Minimum Wage Help

[shadowhooch]

Okay folks,
I need help with some arguments of why a minimum wage isn't necessary. I know some lifelong Republicans who are switching over to Democrat this year because they don't understand why the Republicans are against the minimum wage. They have some compelling arguments that I could not address:

--They understand minimum wage creates unemployment. But they point out that it is pointless to work your butt off if the minimum wage can't pay the bills.

--They also point out the rediculous salaries executives and CEOs make compared to hourly workers. These "overpaid" executives and CEOs are the ones saying the company "can't afford" to pay more than the minimum wage to their workers. So if they won't increase pay to meet the everyday demands of life, they must be forced to.

These are hard to refute because I see the same things too. How do you help discourage overpaying execs and underpaying avg workers?
Trying to make a living on minimum wage is nearly impossible. A lower minimum wage discourages people from wanting to find work. What is wrong with raising it?

And they've heard the small businesses can't afford it argument and they've heard the highschooler and apprenticeship argument. But people don't have much sympathy for business owners as much as they do for the single mother working 2 minimum wage jobs just to get by.

So how 'bout it? Why are minimum wages so bad? There are many compelling arguments why they are a good thing for people trying to legitimately "get by". Shouldn't people who are trying to work for a living instead of living off welfare be rewarded?

[foofighter20x]

1) It replaces work with unemployment as people that used to work for wage less than the new minimum get fired. (i.e. if I emply 10 people at $5/week and the min wage is set at $10/week, five people are going to be saying goodbye to their job)

2) When coupled with a social safety net like unemployment, it causes people to work less. Again, assume a min wage of $10/wk. Now, imagine a employment benefit of $8 /week. You get the $8 for doing nothing. So, if you want a job, you have to give up all that free time for only a net gain of $2/wk. If I was enjoying the time I got to spent not working, that extra $2/wk wouldn't be worth it.

3) Address that min wage not being able to meet the bills is a result of inflationary spending by Gov't.

4) CEO wages are set by a company's board of directors. Problem is that most CEOs sit on the boards of other companies. It's a real ethical conflict-of-interest that turns into a giant game of scratch my back and I'll scratch yours, and it's done at the expense of complacent shareholders. Shareholders need to be more vigilant and companies need more stringent shareholder disclosure laws (i.e. the company must disclose all financial information to a shareholder).

[0zzy]

People should excel beyond minimum-wage jobs. All minim wage does is get higher and higher and inflates the money.

[njandrewg]

The only people working minimum wage are those who are not trying. At the age of 16 I was able to get a job at CVS that paid $2 more than minimum wage...this was without any experience whatsoever.

[bbachtung]

Other than creating unemployment, minimum wage laws discourage employees from remaining with a particular employer in the long-term. While many employers who pay salaries increase those salaries based on time on the job, hourly wage-earners are far less likely to get that benefit because the market is not being allowed to price the value of an employee accurately due to government interference. An employee without an incentive to stay and get increased pay (remember, the minimum wage is exactly that -- the MINIMUM) has little incentive to improve his / her job skills at that particular job.

Further, it sets wages artificially low by allowing all employers to "fix" the price for an hourly wage without actually having to collude (which would violate anti-trust laws), and fails to take into account regional and statewide differences in cost-of-living.

Finally, as is usually the best answer for these questions re: Ron Paul: it should be -- if anything -- a state issue (where in the Constitution is the setting of wages by the federal government authorized?). Ron Paul is not running for governor of some state, he is running for President of the United States -- the federal government is supposedly one of enumerated powers.

[Matt Collins]

Fundamentally, federal minimum wage laws are unconstitutional. Nowhere in Article 1 Section 8 is Congress authorized to create legislation about wage.

Secondly, a wage is an agreement between an employer and a worker. Whatever agreement the worker and the employer happen to come to is none of the business of the government. Don't we have the freedom to contract? Therefore minimum wage laws prohibit contracts for labor, thus trampling our right to contract. We are not free if we are told by the government what we can and cannot put in our private contracts.

[Kregener]

What EVER made you think the Republicrats are against the minimum wage?

Watch what they do, not what they say.

[Bradley in DC]

Minimum wages laws are offensive because they violate basic contractualism--a legit function of government.

If two competent parties (no force, fraud, drunkenness, etc.), agree to terms, it is the default responsibility of government not only to respect that agreement but to enforce it (unless they contract that responsibility explicitly to another third party).

"All voluntary associations should be permissible -- economic and social."
From Ron Paul's Freedom Principles
http://www.house.gov/paul/bio.shtml

[angelatc]

The first argument is that the Constitution doesn't provide that the Feds should be responsible for wages.

The "overpaying of executives" is really not anybodies business. Everybody in the game cuts their won best deal. Private compensation by private business shouldn't be regulated by the government. Note those people never beef about over payment of movie stars.

Minimum wage laws are unnecessary on a federal level for a couple of reasons. First, the market the market naturally drives wages. (And the term wages should really include benefits like insurance. The feds use it to mean "hourly pay.")

