No Minimum Wage Law? (Lookout Mountain: military, wages, jobs)

[Wordy]

Ayn Rand--one man is an island--Ayn Rand? I've read several of her books myself. The first because I was bored and after that because I liked the first so much. I think I was 15 or so, though, so I probably missed why having read her words credentials me to opine on the issue of a federally/individual-state mandated minimum wage?

As minimal a wage as it is right now, the minimum wage hardly seems relevant any longer. Perhaps that's always been true and it's my own perspective that has changed.

[Avram42]

Originally Posted by harry chickpea

Minimum wage serves a number of purposes, including but not limited to: <snip>

While I will agree it does serve some of those purposes--I don't know that I can agree any of them are positive. I also fail to see how employers defrauding their employees has anything to do with the wage they are paid.

Furthermore, if I sign a contract for my pay amount, I expect to receive it--failure would be a breach of contract. I don't see where minimum wage comes into play at all.

[hiknapster]

Originally Posted by harry chickpea

I find it somewhat puzzling that Tennessee, whose citizens benefited from minimum wages more than many other areas of the country, seems to be a hotbed of hatred towards it.

I think I'm qualified to respond to those comments. I have worked (for pay) since I was 14, been paid on piecework as a paperboy, had to work within guidelines to hire sub-minimum wage students as a manager, worked as employee, in management and as owner of my own unsuccessful and successful businesses. I've read every word that Ayn Rand wrote, visited her offices, as well as reading the writings of Alan Greenspan from that era. I've read my American history, the Federalist Papers, the Constitution, writings on the causes and effects of the great depression, and so on. I've watched the changes in attitudes of employers from the 1950s to today, and watched with increasing fascination how the government increasingly controls the economy and manages to get more taxes out of an unsuspecting citizenry. In short, I've had a lifetime of experience, and I find the negative responses to minimum wages in this forum naive at best. I'm sure this will upset some readers, and I'm sure there will be those who disagree for sound reasons, but the discussion needs to rise above sound bits and talking points.

Minimum wage serves a number of purposes, including but not limited to:

1. Weeding out businesses that have no earthly potential for success, and diverting the labor to ones that do. Ma and Pa Joad might continue their buggy whip manufacturing operation long after the market has dried up, as long as they can keep lowering the wages of long-time employees, or hire new ones based on promises and no money.

Minimum wage in this case is a merciful killer that prevents loyal employees within this country from being taken advantage of. That isn't to say that some employers might still try to short the hours of workers to effect the same results. It also isn't to say that the business owner might still think their business makes sense and works harder until reality sets in. I've had that happen to me as well.

Minimum wage has had the effect of taking many of the most menial, stinking jobs, and moving them to poor countries. That has had positive and negative effects. On the plus side, work in the U.S. tends to be more productive because of minimum wage laws. On the negative side, it has created a haughtiness in U.S. workers that limits them. In working with young employees, I have increasing found them unwilling to handle a mop, clean up a spill, or do any work "beneath their 'dignity'". Many times I've had to do the job myself as a manager, and then try to re-educate or remove the employee.

2. National minimum wage laws assisted the country in coming out of an era when folks in poor pockets of the nation were ripe pickings for "company stores", tenant farming, and the excesses of the robber barons. I still remember some of my first historical research, where I discovered that a railroad owned by a state governor (not TN) was able to string along construction workers without pay for four months, and when they finally rioted, have them dispersed by government force, allowing construction to continue with a new crew, again without ever having paid those workers a penny. Sometimes laws like minimum wage laws are needed to protect the worker. Be thankful that the word "blackballing" has fallen into such disuse that many don't know the definition. Threats of that were what many of those men on the job without pay.

3. Minimum wage provides a basis for taxation. The government requires "contributions" to social security and unemployment from employers and employees based on a percentage of income. If income is not kept above a minimum, then the "contribution" revenues fall.

Life for seniors before social security was predicated on their having enough offspring to support them, or their admission into poorhouses, which were funded in part by work of the residents and in part by the citizens of the local town, with no state or federal assistance. Toss social security out, and you go back to that, or more likely, pay for nursing homes out of your property tax.

