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dadmonson

How Would An Objectivist Handle This Debate About Minimum Wage?

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I'm just curious how an Objectivist  would handle this debate... Is it convincing to you?

 

 

"A reader of Thank You for Arguing wrote saying he had been tongue-tied during an argument over the minimum wage. "My opponent, whom I had only just met, claimed 7 million Americans would lose their jobs if we raised the minimum wage to $10.10 an hour, while I said that number wasn't supported by the data. We both claimed the same CBO study as our reference point, which made for a "yes it will/no it won't" farce. Attempts to move the argument along kept being brought back to the fanciful job loss number. It wasn't fun, or convincing, for anyone. And now I think my colleague's wife hates me."

When a spouse is nearby, the best thing to do is simply to pour more wine and ask about the kids. But if you really want to argue in a situation like this, try skipping the statistics. One technique the Greek sophists used--it helped get Socrates a death sentence, mind you--is to seek definitions.  I sent the reader the following suggested dialogue. Let me know what you think.

Opponent: Raising the minimum wage would cost 7 million jobs.

You: 7 million! That's a lot of jobs.

Opponent: Right.

You: So what do you mean by "jobs," exactly? What defines a job in your view? And is a job always a good thing to have?

Opponent: What kind of question is that? A job, obviously, is work that earns a paycheck.

You: So work that doesn't earn a paycheck isn't a job? I have a friend who runs a hospital. She works seventy hours a week for a dollar a year; she doesn't need the money. Yet she works really hard running an important institution. She doesn't have a job?

Opponent: You're splitting hairs. Most people work for a paycheck.

You: My friend gets a paycheck. It's one dollar.

Opponent: Your friend is a volunteer.

You: So if she made $50 a year, would that make her employed? Would her work count as a job?

Opponent: Not really. What's she going to do with $50?

You: I guess what I'm trying to establish is how much money counts as a paycheck that defines a job.

Opponent: That depends on the work, of course. A kid in Bangladesh might be happy to earn $3 a day in a sweatshop.

You: So that kid would, by your definition, have a job.

Opponent: Sure. 

You: My son is 12 years old. He doesn't work in a sweatshop. In fact, he doesn't have a job at all, by your definition. He just goes to school.

Opponent: So?

You: If given a choice between going working in a sweat shop and going to school, I would guess he'd prefer school.

Opponent: Of course he would.

You: So in his case, not having a job is better than having a job.

Opponent: Well, that's different. He's a kid. He's a student.

You: My parents are retired. They don't have a job either.

Opponent: Well, they earned their retirement.

You: The Koch brothers don't have a job either. They just invest.

Opponent: What's your point?

You: I'm wondering why jobs are so important to you. 

Opponent: Without jobs we wouldn't have an economy.

You: But the economy has risen above pre-recession levels, while jobs haven't. So the health the economy doesn't necessarily depend on jobs.

Opponent: OK, not entirely.

You: And if people get money in other ways--from parents, or investments, or retirement income, or the government...

Opponent: The government shouldn't pay people not to work!

You: Including my parents? Half their income comes from Social Security, and their health care is almost entirely paid for by the government.

Opponent: That's different.

You: OK. You said that raising the minimum wage would cost 7 million jobs. But you never fully defined a job. Is a job work for a paycheck someone could live off? And if the person can't live off it, what' the point of the job? And if the economy doesn't depend simply on the number of people employed...tell me again why jobs are the highest priority.

Opponent: So people can work.

You: Whether they want to or not? 

Opponent: Every able-bodied person should be required to make a living.

You: Except for my able-bodied son and my able-bodied parents, presumably. OK. But we still haven't established the definition of a job. If a job is nothing but work, then millions of slaves lost their jobs after the Civil War. Most of them didn't seem to mind.

Opponent: I said that a job is work for a paycheck! We're not talking slavery!

You: But when I mentioned my friend's one-dollar paycheck, you said that wasn't a job. You mentioned the sweatshop pay. Is $3 a day the minimum that defines a job?

Opponent: I don't like talking about minimums at all!

You: Well, then you need to do better in defining what a job is. You still haven't, you know. And while you're at it, you might define what a job is for. Is it because you're offended by able-bodied people--certain able-bodied people--not working? Why does that offend you?

Probably, you'd drive him crazy. So there's that."

 

http://www.jayheinrichs.com/blog/2014/4/29/c18l9ow2t4vtgizgbfl5gn9pbb5wao

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46 minutes ago, dadmonson said:

I'm just curious how an Objectivist  would handle this debate... Is it convincing to you?

I would ignore both sides of this conversation as being completely irrelevant to anything that I'm interested in. 

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I would point out that the minimum wage is not something supported by Objectivists.

The exchange seems to ramble and digress. I can't see anything convincing about it.

If you except neoclassical economics, specifically its microeconomics, it is clearly the finding that if you set the minimum wage above the market wage, at that level there will be greater unemployment. Employers will have less demand at a higher price but more people will have an incentive to pursue work.

Besides this demonstrating that the policy of minimum wage is counter-productive, it is also immoral. Why should the government interfere. Why should it force employers to pay more than they want to.