If a city has 3 factories, and each factory requires 200 workers, and the city only has 500 workers....look what happens to the wages. They go up, because each factory has to pay more to attract workers from that pool. Companies that aren't efficient enough to make a profit while costs rise will go under.

Another reason is that each area has widely varying ecomonic conditions. Nobody in Chicagoland works for the Federal minimum wage, but that wage might discourage the failing factory (above) from reloacting to a region where workers are cheaper instead of failing entirely.

Note that some workers will not take the top pay offer, because other factors come into consideration, like location and work hours.

ON local levels, I think there are some instances where a minimum wage might be necessary. Companies have been known to collude to drive wages down, especially in small towns. And in some areas, there is only a single employer. Coal mining towns are notorious for this. But even in those instances I think that a non-corrupt union is a better solution than government.

The single mom working 2 minimum wage jobs wouldn't be making minimum wage if we deported all the illegal immigrants. That's their most devastating effect - they hold down wage levels for the low income workers.

[angelatc]

.

Further, it sets wages artificially low by allowing all employers to "fix" the price for an hourly wage without actually having to collude (which would violate anti-trust laws), and fails to take into account regional and statewide differences in cost-of-living.
.

I"ve never seen that before and it's a very good point. Wow.

[shadowhooch]

Well, I hear all your arguments. But they aren't compelling enough to convince someone who is living it.

This family is a bank teller and a clerical at a larger company. They make less than $15 an hour. They both started at the minimum wage and worked their way up to where they are now. But it is a rediculous task to try to "get by". They always see a bump in pay with minimum wage legislation increases. They could give a crap about "consitutional this and that" or telling them it is the govt's inflationary fault. They are trying to LIVE right here, right now. They aren't lazy or unmotivated. They just made some poor decisions early in life, didn't stay in school, and don't have "skills". They work hard.

If there was no minimum wage, they company would gladly replace them with some highschool kid who'd LOVE to make $5.00 an hour. Highschool kids don't have bills and a family to support. Wouldn't it be the unskilled family worker that would be hurt most by a lack of minimum wage?

I need some more arguments.....keep 'em coming.

[Nash]

1) Encourages outsourcing of jobs to foreign countries that don't have a minimum wage.

2) Companies that cannot afford the initial outsource investment (small businesses) are crushed by larger competitors because they must comply with the minimum wage while the large companies do not.

3) Drives up the costs of goods, the more these companies must pay their employees the more the items they sell will cost.

4) Discourages employment in general

5) The minimum wage generally punishes small retail establishments the most since they can't afford to actually pay it, where companies like Mcdonalds can afford to pay it. This creates a vicious cycle where small competitors leave the marketplace and there is less competition thus driving wages down further as the costs of goods continue to increase for a variety of reasons related to failed government regulation of the marketplace.

6) Finally, the minimum wage doesn't even benefit the people it is intended to help "the working poor" most people who are paid the minimum wage use it as supplemental household income. They are generally teens or spouses working second jobs and not household breadwinners (they usually don't make a lot more, but they rarely earn the minimum).

[foofighter20x]

Read Chapter XVIII (http://www.mises.org/books/onelesson.pdf)

[angelatc]

If there was no minimum wage, they company would gladly replace them with some highschool kid who'd LOVE to make $5.00 an hour. Highschool kids don't have bills and a family to support. Wouldn't it be the unskilled family worker that would be hurt most by a lack of minimum wage?

I need some more arguments.....keep 'em coming.

THere's nothing from stopping them from going back to school.

There's also nothing stopping their employer from replacing them with a minimum wage employee.

They're not making minimum wage because they are doing jobs that require workers with skill sets that exceed minimum wage level. If they want to increase their value, then they need to take steps, like getting an education, that makes them more valuable in the labor market.

[jb4ronpaul]

low wage jobs are a stepping stone to better things. When you outlaw low wage jobs you essentially cut off the bottom rungs of the employment ladder, dooming the poorest section of the population to a life of dependency on others. The minimum wage is morally disgusting to me and just a feel good policy for richer people.

Yes, passing a minimum wage law will help one person, but it will also hurt another. No one should play God like that, and say this person could have a higher wage while this other person should be out of a job. Freedom is the only moral choice. You and me helping each other out is the only moral choice. The government can only take from one and give to another. Freedom is the only sure way to bring prosperity go the greatest number of people. Easily proven by looking at history and looking around the world today.

The minimum wage is also corporate welfare. Walmart supports the minimum wage because it knows it can absorb the costs, while smaller competitors cannot. This will help large corporations put their smaller competition out of business.

[1000-points-of-fright]

They aren't lazy or unmotivated. They just made some poor decisions early in life, didn't stay in school, and don't have "skills".

How is that my fault? Or yours? Or anybody else's other than their own? Not to sound like a dick but that's really what it all boils down to. THEY fucked up and it should be up to them to fix it themselves or find somebody else who WANTS to help them of their OWN FREE WILL, not to force the responsibility onto someone who may also be struggling to make ends meet.