FWIW, local taxation for poorhouses, and care for parents was a huge burden for many of our ancestors, and the federalization of the system allowed them greater spendable income, freedom, and more time for productive pursuits.

4. Minimum wage allows the government to add to inflation (which is another form of rarely understood tax) without incurring the wrath of the masses. By periodically increasing the minimum wage to compensate the people most affected, the government can achieve some stability and keep focus away from inflationary monetary policies.

Minimum wage is only a tiny part of the managing of the economy. To single it out for derision is simplistic. If the government was to go back to no income tax, and a complete outlawing of sales tax (contrary to Huckabee's plan), with revenues generated only from trade tariffs, as it was in the past, then perhaps the concept of a minimum wage would need review. However, the nation is no longer a simple republic, and gave up raw capitalism long ago for some very compelling reasons.

Readers can continue to depend on political rhetoric to inform their opinions, or do their own research from a broad spectrum of sources to make a more considered position.

Fair and balanced. Amen.

[harry chickpea]

"Ayn Rand--one man is an island--Ayn Rand? I've read several of her books myself. The first because I was bored and after that because I liked the first so much. I think I was 15 or so, though, so I probably missed why having read her words credentials me to opine on the issue of a federally/individual-state mandated minimum wage?"

Rand is commonly cited by Libertarians as an expression of the Libertarian ideal. Like you, I read her when I was much younger. Until I understood that the world was not bound as she had defined it, by black and white, I thought she was pretty smart. The reason I cited her in this context is that the objection to minimum wage comes primarily from that quarter, and I wanted folks to know that I understood that point of view.

As an aside, her position of using "Aristotlian logic" is flawed, in that she is not really using it, and her worldview neglects to recognize that individuals act based on multiple and divergent motives, rather than the romantic ideal of single purpose.

[JMT]

Originally Posted by Wordy

As minimal a wage as it is right now, the minimum wage hardly seems relevant any longer. Perhaps that's always been true and it's my own perspective that has changed.

As I understand it, one of the reasons many on the Left like having a minimum wage--and like increasing it--is because labor unions often have their wages tied to the minimum wage so that an increase in the minimum wage automatically means an increase in wages to members of the labor union. I could be totally off base, but I heard that somewhere and it makes sense.

[rabok416]

Originally Posted by Avram42

While I will agree it does serve some of those purposes--I don't know that I can agree any of them are positive. I also fail to see how employers defrauding their employees has anything to do with the wage they are paid.

Furthermore, if I sign a contract for my pay amount, I expect to receive it--failure would be a breach of contract. I don't see where minimum wage comes into play at all.

Harry's post does raise some interesting and much appreciated points. I do agree that the minimum wage is probably a much smaller issue than a lot of other problems our country faces at this time. The intent of my post was to simply challenge the conventional wisdom that the minimum wage is a good thing. Hopefully anyone reading this thread will be stimulated to do their own research and thought on the issue. Most people also tend to believe that FDR got us out of the depression and was one of our best Presidents, that the UN is a worthy organization, that the U.S. is a democracy, and that the Democratic Party passed the Civil Rights Act of 1964. A good case can be made against any of those assertions, but you won't find any debate on those topics in schools or almost anywhere else. Our Republic was founded out of distrust of government as a whole. That's why the national government was not given very many express roles.

As to your 4 assertions:
1. The Constitution does not give government any role in determining the economy's winners and losers. People are rational creatures and are capable of choosing what they do for a living. If Ma and Pa Joad still want to continue their business even at marginal profit or at a loss, then why should they not be free to do so? Government hasn't exactly done a bang-up job identifying profitable enterprises (i.e. corn ethanol), has it? A big company (like ADM in the case of ethanol) should have the same standing in the eyes of government as a mom-and-pop business.
2. No doubt there have been companies that have abused their employees. This has nothing to do with minimum wage laws, but is the province of the court system, which is accessible to all in our country.
3. Since having a minimum wage creates unemployment, which falls disproportionately on the younger workers, then it is hard to say whether tax revenues really go up with a mandated minimum wage. The treasury forgoes the Social(ist) Security taxes of a 14-year-old who doesn't work because his work is only worth $5/hr to an employer and therefore he isn't worth hiring at the higher minimum wage. Also, as for me, I am more than willing to take care of my parents when they are no longer able to work. I am also willing to help other elderly folks who can't work through private charity. I fail to see where retirement was stated as an inalienable right. Maybe I missed that part of the Declaration of Independence and the Constitution?
4. I can't believe anyone would see inflation (which is a tax, as you rightly pointed out) as a good thing. To use that as an argument for a minimum wage doesn't make a whole lot of sense to me.

