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View Diary: Minimum Wage Raise Essential To Fix Our Economy (21 comments)

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  •  Please explain... (1+ / 0-)
    Recommended by:
    Samulayo

    ..this. If a guy only has the skills to produce $8 worth of goods and services, (why why, why why?) do you think anyone will ever pay him $10?

    Will you be the person to pay $10 for this guy? If you are willing to do it, feel free. But every hour he is on your job, you will be $2 poorer.

    •  The moment you use a phrase like, (0+ / 0-)

      "$8 worth of goods", you reveal the box in which your thinking is constrained. In the first place, there is no magic to the price that the "market" has attached to something. The prices of everything can be manipulated in any number of ways -- and indeed, they are. In the second place, the price that the "market" has attached to something is always a dynamic value. Any analysis that begins with the economists' mantra, "All else being equal," is, simply, meaningless, because all else is never equal. If I raise the minimum wage at $10, it will change everything else in the market -- every single price of everything else will change.

      But apart from that rather sophisticated point, the main point is that minimum wages exist because the fundamental problem is not that there are people who are so pathetically useless that they cannot do enough work to support themselves and a family; rather the fundamental problem is that without a minimum wage, general wages will inevitably and inexorably fall to subsistence levels, and remain there, condemning the mass of the population to poverty. Adam Smith, Lord God on High of the hopelessly, murderously selfish, understood this perfectly well, and insisted that it was up to governments to do something about it. If your market-based scheme were implemented -- eliminate the minimum wage and send folks a supplementary check, wages for most labor would fall through the floor, as employers cheerfully relied on the government to write the checks to support their employees. Your plan is fundamentally unstable, and cannot ever be practicable.

      Markets Do. Not. Work.
      End of story.

      To put the torture behind us is, inevitably, to put it in front of us.

      by UntimelyRippd on Fri May 03, 2013 at 08:44:28 PM PDT

      [ Parent ]

      •  Please think it through. (0+ / 0-)

        First, there is no reason why wages will "inevitably and inexorably fall to subsistence levels".  Asserting (with no evidence) that something is "inevitable" is as silly as those economists who claim that tax cuts "inevitably" reused jobs.  Workers have bargaining power, and they can unionize. They have done it before. The fact that most of us make more than the minimum wage is proof of this.

        Second, I don't understand what you mean by a "dynamic" value. If we make the minimum wage $10 will it make my $8 guys more skilled? Will it increase the value of their labor product by at least $2? Are you sure it will? 'Cause if not, they will be unemployed.

        Besides, suppose wages did fall. Employers would make more profits and they would pay more in taxes. These taxes fund the transfer payments.

        The transfer payments also give workers bargaining power.

        EITC funding is also more fair. Since it is funded by taxes, the rich pay more. Remember, not every employer is rich.

        Lastly, don't confuse me with some free-market disciple. You are reading things that I didn't write.  

        •  "Please think it through" (0+ / 0-)

          You tell me to think it through, and then you tell me that you don't understand what I mean by a "dynamic" value. Maybe I'm not the one who needs to do more thinking. Suffice it to say this much: You aren't going to tell me anything I haven't heard before.

          Similarly, you say that I'm confusing you for "some free-market disciple", to which I can only respond, "You are reading things that I didn't write."

          As to your hypothetical that the secret solution is that wages would fall and then profits would go up and then tax revenues would rise and then we'd give the money to the underpaid workers, i really don't think you're getting it, soldier: wages would fall effectively to zero. If the government guarantees a minimum income to anybody who works "for a living", to be paid out of tax revenue, there is no floor below which wages cannot sink. It is an absurd scheme, it is largely unnecessary, and it is motivated entirely and only by your conviction that there is some magic value to be associated with the "worth" of someone's labor. There are far superior approaches to managing full employment as well as providing essential physical security to the people (superior meaning: stable, practical, and tending to ensure that the maximum fraction of the population receive the lion's share of economic output). For starters, nationalize health care and energy resources. There is never a shortage of useful work to be done in the country -- if neither soulless amoral behemoths like walmart, nor benevolently-minded small-time pillars of the community think Joe McBlow is worth minimum wage, then have the government hire him to perform any of the myriad of chores that need doing.