[Gilby]

--They understand minimum wage creates unemployment. But they point out that it is pointless to work your butt off if the minimum wage can't pay the bills.

Shouldn't the person looking for work determine for them self if the wage is adequate?


--They also point out the rediculous salaries executives and CEOs make compared to hourly workers. These "overpaid" executives and CEOs are the ones saying the company "can't afford" to pay more than the minimum wage to their workers. So if they won't increase pay to meet the everyday demands of life, they must be forced to.

Executive pay affects the shareholders much more than it affects the pay of hourly workers. The shareholders may be happy with the high pay if the executives are good, as not paying them this high pay would lure them to other companies who can (and many executives have been lured to private companies because they can pay better than public ones).

Hourly wages are based on what the market determines from the competition for those workers.

The real problem is that it is costly to have an employee because of the government's regulations and the government taking away half of the wealth created by a company (through all the taxes, corporate income taxes, individual taxes, sales taxes). This causes the labor surplus (unemployment) and therefore the low pay for unskilled labor. Get the government out of it and the businesses then have more money to offer the workers.

[torchbearer]

Okay folks,
I need help with some arguments of why a minimum wage isn't necessary. I know some lifelong Republicans who are switching over to Democrat this year because they don't understand why the Republicans are against the minimum wage. They have some compelling arguments that I could not address:

--They understand minimum wage creates unemployment. But they point out that it is pointless to work your butt off if the minimum wage can't pay the bills.

--They also point out the rediculous salaries executives and CEOs make compared to hourly workers. These "overpaid" executives and CEOs are the ones saying the company "can't afford" to pay more than the minimum wage to their workers. So if they won't increase pay to meet the everyday demands of life, they must be forced to.

These are hard to refute because I see the same things too. How do you help discourage overpaying execs and underpaying avg workers?
Trying to make a living on minimum wage is nearly impossible. A lower minimum wage discourages people from wanting to find work. What is wrong with raising it?

And they've heard the small businesses can't afford it argument and they've heard the highschooler and apprenticeship argument. But people don't have much sympathy for business owners as much as they do for the single mother working 2 minimum wage jobs just to get by.

So how 'bout it? Why are minimum wages so bad? There are many compelling arguments why they are a good thing for people trying to legitimately "get by". Shouldn't people who are trying to work for a living instead of living off welfare be rewarded?

I always start with.. .why not make everyone a millionaire and pay them a $1000 dollars an hour.... for some reason, they understand why that is a bad thing....

[MBA2008]

Shadow said, " Well, I hear all your arguments. But they aren't compelling enough to convince someone who is living it."

Here's something "compelling."

Imagine you are one of ten workers working for a small business earning a minimuum wage of $5/hr. Then the gov't raises the minimum wage by 10% to $5.50/hr. "Great!" you think. I'm getting a ten percent raise!

But wait, the business owner is only obligated to pay his employees $5.50, but he's not obligated to have ten employees, so he fires you (10% of his work force).

The minimum wage is great for those who keep their jobs; it really sucks for those who don't. Try "getting by" on $0.00/hr.

Of course, the business owner is also not obligated to give his employees 40 hours of work, so he may just have everyone work 4 less hours a week (10% reduction), and expect the same, or nearly the same level of output from his employees. The end effect is that, the employees make the same money, but do more work. I guess that's good for the business owner, but I can hardly se how that's good for the worker.

The minimum wage is a sham. You can color it with all of your sugary sweet notions of equality and fairness, but I can assure you that those who have their hours cut back or get laid off don't think it's fair at all.

[austin356]

I live below the poverty level but believe I have no right to a government forced minimum wage.

I have a right to contract with a union to help conduct bargaining......with leverage.

I have a right to quit my job and find a new one.

I don't have a right to a set wage. Such would always be arbitrary and infringe the legitimate rights of others.



If mimimum wage laws did not cause unemployment (hurt the poor, unskilled) then why not raise it to $20 ph? $30?
Because it is accepted as common sense that it does create unemployment (some know this but don't want to admit it), the question is to what extent, and do the wage raises "outweigh" the increase in unemployment.

OF the democrats that understand economics, and support statism as the same time, they know they can retain power if they get more people on government doles (unemployment insurance).

[austin356]

Lets all be clear here, there are MUCH MUCH MUCH worse problems with our economy that minimum wage laws. Eliminating the minimum wage laws is something a president Paul would never get around to doing. It cost too much politically.

I prefer tackling the big issues such as the regulator and monetary system.

[Zeeder]

98% of americans make more than the minimum wage.

http://www.heritage.org/Research/Economy/wm1186.cfm

Heritage has a good article, might help.


Also, I think you can appeal to logic by asking why don't we increase the minimum wage to 20$ an hour? Increasing the minimum wage is like printing money. It hurts the poor.

If that isn't enough I always ask this in a debate with a economic retard. Why does Walmart pay it's employees 8$ an hour, when by LAW, it's only required to pay them 5.15?

They will have no real answer. They will still believe that without minimum wage laws, Businesses would be paying people 1$ an hour.