Minimum Wage? (3 Viewers)

[walrusbear]

2. It is an impingement on the freedom to associate and deal with who you like. If I want to go and work for $5/hr and someone is willing to pay me that, I should have the right to do that. No bureaucrat should have the right to barr a person from their right to choose to work in a certain job.

are you fucked in the head?

 

[John0]

Abolish unemployment benefits, remove the incentive, problem solved.


The firms will be able to employ more staff than they would have done otherwise, fueling demand for goods and services.

If wages are cut and firms choose not to employ more staff, what do you think they'll do with their extra money?
They'll either spend it on goods and services, or invest it, either of which will promote employment and consumption.

Yes, firms can employ more workers if they reduced the minimum wage, but why should firms employ more staff when demand could have been met with the original level of workers? It’s completely irrational for firms to employ more workers even if the minimum wage was reduced, firms should behave rationally and still reduce the amount of workers regardless of the minimum wage to meet level of demand.

Income has been reduced (reduced minimum wage) and at the same time more of the labour force will still see unemployment benefits as a better option even if there are jobs available. Reduction in income leads to reduced consumption which inturn reduces demand for the firm’s goods and services.

Firms are not going to invest in capital if there is no excess demand for the goods & services they produce. Firms don’t attempt to stimulate the economy by investing in capital when there is a decline in demand, they scale back production to meet the new level of demand. They don’t behave like governments nor should firms be expected to behave in that manner.

 

[John0]

This thread is full of misinformation.

The minimum wage is unquestionably a stupid policy:
1. Because it hurts the people who are worst off. People whose labour is not worth the amount of the minimum wage end up just not being employed at all, which is not a favourable result. It is far better for them to at least have a job (even if it doesn't pay as much), and be getting some type of experience or on the job training than just to be jobless.
2. It is an impingement on the freedom to associate and deal with who you like. If I want to go and work for $5/hr and someone is willing to pay me that, I should have the right to do that. No bureaucrat should have the right to barr a person from their right to choose to work in a certain job.
3. The government lacks the information to set the wage at the correct price because it lacks the information provided by the price mechanism. google the economic calculation problem for more info on this.

To put it another way, think about what wages really are. They are merely a price, the price of a person's labour. Minimum wages are retarded for the same reason that price controls are. The minimum wage is popular politically, but economically it is retarded policy.

Agreed, to an extent there is a lack of information for the government to set the appropriate minimum wage. But the government is still far more effective at setting the minimum wage then every individual acting on their own knowledge to set their own minimum wage.

It’s not stupid having a minimum wage, without the government setting the minimum wage, individuals would at the very least set their minimum wage to the cost of survival. Why should an individual work for a wage if it doesn’t meet the cost of survival? The governments would be in greater position then individuals to determine what the minimum wage should be and would in a better position to bargain with employers.

 

[volition]

They can always choose to be voluntarily employed, and receive experience that way, while receiving a decent living allowance from unemployment benefits.

Rather than expecting people to work for free, why not permit them to take a job (even if some bureaucrat thinks they shouldn't be allowed to work for $x/hr) and actually get paid something, rather than nothing. And be getting actual experience in a job, that will enable them to perhaps get some other type of job in the future.

I've also seen studies that indicate that minimum wages can make employers reduce the amount of on the job training (to make up for the increased cost of hiring people). So this is another argument against minimum wages.

An undeniably shit job, taken out of desperation, is worse for the recipient, than to receive free government subsidised welfare, education and training.

1. TANSTAAFL
2. Government programs tend to be fairly crap and not actually do a good job at what they claim to do. The welfare they provide isn't all that great (given the amount of money that society spends on it). The training isn't necessarily relevant to what employers actually want - because it isn't being disciplined by the profit and loss system like the market is.

 

[volition]

are you fucked in the head?

this is just pure ad hom, try making an actual argument next time.

Agreed, to an extent there is a lack of information for the government to set the appropriate minimum wage.

No, not to an extent, rational economic calculation becomes impossible for the state, because it lacks a pricing mechanism and the distributed information that the entire population combined does.

But the government is still far more effective at setting the minimum wage then every individual acting on their own knowledge to set their own minimum wage.

You've misunderstood the point. These prices are the result of millions of people making so many different decisions. So rather than comparing the knowledge of one individual to the government, it is more correctly understood as a comparison of all the individuals in the market with the few state employees/bureaucrats who set the minimum wage.

It’s not stupid having a minimum wage, without the government setting the minimum wage, individuals would at the very least set their minimum wage to the cost of survival. Why should an individual work for a wage if it doesn’t meet the cost of survival?

Part of the idea behind this is that individuals know what their own situation is best and that they should be empowered to make these decisions for themselves. If they want to decide that a given wage is not enough, let them make that choice themselves.

 

[Planck]

Why don't we set the minimum wage at $1000/h? Then we'll all be rich and affluent!

