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Zoltan_Cobalt
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Arandur
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That’s the question I like to ask. It’s helpful for illustrating the effects of artificial manipulation of the market and how the market works, naturally. Many people I speak with have to have it explained to them even then. Which just tells me that many people are simply too economically ignorant to have a valid opinion, and should not be involved in any decisions regarding such topics.
I like to go for an extreme even higher than what you suggest, though. Why not set the minimum wage at $50 an hour? $100?
If someone can’t identify for me the ripple effects that will have, and how destructive it will be to the economy, then that person needs to learn some basic economics before claiming to have a useful opinion.
If you want to just argue about matters of degree, then we have to consider how much of those effects at $100 an hour we want to swallow at lower wages, and why.
And then, very quickly, we must consider that cost of living varies dramatically by location, and that minimum wage should be determined at highest at the State level, because of this variance. That would also respect the Framers, give us something useful to study (as the states would function in their role as “laboratories of democracy”), and respect the Principle of Subsidiarity.
Even better would be to let it be a decision for local governments, since cost of living in big cities varies dramatically compared to rural cost of living, even within states. Again, the Principle of Subsidiarity.
We must also consider that the minimum wage is a “one size fits all” approach with respect to types of jobs and ages. Most arguments about a “living wage” focus on adults trying to sustain themselves or a family. But what about teenagers, the elderly, moms looking to make a little bit of money on the side while they primarily stay at home? These may be looking to just supplement their income, and they may not have the opportunity to even get a job if the minimum wage is too high.
After all, employers who must accommodate a higher minimum wage are justified in demanding more of their employees. On the other hand, if they could be flexible with wages, they may easily be able to accommodate the kinds of flexible shifts that most of those groups I mentioned above would appreciate. Moms, students, retirees, and disabled people might love to be able to work 1-3 hours at a time, here and there, even if it meant they only earn $6 an hour while doing it.
Further, students love jobs where they can do their homework while working (like monitoring a front desk), and moms and retirees may not want exhausting work. However, employers who must get enough value from their labor to not lose money when paying them $8+ an hour. So the employer must make them also work hard and do high value things to justify that wage.
In those instances, then, high minimum wages not only kill jobs and shut people out of the workforce, it also eliminates whole types of jobs and things that could be more convenient to students, families, disabled people, and retirees. In these instances, higher minimum wage laws can have be unjust.
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JamesATyler
Guest
What about my circumstance? I work for a retail store chain that is in several states and is a growing company. this store is in NY. I started out as a part time worker for this store and have been promoted twice and am now a full time supervisor. A full time supervisor is guaranteed 35-40 hours per week. They pay me about 9.50 an hour. The company requires me to have complete open availability. Mon-Sun and any hours. My schedule changes from week to week and my hours can be anywhere from 5am to start the day and to 2am to end the day. It is nearly impossible to market myself for a 2nd job. So basically, to work for this company, I have to devote myself to them completely. This store requires the same commitment from its part-time workers as well. I just overheard my store manager telling an applicant who was turning in her application, about a month ago, that she would not be hired because she was not available all the time. She stated, “We require complete open availability.”
My community is fairly expensive. Average rent for a minimal place is 700 an month. i currently have a roommate but even if i lived alone I think i could just barely make ends meet. I would have to keep myself to a strict budget and I would probably not have much extra cash and i would go paycheck to paycheck praying nothing went wrong that costs much money.
How valuable am I? There are 4 supervisors, 1 customer service manager, 1 co-manager, 1 store manager. Depending on the season, there can be anywhere from 10-20 part time workers for extra labor (cashiers or floor personnel). Starting wage right now for a part time employee is 8 dollars an hour, the minimum wage. i can expect 1 raise per year with the average raise at 3%. That is a little more than a quarter more per hour a year.
