The Minimum Wage

[steven]

Mike I feel as if I abandon you in this debate but I just don't see the point in continuing it. The "minimum wage is bad" people are all addressing this issue from a philosophical standpoint and refuse to except the reality that is our economy. While their arguments are well written and I am sure they believe in what they say they don't deal in the harsh realities of real life.

Delaware said "When I was a teen in high school I certainly could not have supported myself on the money I was making. Did I complain? NO, I was looking for spending money."

For millions of Americans a minimum wage job isn't something they do just to get "play money" its what they do to support their family. Its easy to be philosophical when you no that your money or your position will probably ensure that you or your family members will never be in the position to have to take a minimum wage job for anything else but "play money".

Jim goes further pointing out more rich academia that take his position. This is a no brainer for them as once again they or their children will never be in the position of supporting their family with a minimum wage income. As a matter of fact their money and status will more than likely rise as workers trapped in poverty are reduced to working for 1.00 and hour and the price of goods drop while their money ensures there children will attend good colleges thus assuring them of never being caught in a cycle of poverty that the dollar an hour worker will be trapped in.

Probably the worst argument though is the "I could have Hired a thief or crack head if only I could pay him only a dollar"

I don't want to be rude or nasty in my response to this so I will only say.....
"C'mon guys you cant be serious can you? A thief? A druggie?" I hope you are not planning on using that at the next press conference.

Sorry but this is so far a field of the reality where we started (single mother working for minimum wage) that its just not real enough for me to talk about.

[WNYresident]

In a global economy as we have the minimum wage means really nothing anymore. When you can have anything made someone where else as a lower wage it leaves for an unfair advantage to the businesses who have to compete with companies with no minimum wage.

[moonshine]

This entire thread is summed up quite well in "Economics and Ethics of Private Property", by Hans-Hermann Hoppe. See chapter 5, "Theory of Employment, Money, Interest, and the Capitalist Process: The Misesian Case Against Keynes"

[mikewrona]

Mike I feel as if I abandon you in this debate but I just don't see the point in continuing it. The "minimum wage is bad" people are all addressing this issue from a philosophical standpoint and refuse to except the reality that is our economy. While their arguments are well written and I am sure they believe in what they say they don't deal in the harsh realities of real life.

Delaware said "When I was a teen in high school I certainly could not have supported myself on the money I was making. Did I complain? NO, I was looking for spending money."

For millions of Americans a minimum wage job isn't something they do just to get "play money" its what they do to support their family. Its easy to be philosophical when you no that your money or your position will probably ensure that you or your family members will never be in the position to have to take a minimum wage job for anything else but "play money".

Jim goes further pointing out more rich academia that take his position. This is a no brainer for them as once again they or their children will never be in the position of supporting their family with a minimum wage income. As a matter of fact their money and status will more than likely rise as workers trapped in poverty are reduced to working for 1.00 and hour and the price of goods drop while their money ensures there children will attend good colleges thus assuring them of never being caught in a cycle of poverty that the dollar an hour worker will be trapped in.

Probably the worst argument though is the "I could have Hired a thief or crack head if only I could pay him only a dollar"

I don't want to be rude or nasty in my response to this so I will only say.....
"C'mon guys you cant be serious can you? A thief? A druggie?" I hope you are not planning on using that at the next press conference.

Sorry but this is so far a field of the reality where we started (single mother working for minimum wage) that its just not real enough for me to talk about.

You didn't abandon any one! You were true to your principles and made your point. That's all anyone can do. Altruism is not an American strong point when it comes to sharing wealth.

[mikewrona]

In a global economy as we have the minimum wage means really nothing anymore. When you can have anything made someone where else as a lower wage it leaves for an unfair advantage to the businesses who have to compete with companies with no minimum wage.

If it was a global economy we would see Chinese companies, products, etc. appearing in the U.S. What you see is American companies going to China for the purpose of utilizing a near limitless (800,000,000 people in poverty) at unbelievably cheap wages and turning around and selling their products in competition against American companies who do not produce in China.

This starts an exodus to take advantage of Chinese labor.

