Do we Really Need a Minimum Wage?

[SilentBull]

I created this video recently. Share it with open-minded people. There is more to come.


http://www.youtube.com/watch?v=AbuJYhX3prc

[Zippyjuan]

According to the Bureau of Labor Statistics, only about five percent of people get paid the Federal minimum wage or less.
http://www.bls.gov/cps/minwage2009.htm

The percentage of workers earning the minimum wage did not vary much across the major race and ethnicity groups. About 5 percent of white, black, and Hispanic hourly-paid workers earned the Federal minimum wage or less. Among Asian hourly-paid workers, about 4 percent earned the minimum wage or less.

[RCA]

Do we Really Need a Minimum Wage State? Fixed to make worth discussing.

[iamse7en]

Logikal: that was hilarious. I was skeptical when it first started to load, but that was fabulous. I laughed several times, and it was extremely clear in teaching the simple economic principle. Thank you!

[Keith and stuff]

One of the 53+ liberty bills that became a law in NH this year addresses this issue.
http://www.ronpaulforums.com/showthread.php?283949-NH-House-passes-bill-to-end-NH-minimum-wage

[MJU1983]

Nice! I enjoyed that.

[SilentBull]

Logikal: that was hilarious. I was skeptical when it first started to load, but that was fabulous. I laughed several times, and it was extremely clear in teaching the simple economic principle. Thank you!

Thanks :)

[Seraphim]

I'm not worried about how many people earn minimum wage - I'm concerned about how many are pushed out of the marketplace because of it.


According to the Bureau of Labor Statistics, only about five percent of people get paid the Federal minimum wage or less.
http://www.bls.gov/cps/minwage2009.htm

[fisharmor]

I can't watch the video, but does it show which section of the Constitution authorizes federal minimum wage laws?
Utilitarian arguments are nice, but when the people who make the rules don't follow the rules, it encourages us plebs not to follow any of the rules.

[cindy25]

Hong Kong and Singapore, which have the highest wages in Asia, have no minimum wage; the income level far exceeds Indonesia, Thailand and the Philippines.

[wannaberocker]

I actually work part time and i earn min wage. But yeah we dont really need it.

[Acala]

The issue of minimum wage is really a good litmus test for economic ignorance. It is virtually impossible to defend the minimum wage with reason.

[nicoleeann]

besides being anti-freedom the minimum wage has these drawbacks:
limits employment opportunities for the lowest educated and skilled people
limits employment for senior citizens who want a hobby type job
limits chances for apprenticeship and learning type jobs, which i believe are very important
higher minimum wages means longer time between and less raises for those who deserve them
increased unemployment due to less money in wages pool

[erowe1]

According to the Bureau of Labor Statistics, only about five percent of people get paid the Federal minimum wage or less.
http://www.bls.gov/cps/minwage2009.htm

That's not true. The number of people making less than the minimum wage because they're unemployed is far greater than that.

[oyarde]

No

[AGRP]

Good video. Probably could have addressed people who are forced to work "under the table" as well.

[TomtheTinker]

Do we Really Need a Minimum Wage?

No

[DamianTV]

Unfortunately, without a Free Market system, I think we need it as a result of lack of competition. If things were the way they were supposed to be, then we wouldnt need any sort of government intervention, but they have everything so mucked up that if companies could get away with paying absolutely nothing (which is pretty damn near what we have right now, internship jobs that never turn into full jobs) they would just enslave people for absolutely free. Minimum wage should be one of those laws that goes away after we've fixed everything else, and it would go away because it would be irrelevant, like laws on how to tie your horses, etc.

[TCE]

The issue of minimum wage is really a good litmus test for economic ignorance. It is virtually impossible to defend the minimum wage with reason.

I remember Stossel having a show on this a couple months ago and he said virtually all economists he spoke to, Keynesian or not, understood that raising the minimum wage increases overall unemployment. So the economists do understand this correlation, Main Street doesn't. As an experiment, the federal government should lower the minimum wage down to $6.75, $0.50 less than the current one, and see how unemployment, especially among teens, drops. Wishful thinking, of course.

The argument is always, "companies would pay their workers $2.00 or less an hour and everyone would have to take it or leave it, look at China."

[DamianTV]

China isnt exactly a Free Market Economy either. They are being propped up by the US borrowing as much as it does from China.