My store manager was just telling me a couple of days ago that she considers me extremely valuable and a key part of the team. Always on time. Always present. Always working hard with minimal complaint. Easy to work with. Good personality. Good ideas. Efficient. Require no supervision other than to receive tasks. Yet, i can only look forward to having minimal financial stability. The outlook for the future is the edge of poverty if I stay with them in the position. Manager turn-over is very low. I could hang on until a manager position comes open and the lowest paid manager makes 10 dollars an hour for a slight improvement.
The company asks for a lot from me. I have to devote myself to this company exclusively. The job is more labor than anything else. I push freight, merchandise, some maintenance, customer service, some cashiering, and a million other things that they might need. But all they are willing to give me for my life’s work is near poverty living with no hope of anything more really. Yet the company is growing nicely. If they need my complete devotion for the job that i have, why can’t they make me more comfortable? They can’t do without my job position. I think that if a company wants you exclusively to itself then they should take care of you well, even if it is labor. Why should companies suck up all of a person’s available time and throw peanuts at you in return? Screw them. I will feel no sorrow for the hard times coming their way either. Because these “people” want everything you have to give but give as little back in return as the law allows. I believe that without “Law” these “people” would suck people dry and when the person could no longer produce a profit for them they would be discarded like a dirty rag. Screw every brand of them.
My community is fairly expensive. Average rent for a minimal place is 700 an month. i currently have a roommate but even if i lived alone I think i could just barely make ends meet. I would have to keep myself to a strict budget and I would probably not have much extra cash and i would go paycheck to paycheck praying nothing went wrong that costs much money.
How valuable am I? There are 4 supervisors, 1 customer service manager, 1 co-manager, 1 store manager. Depending on the season, there can be anywhere from 10-20 part time workers for extra labor (cashiers or floor personnel). Starting wage right now for a part time employee is 8 dollars an hour, the minimum wage. i can expect 1 raise per year with the average raise at 3%. That is a little more than a quarter more per hour a year.
My store manager was just telling me a couple of days ago that she considers me extremely valuable and a key part of the team. Always on time. Always present. Always working hard with minimal complaint. Easy to work with. Good personality. Good ideas. Efficient. Require no supervision other than to receive tasks. Yet, i can only look forward to having minimal financial stability. The outlook for the future is the edge of poverty if I stay with them in the position. Manager turn-over is very low. I could hang on until a manager position comes open and the lowest paid manager makes 10 dollars an hour for a slight improvement.
The company asks for a lot from me. I have to devote myself to this company exclusively. The job is more labor than anything else. I push freight, merchandise, some maintenance, customer service, some cashiering, and a million other things that they might need. But all they are willing to give me for my life’s work is near poverty living with no hope of anything more really. Yet the company is growing nicely. If they need my complete devotion for the job that i have, why can’t they make me more comfortable? They can’t do without my job position. I think that if a company wants you exclusively to itself then they should take care of you well, even if it is labor. Why should companies suck up all of a person’s available time and throw peanuts at you in return? Screw them. I will feel no sorrow for the hard times coming their way either. Because these “people” want everything you have to give but give as little back in return as the law allows. I believe that without “Law” these “people” would suck people dry and when the person could no longer produce a profit for them they would be discarded like a dirty rag. Screw every brand of them.
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JamesATyler
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And truthfully, the “law” is created for people who only serve the economics of padding their wallet. Those people don’t give a damn, about the people working for them, beyond how many dollars they can stuff into their wallet. Without “law” they would certainly hire people for 2 dollars an hour and have them working 100 hours a week to just get by. Meanwhile, these immoral people, would say to themselves, “Look how many people i am employing. Am I not grand?”
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freeRadical
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You assume that people will work for 2 dollars an hour and for 100 hours a week.
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Zoltan_Cobalt
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No ambition???
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sallybutler
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Some of us will rather than go on welfare.
Some salaried people put in that many hours a week, bringing their effective rate down close to that.
And don’t business owners often complain that they make less than minimum wage.
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Arandur
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I would recommend reading these, linked previously, particularly the first one:
spectator.org/articles/33925/…-wage-delusion
nypost.com/2014/09/09/the-mob…ing-wage-scam/
In the first, the writer speaks of how he started off in a low-paying, demanding, dead-end job like yours, but rather than get angry at the employer and just seek to punish them, he focused on his own career and bettered himself.
