Comments on: The Minimum Wage: An Unfair Advantage for Employers http://www.thefreemanonline.org/columns/the-minimum-wage-an-unfair-advantage-for-employers/ Ideas on Liberty Wed, 15 Feb 2012 03:46:16 +0000 hourly 1 http://wordpress.org/?v=3.3 By: beeport http://www.thefreemanonline.org/columns/the-minimum-wage-an-unfair-advantage-for-employers/comment-page-1/#comment-68746 beeport Mon, 13 Feb 2012 03:01:32 +0000 http://www.thefreemanonline.org/uncategorized/the-minimum-wage-an-unfair-advantage-for-employers/#comment-68746 These arguments are always biased because they consider only factors that make the analysis outcome favorable to the employer. For instance there is a tendency to mix unskilled and low skilled labor into the same pool. The expressed purpose of the minimum wage is to protect UNSKILLED labor from being used (otherwise known as wage slavery). This tendency to mix the labor classes gives the employer the benefit of gaining more capability from the work force without paying for it. The intent of requiring a minimum wage to is to ensure that people with no documented skills are not taken advantage of. It is not to set the wage floor for trained workers. Take the newly proposed changes to the minimum wage/child labor laws. Business people want to be able to pay minors less than minimum wage for 6 months (in Maine anyway). The premise being that these minor workers are unskilled and require training that costs the employer, thus the employer should be allowed to recoup their training costs through less than minimum wages. This might make sense if we were to ignore the fact that minimum wage is intended to be just that, the minimum wage for UNSKILLED labor. Further, if we take their argument at face value, then once the supposed training is accomplished, these business owners figure the "trained" worker would then be worth minimum wage. However, by their own argument, the labor they would be receiving would no longer be UNSKILLED and therefore should be worth more than minimum wage. The “price fixing” argument makes no distinction between those products and services which would be considered "necessities" and those that are not. In a "free market", people get to choose whether they want to purchase something that is not a basic requirement to live. No doubt price plays a part in that decision. But I am not aware of any guarantee ever being made to widget makers that anyone, regardless of price, must buy their product. On the other hand there is ample evidence that for things like food, housing and energy that are necessities, the cost of labor is irrelevant to the price. Regardless, it has been well proven that people will pay what they must, as long as they are able, for the necessities. This brings us back to the purpose of minimum wage. If a person cannot, in a normal work day, earn enough to pay for the necessities, then their labor serves only the employer. If there is a better definition of wage slavery, I don't know what it is. Add to this condition the fact that if they cannot earn something more than the minimum to survive, the laborer cannot expect to ever improve their lot, except through some form charitable help. Speaking of such help, if an employer wants to profit from the labor of another, should they not be expected to make some investment to gain that skilled labor? Why should it be that employers now get to defray the costs of education and training to the government, their employees, the tax payers or anyone but themselves? This is not the way it has always been. In fact I would venture to say that it is the ever increasing amount of undue influence from business that has allowed the shift of the training burden to others. Now they would have us give them a further financial advantage through lowering or eliminating minimum wages to compensate them for training. Training, that in most cases, for the types of jobs we are discussing, takes place at the business, by the business, for the business at little to no actual cost. As such, this type of training is not charity (from the tax payers via the government or others), but an investment by a business in itself. As for the unfair advantage theory, I would suggest those who subscribe to it go to one of the many places in this country where illegal immigrants are hired. Spend some time watching what happens when there is a surplus of labor AND the employer can offer whatever they like. The end result of such a situation is that people will take what they can get even if doesn’t cover their cost of living. You end up with people breaking the law to survive, fighting each for scraps and the employers reaping the spoils of their war on laborers. I have personally seen five families (mother, father, 2- 4 children each) living in a two bedroom house, because that is what no wage standard affords them. You don’t need to take my word for any of that. Do the least bit of research and find out the history of labor and wages. These arguments against minimum wages strike me as rather self serving for the business owner. Especially when I consider that in the area where I live the cost of the “necessities” has approximately tripled in the past 5 years. Minimum wage certainly has not increased to match, nor have my own SKILLED wages. And let's not forget that while the cost of living has rocketed upward, so have corporate profits. It seems to me that as a nation we have lost sight of the purpose of our society. Or perhaps turned a collective blind eye in the hope that one day, we as individuals might ascend to be one of the truly over-compensated too. These arguments are always biased because they consider only factors that make the analysis outcome favorable to the employer. For instance there is a tendency to mix unskilled and low skilled labor into the same pool. The expressed purpose of the minimum wage is to protect UNSKILLED labor from being used (otherwise known as wage slavery). This tendency to mix the labor classes gives the employer the benefit of gaining more capability from the work force without paying for it. The intent of requiring a minimum wage to is to ensure that people with no documented skills are not taken advantage of. It is not to set the wage floor for trained workers.