[wannaberocker]

Generally i hear people say "well if you eliminate the min wage then how will people live on 2$ an hr? how will they buy food? etc". But what alot of people forget is that in a free market the employer cant simply raise or lower wages at will. If the wage is to low according to the market, the employer will have trouble filling the position (the quality of candidates and work ethic should also be considered). The truth is if an employer wants a quality worker to fill the position, they will have to set a wage that is considered acceptable by the market standards.

Also the issue of how can people buy food with 2$ n hr. Well in a free market if the spending power of the customers is 2 $. The prices of food would most def be lowered by producers because they will see that trying to sell food for 10 $ when the purchasing power of the consumer is only 2$ dosnt make sense. The food will not be baught and will eventually go bad and the producers will lose money. Bottom line prices in a free market almost always level off. I wish i had more time to explain this better, but oh well i think most ppl on here know this stuff already.

[oyarde]

Yes , economists understand that the minimum wage decreases the amount of jobs available for young people , students .

[Paul Or Nothing II]

Unfortunately, without a Free Market system, I think we need it as a result of lack of competition. If things were the way they were supposed to be, then we wouldnt need any sort of government intervention, but they have everything so mucked up that if companies could get away with paying absolutely nothing (which is pretty damn near what we have right now, internship jobs that never turn into full jobs) they would just enslave people for absolutely free. Minimum wage should be one of those laws that goes away after we've fixed everything else, and it would go away because it would be irrelevant, like laws on how to tie your horses, etc.

It does NOT matter whether there's a free market or not, MW still hurts the people. What about people who're unemployed RIGHT NOW, let them remain unemployed & unproductive & let'em keep sucking on taxpayers' tits? There's never a rational argument for MW.


China isnt exactly a Free Market Economy either. They are being propped up by the US borrowing as much as it does from China.

Again, it doesn't matter, they've seen enormous increase in their living standards as a country, MILLIONS of people have been raised out of dreadful poverty & the middle-class is growing, if they have MW at $5 or something, people will start dying on the street again, they will NOT be better off.

[Paul Or Nothing II]

Generally i hear people say "well if you eliminate the min wage then how will people live on 2$ an hr? how will they buy food? etc". But what alot of people forget is that in a free market the employer cant simply raise or lower wages at will. If the wage is to low according to the market, the employer will have trouble filling the position (the quality of candidates and work ethic should also be considered). The truth is if an employer wants a quality worker to fill the position, they will have to set a wage that is considered acceptable by the market standards.

Also the issue of how can people buy food with 2$ n hr. Well in a free market if the spending power of the customers is 2 $. The prices of food would most def be lowered by producers because they will see that trying to sell food for 10 $ when the purchasing power of the consumer is only 2$ dosnt make sense. The food will not be baught and will eventually go bad and the producers will lose money. Bottom line prices in a free market almost always level off. I wish i had more time to explain this better, but oh well i think most ppl on here know this stuff already.

+1

If only people'd take the time to learn just the basics of sound economics.......

[ChaosControl]

You can get rid of a minimum wage, but you also need to get rid of all the corporate protections like limited liability. I'd rather get rid of the corporate protections before the employee protections. Get rid of the state as a whole, but start by getting rid of the things that protect the rich before getting rid of the things that protect the poor.

[Seraphim]

I understand your argument but min. wage is designed to benefit the State. More unemployed = more welfare recipients = more votes = more money.

Min. Wage does not protect the poor, it drives more of them into poverty.

I agree with the corporate protection needing to be lifted though. Not arguing that.


You can get rid of a minimum wage, but you also need to get rid of all the corporate protections like limited liability. I'd rather get rid of the corporate protections before the employee protections. Get rid of the state as a whole, but start by getting rid of the things that protect the rich before getting rid of the things that protect the poor.

[LibertyEagle]

Nice video, logikal. Thanks. Posted it on facebook.

[Keith and stuff]

Hong Kong and Singapore, which have the highest wages in Asia, have no minimum wage; the income level far exceeds Indonesia, Thailand and the Philippines.

Thank you. According to this source ( http://sayitaintsoalready.com/2011/06/23/nh-republicans-vote-to-cap-minimum-wage/ ) NH has the lowest min. wage in New England/tired for the lowest in the US as it uses the federal rate. However, NH also has the highest median household income, according to this source ( http://www.seacoastonline.com/articles/20100926-NEWS-9260325 .) Crazy how freedom works...

[josh b]

Do we really need price floors? If I'm remembering Rothbard's work correctly then that's all the minimum wage is, a price floor. It comes with all the fantastic side effects like an 'artificial unsold surplus' of labor and permanent mass unemployment.