And, please note that this so called globalization affects only the workers, all the upper management continues earning U.S. level wages. The wage battle is only fought on the bottom levels of the American economic pyramid.

[Jim Ostrowski]

Steven:

There's obviously been a complete failure to communicate between us.

Where do I start?

You think that ideas do not reflect realities. I disagree. Obviously, false ideas by definition do not reflect reality, but true theory does.

For example, I knew, prior to the Iraq War that it would end up as an ethnic/religious civil war because I have studied the history of intrastate war and developed a theory about it.

Mises and Rothbard both predicted the end of communism well before it happened. They knew as a matter of theory that complete central planning does not work.

Economics is different in that it’s more like logic than history or physical science. Nevertheless, there is a body of sound economic theory that has been built up over the centuries that is true. We can use it as a guide to policy.

There is no theory-practice dichotomy here. Our theory of the minimum wage is precisely mirrored by the observable facts. Lots of low-wage jobs that were ideal for unskilled young workers have disappeared from the economy, e.g., ushers at movie theaters; gas station attendants. Now, huge swaths of unskilled young males are permanently unemployed. They don't even appear in the stats. Our theory correctly corresponds with these facts.

We fully accept and know and understand the reality of the economy. It sucks. Why do you think we started Free Buffalo? I live and work in the city and am in all parts of the city during the course of a normal week. I am fully aware of what it going on. Being a general practicing lawyer for the poor and working class gives you a pretty good vantage point around here.

The minimum wage law produces no new wealth. It’s a piece of paper that scares most employers into not hiring certain people and into gradually investing in equipment not labor. That's all it does. It makes society poorer--reduces the sum total of wealth in the world.

The law doesn’t require employers to hire anyone at the minimum wage; it merely compels them to fire people who they think are worth less than the minimum wage. I've repeated this point endlessly!

It's easy to be philosophical? No, it isn't.. That's why most people don't read Plato or Aristotle. What is easy is to type into a message board certain words that favor other words on paper in Albany law books and think you have helped others. You have not.

There are literally thousands of ways to help the working poor. Free Buffalo has proposed many already. We plan to propose many more.

What I’ve seen in this thread is not that much argument against our specific points but lots of claims that "we feel your pain" and Ostrowski doesn't.

Is that the best you can do? If you were building a skyscraper, would you hire the contractor who felt your pain or the one who knew physics. This isn't about feeling pain; it’s about thinking clearly about economics because if you don't, history shows that lots of people feel lots of pain for a real long time. E.g, Greater Buffalo (1960-2006).

As for hiring ex-criminals, this is a very serious problem in certain communities that have experienced the "war on drugs". Lots of folks have records and it makes them very difficult to hire. So, again, my arguments are addressing the cold hard facts on the ground.

[mikewrona]

How does simply re-distributing income help the poor?

do you want a large group of people simply waiting for a free handout?

Why do you assume it's a handout. I think upper management is over paid.
I think lower level workers are under paid. There is no reason mis-spent money on top can't be moved down.

Enron paid Ken Lay, a person with a Phd in Economics (I'm sure like 80% of all economists, he thought the minimum wage hurts business), $6,000,000 a year plus options to bury the company under $65,000,000,000 in debt.

Was Ken Lay given a handout? Certainly, he was paid handsomely and the end results proves he was unqualified for the job. Yet, someone gave it to him.

That debt hurt a tremendous amount of suppliers and jobs lost. It also equals the pay of 6,057,781 people earning an annual minimum wage of
$10,730.

[yokes]

Why do you assume it's a handout. I think upper management is over paid.
I think lower level workers are under paid. There is no reason mis-spent money on top can't be moved down.

Enron paid Ken Lay, a person with a Phd in Economics (I'm sure like 80% of all economists, he thought the minimum wage hurts business), $6,000,000 a year plus options to bury the company under $65,000,000,000 in debt.

Was Ken Lay given a handout? Certainly, he was paid handsomely and the end results proves he was unqualified for the job. Yet, someone gave it to him.