          Incidentally, one very nice side effect of a $15/hour minimum wage -- which seems an eminently reasonable figure to me, by the way, though I admit it's an off-the-cuff number -- is that it would pump 10s of billions of additional dollars into FICA every year. If everyone making 8 bucks an hour were suddenly making 15, billions of dollars in CEO compensation and undertaxed capital gains would become FICA-taxable wages.

          To put the torture behind us is, inevitably, to put it in front of us.

          by UntimelyRippd on Fri May 03, 2013 at 10:02:53 PM PDT

          [ Parent ]

          •  Think about it. (0+ / 0-)

            If wages are zero, why would anyone show up for work? Workers say "no". They say "no" a lot!

            I still don't understand your "dynamic" idea that raising the minimum wage will magically make the output of my $8 worker worth $10. Where are you getting the extra $2 from? How do you know it's $2 and not $1.99?

            These questions are important because if it is $1.99, you've just rooked my guy out of a job...

            •  They would show up for work because, per your (0+ / 0-)

              scheme, the EITC is given to people who actually work. That's why it's called the Earned Income Tax Credit. Would the actual wage be 0? Or would it be a nickel an hour? Or would it be exactly enough for the lowest of the low to be able to acquire just enough to physically survive from day to day? Does it matter?

              The answer is, no, it doesn't matter -- the point is that without a minimum wage, wages fall to subsistence. And in fact, in our real American economy, wages have fallen to subsistence -- they've fallen so low that many people can't afford to work, because they can't even earn enough money to offset the costs of being someone who goes to work. We are already there, in our current economy. Whenever some ass observes that raising the minimum wage isn't necessary, because almost nobody earns that little, said ass deserves to be kicked around the block, put in the stocks for a day, and then tossed out to live in the streets of an unfamiliar city -- preferably in another country -- for 2 days without money, identification, or a cell phone: If everybody is already making above the minimum wage, that means people are working for subsistence wages, and therefore the minimum wage needs to be higher.

              Employers don't pay their employees what their employees are worth, they pay their employees what their employees will take. Period. Your question about 10 dollars versus 8 dollars is fricking moot, though of course the answer is, "No, I can't guarantee a goddamned thing, but that validates neither your objection, nor your alternative proposal."

              To put the torture behind us is, inevitably, to put it in front of us.

              by UntimelyRippd on Sat May 04, 2013 at 09:18:20 AM PDT

              [ Parent ]

              •  You can't... (0+ / 0-)

                ...guarantee a "goddamned thing", but I can. And it is a problem that you have been dodging:

                I can guarantee that if a man spends an hour producing things that sell for $8, nobody will pay him $10 for that hour.

                Nobody.

                Your problem is that you are sad that this guy only gets $8. You think he should have $10.

                Fine. Let's give him $10. But the money should come from all of society (including you), through taxes. It should not just come from the employer...the employer may not even be profitable!

                Lastly, the EITC has a sliding scale. If you make $8 (for example) we would add $2. But if you make $7, we might only add $2.50...this gives people an incentive to demand better wages.

                Look, I'm speaking from real-world, actual experience. Those house renovation numbers I gave are pretty accurate. I do it for a living. Unskilled, inexperienced workers have a tough time producing 1/3rd as much as skilled tradesmen.

                I know that personal experience isn't everything, but you've offered no data to contradict me. The fact that there are hundreds of thousands of guys that even McDonald's won't hire at minimum wage tends to suggest I'm right.

                Some people just aren't worth $10. We can't let them starve, but the burden of feeding them should not fall on the one guy who is giving them a chance to get some experience and training.

        •  Decades of studies say youre wrong. (0+ / 0-)

          Seriously.... what your peddling was debunked better than 40 years ago.

          Whats worse is you expect to be taken seriously.

          .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Sun May 05, 2013 at 05:45:10 PM PDT

          [ Parent ]

          •  Please provide a link... (0+ / 0-)

            ...to a study or a literature review.

            If a guy makes something in an hour that sells for $8, I don't understand who will pay him $10 for that hour.

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