn't change at all, and in many cases would increase in real terms (as people who are currently unemployed would be put to some productive use).
Let me ask again: what's the point of working when you cannot survive on what you earn?
So, no. Outside America, Germany or Australia, people wouldn't throw themselves at 200$ jobs. What would realistically happen? University graduates would be offereed 100-200$, because they "lack experience", as opposed to minimal wage. Which is my main concern. It's common practice in Poorland to offer graduates the lowest cash possible, and the only thing that stops this is minimal wage.
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I don't necessarily consider them superior. I consider them moral equals - and if they're equals, the law should not restrict the freedoms of one to benefit the other (even though in this case the other doesn't even benefit). What you're saying is that we should restrict people's freedom of association so some low-skilled workers can keep their jobs. What's so special about them that benefiting them justifies restricting voluntary association?
Let's see... because they would start dying on the streets, inducing riots, burning the cars of homo superior and making countries such as Poorland an equivalent to Somalia?
Ever thought of that?
A typical post-Soviet country like mine suffers from the most ridiculous social situation: western prices, eastern payment. University graduates treated like scum, with 50% unemployment in the age group of 25-33. And you're asking me why I don't care for homo superior's Ferrari?
Because I'm biased, because I'm poor, because I work my butt off and earn 200$. That's why? Good enough for a reason, I think.
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Chinese workers are poor because they're not as productive as workers in Western countries, not because of minimum wage laws.
That's Elodin-class lack of knowledge about the situation over the world.
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xerox
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posted February 19, 2013 05:28 PM |
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Great debate so far
Question: Consider this scenario. The minimum wage in Sweden is 2750$/month. Long-term unemployed people get 1200$/month, including rent, from wellfare. If the minimum wage is abolished, would wellfare prevent wages from going below 1200$/month?
Mytical: Even without minimum wages, I'm sure most states would keep the 8 hour work day that is standard in anglo-european countries.
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Doomforge
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posted February 19, 2013 05:30 PM |
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Quote:
The minimum wage in Sweden is 2750$/month
So, any janitor jobs for me there?
I'll gladly trade my 200$/month "payment" in a research institute for 2750$ "minimal wage" in Sweden, even if it means 10 hours of sorting trash.
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JollyJoker
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posted February 19, 2013 05:31 PM |
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Certainly, because no one would work for money you can get for doing nothing.
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xerox
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posted February 19, 2013 05:39 PM |
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Edited by xerox at 17:42, 19 Feb 2013.
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Well, you live in Poland which means that there's free immigration to Sweden. 
Will there be a janitor job for you?
Requirements are skills in the Swedish language (but I believe the state will GIVE you money for attending Swedish courses), a driver's license and some working experience and refrences from previous employers. General unemployment is 8%, unemployment among young people (including people who are studying) and immigrants are at 25%. And with a two-thousand dollar minimum wage, I believe we'll only see those unemployment numbers rise...
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Certainly, because no one would work for money you can get for doing nothing.
So there's basically NO reason for Sweden to have a minimum wage?
Unfortunaly the case is sensitive here since it's part of the ancient "Swedish model" which basically means that unions decide the minimum wage.
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