3 ms·
I don't disagree that people should be able to earn a living wage. However it is supply and demand that sets wages (in the absence of a minimum) and so if you
by grandalf 16y ago
I don't disagree that people should be able to earn a living wage. However it is supply and demand that sets wages (in the absence of a minimum) and so if you are arguing that the minimum wage sets the "floor" you are proposing some fairly mind boggling demand side effects.
Your view also defines workers and firms as adversaries with no shared interest in improving worker productivity (ability to add value). Aside from pure manual labor (for which workers might be whipped to increase productivity and for which virtually no intellect or interest is required) all firms would benefit from improving the human capital value of their labor force.
Strikes are a legacy of the days when work was simply straining one's muscles against the earth or repetitively doing stitching, stamping, etc.
Unions, too, are a legacy of the days when you could be replaced by any willing person ready to step in and earn your wage. Today, Unions are granted additional power (beyond the market power they would have just via collective bargaining) and they essentially impose a tax on certain firms. I'm not anti-union... they serve an important purpose, they just shouldn't have any extra power beyond collective bargaining. New hires shouldn't be forced to join, etc.
In my view, minimum wage laws have a few negative effects:
- they drive low wage work into the black market where there are no protections against abuses.
- they limit employment opportunities for those whose ability to add value is lower than minimum wage... such people become wards of the state, terminally unemployed.
- They make subsidized training arrangements infeasible for low end workers.
- They draw a sharp distinction between employed an unemployed. It would be far more accurate to determine that a person needs $3/hour of support from the state b/c they can only reliably pull in $4 per hour. In today's world, that person is unemployed or is constantly fired after it becomes obvious that he/she is not fit for minimum wage work.
- thaumaturgy 16y ago> However it is supply and demand that sets wages... This has been shown to be false throughout history, at least as many times as supply-side economics.
- grandalf 16y agoAre you saying that you don't think prices are set by supply and demand? What sets them, then?