What is a decent minimum wage?

[vz71]

So what will happen when it is left to its own devices? Does you have a good theoretical explanation why that with a “free market” unemployment would fall ***AND ***the resulting real wages of most workers will be high?

I do not believe anyone has argued this.
A market left to its own devices will settle with some wages low and other wages high.
Ultimately the wage would be set based upon what someone would be willing to take for the job.

 

[sedonaman]

I do not believe anyone has argued this.
A market left to its own devices will settle with some wages low and other wages high.
Ultimately the wage would be set based upon what someone would be willing to take for the job.

And what someone would be willing to pay. This is what free people do.

 

[Darkbloom]

So what will happen when it is left to its own devices? Does you have a good theoretical explanation why that with a “free market” unemployment would fall ***AND ***the resulting real wages of most workers will be high? I doubt it would involve abstract reasoning or concrete evidence at all; just something filled with neoliberal platitudes about the “efficiency” of the market.

BTW, after the Panic of 1893, unemployment stayed at double digits for many years, and their economy could be considered a “free market” back then – gold standard, no income taxes that “steals” money from the laborers and capitalists, only Republican-supported protective tariffs. That is just a countercitation of the common early 1920’s mini-depression often cited as a virtue of the free market.

(Of course, I could copy and paste things said by a certain “Henry CK Liu” just to make things easier… )

I find it perfectly darling that you rebut the - to your estimation omnipresent - neoliberal platitudes with anti-neoliberal platitudes. But I guess the necessity for logical consistency is a Western plot.

Theoretically, yes. Without an artificial and arbitrary price floor supply and demand would come into equilibrium, hence fuller employment. The existence of a polity with some means of subsistence would in turn stimulate entrepreneurs to tap that market. Ergo, real wages improve, the economy expands with resultant increases in employment and so on.

Excuse me if I’m not in the mood to read the Gospel according to Henry CK Liu. I make it a point not to put stock in neo-Maoists.

But in the interests of broadening perspectives, I will read an article you post if you read this.

The “efficiency” of the market is not a platitude but a proven fact

 

[Darkbloom]

BTW, after the Panic of 1893, unemployment stayed at double digits for many years, and their economy could be considered a “free market” back then – gold standard, no income taxes that “steals” money from the laborers and capitalists, only Republican-supported protective tariffs. That is just a countercitation of the common early 1920’s mini-depression often cited as a virtue of the free market.

Really? Protective tariffs = free market? That’s news to me.

 

[jmcrae]

Not at all true. Lebron James is an extreme case, which is why I used him, to illustrate the point, but he is the rule rather than the exception.

I’ve worked for several large corporations that have entire departments that analyze in the minutest detail the performance of the people who have their bottom rung jobs and pay more to those who do the job most productively.

I’ve worked at a lot of different places, but I have yet to encounter an employer who does this. Most employers will keep paying you whatever your starting rate was, until you actually ask for a raise - and then you need to be able to prove that you are actually that valuable to them.

China and Mexico get so much of the work that use to be based in the US for a multiplicity of reasons. Yes, cheaper labor is part of it, but so is less red tape, freedom from onerous environmental regulations, reduced cost of raw materials, etc, etc.

One thing it definitely isn’t, is their ability to follow instructions. The vast amount less that you have to pay them, is what compensates for the amount of mistakes they make.

 

[Darkbloom]

I’ve worked at a lot of different places, but I have yet to encounter an employer who does this. Most employers will keep paying you whatever your starting rate was, until you actually ask for a raise - and then you need to be able to prove that you are actually that valuable to them.

I’m a supervisor for a large company that calibrates everything my employees do, and these are the guys who are very near the minimum wage level of pay. We pay MORE to those who do their job well and fire those who don’t. I have two guys on my crew who makes 50%-75% above minimum wage after their incentive pay. We could fire them and get three and perhaps even four people to do their jobs for about the same amount of payroll, but we don’t, because we want to succeed in business.

Likewise I spent a few years unloading containers for Fed Ex, which was a bottom rung job in the organization, and I was evaluated extensively even though my job was low skill. I was good at the job and got to nearly double the MW by the time I left.

Companies look not for the cheapest, but the best investment. Even for low skill jobs, it makes much more sense to pay more for a better product.

You can’t say that employers are both out to make as much money as possible AND that they only want to pay as little as possible. Those two things don’t mesh.

One thing it definitely isn’t, is their ability to follow instructions. The vast amount less that you have to pay them, is what compensates for the amount of mistakes they make.

Are we talking language barriers or lack of education here? I’m not following.

 

[jmcrae]

Companies look not for the cheapest, but the best investment. Even for low skill jobs, it makes much more sense to pay more for a better product.

Only if you can’t get the better product more cheaply. Like I said, I have never had anyone just spontaneously offer me a raise. The only times I’ve been offered raises was when they thought I was thinking of quitting to look for higher paying work, and when I actually asked for a raise.

Are we talking language barriers or lack of education here? I’m not following.

There are also cultural factors, as well. For example, workers from some parts of India will never tell you that you are asking them to do something that is physically impossible for them to do. They will simply say “Okay,” and then not do it. They assume that you already know that you are asking the impossible - it doesn’t occur to them that they have to tell you that there is a problem.

Workers from some parts of China tend to ignore or fluff over safety considerations, which is why there were issues with lead in children’s toys a few years back, and why when you are hiring Chinese people for construction projects, you have to personally supervise them to ensure that they are using safety equipment.

 

[Darkbloom]

Only if you can’t get the better product more cheaply. Like I said, I have never had anyone just spontaneously offer me a raise. The only times I’ve been offered raises was when they thought I was thinking of quitting to look for higher paying work, and when I actually asked for a raise.