It may also harm the opportunities of those who want to work and get experience, who are willing to be paid less.

There are some videos by Milton Freidman which are very persuasive as to the reasons for rejecting the minimum wage. Take a look if you like.

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Until recently I would have said that "of course a minimum wage is necessary, otherwise people won't have enough to live on and employers would exploit workers by paying them very little". This is the simplistic "of course" argument that doesn't require any thought. Having now become interested in Objectivism, attracted by the emphasis on Reason and human achievement, I am looking at political and economic questions from a different angle and can see the reasons against a Minimum Wage. Jon summarises these above. Under a free market, if employers maximise profits by paying people as little as possible, it should benefit the whole economy and create more prospects for the workforce. It also means that in reality the minimum wage would not be set by the government, but would be the level at which it was possible for the workers to find an employer that paid more, and go and work for him instead - so an employer benefits himself by paying enough to keep his workforce and motivate  them.

I am trying to work out one problem with not having a statutory MW: the relation to Unemployment Benefits. We have Unemployment Benefit here in the UK (it is now called "Employment Support Allowance"); I don't know how it works in the USA. Perhaps some Objectivists would say that people have no right to such government handouts, but in reality, this is the situation and no government would get elected if it proposed scrapping it. Of course these Benefits have created a degree of dependency for at least some recipients. The current UK government is trying to reform the Benefits system by ensuring that every recipient can always receive more money by working that by being on Benefits (Americans might be shocked to hear that this was often not the case). But a problem with this, is that if we are going to ensure that "it always pays to work", then there may a need for a minimum wage, simply because otherwise it will be impossible to determine what level Benefits must be kept down to, in order that they are less than people could earn.

How can we get round that problem?

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I had a hard time following that dialogue but I wouldn't debate the minimum wage by speculating about how many jobs would be lost if it was hiked to X level, as doing so is only a short-term analysis at best anyway. I explain it in terms of individual rights the and consequences of violating them. The minimum wage violates the interests of employers by forcing them to pay higher wages than what their employees labor is worth to them. If it is not in their interest to hire people or retain them, they will not do so, and everyone will lose both the jobs and the values that result from them, leading to less demand for labor, lower wages, and lower value of money. This would be a good point at which to insert historical examples of employers laying people off when the minimum wage was imposed. If your opponent counters by saying "but nobody who works full-time should be unable to support a family," you point out that his "should" statement reflects his own arbitrary feelings, not actual facts. If he says "but academic economists agree that raising the minimum wage doesn't affect the unemployment rate," you point out the logical fallacies there, and depending on his attitude, maybe insult him for posturing as an expert on economics while not even knowing the basic rules of reasoning. It won't change the person's mind, at least you won't be tongue tied.

Edited by happiness

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20 hours ago, Adrian Roberts said:

... if we are going to ensure that "it always pays to work", then there may a need for a minimum wage, simply because otherwise it will be impossible to determine what level Benefits must be kept down to, in order that they are less than people could earn.

How can we get round that problem?

As you said, an Objectivist would reply that there should not be any government-provided unemployment compensation. [As for voters: would it be true that a statistically significant majority of people who vote will probably not collect a welfare check except perhaps for very short period between jobs?]

Within the framework of a welfare-state, one approach (being considered by Finland) is to give everyone: from pauper to prince a small check every month. That way, adding a job into the mix always adds income, unlike today. In the U.S. too, there's a large slab of low income where it does not pay to work, in particular if one has a certain type of family: e.g. single mom with a few kids. 

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t

Quote

As you said, an Objectivist would reply that there should not be any government-provided unemployment compensation. [As for voters: would it be true that a statistically significant majority of people who vote will probably not collect a welfare check except perhaps for very short period between jobs?]

Within the framework of a welfare-state, one approach (being considered by Finland) is to give everyone: from pauper to prince a small check every month. That way, adding a job into the mix always adds income, unlike today. In the U.S. too, there's a large slab of low income where it does not pay to work, in particular if one has a certain type of family: e.g. single mom with a few kids. 

SN - When it comes to voting, in reality it would not just be the unemployed who would vote against a government that proposed stopping unemployment benefit; I think most of the rest of the country would oppose such a measure.

And I think I would agree with them; a civilised country would be one who would provide some degree of security for those citizens who are genuinely in distress. The question is how much money should be spent; how can we avoid creating dependency, and in the case of healthcare, can the money come from private insurance rather than the taxpayer? As I said in another thread, since the time of Margaret Thatcher (the most Objectivist of British politicians whether or not she had any formal links to the movement), the British government has been trying to undo the most Socialist aspects of health and welfare, and runs into a lot of opposition for doing so.

Perhaps some would say that my compromises mean that I am not a true Objectivist. As I have also said before, I have spent too much of my life surrendering my thinking to other people, in Christianity, and now that I have got free of that, I am not letting anyone else tell me what to think; neither Ayn Rand, nor Jesus, nor Marx. Objectivism is the ideology that I find most attractive at the moment: but basing a system on Reason means that we have to start thinking how to put our ideals into practice by starting from how a situation is now. Proposing a change that we believe is ideologically sound but is impossible to put into practice in the real world, is not Reasonable. Imposing our beliefs on society will just make us another form of Statist.

