With all of the talk about unemployment lately I thought I would give you all my 2 cents. Our government is completely opposed to abolishing, or even lowering, the minimum wage at the federal level. It is considered political suicide. It have disastrous results for the working poor we are told. The fact is, those who say this are wrong. The minimum wage has a huge impact on the unemployment rate, which is something that has the biggest effect on the people that its proponents claim that they are helping. The biggest problem we have when addressing unemployment is that we treat it differently than any other commodity. The fact remains that labor is but a commodity. It is bought and sold just like anything else. We learn that price floors and price ceilings cause surpluses and shortages, respectively. The minimum wage is nothing more than a price floor on labor. A high unemployment rate is nothing more than a surplus of available labor. By mandating a minimum price that labor can be bought for, the government is distorting the natural order of the market for labor. This price floor creates a surplus because it is above the equilibrium price based on supply and demand. This creates a surplus because there is not enough demand, due to unnaturally high prices, to meet the supply of labor. This is essentially what the unemployment rate is. The higher the minimum wage, the bigger the surplus and the higher the unemployment rate will go. So in summary the biggest step (other than serious institutional changes in our house of cards economy, but that is a different conversation entirely) is abolishing the minimum wage.
While this is true, I disagree with the way you're looking at it. I'll try to prevent my view. Let's say there are ten people, representing for us the working poor. Minimum wage doesn't exist. They're all employed, but for two bucks an hour. They can't live off that money, no matter how hard they try. The job is basically worthless, as they're definitely going to be taken advantage of financially. In this scenario, in the end, for the working poor, everybody loses. Okay, same ten poor workers, this time minimum wage does exist. Due to this, only 3 of them are able to. Those three can live, not well, but they can live. They have electricity, water, etc. The other seven have to rely on unemployment or continue struggling. At the end of this scenario, we have three people winning, seven losing. So, it doesn't ultimately hurt the people it is supposed to help. Not all of them. It hurts the majority of them, but this is still better than the zero people who'd be benefited with the abolishment of minimum wage. I think you're failing to look at this through the poor person's perspective. From what you've said throughout this post, you seem more intent on getting America out of the current economic garbage can its in. As long as the money is positive, everything is successful. All we need to do to fix the way we look at labor, with a need to consider a commodity no different from any other. But these aren't robots doing this labor; they're humans, like you or I. Despite the fact that the act of labor is a commodity, the very nature of it is one that relies on some outside entity manufacturing the labor. And these are human beings, for the most part, especially regarding this topic. So we have to take different things into account when addressing this specific commodity, such as quality of other human's lives. If we look at it as a regular commodity and toss minimum wage away and the numbers come back in our favor, recession over, that's probably enough to satisfy you, correct? Hell, it would be great. But, in your plan, this once again financially comfortable nation - when looking at the numbers - is a terrible place to live if you aren't rich; the standard of living for the majority of the country would drastically drop and we'd regress as a society; less and less people would go to the movies, use the internet, watch TV, use cell phones, etc. All of these aspects of our culture and way of life would change and be minimalized in a clear way. Those who brought the country back to the top, of course, would be beyond rich. To them, everything would be groovy. But what about everybody else? These are things that must be considered, and they're things I don't think you're taking into account. You have to look at things beyond what they look like in theory and how they'll be in practice. The overall human experience in America would change for the worst for the majority of its citizens, which is something that we need to consider when discussing labor as a commodity; human beings should look out for each other more because, as Bill Hicks once said, "Evolution didn't end with us growing thumbs." We need to evolve again as a people and work towards a future where we look at things beyond numbers and start thinking about others.
It's basic economics that the minimum wage is a distortion in markets. However, the true reason why the minimum wage exists is not to 'give people a livable wage', rather, it gives Unions a higher starting point to begin collective bargaining. If the minimum wage is $12/hour, that means that Unions can jack up their rates even higher, because Unions never work for less than the minimum wage. If the Government wanted to make life cheaper for poor people, they would stop devaluing our currency, they would get rid of ridiculous tariffs and taxes on imports, etc. The simple fact is, the Government doesn't care about people. It gives people just enough to make them complacent and dependent, and once they get to that point, they will go no further. Things like 'Universal Healthcare' are merely a facade. Anyone with half a brain sees that this will NOT lower costs and will DECREASE the quality of service. However, the Government doesn't look at it in terms of how well it's working, but how many votes they'll get from it. It's another tool to make us complacement and dependent. If they Government TRULY wanted to help poor people, there's a million things that they're doing that are counter-productive to 'helping the poor'. Two of the biggest, is the minimum wage and welfare.