This is your life’s work? Is this the job that you see as your vocation, and want to stay in it because of what it is?
I learned from a mentor long ago not to let work define me. That it was a means to an end, unless it was my vocation itself.
Why not use this as a stepping stone to something better? Your work ethic will distinguish you in any endeavor. Try to find a job where your particular skills are applied to work that generates more revenue, where the employers thus pay more. This may require a change in industry.
It also may require that you acquire more skills, either through some form of training or education, or just a change in industry so that you can set yourself on a better path.
Do you know the finances of the company?
You’re not a slave. You can leave. Yes, a company that wants someone usually has to be very competitive to keep them, because people who don’t feel valued or think that they can be better compensated somewhere else leave. So should you.
They pay what people will work for. And it seems that by your own admission, it’s above minimum wage – above what the “law” requires.
You are running into a simple, unavoidable economic reality: you are in a job where the supply of labor is greater than the demand for it, thus people are willing to work the job under the conditions and compensation that you are experiencing.
If there were less competition for jobs, pay would be higher. If you position yourself for a job that fewer people can do (i.e., the labor supply is lower and the demand is higher), you will find that it pays better. Better paying careers are in those fields where there is high demand and fewer people who are qualified to work it.
That’s just how it works, naturally. Economics mirrors ecology; it’s the natural system, and can’t really be defied without causing unintended negative consequences. That’s why, properly speaking, a market economy operates under what is properly called “natural freedom.”
Exactly. Or that the productivity of people who couldn’t find better jobs would make it worthwhile (while companies don’t always make wise decisions, the price mechanism tends to lead them to make more efficient choices, which often means an investment in skills or equipment or compensation to build morale, thus enhancing productivity).
And then there’s always the right to organize. Before unions became industry-killing leeches, they existed to help people address safety in their workplaces, raise skill levels, and bargain for better treatment.
In short, a truly oppressive company that was paying a wage below what people would be willing and available to work for would find no one willing to work for them–or would find them unionized and striking, which would end in either an agreement about compensation and policies the employees would be willing to work for, or the employees would leave, and the company would have no workers, and thus go out of business.
The best way to show a company that you don’t feel you’re paid well enough or the working conditions are unacceptable to you is to just go find a job elsewhere. Or start your own business. This is America.
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Arandur
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My father owns a small business. He has experienced this first hand. I suffered through it in childhood, with him working constantly and us still pinching pennies and going without.
Several of his employees make more money than he does, get more vacation time, and all while working 40 hours a week. Because he set incentives to keep increasing pay and benefits as they stayed and worked well.
He, on the other hand, assumes all the risk, works extremely long hours, is always on call, and has always been heavily in debt.
And his company is considered somewhat “successful” by the standards of most small businesses, even those that last for any length of time. Heck, with how hostile our government and laws are to small businesses, it’s a wonder that he’s still in business at all.
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DarkLight
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What this model doesn’t account for is cost of entry. So one big issue for people in situations like me is a lack of transportation. Relying on public transit means that the jobs you can take are quite limited, especially if you don’t live in a large city. And the jobs available may not allow enough room to purchase and pay insurance on a car. Which means you’re not going to get a better job unless you manage to find some way to make more money than you’re getting paid while still being fully available.
Education is obviously the same way. You need both money and time to get more skills. Sure you could learn in your free time, but employers won’t take your word for it with neither a degree nor listed work experience. And an employer who requires open availability isn’t going to give you time off to go to class.
Moving is also a major cost. Most landlords will not take on someone who cannot provide proof of income, so moving to a new city is likely out of the question unless you already have a job there - and unless you’re particularly skilled that’s unlikely. Even if you find a landlord willing to take you on, moving and paying the rent and deposit while you don’t have a job is difficult.