Take the newly proposed changes to the minimum wage/child labor laws. Business people want to be able to pay minors less than minimum wage for 6 months (in Maine anyway). The premise being that these minor workers are unskilled and require training that costs the employer, thus the employer should be allowed to recoup their training costs through less than minimum wages. This might make sense if we were to ignore the fact that minimum wage is intended to be just that, the minimum wage for UNSKILLED labor. Further, if we take their argument at face value, then once the supposed training is accomplished, these business owners figure the “trained” worker would then be worth minimum wage. However, by their own argument, the labor they would be receiving would no longer be UNSKILLED and therefore should be worth more than minimum wage.

The “price fixing” argument makes no distinction between those products and services which would be considered “necessities” and those that are not. In a “free market”, people get to choose whether they want to purchase something that is not a basic requirement to live. No doubt price plays a part in that decision. But I am not aware of any guarantee ever being made to widget makers that anyone, regardless of price, must buy their product. On the other hand there is ample evidence that for things like food, housing and energy that are necessities, the cost of labor is irrelevant to the price. Regardless, it has been well proven that people will pay what they must, as long as they are able, for the necessities.

This brings us back to the purpose of minimum wage. If a person cannot, in a normal work day, earn enough to pay for the necessities, then their labor serves only the employer. If there is a better definition of wage slavery, I don’t know what it is. Add to this condition the fact that if they cannot earn something more than the minimum to survive, the laborer cannot expect to ever improve their lot, except through some form charitable help.

Speaking of such help, if an employer wants to profit from the labor of another, should they not be expected to make some investment to gain that skilled labor? Why should it be that employers now get to defray the costs of education and training to the government, their employees, the tax payers or anyone but themselves? This is not the way it has always been. In fact I would venture to say that it is the ever increasing amount of undue influence from business that has allowed the shift of the training burden to others. Now they would have us give them a further financial advantage through lowering or eliminating minimum wages to compensate them for training. Training, that in most cases, for the types of jobs we are discussing, takes place at the business, by the business, for the business at little to no actual cost. As such, this type of training is not charity (from the tax payers via the government or others), but an investment by a business in itself.

As for the unfair advantage theory, I would suggest those who subscribe to it go to one of the many places in this country where illegal immigrants are hired. Spend some time watching what happens when there is a surplus of labor AND the employer can offer whatever they like. The end result of such a situation is that people will take what they can get even if doesn’t cover their cost of living. You end up with people breaking the law to survive, fighting each for scraps and the employers reaping the spoils of their war on laborers. I have personally seen five families (mother, father, 2- 4 children each) living in a two bedroom house, because that is what no wage standard affords them. You don’t need to take my word for any of that. Do the least bit of research and find out the history of labor and wages.

These arguments against minimum wages strike me as rather self serving for the business owner. Especially when I consider that in the area where I live the cost of the “necessities” has approximately tripled in the past 5 years. Minimum wage certainly has not increased to match, nor have my own SKILLED wages. And let’s not forget that while the cost of living has rocketed upward, so have corporate profits. It seems to me that as a nation we have lost sight of the purpose of our society. Or perhaps turned a collective blind eye in the hope that one day, we as individuals might ascend to be one of the truly over-compensated too.

]]> By: JT http://www.thefreemanonline.org/columns/the-minimum-wage-an-unfair-advantage-for-employers/comment-page-1/#comment-31898 JT Mon, 23 Aug 2010 02:24:43 +0000 http://www.thefreemanonline.org/uncategorized/the-minimum-wage-an-unfair-advantage-for-employers/#comment-31898 I've been debating this for years with friends. I call the minimum wage 'legalized price fixing'. My friends say this makes no sense because buyers can't fix a price. The wage they argue would only go down in it's absence. I counter that it would 'float' and sence there are more up years than down, it would float to the workers advantage. Plus in recessions, unemployment numbers would be lower leading to faster recovery. GDP would suffer, but marginally. I'm seeking a good arguement to support this. Thanks, JT I’ve been debating this for years with friends. I call the minimum wage ‘legalized price fixing’. My friends say this makes no sense because buyers can’t fix a price. The wage they argue would only go down in it’s absence. I counter that it would ‘float’ and sence there are more up years than down, it would float to the workers advantage. Plus in recessions, unemployment numbers would be lower leading to faster recovery. GDP would suffer, but marginally.

I’m seeking a good arguement to support this.

Thanks,
JT

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