This post should be required reading. For everyone. Minimum wage only punishes the poor, it doesn't help them.
wow...seriously...wow... 1. A company will produce products at the cheapest possible price, and sell them for as much as they can. 2. They will charge whatever the market will bear. This is normal and accepted because of the need - demand - supply structure IE...example....drug companies....they sell pills for $600 each...that cost $1 to make...because there is a NEED, a SUPPLY and a DEMAND....people will actually pay the $600 (actually insurance does, but thats for a healthcare debate) with that same mentality and thought you apply that to employee compensation. THEY WILL PAY YOU AS LOW AS THEY CAN Mcdonalds would eat your ass out if they could pay their employees 10% less, in turn charge 5% less for a Happy Meal and make 5% more in profits...OFF THE TOP When it comes to remedial jobs...there is a REAL reason there is a floor for employee compensation. Businesses do not have your interests as their priority, profits and shareholders are their priority.
Except you never addressed the issue of minimum wage and unemployment in your post. Does minimum wage contribute to unemployment or not?
Minimum wage hurts unemployment but not nearly as much as NAFTA and GATT. And illegal aliens hurt it as well(at least in the southern boarder states). I will give an example of how. I got laid off my old job because 2 illegals are willing to work for half of minimum wage each. So now my ex employer is paying the same rate as before but with an extra worker. You might ask how that hurts the unemployment? It hurts it because illegals are not counted in the % of unemployed. So the unemployment rate goes up from me now being on it even though more ppl have jobs then when I was working. I bet the Feds could get unemployment down to 5% or less if they abolished NAFTA and GATT. They should also abolish wellfare. Unemployment insurance is a good thing as long as its not being taken advantage of. Minimum wage is also a good thing. Who the hell wants to work a job that you can't even support yourself on? Whats the point of working for $2 an hour? You can make that much collecting cans.
Without government regulation there would be competition in the drug market. Companies wouldn't be able to charge an arm and a leg for prescription medications because they would no longer have a monopoly in the industry Also, you have to think about the money spent in R&D for a new drug. The prices are very high (again due to government regulation) to get a drug approved by the FDA. Your argument doesn't hold much value... Minimum wage hurts unemployment. Would you rather have one person make $10/hr or have two people make $5/hr? I thought you liberals were all about helping the majority... right?
I think what is being over looked here is the fact prices will come down if wages go down. Take ground beef for instance, if the market can only bear ground beef at .25 cents a pound the price of ground beef will drop to .25 cents a pound. The same applies across the board because producers and merchants want to make money but if their prices are so high that very few people can afford them then they wont make any money. You must not be narrow minded with this because the cost of production will drop the cost of materials will drop the cost of labor will drop the cost of everything will drop. What will change is the size of profits not the profit ratio. Take walmart for instance if they making 10% profit on a given item they will still make 10% profit on said item because the wholesale cost of the item will be lower so in turn they can sell it for a lower amount of money and still pull in 10% profit off the sale of item. The prices will always meet wages if you are raising wages to meet prices then you creating artificial inflation.
no one is forcing you to work for $2 an hour. we could employ all illegal immigrants at that rate. better then living off the successful. people feel they have a right to a job, a right to property, a right to ownership. except no one wants to employ themselves, work for below a certain standard, they even want to take a standard and apply it to the world. IE free health care, running water, shelter, bathroom, and even food stamps. you hate these huge corporations, but it seems like you all dream of working for one. the federal reserve is constantly printing money, inflating the value, diminishing our purchasing power, where it drastically effects the poor. but to make up for the fact, we should just increase everyones taxation so we're all dependent on the current system. forget letting anyone save for retirement or investment options, tax 35% of their income to redistribute. my parents came form poverty, their family came from poverty, i was a baby when they were 18 years old. the government didn't provide health insurance, car deductibles, or even food stamps for us. but the IRS says they owe 90k in taxes. to feed a useless debt and dependency problem we all face as Americans. the government should be stopping the Federal Reserve who is devaluing the nations money, while printing an undocumented amount of artificial cash is lowering everyones purchasing power. we'll just keep taxing everyone else, redistributing the money, and calling it even. how can you let a system take half of your work, even a third, in the name of freedom? democracy? what? that's modern day slavery, you can live in your home, buy whatever stupid shit we produce, as long as a third to half of your money comes back to the system. we're only facing one crisis and it's federal government, look at the Iraq war. we're trillions in debt to fighting terrorists? we're paying terrorists to transport our food and supplies. we're funding the terrorists and every other political pay off these corporations and political heads have used to keep us obedient and manipulated.
I understand the arguments, and I agree with them in principal. But I would rather have one person working for $10/hr rather than two at $5/hr because you can't do shit with $5/hr, you might as well not even be working.
unfortunately that's not for you to decide, because you'd have to redistribute that guys $10 to support those other 2 living on welfare. now i assume it would be better for the individual to work for his property, but, why work when we can live off others. shit, i can't even find a job, i come from parents who make 250k+ combined, i'd work for $5 an hour. you're too good for $5 an hour and my parents should keep on working to provide those food stamps, running water, electricity, you know, the "essentials" everyone should have without even working for.