I would respond by saying 1) your actions show the dynamics of the market and 2) good companies understand that it takes money to make money, and they pay accordingly. They get better workers, thereby getting better products which either increase their market share or force competitors to follow suit to stay competitive. Either way, left to its own devices, the market incentivizes employers to improve their workers lot.

There are also cultural factors, as well. For example, workers from some parts of India will never tell you that you are asking them to do something that is physically impossible for them to do. They will simply say “Okay,” and then not do it. They assume that you already know that you are asking the impossible - it doesn’t occur to them that they have to tell you that there is a problem.

Workers from some parts of China tend to ignore or fluff over safety considerations, which is why there were issues with lead in children’s toys a few years back, and why when you are hiring Chinese people for construction projects, you have to personally supervise them to ensure that they are using safety equipment.

I can’t speak to this. But it still holds that cheaper labor is only one of the reasons for outsourcing. It should also serve as lesson to those who price themselves out of the market. I’m look at you UAW.

 

[Darkbloom]

For example, workers from some parts of India will never tell you that you are asking them to do something that is physically impossible for them to do. They will simply say “Okay,” and then not do it. They assume that you already know that you are asking the impossible - it doesn’t occur to them that they have to tell you that there is a problem.

Just out of curiosity, doesn’t it cause an Indian worker to scratch his or her head as to why they are being asked to do the physically impossible? If they assume you already know you are asking the impossible, wouldn’t it be even sounder to assume that they wouldn’t even bother to ask something they know to be impossible?

 

[jmcrae]

Just out of curiosity, doesn’t it cause an Indian worker to scratch his or her head as to why they are being asked to do the physically impossible? If they assume you already know you are asking the impossible, wouldn’t it be even sounder to assume that they wouldn’t even bother to ask something they know to be impossible?

All I know is that they think very differently than we do. For them, it seems as if the goal of work is not to produce a product and get it to market as quickly and inexpensively as possible, or else to be of the best possible service to others if it’s a service industry, but rather, to reinforce everyone’s sense of place and belonging in society.

Because it would (in their world-view) threaten his sense of self and place in society, they would absolutely never tell a superior that he is mistaken about how long a task will take to complete, or that there is a better way to do something, or that they haven’t been trained yet on that piece of equipment, or that the parts and materials for the task at hand are not currently available, out of courtesy to him.

Also, if you tell an East Indian about any of these kinds of problems when you are working beside him, he will start arguing with you about who is in charge, and what their rights are, without ever addressing the difficulties actually being encountered.

 

[Darkbloom]

All I know is that they think very differently than we do. For them, it seems as if the goal of work is not to produce a product and get it to market as quickly and inexpensively as possible, or else to be of the best possible service to others if it’s a service industry, but rather, to reinforce everyone’s sense of place and belonging in society.

Because it would (in their world-view) threaten his sense of self and place in society, they would absolutely never tell a superior that he is mistaken about how long a task will take to complete, or that there is a better way to do something, or that they haven’t been trained yet on that piece of equipment, or that the parts and materials for the task at hand are not currently available, out of courtesy to him.

Also, if you tell an East Indian about any of these kinds of problems when you are working beside him, he will start arguing with you about who is in charge, and what their rights are, without ever addressing the difficulties actually being encountered.

Fascinating stuff.

 

[sidbrown]

How do you mean? Analytically, deductively, it doesn’t necessarily follow. But it doesn’t analytically and deductively follow that fire is hot either. Synthetically, inductively, empirically it does follow.

Let say you had a minimum wage of $1 per hour. Who would be thrown out of work? No one.

 

[vz71]

Let say you had a minimum wage of $1 per hour. Who would be thrown out of work? No one.

No one that you know of, anyway.

 

[Darkbloom]

Let say you had a minimum wage of $1 per hour. Who would be thrown out of work? No one.

I don’t even know what you’re driving at with that, but no one. That price floor is beneath the equilibrium price for practically every job.

 

[cynic]

I don’t even know what you’re driving at with that, but no one. That price floor is beneath the equilibrium price for practically every job.

The “equilibrium price” as you call it depends on things like expected profit, return for investors, renumeration for managerial staff and so on… it’s not set in stone. What’s more you wouldn’t expect employers to be honest about what they could pay after these requirements are met.

 

[sidbrown]

I don’t even know what you’re driving at with that, but no one. That price floor is beneath the equilibrium price for practically every job.

| am driving at the question of eill the establishment of a minimum wage caseu people to be thrown out of work. I think that this example, proves it will not.

 

[vz71]

| am driving at the question of eill the establishment of a minimum wage caseu people to be thrown out of work. I think that this example, proves it will not.

No, it proves nothing more then the extent of your knowledge of economics.

Establishment of a minimum wage (no matter what the price is set at) is an artificial limit upon the market that can have an adverse effect upon the job market.

The minimum wage should be set by the market forces and not by the government.

 

[Darkbloom]

No, it proves nothing more then the extent of your knowledge of economics.

Establishment of a minimum wage (no matter what the price is set at) is an artificial limit upon the market that can have an adverse effect upon the job market.

The minimum wage should be set by the market forces and not by the government.

What he said.

 

[vz71]

…you wouldn’t expect employers to be honest about what they could pay after these requirements are met.

I do not care if these employers are honest or not.
A market that is not hindered by the government will keep these employers in line (even if personal integrity does not).

An employer paying his employees too little will quickly find that the employees are leaving and he cannot maintain business.
An employer paying too much will find his product is overpriced and he cannot compete for business.

 

[Darkbloom]

The “equilibrium price” as you call it depends on things like expected profit, return for investors, renumeration for managerial staff and so on… it’s not set in stone.

Why are these not acceptable expenses? If not for these expenses, no one would create jobs to begin with.