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Again, you are only making a descriptive statement. The question is why employees' survival is not something the employer ought to consider.
Use utilitarianism, social contract theory, or Kantian ethics...
Some of mankind has fought against it. Others have fought for it.
Why should they consider that? They are paying that person to work. Period. What the employee does off-hours is not the employer's business. Or are you saying that the employer should be able to dictate how the employee spends money? Because that is the only way your argument would work. To take it to the extreme, what if that employee eats at expensive restaurants, drives a luxury car and lives in a very expensive home? Should that employer "ought" to take that in to consideration when setting a wage?
Otherwise economics also requires you to disbelieve in weather and gravity.
I just think the concepts of social justice, exploitation, religion, weather and gravity are completely orthogonal to studying the efficient allocation of resources (economics).
Actually, weather may be an outlier - IIRC, Enron created a futures market in weather. There may very well have been a futures market on the discovery of gravitational waves, but if so, that was probably more of a wager than a futures market.
There was a proposal from a think tank 10-15 years ago to create a futures market on terror of the 9/11 sort. The idea was if insiders were planning a follow-on 9/11 event, they would be drawn to profit economically by bidding on the price of futures contracts; we could extract information on the timing of such a hypothetical event from futures contracts, and hence law enforcement and Homeland Security could ramp up efforts in advance. In theory, it might work, but the optics sux so the idea was shelved.
At the end of the day, where there is a willing seller and a willing buyer and where a transaction takes place, we know a few things:
1. The willing seller is better off. If the seller were not better off, the seller would not have sold.
2. The willing buyer is better off. If the buyer were not better off, the buyer would not have purchased.
The above are true in a flea market, in a grocery store, a used car lot, and yes, they are true when it comes to the market for selling one's own labor.
We also know a few other things. Depending on the slopes of the Supply Curve and the Demand Curve...
3. The seller sold for price $X, even though he would have been willing to sell for less -- say for a price of $Y, where X>Y.
4. The buyer purchased for a price of $X, even though she would have been willing to pay more -- say, pay a price of $Z where X<Z.
Because the actual market price differs from what the buyer (and the seller) would have been willing to pay (charge), the buyer (seller) receives a "buyers premium" ("sellers premium") of $Z-$X ($X-$Y).
Everyone is better off. Everyone did this voluntarily.
Hence... in economics, there is no notion of exploitation. It is undefined absent government coercion (and possibly fraud).
Why should they consider that? They are paying that person to work. Period. ?
What matter is how much the Fair Market value is for the position and their skill set. If it is insufficient or tremendously past that level is immaterial.
I am older and we bought our first house for $34000.in 1974. This was a new, 4 bedroom house. I do not remember what our annual income was, but it was 6 years after my husband was hired out of college for $8000. a year. My point is, it is all relative.
I do not know if the minimum wage has kept up, or not. There should be a formula that adjusts it according to certain economic factors. Maybe it should be $30. for all I know, or maybe there should not ever be a minimum wage. Wages should be whatever someone is willing to work for, and everyone would find their level.
Why should they consider that? They are paying that person to work. Period. What the employee does off-hours is not the employer's business. Or are you saying that the employer should be able to dictate how the employee spends money? Because that is the only way your argument would work. To take it to the extreme, what if that employee eats at expensive restaurants, drives a luxury car and lives in a very expensive home? Should that employer "ought" to take that in to consideration when setting a wage?
The employer should pay them enough to live within certain parameters, I am saying. Of course one of those parameters should be working full time (not part time!)
I just think the concepts of social justice, exploitation, religion, weather and gravity are completely orthogonal to studying the efficient allocation of resources (economics).
Actually, weather may be an outlier - IIRC, Enron created a futures market in weather. There may very well have been a futures market on the discovery of gravitational waves, but if so, that was probably more of a wager than a futures market.
There was a proposal from a think tank 10-15 years ago to create a futures market on terror of the 9/11 sort. The idea was if insiders were planning a follow-on 9/11 event, they would be drawn to profit economically by bidding on the price of futures contracts; we could extract information on the timing of such a hypothetical event from futures contracts, and hence law enforcement and Homeland Security could ramp up efforts in advance. In theory, it might work, but the optics sux so the idea was shelved.
At the end of the day, where there is a willing seller and a willing buyer and where a transaction takes place, we know a few things:
1. The willing seller is better off. If the seller were not better off, the seller would not have sold.
2. The willing buyer is better off. If the buyer were not better off, the buyer would not have purchased.
The above are true in a flea market, in a grocery store, a used car lot, and yes, they are true when it comes to the market for selling one's own labor.
Ah, but you are equivocating between two notions of "better off":
1. Better off than they would have been without any transaction taking place
2. Better off than they would have been with a different transaction taking place instead ( for example, with a different wage or price).
It is absolutely true that the free market exchange implies that (1) is the case. However, it does not follow that (2) also holds.
Quote:
Originally Posted by SportyandMisty
We also know a few other things. Depending on the slopes of the Supply Curve and the Demand Curve...
3. The seller sold for price $X, even though he would have been willing to sell for less -- say for a price of $Y, where X>Y.
4. The buyer purchased for a price of $X, even though she would have been willing to pay more -- say, pay a price of $Z where X<Z.
Because the actual market price differs from what the buyer (and the seller) would have been willing to pay (charge), the buyer (seller) receives a "buyers premium" ("sellers premium") of $Z-$X ($X-$Y).
Everyone is better off. Everyone did this voluntarily.
Hence... in economics, there is no notion of exploitation. It is undefined absent government coercion (and possibly fraud).
The employer should pay them enough to live within certain parameters, I am saying. Of course one of those parameters should be working full time (not part time!)
One of my employees is 18. How much should I pay her? Oh, and she has a much nicer car than I have.
Do you care what she does or what training I am giving her that will help her get better jobs down the road?
Do I need to have her fill out a form disclosing her living situation, bills, loans to make sure I pay her enough?
Is your observation that GNP would increase if, instead assistance programs that keep people in place, the government offered the destitute a supply of suitcases and bus tickets?
I would guess so. I think if combined with other incentives to work and maybe some job training programs, it could be very powerful...
One of my employees is 18. How much should I pay her? Oh, and she has a much nicer car than I have.
Do you care what she does or what training I am giving her that will help her get better jobs down the road?
Do I need to have her fill out a form disclosing her living situation, bills, loans to make sure I pay her enough?
No, this is why I said "within certain parameters". I do not think anyone should go run up large amounts of debt and then be entitled to higher wages as a result.
No, this is why I said "within certain parameters". I do not think anyone should go run up large amounts of debt and then be entitled to higher wages as a result.
Forget about any of her debt. Do I need to find out what her living expenses are to make sure I pay her enough?
And what do you mean by "within certain parameters?"
Or, should I pay her what I believe the job is worth and continue giving her merit increases as she learns more skills?
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