You would rather have no money than $5/hr???!!!! Are you fucking retarded? Aside from the fact that little money is always better than no money, the cost of living would not be anywhere near as high as it is now if minimum wage and inflation in general were not so out of hand. There will always be bottom feeders, always. These people are bottom feeders if they make $7.50/hr or $2/hr because the rest of the world adheres to that income. If minimum wage were $2/hr a meal at McDonald's wouldn't be $7...
The government is keeping the minimum wage low to both artificially create jobs, and keep the pockets of the wealthy full. If the US minimum wage was anything like the countries we compare ourselves to, England, Australia, or most countries in Europe, then it would be something like 13 to 15 an hour, but, because of the sickeningly greedy wealthy still wanting to keep their claws embedded in the huge percent they own now, literally half the jobs available would be eaten up by it to support that wage. But, it's not the wage's fault. It's the disgusting elite and wealthy, keeping both wages low and jobs scarce by hoarding the money the country does have, becuase they have shallow lives with nothing left to compete over and compare with each other besides numbers, ie, the amount of money in their accounts. And they're under the impression that all that money just magically appears in their bank accounts, when in reality it's coming out of the mouths of the employees their companies are firing, and from the mouths of the few they keep around, who aren't given raises that cover the increased cost of living, increases controlled by the rich, competing with other rich people, for more money so they can 'win'. Prices keep going up, and wages just stagnate and stay down, and all the sheep blindly go along with it, never wondering where all that extra money is going if it's not to the working people who are actually responsible for supplying them with their products. It's all going to some guy who hasn't raised a finger to work for it in years. And the cycle continues. Everyone wants to blame it on the poor, on the working class, on the homeless, on the low-income programs, but it's none of those things. Other countries have much better benefit systems for the needy than the US, and you don't see it crippling their government/tax income, like the American public is brainwashed into believing. Most countries pay LESS in taxes and have MORE in government programs available to them. But people in the US are horrible at math, and on such a huge scale it's even harder for them to understand how that could work. Over 97 percent of the money in the US is in the hands of less than 2 percent of the population. The rest of the population, 98 percent of millions and millions of people, are left fighting and squabbling over that last few pennies, a mere 3 percent of the money that exists in the country, and they are tricked into pointing the finger at each other, instead of at the people who actually have hoarded it all. So in a word, no, lowering minimum wage would not create more jobs, that's already been done and it's stretched as thin as it can be. With the system the US is currently running, it would just create more money for the rich.
Seriously though, what can you do on $5/hr? You can't pay for housing on $5/hr, you can't pay for a car on $5/hr, if you have kids, you sure can't support them on $5/hr because you can't even support yourself. You would STILL have to be on some kind of government assistance or else you would be living on the street, making $5/hr for about a week before you get fired for hygiene issues because you can't find housing to take a shower in.
then don't remain dependent on your 'hands' and 'legs'. 300 million americans have the same skills you do, we can all press the button open and hand the customer his change. until we stop remaining dependent on the corporation for our check, our style, our living conditions, we will always depend on them for happiness. unfortunately there is never enough to go around.
The value of money changes. If the prevailing wage for entry level jobs were $5/hr, you would see many prices change accordingly. And as it now stands, many people (mostly illegal immigrants) are employed at $5/hr. Further, 2 people working at $5/hr will very likely add more value to the economy than one person at $10/hr, which will eventually translate into higher wages for them since someone out there will now be able to pay $6/hr since the economy now contains more value in it.
You do realize that government welfare functions as a way to artificially suppress wages, right? It allows persons to be paid less by employers because employers no longer need to pay employees what it costs to live. It also (essentially) functions as a way for small companies to subsudize large corporations (since those corporations employ more min wage workers overall), thus harming small business competitive advantage and contributing to the growth of corporations. Remove all the taxes associated with paying for welfare, remove all welfare, and remove the minimum wage. Enforce the border. Punish any employers who knowingly employ illegal immigrants with mandatory prison. You will likely see the minimum wage that persons are paid substantially increase, as well as the purchasing power of their dollars increase.
^^^All valid points that I agree with, in principal, like I said earlier. I don't think you are taking into account the tendency for humans to be complete selfish pieces of shit though. I mean, I would like to think that it could operate like that, but I don't feel like value would change. You're talking about a complete upheaval of a well established system, even if it's a failed one. And while I agree with everything you posted, I can't even imagine the resistance it would face. This is like Civil War stuff.
Minimum wage also hampers small businesses. Walmart can afford to pay employees 7.50 an hour whereas smaller stores can't. This leads to a decrease in competition and higher prices for everyone.