By the way, I certainly do not rely on sound bites or political rhetoric to make my decisions. I prefer to rely on economic facts.
Fact 1: Minimum wage laws, when set at a level higher than the equilibrium wage, cause unemployment, which hits those at lower education and skill levels harder. To argue otherwise is to assume a perfectly inelastic labor demand, which doesn't seem to be a reality.
Fact 2: Employers have to find a way to pay more of their gross income in labor costs, so they raise prices. Therefore, minimum wage laws cause inflation.

I don't know about you, but I don't particularly enjoy unemployment and inflation.

Now, our minimum wage isn't that much higher than the equilibrium wage, so its effects are less pronounced than if it were, say, $100/hr. However, when you start down the slippery slope that government has this kind of authority to transfer money from one private wallet to another, you might find yourself in the Soviet Union before too long.

[hiknapster]

Maybe someone would like to have the perspective of a person who barely has a high school education. I say barely because, as a foster child, I probably moved 25 times during my high school years. I missed a lot of school.

The point is, as a 46-year-old woman, I face the prospect of earning a minimum wage, everyday.

With years of work experience, I am still offered very low wages. I was fortunate to luck into a newspaper reporter position for a daily paper back in the 80s, but without a college degree, I could never secure that position, again.

I only mention this to illustrate that not all intelligent, willing, hard-working people will rise much above minimum wages. Contrary to the party line that we have been fed since birth, it is not always possible to be able to get a college education and make something of yourself. Sometimes we have responsibilities that preclude that.

So, we are left we what we are left with.

I have dealt with going back to work, after having a baby, and paying for daycare, only to find at the end of the week that the office was cleared out and they had my social security number and I didn't have a paycheck.

My husband, who has a trade, recently opened up his paycheck to find $200 less than he had been paid for the last year, and all on a whim by his employer.

The deal about the employer must make up the minimum wage if your tips don't make up the difference? It doesn't work out that way. It doesn't happen. And yes, you will pay the taxes on the actual minimum wage, even though you made $2.00 an hour while you cleaned toilets, not waiting on tables.

If the employer decides that after you gave two-weeks notice and left for another job, that he chooses not to pay you, then you are out of luck. Do you know how many people I know that have had their paycheck bounce?

The point of this diatribe is that some people live paycheck to paycheck or even less and don't have the resources to pursue the issue.

In my liberal former state of Massachusetts I had the option of picking up the phone and calling the labor board. In more red states I have been given the run-around until I finally gave up and went back to working and raising a family.

I worked for a union once, and I hated it. Management was constantly at odds with the employees. I was glad to be gone.

I started working for a company that valued its employees. But since the economy has soured I have seen the company bear down on the workers to the point of physically sickening its employees.

There is the far left and the far right and somewhere in between there has got to be a middle. Until the human race becomes honest and always does the right thing there will always will be the haves and the have-nots and those that will be willing to take advantage.

Oh, and I think the example of the worker who is non-productive, but the minimum wage will make the employer reduce his hours is ridiculous. If the employee is that bad then he should be fired. What does that have to do with minimum wage?

So some people will take advantage of others and there has to be something to stop that, without intrusive government. It is a dilemma that our country was founded upon.

[harry chickpea]

Excellent response!

As to your 4 assertions:
1. The Constitution does not give government any role in determining the economy's winners and losers. People are rational creatures and are capable of choosing what they do for a living. If Ma and Pa Joad still want to continue their business even at marginal profit or at a loss, then why should they not be free to do so? Government hasn't exactly done a bang-up job identifying profitable enterprises (i.e. corn ethanol), has it? A big company (like ADM in the case of ethanol) should have the same standing in the eyes of government as a mom-and-pop business.

