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View Full Version : Minimum wage argument with friend




z9000
03-17-2012, 11:05 AM
deleted

TIMB0B
03-17-2012, 11:13 AM
Fiat currency, corporate welfare, direct taxes, and lobbyists come to mind.

erowe1
03-17-2012, 11:14 AM
There are people who would like to be able to offer their labor at below the minimum wage. What right does anyone have to tell them they can't?

MelissaWV
03-17-2012, 11:17 AM
If spending money is what makes the economy go 'round, then let's please give everyone $1000 more. No? $10,000 more? Guess what happens at that point?

Now let's leave me out of a job for a moment. While times are insanely hard, I'd be willing to work for, say, $5/hour. There are places where you can scrape by on that. Let's also assume that I don't realize Government assistance would pay me more than that. Unfortunately, it's not possible, because the Government says I can't work for $5/hour. I'm left working for nothing (volunteering) or simply not working and not getting paid. How does that help anyone?

If that doesn't work, politely ask which minimum wage your friend is referring to. There are different wages all across the country, largely due to the fact that a wage in NYC considered barely adequate to live... would have you living like a king in WV.

TheGrinch
03-17-2012, 11:34 AM
There are people who would like to be able to offer their labor at below the minimum wage. What right does anyone have to tell them they can't?
This, and the biggest problem with minimum wage is that it hurts the people it is said to help (i.e., disadvantaged and underskilled workers)... Take a look on youtube at Milton Friedman on minimum wage (http://www.youtube.com/watch?v=ca8Z__o52sk) or search it with Dr. Paul for more insight, but businesses are not charities, nor can most afford to do so.... So they have to maximize what they get out of what they're paying or they'll end up out of business. This either means they get the most skilled/reliable who's willing to do it, and/or less employees to do so to maximize profit when forced to pay a higher wage. Thus, if you raise the minimum wage to $10 an hour, then maybe it makes it worth this college grad's time in a tough economy, whereas at $7 and hour he'd consider himself too skilled for that level of pay. Not worth his time.

Moreover, it's not just minimum wages that raise, it tends to trickle up with wage inflation (some companies simply pay 2, 3x minimum wage, rather than set amounts), and in turn cost inflation, to where it ends up being a wash at best for those employed, while preventing underskilled workers to gain marketable skills through employment, by simultaneously making it more desirable for the skilled workers to want their job at that pay.

Most economists, left or right leaning will tell you that raising the minimum wage is not a good way to help disadvantaged and underskilled workers... What would help them far more is to be able to do what I did when I got out of college, take an underpaid sort of internship to gain the skills and advance beyond that...

I mean, the minimum wage advocates want to act like companies will just pay entry level workers next to nothing, but there are 2 counterarguments: 1) Why then are minimum wage jobs such a small % of jobs out there? According to MW advocates, businesses should already just be paying far more workers at minimum wage, just because they can, right? The reason they don't is because of supply and demand of skills, as well as the wage that people are willing to do certain jobs for, all works in a free market to dictate wages.

2) If you did decide that you were only going to pay $3 an hour, then well, you're going to get nothing but homeless guys, and the chances are very high the underskilled worker isn't going to overachieve at the job at that wage... But if you feel it's worth it, he feels that it's better than no job at all, then who's to tell you that you can't agree at this wage? One might say that "one's desperation is another one's gain" but that's only half-true. It's to both of their gains if it's better than not being employed at all.... If it's not worth it, people won't do it (hence why mexican laborers are doing it for cheaper, because they realize that this is they only way that they as underskilled workers can find employment, which is much better than the poverty they had with no jobs).

JamesButabi
03-17-2012, 11:34 AM
You can't start a discussion at minimum wages. You need to teach someone economics 101 and sound money before they can even grasp why you say the things you do.

evilfunnystuff
03-17-2012, 11:35 AM
Here's a great article by Schiff, and a great vid of some guy calling out Pelosi hypocrisy regrading the minimum wage.


http://www.youtube.com/watch?v=8pFC3LKMIQo

http://www.lewrockwell.com/schiff/schiff34.1.html

Minimum Wage, Maximum Stupidity

by Peter Schiff

Recently by Peter Schiff: Double Whammy

In a free market, demand is always a function of price: the higher the price, the lower the demand. What may surprise most politicians is that these rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the one set to take effect later this month, are always seen as an act of governmental benevolence. Nothing could be further from the truth.

