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Thoughts on the Minimum Wage

posted Sunday, 24 December 2006
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Last night I was listening to talk radio and the host, who labels himself as a conservative libertarian, was talking about proposed upcoming changes in the minimum wage.  The host stated that he's against having any sort of a minimum wage.   He believes that in a free market system that both workers and employers should have total freedom in setting the terms of the employment contract; that a worker is always free to decline a job offer if they deem the pay offered to be insufficient.  He went on to say that those seeking work are selling their physical skills, their mental skills, or a combination of both.  To these, I'd add that what people are primarily selling before these two things is their TIME, which is the most precious commodity we have.

In theory, the libertarian part of me agrees with him; that greater freedom from government interference in conducting our private affairs is a good thing.  But on a more practical, realistic level, I know this would work only to the benefit of employers.  The goal of employers is to get as much work out of an employee while giving back as little as they can legally get by with in order to maximize their profits. 

It's easy to say that people are always free to seek work elsewhere if what a particular employer is offering is unacceptable, but with no checks and balances to curb the worst excesses of greed, it is likely that nearly all employers would be offering rock bottom wages.  It is naive and shortsighted to think that employers will offer fair wages just out of the goodness of their hearts.  From their perspective, they are in business solely to make money, not help people make a living. 

Workers would have to eventually cave in, because they'd have to work somewhere or starve, and more people would be compelled to work at more than one job just to get by.   We'd be working more hours in order to get the same wages.

Many people in the 19th century were able to get by without a minimum wage because people then were able to produce much of what they needed themselves and were also able to resort to bartering.  But we must remember that child labor was also prevalent during this time, as many families needed every member earning wages, working from sunup to sundown, to support the family.  But it's a different world now -- families are no longer self-contained production units, nor is barter a practical solution to cash-flow problems.  And, needless to say, child labor is totally unacceptable, repugnant to a modern society.

A completely unrestrained free market system is an unworkable utopia.  We must have basic safeguards, such as a fair minimum wage, to curb the marketplace's natural tendency to greed.  Let's support raising the minimum wage.

Thoughts?

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1. Nutsy Fagan left...
Sunday, 24 December 2006 1:04 pm

I'm in complete agreement.


2. Hathor left...
Sunday, 24 December 2006 4:03 pm :: http://hathor-sekhmet.blogspot.com

I worked for a company where they had made an agreement with other companies in that area; not to hire anyone from those companies, so that they could suppress wages. A few companies threatened to fire anyone looking for a job. I don't need convincing.


3. Paula Reed left...
Sunday, 24 December 2006 5:10 pm :: http://www.paulareed.blog-city.com

I think that sometimes the government has to protect individuals from larger groups with the power to exploit them. I just wish it would stay out of the lives of individuals, aside from basic protection from each other.


4. catty left...
Sunday, 24 December 2006 5:21 pm :: http://savetheamericanfamily.blog-city.c

You and I agree on a great many things. What works in theory is much different than what works in practice. There are many times in history and many places on the planet where there has been freedom between the employer and employee. Who has the resources to hold out for the best offer? I don't see it as the employee.

I know a good many people who hold more than one job to provide basic necessities. So, there is a balance between making the living wage and the time spent making that living wage. You yourself point out that our most precious commodity is our time. Screw the fundamentalists and declining church attendance, I believe in or practice neither, but I feel that your community repealing the blue laws is a direct assault on it's workers. They have just told the corporate money makers that it's ok to impose their hours of business on the workers who have been giving up more of their benefits. They have placed the dollar before the workers.


5. miss negative left...
Monday, 25 December 2006 6:50 pm :: http://failingonsomanylevels.blog-city.c

have to say the US job market looks terrifying and inhumane to me the way it is already.

I live in one of the most liberal economies in Europe, generally thought of as rather worker-hostile... and yet we have: a) a minimum wage that is raised almost every year, b) full public health insurance + paid sick leave for everyone who's working legally (or studying or under 18 or retired or registered as a job-seeker + free emergency healthcare for those not covered by any of that), c) state pensions for the retired (smallish, but backed by a system of compulsory + optional retirement savings plans), d) 40-hour work weeks (shorter if the work is dangerous) and very strict rules for any overtime, e) at least 4 weeks of paid vacation each year + state holidays, f) compulsory unemployment insurance for all workers (means the state will pay you a decent compensation if you get laid off by no fault of your own), g) state-paid maternity or paternity leave for up to 1,5 years, etc.


6. JohnSherck left...
Tuesday, 26 December 2006 10:18 am :: http://wheresmyplan.blog-city.com

Let's remember the name of the system: "capitalism." In its purest form, it serves, first and foremost, for the accumulation of capital, of money. Left to its own devices, it will do so quite efficiently without regard to whether workers can make a living or not. As you point out, the 19th Century was probably the most unrestrained capitalism has been, and what did we see? Long work days, child labor, massive pollution... sounds like paradise, doesn't it?

On the other hand, I heard an interesting NPR segment on the minimum wage, looking at Florida, where a higher minimum wage was enacted a few years ago. Leading up to it, businesses were screaming bloody murder, that it would put them out of business or force them to employ fewer workers, while supporters of the bill were claiming that it would help the state's poor to make a decent living. In the end, neither sides claims entirely panned out. Businesses haven't failed or had massive layoffs, but it also hasn't done that much to help ease poverty. In Florida's case, there was and is a labor shortage, which means that "the market" dictates wages that were above the minimum wage anyway in most job sectors. The minimum wage increase mostly affected teens, who were just about the only ones actually working for minimum wage. It had a minimal impact on anyone else. The people discussing it on the program suggested that it might have a greater impact in areas of the country where unemployment is higher, causing wages to be depressed below the new minimum. Time will tell.


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