 

[John0]

distributed information that the entire population combined does.

it is more correctly understood as a comparison of all the individuals in the market with the few state employees/bureaucrats who set the minimum wage.

You’re assuming that every individual acts as a collective, what society do you know of where every individual freely exchanges information and acts as one single unit?

Part of the idea behind this is that individuals know what their own situation is best and that they should be empowered to make these decisions for themselves.

Yes, individuals would understand their own situation better then a government would, that’s why I’ve stated in the absence of governments setting a minimum wage, each individual would work out their own minimum wage based on their cost of survival.

You claim that the minimum wage is a stupid, retarded policy, but are we really better off without the government setting the minimum wage? The minimum wage if anything would be lower if the government did not set it, since individuals don’t have the same bargaining power as a government would. More individuals would be working for wages closer to the cost of survival, economic slavery. You have stated that individuals should have the freedom to work for who they please. Economic slavery isn’t freedom.

 

[matthew.mclean]

Why is it that wage can be vary because of age?

The old equal pay for equal work argument seems valid even if it is the equal work of a fourteen year compared with that of his or her senior.

 

[williamc]

i agree that reducing the minimum wage wouldn’t cause inflationary pressures (if anything cause deflation), but unemployment would rise for the reasons i mention above.

it is economically impossible for unemployment to rise if the minimum wage was abolished

edit: you go to uws, that explains your idiocy

 

[williamc]

Why is it that wage can be vary because of age?

The old equal pay for equal work argument seems valid even if it is the equal work of a fourteen year compared with that of his or her senior.

It is true through econometric inspection, that older individuals earn a higher income than younger people. The reasons for this isn't because they are older. Generally older people have greater levels of experience and academic qualifications which allows them to demand a higher wage rate.

Equal pay for equal work argument? Go back to the HSC forum mate.

 

[williamc]

I didn't advocate an expansionary fiscal or monetary policy?

I may be being simplistic here, humor me, but when number of available jobs is significantly greater than the number of jobseekers, employment vacancies are high and unemployment is extremely low, what benefit could there possibly be in abolishing the minimum wage?

Basic economics Graney:

Supply > demand = Firms offer a higher wage. Not to mention all the lower skilled workers may now seek employment in sectors in which would not be deemed efficient given a minimum wage.

 

[spence]

it is economically impossible for unemployment to rise if the minimum wage was abolished

edit: you go to uws, that explains your idiocy

no it isn't

 

[John0]

it is economically impossible for unemployment to rise if the minimum wage was abolished

edit: you go to uws, that explains your idiocy

Did you even read my entire post? When you've passed 2nd yr economics let me know... if you don’t understand how unemployment can rise when the minimum wage is reduced you should google the wage setting relation, which implies a NEGATIVE relationship between real wages and the unemployment rate( ie unemployment rises when real wages fall). Before making arguments and remarks about my university, you should at least understand what you’re talking about.

 

[whatashotbyseve]

Why don't we set the minimum wage at $1000/h? Then we'll all be rich and affluent!

Good tautology.

I have no real objection to the minimum wage. After all, someone has to perform the menial jobs that minimum wage covers otherwise the country wouldn't run.

 

[BigBoyJames_]

min wage for large companies only, not for small business'

 

[williamc]

Did you even read my entire post? When you've passed 2nd yr economics let me know... if you don’t understand how unemployment can rise when the minimum wage is reduced you should google the wage setting relation, which implies a NEGATIVE relationship between real wages and the unemployment rate( ie unemployment rises when real wages fall). Before making arguments and remarks about my university, you should at least understand what you’re talking about.

hahahahah

1)I said minimum wage is absolished.
2) we are not talking about real wages. Think back to hsc economics, the price floor diagram.
3) I've scored a D or HD in every econ unit i've done bar 1 and i go to a decent uni bad luck there idiot

 

[zstar]

Alot of Jobs people used to do were destroyed by minimum wage.

 

[spyro14]

Alot of Jobs people used to do were destroyed by minimum wage.

In all fairness, they must of been crap jobs.

 

[matthew.mclean]

It is true through econometric inspection, that older individuals earn a higher income than younger people. The reasons for this isn't because they are older. Generally older people have greater levels of experience and academic qualifications which allows them to demand a higher wage rate.

Equal pay for equal work argument? Go back to the HSC forum mate.

You've misunderstood, I'm not talking about experience and credentials, I'm referring to legal wages differences.

For example, under the employees in retail award a 14 year old may receive $8.60 an hour, but when they turn 15 that may rise to $9.90. This change is regardless of the actual job they perform or the quality of work they produce.

 

[zstar]

In all fairness, they must of been crap jobs.

Well of course but you have to remember that these jobs would employ youths and also give them pocket change and many would later on move up and even make it to management.

Minimum wage has completely wiped out those oppurtunities.