Labor actions also cost a certain amount of money. You have to have enough money to meet your own expenses while striking. That means you can’t be living paycheck to paycheck, otherwise striking is likely to lead in short order to being evicted. Which means your job has to pay enough for you to save up a few months.
In short, I find that most people who say just get a new job or more skills or something have never actually tried to do any of that without having a good deal of money in the bank to do it with. Most opportunities cost a certain amount of money and time to take advantage of, which means you have to start by being paid enough to take on those opportunities and have the time available and not consumed by your job to do so.
And all of this is of course assuming a single healthy adult. If you have children, extra health costs, or any sort of limitations on the work you can do, that’s an additional problem and more limits on what you can do.
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Zoltan_Cobalt
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Assuming you are a single healthy adult with a high school education…no car…and no marketable skills…Zoltan says: Join the military.
Enter a program that will train you in a technical, marketable skill. If you can qualify for a program that leads to a college degree, extend your enlistment and take advantage of it.
You will be out in four years (six with a degree) with a marketable skill, experience, and an honorable discharge that will move you to the top of any employer’s list.
Actually if you had joined right out of high school, by 25 you could have had a degree and six years of work experience. All this while your dopy friends from high school were sitting home playing video games or working at a dead end job or goofing around in a jr. college…and then whining about not having a good job or any education…and needing a car to survive.
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DarkLight
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Of course, this presumes you are single healthy young adult who meets their requirements, and is morally ok with the modern military (something I’m not). So in a case like mine, health problems aside, I might struggle to meet the health requirements simply due to having a very small body size. And of course even very minor common health problems can keep the military off the table - so in my case I’ve always had a simple vision problem, easily correctable with lenses but not surgically fixable. That’s enough to keep you out of the military
Also, I don’t know any of my friends from high school or college who are sitting at home playing video games or goofing around. Far more common I’ve found is for young adults to get degrees, even degrees they’ve thought were marketable, and then find out that they either need more education and can’t afford it, or that they can’t find work in their field without experience. The unpaid internship is becoming more common, which is another thing that requires money. Or that the market has simply changed and their skills are in a lot less demand than they thought or even than they were when they started college (especially common for those getting advanced degrees).
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Arandur
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Are any of these woes fixed by a minimum wage? No. They are made worse by such. More people competing for fewer available jobs, and less flexibility for employers to set flexible schedules and employ unskilled work that would free up more skilled employees to spend more of their time doing high value things, thus allowing a company to produce more or offer a greater service overall for a lower cost.
Also, I have found it amazing what can be accomplished with some creativity, openness to change, determination, and work ethic. I have taught a couple of Dave Ramsey’s Financial Peace University classes, and people are often amazed at how much they can accomplish and how their finances can change when there’s a will to do so.
Personally, yes, I’ve moved without a job (twice). I’ve supported a pregnant wife and then an infant while having to buy health insurance independently, and having no maternity insurance – paying out of pocket for the maternity care, labor, delivery, etc. All while not taking out any additional debt, with barely any savings to start with, with an unsteady income at a job that had me traveling constantly (many weeks where I was home for just 1.5 days), renting while losing money on a house I could not sell from the city that I moved from, and having significant debt to still pay off. Yes, I still managed to earn $30k that year – but that was as a 1099 contractor, so responsible for self-employment tax in addition to the rest. Oh, and I changed careers twice in that period, trying to find something that paid the bills.
I know many people have had it harder. But I’ve been through some hard times. I was never tempted to go crying to the government to take it out on “unfair employers,” or to try to get me a job when the job market was terrible (this was in 2009-10, at the height of the Great Recession).
I’ve seen people do better than me. People willing to find roommates or live with family; carpool or buy cheap beater cars (I still drive one that’s worth maybe ~$1,000–owning a car doesn’t have to cost much!); work extra jobs or even odd jobs for friends and family; turn their meager homes (or their relatives’, like I did) into a food garden; study on their own and go to technical schools or pass certification exams; and bargain, pinch, negotiate, and work their way out of deep deep holes to actually make it.
