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No minimum wage: helpful or harmful

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TrueMaterialist

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Yes, let employees take care of themselves. If taking a job below some minimum wage is to their interest, then let them take it. If it is not to their interest, then they shouldn't take the job.

And, just as an aside: until one has a job they are not employees, they are the unemployed and should thank anyone willing to hire them.

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Minimum wage seems like a good idea because it's goal is to give people with low-wage jobs more money. This supposedly raises the standard of living for poor people and will help them better their situation. The problem with minimum wage is that it was created on the principle that the government can redistribute the wealth, passing it from the middle and upper classes to the lower class. The reason wages should be raised is because of greater productivity: the more you produce, you more you should earn in terms of wages and benefits.

Because of minimum wage, many lower paying jobs have been cut. Notice how it's so hard for a teenager with no job experience to find work. Businesses have decided it's not worth it to pay $10 an hour for a gas station attendant or movie usher, so the jobs have been cut (or completely eliminated). This ultimately hurts the kid who wants to earn his own money, gain a skill, and work towards his own independence.

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So long as the law protects individual rights and allows for legal recourse against acts of force and fraud, there is no need to interfere with a voluntary employee/employer relationship.

(null)

freestyle, then you believe that government has a valid funtion in the market because an employee can take legal action against a company that violates labor laws? If some one reports the abuse of an employee, as it is defined in our legal system, then the justice system, a branch of the government, is obligated to conduct an investigation of the company in question, correct?

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Minimum wage seems like a good idea because it's goal is to give people with low-wage jobs more money. This supposedly raises the standard of living for poor people and will help them better their situation. The problem with minimum wage is that it was created on the principle that the government can redistribute the wealth, passing it from the middle and upper classes to the lower class. The reason wages should be raised is because of greater productivity: the more you produce, you more you should earn in terms of wages and benefits.

Because of minimum wage, many lower paying jobs have been cut. Notice how it's so hard for a teenager with no job experience to find work. Businesses have decided it's not worth it to pay $10 an hour for a gas station attendant or movie usher, so the jobs have been cut (or completely eliminated). This ultimately hurts the kid who wants to earn his own money, gain a skill, and work towards his own independence.

Well, I think there is more to it than simply giving employees a "better situation." Many believe that minimum wage helps stimulate the buyer market. They think people need to be able to afford more than just basic necessities like the minimum shelter and food. They believe that if more people have enough money to buy other consumer products, besides the basics, then the pool of buyers grows, contributing to a higher rate of sales for businesses. This higher rate of sales makes products cheaper and dissuades employers from having to make labor cuts, or hike up prices to make up for the lack of sales. Thus, in other words, they believe that minimum wage benefits more people than just the millions of low wage employees.

when the pool of potential buyers shrinks, the price of an item must either become more expensive, or labor expenses must be cut even more. This can contribute to either inflation or deflation and both can be detrimental to a free market. In a free market, it must be possible for potential buyers to buy and it also must be possible for sellers to sell. This is an interdependent relationship, meaning that a balance must be acheived.

If the consumer pool shrinks, it actually means that control is largerly in the hands of the few who can still afford to buy. Throughout history merchants sold only to the wealthy elite. It has only been in the past 200 years or so that merchants began having the luxery of buyer diversity, which is what has made many companies wealthy.

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freestyle, then you believe that government has a valid funtion in the market because an employee can take legal action against a company that violates labor laws? If some one reports the abuse of an employee, as it is defined in our legal system, then the justice system, a branch of the government, is obligated to conduct an investigation of the company in question, correct?
You've misunderstood what Freestyle said. He said that the law should uphold individual rights and work against force and fraud. He was not supporting laws as currently defined. Edited by softwareNerd
Oops! forgot the "not"
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You've misunderstood what Freestyle said. He said that the law should uphold individual rights and work against force and fraud. He was not supporting laws as currently defined.

I understand that, but he does support laws and the enforcing of said laws...and who will enforce such laws? Who will ensure that force or fraud is not used as a method of profiteering? Also, define force please. But be sure to answer my other questions too, so we dont go out of scope.

Edited by TrueMaterialist
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I understand that, but he does support laws and the enforcing of said laws...and who will enforce such laws? Who will ensure that force or fraud is not used as a method of profiteering? Also, define force please. But be sure to answer my other questions too, so we dont go out of scope.

The government will enforce laws.

"Profiteering" really has no meaning except: making more profit than some arbitrary person arbitrarily deems "fair"

Force, at its simplest, is physical force or the threat thereof. e.g. instead of doing a deal with another person, you shoot him and take his money, or threaten to shoot him so he gives you his money.

Other questions: Your reply to Michelle contains a lot of mistaken ideas about Economics. I'll try to reply to that post at some point, unless someone else beats me to it.

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The government will enforce laws.