Again, what you are trying to posit is a particular populist or granger view (which I happen to like) that the rich and influential should be treated equally, and without favoritism, as defined in the herald "all men are created equal." As much as we both appreciate the ideal, that simply will never be the case.

Our patent, trademark, copyright have all been twisted into misshapen laws that favor those with expensive lawyers to defend their "rights." Disney forced the change in copyright to protect the "mouse" long after the creator was dead. The fallout from that is that rights which should have fallen into public domain are unavailable for full integration into the fabric of society. Drug patents are such sought-after protected properties that people have to choose between high-cost medicine or food. When the patent expires, the real cost of production is often revealed to be pennies per dose. Inventors find themselves thwarted by patent mills that somehow are allowed to slap a patent on concepts that should never have been patentable in the first place. The LWZ compression algorithm, the GIF file format, the concept of "one click checkout" are illegal patents that stifle the creativity of the marketplace.

One can see how quick growth is without restrictions by examining the explosion that occurred in personal computers once the courts ruled that clean-room reverse engineering was legal. We wouldn't have to worry about minimum wage if the true potential of the people in the U.S. was allowed to flourish. That is not the way that big business and those with existing wealth want to guide us.

As for Ma and Pa, they have a perfect right to continue their business, but when they can't afford it given prevailing market conditions, then government should not come to their rescue, nor should it have done so for airlines, Conrail, the savings and loans, and countless other big businesses. The waste of those bailouts could pay the difference in an increased minimum wage for a century or more. In other words, don't ding the smallest of the small when the largest of the large are behaving far more egregiously. Fix the big problems first.

2. No doubt there have been companies that have abused their employees. This has nothing to do with minimum wage laws, but is the province of the court system, which is accessible to all in our country.

Actually, without the minimum wage laws, the abuse would be legal. The court system is accessible to all??? The civil court system may be nominally accessible to those who want to use small claims court, but larger cases require increasingly expensive attorneys, and the criminal court system is designed to only respond to the the demands of government. You might want someone put in jail, but the DA has to agree with you and do the legwork, paid for by taxpayers. When you get into patent and copyright courts, the system is simply impossible for an average citizen to negotiate or afford.

3. Since having a minimum wage creates unemployment, which falls disproportionately on the younger workers, then it is hard to say whether tax revenues really go up with a mandated minimum wage. The treasury forgoes the Social(ist) Security taxes of a 14-year-old who doesn't work because his work is only worth $5/hr to an employer and therefore he isn't worth hiring at the higher minimum wage.

Actually, you missed a point. The revenue doesn't go up in real inflation adjusted dollars, it merely keeps place with what it was when the last minimum wage increased was allowed. Inflation makes for some slick tricks with perception. I get caught in them as well.

Also, as for me, I am more than willing to take care of my parents when they are no longer able to work. I am also willing to help other elderly folks who can't work through private charity. I fail to see where retirement was stated as an inalienable right. Maybe I missed that part of the Declaration of Independence and the Constitution?

Good points. Let's work through them for a minute. You are willing to support your parents. I applaud that, and I assume that your parents were equally willing to support you as a child and through your education. If so, you are living a part of the American dream. What of those born out of wedlock, whose children have died, who spent their income supporting a disabled child, or any other of a number of less fortunate scenarios?

You state that you are willing to support them through private charity, which means, in lay terms, that you get to pick and choose who you support, based on your personal beliefs. Does that mean that you might refuse to support a charity that houses liberals, or Hindus, or those with expensive medical needs, in favor of those of your own creed and color and religion? Even if you would support such a egalitarian charity, would you honestly expect everyone to do the same, to your high standards? How would you react when they didn't, and people started starving and dying?

When we talk of retirement as a right, you are correct that it isn't in the Constitution. I could make the argument that the bill of rights and other amendments aren't in the constitution either, a common flaw in Libertarian and neo-Federalist rhetoric, but that belabors the real response; that social security kicking in at age 65 was written at a time when most people did not live to that age, and if they did, were often in desperate need of basic help. Looking back to those days, those were days when the poorhouses were overflowing, citizens couldn't afford the cost of care, and the depression was threatening to have thousands of elderly dying in the streets while the government did nothing.