When confronted with a clogged drain, most of us will call several plumbers and hire the one who quotes us the lowest price. If all the quotes are too high, most of us will grab some Drano and a wrench, and have at it. Labor markets work the same way. Before bringing on another worker, an employer must be convinced that the added productivity will exceed the added cost (this includes not just wages, but all payroll taxes and other benefits.) So if an unskilled worker is capable of delivering only $6 per hour of increased productivity, such an individual is legally unemployable with a minimum wage of $7.25 per hour.

Low-skilled workers must compete for employers' dollars with both skilled workers and capital. For example, if a skilled worker can do a job for $14 per hour that two unskilled workers can do for $6.50 per hour each, then it makes economic sense for the employer to go with the unskilled labor. Increase the minimum wage to $7.25 per hour and the unskilled workers are priced out of their jobs. This dynamic is precisely why labor unions are such big supporters of minimum wage laws. Even though none of their members earns the minimum wage, the law helps protect their members from having to compete with lower-skilled workers.

Employers also have the choice of whether to employ people or machines. For example, an employer can hire a receptionist or invest in an automated answering system. The next time you are screaming obscenities into the phone as you try to have a conversation with a computer, you know what to blame for your frustration.

There are numerous other examples of employers substituting capital for labor simply because the minimum wage has made low-skilled workers uncompetitive. For example, handcarts have replaced skycaps at airports. The main reason fast-food restaurants use paper plates and plastic utensils is to avoid having to hire dishwashers.

As a result, many low-skilled jobs that used to be the first rung on the employment ladder have been priced out of the market. Can you remember the last time an usher showed you to your seat in a dark movie theater? When was the last time someone other than the cashier not only bagged your groceries, but also loaded them into your car? By the way, it won't be long before the cashiers themselves are priced out of the market, replaced by automated scanners, leaving you to bag your purchases with no help whatsoever.

The disappearance of these jobs has broader economic and societal consequences. First jobs are a means to improve skills so that low-skilled workers can offer greater productivity to current or future employers. As their skills grow, so does their ability to earn higher wages. However, remove the bottom rung from the employment ladder and many never have a chance to climb it.

So the next time you are pumping your own gas in the rain, do not just think about the teenager who could have been pumping it for you, think about the auto mechanic he could have become — had the minimum wage not denied him a job. Many auto mechanics used to learn their trade while working as pump jockeys. Between fill-ups, checking tire pressure, and washing windows, they would spend a lot of time helping — and learning from — the mechanics.

Because the minimum wage prevents so many young people (including a disproportionate number of minorities) from getting entry-level jobs, they never develop the skills necessary to command higher paying jobs. As a result, many turn to crime, while others subsist on government aid. Supporters of the minimum wage argue that it is impossible to support a family on the minimum wage. While that is true, it is completely irrelevant, as minimum wage jobs are not designed to support families. In fact, many people earning the minimum wage are themselves supported by their parents.

The way it is supposed to work is that people do not choose to start families until they can earn enough to support them. Lower-wage jobs enable workers to eventually acquire the skills necessary to earn wages high enough to support a family. Does anyone really think a kid with a paper route should earn a wage high enough to support a family?

The only way to increase wages is to increase worker productivity. If wages could be raised simply by government mandate, we could set the minimum wage at $100 per hour and solve all problems. It should be clear that, at that level, most of the population would lose their jobs, and the remaining labor would be so expensive that prices for goods and services would skyrocket. That's the exact burden the minimum wage places on our poor and low-skilled workers, and ultimately every American consumer.

Since our leaders cannot even grasp this simple economic concept, how can we expect them to deal with the more complicated problems that currently confront us?

July 13, 2009

Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets and Crash Proof: How to Profit from the Coming Economic Collapse.

Copyright © 2009 Euro Pacific Capital

soulcyon
03-17-2012, 11:44 AM
I always think of saving money = letting the bank spend my money wisely.

mczerone
03-17-2012, 11:45 AM
If you're friend can't form a coherent argument with logical sentences, why should he trust his feelings about economics?

More to the point, if he feels that no human should earn less for their labor than some specific amount then he's free to spend his resources to remedy the situation.

Where does he justify forcing other people to fund his utopian goals?

kpitcher
03-17-2012, 11:50 AM
In Michigan farm work is a funny thing. If a farmer pays $X per bushel of product picked, apples, cucumbers, peaches, etc, the farmer can't just pay the worker for their work. Instead the farmer also has to keep track of their speed because if they pick too slow then they are not making the minimum wage and the worker must be paid more.

Now if your friend has ever paid a neighborhood kid $5 to wash their car, they better keep an eye on the clock. If they're slow they should be giving them more money to ensure they meet the minimum wage.