Yippee

[Wesker1982]

The minimum wage creates unemployment. A min wage of $7.25 is going to have no effect on anyone already earning above that (say $15/hr), it will only criminalize the employment of anyone who is worth less than the min wage to their employer. Unskilled workers who might be worth $5 or w/e have no chance to gain employment, skills, and experience.

It is a good way to get votes. Make sure tons of people are unemployed due to minimum wage + promise more "free" stuff to help the poor people you just made poor = election win.

Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, ‘See, if it weren’t for the government, you wouldn’t be able to walk.’- Harry Browne

Here is a good article on minimum wage: http://www.lewrockwell.com/hornberger/hornberger180.html
Also see Hazlitt's chapter on min wage in Economics in One Lesson.

[ProIndividual]

from:

Statist Economic Fallacies: Breaking Through the Nonsense (Part II)

http://www.campaignforliberty.com/blog.php?view=41442


13. Minimum wage laws and unions increase standards of living


(exerpt)

So, to conclude, unions and minimum wage laws are not corollary or causal to wage levels. Unions are corollary and causal to unemployment rates, which are not "seen" effects, but instead are "unseen" effects, of pushing wages above market value. Doing this costs other's jobs, but does not increase standard of living overall.

Minimum wage, although I do not give data, works on the same principle as 0% and 100% taxes. If minimum wage laws raise the standard of living, why not just legislate $100 per hour wages? How about $1,000 per hour? Obviously this would tank the economy quickly. So, one can easily and logically see that raising the minimum wage doesn't raise the societies standard of living, it only adds to unemployment. Many economic fallacies are debunked in such a fashion.

Also:

14. If not for unions, wage rates would be driven down


(exerpt)

What sets the minimum wage is the cost of living to the individual laborer, their subjective value on money and labor, and the utility of their time, labor, and money to them individually. Sounds complicated, but it really itsn't. In effect, the minimum wage for you is set by the minimum wage you are willing to work for. You will not work for less than enough to meet your needs, given alternatives. Seeing as how 12% of the economy is unionized, and it used to be much closer to 50%, one would assume that wages would be nearing 1 penny an hour by now...but quite the opposite, real wages and income have risen accounting for inflation. But why?

Because unions do not control wage rates, and various things they support constrict wage growth, like anti-technology approaches to "job security". This leads to the gap between real wages in unionized sectors, given their collective bargaining above the market value and simultaneous attack on task maximization, and non-unionized sectors to be smaller. With the gap between compensation packages getting smaller and smaller, so to are the membership rolls of unions. Largely, union breaking is not causing the demise of unions, their inefficiency is.

I'd also like to point out wages generally rise in recessions, or stay flat, they do not drop. This is why unemployment rises so sharply, as opposed to gradually, in a recession. This is for a variety of reasons, and maybe I'll cover it later. But what's important is that unions use downturns (and the atmosphere of fear and apprehension surrounding them) as a recruitment frenzy, when in fact, it's the time in which workers are least vulnerable to wage decreases, and more susceptable to higher rates of unemployment I believe unions create with their artifically high wages.

At any rate, with or without unions, wages only drop so far, and they always rise over the longterm. Wages are a function of task maximization, and therefore productivity, not unions. If we ban all new technology in the process of production that might cause short term unemployment, and unionized the entire country (by force or in some voluntary socialist wet dream), we would still have falling wages in the longterm. Standard of living and wages are that unrelated to unions.

[SilentBull]

I can't watch the video, but does it show which section of the Constitution authorizes federal minimum wage laws?
Utilitarian arguments are nice, but when the people who make the rules don't follow the rules, it encourages us plebs not to follow any of the rules.

The idea was to explain in a simple way, to someone who maybe hadn't even thought about the issue much before, the unintended consequences of this law, so I left that part out.

[wannaberocker]

Funny thing, i was just watching Obama doing a town hall at University of Maryland and he said " I will not rest untill every America looking for a job can find one and American workers can have a living wage. We know that in the past decade the income for the top earners in this country has gone up substantially. Yet the wages for the middle class have stayed the same" (im parapharasing). Of course all the university of maryland sheep cheered like crazy when he said this.
I really am amazed at how ignorant of basic economics this guy really is. So i guess Min Wage is not considered a living wage in Obama's eyes. I bet Obama sits and wonders sometimes why we cant just make 15$ the min wage that way everyone will have a "Living wage".