Communism was on the rise in many parts of the world at that same time, supposedly creating a better life. (I have an advantage of an extensive collection of old National Geographics, and the narrative coloration of such articles as a "Trip Down the Volga" in 1918 give a better feel for public sentiment of the time than a modern history book that has been parsed for current politically correct reporting.) The enactment of social security was part of the battle for the mind of the citizens, by those with wealth who understood exactly what would happen to them if the nation went completely communist. It wasn't just noblese-oblige charity, but self-interest that made the ultra-rich eventually bow to the yoke of income tax and public programs. These and other programs such as the WPA and CCC that took the wind out of the sails of communist revolutionaries in the U.S. Was that a good thing or over-reaction? I don't know. I know I work to avoid as much government intervention in my life as possible, and some of the alternatives to what happened back then make me shudder.

4. I can't believe anyone would see inflation (which is a tax, as you rightly pointed out) as a good thing. To use that as an argument for a minimum wage doesn't make a whole lot of sense to me.

I don't see inflation as a positive from a personal point of view, but from an economics point of view it has the effect of pushing people to invest in higher risk investments rather than the savings accounts of past years. Active money is what an economy feeds on. The government is in the business of raising more taxes, and an active economy allows that. If the Iraq War cost zipty billion real dollars, and the contracts allow for payoff in the same number of dollars that now have a value of HALF a zipty billion, the government gets to look good while the citizenry scratches its collective head and wonders "WTF just happened?"

Your "Fact 1" makes some sense. Fact 2 is an If A=B then C=D type of thinking. Here I have the advantage of experience in watching the minds of employers at work.

Back in the 1970s, I was hired on as an usher at a twin movie theatre. The staff at any time was: manager, union projectionist, cashier, doorman, two ushers, two concessionists, and janitor. A few years later, I managed a new sixplex theatre. When income dropped because of competition, I operated that theatre with just me managing, running projectors, and checking auditoriums, while one employee sold tickets and concession items. I cleaned auditoriums between shows. Why did I bring this up? To show that minimum wage had a minimal effect on the thinking of the employers. The cut in staffing after a minimum wage hike was always token, sometimes enough hours were cut to more or less compensate for the increase, more often they weren't if the season was busy. It wasn't how much people were paid that mattered over time, as much as "how many positions can we eliminate and still operate?" Minimum wage makes a big effect in polls sponsored by those who don't like minimum wage increases, but change little in everyday life.

I contend that we are already in the Soviet Union, in that we have made enough activities illegal that 1% of our population is behind bars (at our expense) and that as property "owners" we have a decreasing say in how we may use our land, and that special interest groups have thwarted even basic fair play. Given that all this has occurred, minimum wage is so minor an issue that it shouldn't even be on our minds.

Example of more pressing ethical issues: how do you reconcile that 18 year olds can fight in our wars and lose their lives, and yet can't legally buy a beer, because MADD pushed legislation denying highway funding to states who didn't raise the drinking age to 21? Is that ethical? Nope. Perhaps we need a new law to combat that? NOT. We need to get rid of these special interest laws on an ongoing basis and not be piddling over pennies.

[Wordy]

Hiknapster, I just wanted to say that you, girlfriend, should consider going back to school. I would never have guessed your educational background from the way you communicate.

My dad was an immigrant orphan by about age 5 and never made it past the 7th grade, skipping lots of grades in between. He joined the Army, made it up the ranks to sergeant, beat up an officer, got busted back down to private, and then worked his way back up until someone saw past his "resume" and decided he should be an officer. Not having a high school education sort of got in the way of that, but they tested him and ultimately he was given two years of college credit in addition to his high school equivalency. Then he went to college while he was in the Army and earned his degree with a perfect 4.0. This was all while he had 4 or 5 kids and his Army gig. He retired as a Colonel.

Anyway, I just wanted to say that there are lots of reasons why pursuing some sort of higher education wouldn't work for you but the only truly important one, that you are not capable, is obviously not the case for you. I have read lots of your posts and one thing that never occurred to me was that you have "barely a high school education." I'm sure your education doesn't even begin to meet your ability.

Ok, backing back out now that I have given my unsolicited opinion!

[hiknapster]

Thank you. Life and barely surviving has always been in the way. Thank you.