Columbus
03-17-2012, 12:28 PM
As per worldwide industry standards companies and factories must earn 20% standard profit over cost of production. If they are earning more than that they should pay their empoyees more.

SilentBull
03-17-2012, 12:34 PM
This is all you need:

http://www.youtube.com/watch?v=QcboZTueWS4&feature=youtube_gdata_player

Wesker1982
03-17-2012, 01:01 PM
All you need here: http://www.fee.org/library/books/economics-in-one-lesson/#0.1_L19

There are a lot of good videos on youtube too

TheGrinch
03-17-2012, 01:14 PM
This is all you need:

http://www.youtube.com/watch?v=QcboZTueWS4&feature=youtube_gdata_player
Haha, that's awesome, perfectly and simply stated... Unfortunately even that might not be dumbed down enough for those who want to believe that the government intervention is somehow a practical solution.

nedomedo
03-17-2012, 01:18 PM
http://www.youtube.com/watch?v=g6IJV_0p64s

Wesker1982
03-17-2012, 01:38 PM
I suggest studying all of the material below. It is must know stuff imo.

http://www.fee.org/library/books/economics-in-one-lesson/#0.1_L19

Part 17: Price Floors (http://www.vforvoluntary.com/young-economist/) is about minimum wage

Outlawing Jobs (http://www.lewrockwell.com/rothbard/rothbard124.html)

Why Do Daily Kos and Alternet Support a Racist Program? (http://www.lewrockwell.com/hornberger/hornberger180.html)


http://www.youtube.com/watch?v=IFbYM2EDz40


http://www.youtube.com/watch?v=Fr4q8ldTnSk


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

These are all basically making the same point. But I think it is useful to study from different sources to hear different ways of explanation.

Edit: You will probably run into the argument "without minimum wage, employers will pay 10 cents an hour!"

As pointed out in the video posted by logikal, this can be debunked simply by pointing out the fact that most people make above minimum wage. According to the logic of the objection, everyone should be making the current minimum wage.

rpwi
03-17-2012, 02:01 PM
Keep it simple...ask him if minimum wage is so good...why not set it to 100 dollars an hour. If that doesn't work...why not? Does 90 dollars have the same problem? 80? And so forth...

As for the 'spending money helps the economy' argument. Ask him if it would be a good idea to spend a billion dollars to produce mud pies. If he says it is a waste, explain how many 'jobs it will create' and how this money will be respent so it won't be wasted (rhetorically).

TIMB0B
03-17-2012, 02:35 PM
Keep it simple...ask him if minimum wage is so good...why not set it to 100 dollars an hour. If that doesn't work...why not? Does 90 dollars have the same problem? 80? And so forth...

As for the 'spending money helps the economy' argument. Ask him if it would be a good idea to spend a billion dollars to produce mud pies. If he says it is a waste, explain how many 'jobs it will create' and how this money will be respent so it won't be wasted (rhetorically).

NSFW

The bold comment made think of what Louis C.K. would do with Bill Gates' money.


http://www.youtube.com/watch?v=gO9PwbtlOIU

Crotale
03-17-2012, 02:42 PM
In grassroots central?

Really?

TheGrinch
03-17-2012, 02:55 PM
In grassroots central?

Really?
Part of the grassroots effort is to be able to articulate as clearly as possible the political positions of Dr. Paul and the liberty movement. If it helps convert one person, then IMO, this is the correct place to ask for assistance with a debate.

(Of course I don't know what the mods prefer, but just saying that I'd rather it go in the "wrong" place here if it can help to convert, and not lose a potential supporter on the line)

Crotale
03-17-2012, 02:55 PM
This is all you need:

http://www.youtube.com/watch?v=QcboZTueWS4&feature=youtube_gdata_player

Just left a channel comment on there mate.

Crotale
03-17-2012, 02:56 PM
Part of the grassroots effort is to be able to articulate as clearly as possible the political positions of Dr. Paul and the liberty movement. If it helps convert one person, then IMO, this is the correct place to ask for assistance with a debate.

(Of course I don't know what the mods prefer, but just saying that I'd rather it go in the "wrong" place here if it can help to convert, and not lse a potential supporter)

Which is why there is appropriate subforms for that.

TheGrinch
03-17-2012, 02:58 PM
Which is why there is appropriate subforms for that.
I understand that, and you're correct that it should be that way. But sometimes time is of the essence when in a debate with someone, so I don't mind at all if they want to tap into the place where it can draw the most help articulating it (though again, I obviously do not speak for the mods).