I’m just saying that it’s possible
And sometimes it takes finding a less pleasant or slightly lower-paying job that affords more reliable hours so that you can find an additional job to bring in the extra income to pay off debts and save up money to break loose some other opportunities. As has been stated, it’s nearly impossible to find a successful entrepreneur, business owner, or even wealthy or well-paid salaried people (with the possible exception of certain privileged union members) who have the luxury of a merely 40-hour work week.
And I do know people sitting at home and playing video games or spending their money on gadgets and concerts and entertainment. In fact, one of the things that I shake my head at is that I now make good money, and yet people who make a third or even a quarter of what I make live more profligately. They squander their money and enslave themselves to debt to live more extravagantly.
Having been there and known people who have had it worse, I have learned sympathy for people on hard times. But I have also learned that very few people are really trapped, and that we bury ourselves in prodigal lifestyles. And our government does us no favors. We can succeed.
But even beyond that, our Faith offers so much more promise, for it doesn’t matter how poor or how suffering we are. We still can have limitless joy and peace in Christ. And it’s often easier to do so amidst poverty and suffering, if we only open ourselves to Him.
Also, I have found it amazing what can be accomplished with some creativity, openness to change, determination, and work ethic. I have taught a couple of Dave Ramsey’s Financial Peace University classes, and people are often amazed at how much they can accomplish and how their finances can change when there’s a will to do so.
Personally, yes, I’ve moved without a job (twice). I’ve supported a pregnant wife and then an infant while having to buy health insurance independently, and having no maternity insurance – paying out of pocket for the maternity care, labor, delivery, etc. All while not taking out any additional debt, with barely any savings to start with, with an unsteady income at a job that had me traveling constantly (many weeks where I was home for just 1.5 days), renting while losing money on a house I could not sell from the city that I moved from, and having significant debt to still pay off. Yes, I still managed to earn $30k that year – but that was as a 1099 contractor, so responsible for self-employment tax in addition to the rest. Oh, and I changed careers twice in that period, trying to find something that paid the bills.
I know many people have had it harder. But I’ve been through some hard times. I was never tempted to go crying to the government to take it out on “unfair employers,” or to try to get me a job when the job market was terrible (this was in 2009-10, at the height of the Great Recession).
I’ve seen people do better than me. People willing to find roommates or live with family; carpool or buy cheap beater cars (I still drive one that’s worth maybe ~$1,000–owning a car doesn’t have to cost much!); work extra jobs or even odd jobs for friends and family; turn their meager homes (or their relatives’, like I did) into a food garden; study on their own and go to technical schools or pass certification exams; and bargain, pinch, negotiate, and work their way out of deep deep holes to actually make it.
I’m just saying that it’s possible
And sometimes it takes finding a less pleasant or slightly lower-paying job that affords more reliable hours so that you can find an additional job to bring in the extra income to pay off debts and save up money to break loose some other opportunities. As has been stated, it’s nearly impossible to find a successful entrepreneur, business owner, or even wealthy or well-paid salaried people (with the possible exception of certain privileged union members) who have the luxury of a merely 40-hour work week.
And I do know people sitting at home and playing video games or spending their money on gadgets and concerts and entertainment. In fact, one of the things that I shake my head at is that I now make good money, and yet people who make a third or even a quarter of what I make live more profligately. They squander their money and enslave themselves to debt to live more extravagantly.
Having been there and known people who have had it worse, I have learned sympathy for people on hard times. But I have also learned that very few people are really trapped, and that we bury ourselves in prodigal lifestyles. And our government does us no favors. We can succeed.
But even beyond that, our Faith offers so much more promise, for it doesn’t matter how poor or how suffering we are. We still can have limitless joy and peace in Christ. And it’s often easier to do so amidst poverty and suffering, if we only open ourselves to Him.
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Zoltan_Cobalt
Guest
You have painted a glum picture of your future. But I can tell by your writing that you are no dummy. What are your plans? What are you going to do?