One way that I try to apply Objectivism, in a massively simplified version of the conversation that started this thread, is that when I am in discussion with work [National Health Service] colleagues about Privatisation, the way I would argue is to say  that a solution has to be found to the NHS funding crisis. Raising taxes is not a good thing, and if Privatisation is the only solution, then we should accept that this is the practical solution and not be influenced by prejudice or ideology. That way, I am employing Reason rather than ideology, and inviting them to do the same.

 

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55 minutes ago, Adrian Roberts said:

SN - When it comes to voting, in reality it would not just be the unemployed who would vote against a government that proposed stopping unemployment benefit; I think most of the rest of the country would oppose such a measure.

And I think I would agree with them; a civilised country would be one who would provide some degree of security for those citizens who are genuinely in distress.

I agree that the people who vote for welfare often -- perhaps typically -- don't do it for themselves, but because they think it is the right thing to do. Many of them probably also give to charities and causes. However, when they vote for it, there are two things going on, not just one. As you say, they're thinking they should be helping people who have fallen on hard times. But, second, they also think they should force their neighbor to pay too. I don't know if people parse it out that way, but I think this is what it boils down to if you were to analyse it: they are not satisfied with doing charity along with the vast majority of others like them who are also for charity (all those pro-welfare voters). No, they want to do it via a government that can send tax-agents to collect. Their neighbors who would vote against welfare are forced to pay the tax agent. 

It is a fashionable bromide to scoff at politicians and to blame government for all sorts of ills. However, the real wielder of force in modern western democracies is the voter who imposes his will on his neighbors. At an abstract, philosophical level, is such a person any different from a 16th century protestant zealot forcing a papist to come to the "right" church and to worship in the "right" way... by supporting a government that imposed such rules?  Both are cheering when force is used to impose their view of morality on their neighbor.

Edited by softwareNerd

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"But, second, they also think they should force their neighbor to pay too. I don't know if people parse it out that way, but I think this is what it boils down to if you were to analyse it"

If they don't parse it out that way, then does it boil down to force? I agree with you actually that it does.

I use the same reasoning on landowners. They think its ok to force their tenants to pay economic rent because they have land ownership rights. They may not parse it that way, but that's what it boils down to. And like in your example where those forced neighbours may not parse it that they are being forced, so can be said for renters who pay willingly.

If you reject that reasoning, you have to reject your own analysis above don't you?

It interests me to know what distinction you will apply. I suspect you will say in my example economic rent is fair and square because its paid in trade to benefit from property.

However in your example you could apply the same thinking to conclude its fair and square that people pay a tax for welfare because it has been voted for democratically, the voter who forces his neighbours to pay has a right to vote in such away, and everyone accepts this right, so if the largest majority agree with him then he has the right to insist if you want to live in this society you will have to pay for welfare.

In fact the above sums up the response from Oists on the economic rent argument. Renters and landowners "vote for" economic rent going to the landowners and so the landowners who force tenants to pay it to them have a "voted for" right to do so. 

We agree wrt welfare, so don't get me wrong on that. What interests me is why we disagree on the other matter when the essence of it seems essentially the same.

Perhaps you could clarify what really counts here.

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3 hours ago, Jon Southall said:

We agree wrt welfare, so don't get me wrong on that. What interests me is why we disagree on the other matter when the essence of it seems essentially the same.

When a masseuse squeezes a muscle with your consent, she too applies force. But, in our discussion, the meaning of force that is relevant is a different one: it must involve the violation of rights. The difference between our positions boils down to the concept of rights that we each have.

I don't mean the abstract definition of rights: we might well come up with the same definition. We might even be able to agree on a few sentences that define what rights are. However, when it comes down to the thousands of concretes in reality that make up the concept of rights, we almost certainly disagree. If the landlord owns his property by right just as much as I own my wages by right, then dictating what the landlord does with his property is no different from dictating that I help my neighbor when he loses his job. So, the real difference is that you do not think the landlord has the right to charge what rent he wishes. I'm sure you agree with me that he has all sorts of rights to his property, but you're excluding the ability to fix any rent he wishes as one such right.

 

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1 hour ago, Jon Southall said:

Well he can agree any rent on his property so we even agree on that, we just disagree on whether or not the location value he collects is his property.

If so, perhaps the underlying -- more philosophic -- disagreement is about the nature of rights: for instance, whether a person has a right to things that come to him by luck, or at least not by his own effort.

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I see that in one sense voting for something that will require more taxes could be seen as force of the majority over a minority. But this kind of force is a whole lot better that the force wielded by a dictator, or the local gangleader. As has been said (by Churchill I think), Democracy is a bad system but it is better than the alternative. The alternative would be anarchy, which I understand is not an Oist principle, and anarchy leads to dictatorship. In reality, people who have lost an election have to put up with the consequences. There have been plenty of examples in third-world countries where a party that has lost an election tries to hang onto power, and chaos and eventual dictatorship result.

Again, it is about starting from where we are, and working for change by winning hearts and minds

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