"Profiteering" really has no meaning except: making more profit than some arbitrary person arbitrarily deems "fair"

Force, at its simplest, is physical force or the threat thereof. e.g. instead of doing a deal with another person, you shoot him and take his money, or threaten to shoot him so he gives you his money.

Other questions: Your reply to Michelle contains a lot of mistaken ideas about Economics. I'll try to reply to that post at some point, unless someone else beats me to it.

Okay, I am interested to hear your economic perspective. Keep in mind, however, that I am aware economics is more complex than just the concept behind minimum wage...and I you would like to pluge deeper into the subject, I would be happy to partake in a discussion. I was simply presenting one aspect. My personal perspective was rather absent. I wass simply providing the way in which many economists justify minimum wage. My perspective will always take "The Balance of Powers" into consideration. I do not believe in taking one side of a posed dichotomy, for I believe that dichotomy is a singularity that is often mistaken for two isolated powers in "opposition."

I agree with your defintion of force on is most simplistic level, but surely force can be much more complicated than that, correct. Force is actually, in its broadest defintion, "energy applied." surely robbing some one at gun point is a forceful immoral action, but dont you think more complicated immoral forceful actions are possible? Do you have an example of immoroal economic force that can be applied in the absence of government.

Yes, government will enforce laws, therefore governnmet intervention is necessary in the market, in order to ensure that those laws are being follwed by those who partake in the market. In truth, you know no other way to enforce laws, except through the use of government. The enforcing of these laws can then be considered a service. No service is free. The government must have the funding to be able to conduct investigations of "immoral" behavior in the market system. Who will fund them for the service they provide?

You have concluded that government must play a role in our market, in the interest of keeping that market free of immoral people who seek to abuse it. Do you mean to say that the government can actually regulate the market to promote capitalism and keep the market free? If so, this is the complexity of the issue I am attempting to address.

Force, at its

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I agree with your defintion of force on is most simplistic level, but surely force can be much more complicated than that, correct. Force is actually, in its broadest defintion, "energy applied." surely robbing some one at gun point is a forceful immoral action, but dont you think more complicated immoral forceful actions are possible? Do you have an example of immoroal economic force that can be applied in the absence of government.

Valid threats of violence should also be considered force. The mafia's "offer you can't refuse" is an example.

Yes, government will enforce laws, therefore governnmet intervention is necessary in the market

You are equivocating here. Most people, when referring to "government intervention in the market", are referring to regulations, selective taxation, redistribution of wealth. We are referring only to preventing or prosecuting acts of violence, threat of violence, and fraud.

The enforcing of these laws can then be considered a service. No service is free. The government must have the funding to be able to conduct investigations of "immoral" behavior in the market system. Who will fund them for the service they provide?

Members of the free market who recognize the value of the government's service will voluntarily donate their money, and help to weed out and boycott freeloaders through networks of trust. To the extent that people are willing to volunteer their money, the government will be able to protect them and keep the market free. To the extent that people are unwilling to volunteer their money, the government will be unable to render its services effectively. The government will be a product of society, which is of course the case in any society under any form of government.

Edited by brian0918
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There is only ever one true minimum wage, and that is zero. The truth about the artificial minimum wage level is that virtually all people working at this pay level are gaining skills and experience towards higher paying jobs. The vast majority are teenaged first-time job-holders getting their first taste of responsibility. The effect of a government imposing a minimum is to deny to those whose skills do not yet command more than "the minimum wage" the opportunity to gain those skills and experience.

Look at the unemployment rate among young black men for evidence of the effect of minimum wage laws.

Once again, the government rushes in to "solve" a problem that either does not exist or is grossly exaggerated, and in turn creates an unintended consequence far worse than the original problem.

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freestyle, then you believe that government has a valid funtion in the market because an employee can take legal action against a company that violates labor laws? If some one reports the abuse of an employee, as it is defined in our legal system, then the justice system, a branch of the government, is obligated to conduct an investigation of the company in question, correct?

Yes government has a valid function. "In the market" is not precise. Government has a valid function in a civilized society.

I specifically spoke of laws that protect individual rights. Many labor laws have nothing to do with protecting rights. The minimum wage law is a perfect example.

And yes, the government is obligated to enforce the laws, whether or not I agree with those laws.

Read these two short essays and it will help you understand the Objectivist position on the purpose of Government and the definition of rights.

by Ayn Rand
(December 1963)

Ayn Rand
(April 1963)

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  • 3 months later...

I would say the minimum wage is harmful to all the people forced to be unemployed who have a productivity rate below the minimum wage. Also, because of the now reduced production in society as the government has forced a large number of people on the margin to be unemployed, I would say the minimum wage is harmful to the entire society in that it reduces production--ie the amount of wealth/goods within the whole society--by mandating that people do not produce.

Edited by ex_banana-eater
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