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DarkLight
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Live off welfare until I get my health stuff under control so I can actually take care of myself properly rather than needing help and having to worry about stupid insurance problems if I do take a job, then borrow money to move out of here.
But I’m guessing welfare doesn’t have much place in your system either? And I’m lucky in having people now that I can borrow money from; that wasn’t always true in my life. I dislike leaving other people’s fates to luck like that.
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freeRadical
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Of course social welfare has a place in a free-market society. They are not mutually exclusive.
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DarkLight
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That’s an interesting idea. That’s actually one of the issues - many minimum wage jobs have a large percentage of employees on some form of welfare. Many people think this is a problem, since it means even people who are working full time are often being supported in part by welfare. I’d rather see larger corporations take on that cost than individual taxpayers (despite the fact that I barely qualify as one of those). And of course job trapping and job costs are an issue. It’s in our interest to ensure those who need work can get it. So another worry might be that a lack of minimum wage would encourage more work to go to those who don’t particularly need it and bypass those who truly need money. After all, you can pay a kid or young adult living with his mom and dad a lot less than if that same kid is trying to make it for himself. And we’d have to do something about the educational climate, since a lot of more than minimum wage jobs require some sort of education or training and that costs money.
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freeRadical
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I think that says more about how generous our welfare programs are, and how high of a standard of living we think the poor should have, then the minimum wage.
Consumers (taxpayers) pay for it one way or the other in the end, they always do.
How do you do that? By forcing companies to hire people, whether they need them or not?
If there was no minimum wage, those who have low-skills could more easily get jobs, and the on the job training that comes with the jobs, and would be better able to move on and get better jobs. I recommend you watch a short movie titled Good Intentions by Walter Williams. You can find it on Youtube for free. It demonstrates the adverse effect that the minimum wage has had on youth unemployment, especially black youth.
The easiest way to make college more affordable would be to get government out of it. Government subsidization is the main cause of the high cost of college tuition.
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DarkLight
Guest
I have my doubts about most of the standard of living stuff. Very few places give out cash aid. So if people are getting aid, they’re getting it in food or housing assistance primarily. Food assistance is the most common, and that of necessity can only contribute so much. I’m on the max amount in a liberal state and I’m getting about $5 a day to eat. That’s hardly going to put someone into luxury.
I actually do think, as a separate issue, that our welfare system needs a good overhaul. If nothing else I think we’ve gotten so focused on cheaters that we make it hard for people to improve themselves without getting kicked out of the system, while many of our anti-cheater regulations actually encourage people to remain dependent.
The other problem is that in general we’ve got a society that has separate tracks of jobs. Most minimum wage jobs are dead ends, or at least dead ends for the few people who don’t get to management (which is of necessity going to be a minority). Jobs that aren’t minimum wage almost all require some sort of costly education.
What most of us are concerned about is creating a two-track society - something I think we’re already starting to suffer from. Where there’s one track for people who have good families and money to back them and all that, and another track for those who don’t. And the people in the latter category generally don’t get the resources to move up into the former. But since all the unskilled jobs they can get to pay similar wages, and those wages aren’t enough to get an opportunity elsewhere, they end up stuck.
I actually do think, as a separate issue, that our welfare system needs a good overhaul. If nothing else I think we’ve gotten so focused on cheaters that we make it hard for people to improve themselves without getting kicked out of the system, while many of our anti-cheater regulations actually encourage people to remain dependent.
The other problem is that in general we’ve got a society that has separate tracks of jobs. Most minimum wage jobs are dead ends, or at least dead ends for the few people who don’t get to management (which is of necessity going to be a minority). Jobs that aren’t minimum wage almost all require some sort of costly education.
What most of us are concerned about is creating a two-track society - something I think we’re already starting to suffer from. Where there’s one track for people who have good families and money to back them and all that, and another track for those who don’t. And the people in the latter category generally don’t get the resources to move up into the former. But since all the unskilled jobs they can get to pay similar wages, and those wages aren’t enough to get an opportunity elsewhere, they end up stuck.
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