That debt hurt a tremendous amount of suppliers and jobs lost. It also equals the pay of 6,057,781 people earning an annual minimum wage of
$10,730.

So you want the government to regulate all wages not just the minimum wage?

[NoCtUrNaL]

So you want the government to regulate all wages not just the minimum wage?

Doesn't the government already do that?

Taxes.

[WNYresident]

Why do you assume it's a handout. I think upper management is over paid.
I think lower level workers are under paid. There is no reason mis-spent money on top can't be moved down.

Enron paid Ken Lay, a person with a Phd in Economics (I'm sure like 80% of all economists, he thought the minimum wage hurts business), $6,000,000 a year plus options to bury the company under $65,000,000,000 in debt.

Was Ken Lay given a handout? Certainly, he was paid handsomely and the end results proves he was unqualified for the job. Yet, someone gave it to him.

That debt hurt a tremendous amount of suppliers and jobs lost. It also equals the pay of 6,057,781 people earning an annual minimum wage of
$10,730.

Stating one bad example doesn't make your reasoning correct. How do you even know if he paid anyone minimum wage at enron?

[crlachepinochet]

If it was a global economy we would see Chinese companies, products, etc. appearing in the U.S. What you see is American companies going to China for the purpose of utilizing a near limitless (800,000,000 people in poverty) at unbelievably cheap wages and turning around and selling their products in competition against American companies who do not produce in China.

This starts an exodus to take advantage of Chinese labor.

And, please note that this so called globalization affects only the workers, all the upper management continues earning U.S. level wages. The wage battle is only fought on the bottom levels of the American economic pyramid.

Ever heard of Hohl appliances or the plan to import Chinese cars into the US? Maybe Chinese companies aren´t here full-force yet, but ever heard of Toyota, Honda, or Sony?

[mikewrona]

So you want the government to regulate all wages not just the minimum wage?

If I believed that I would have said that. But now that you mention it, some U.S. executives earn $25,000,000 + a year. How much work can a person actually do to be worth that?

You say the minimum wage people aren't worth $5.15 an hour, I think there should be a minimum wage. On the other hand I'm saying people like Ken Lay aren't worth $6,000,000 a year. You think they are.

The minimum wage people don't put companies out of business. Arrogant greedy businessmen put companies out of business.

[mikewrona]

Ever heard of Hohl appliances or the plan to import Chinese cars into the US? Maybe Chinese companies aren´t here full-force yet, but ever heard of Toyota, Honda, or Sony?

What's your point?

[mikewrona]

Stating one bad example doesn't make your reasoning correct. How do you even know if he paid anyone minimum wage at enron?

Res-

Who cares if he hired anyone at minimum wage. The point is 1 Ken Lay did more damage to the U.S. economy then all the minimum wage employees.

Here's the top 10 bankruptcies of 2005. Were they uncompetitive because they paid people minimum wage? That's the argument. Minimum Wage hurts companies.

10 Largest Bankruptcies of 2005

Company Filing Assets (a)
Date
----------------------------------------------------------------------
Refco Inc. 10/17/05 $33,333,172,000
----------------------------------------------------------------------
Calpine Corporation 12/20/05 $27,216,088,000
----------------------------------------------------------------------
Delta Air Lines, Inc. 09/14/05 $21,801,000,000
----------------------------------------------------------------------
Delphi Corporation 10/08/05 $16,593,000,000
----------------------------------------------------------------------
Northwest Airlines Corporation 09/14/05 $14,042,000,000
----------------------------------------------------------------------
Collins & Aikman Corporation 05/17/05 $3,196,700,000
----------------------------------------------------------------------
Tower Automotive, Inc. 02/02/05 $2,846,406,000
----------------------------------------------------------------------
Winn-Dixie Stores, Inc. 02/21/05 $2,618,891,000
----------------------------------------------------------------------
ASARCO LLC 08/09/05 $1,108,447,000
----------------------------------------------------------------------
American Business Financial Services, Inc. 01/21/05 $1,042,870,000



That's about $125,000,000,000 that other businesses will not receive for
services rendered. I don't think minimum wage earners caused any of these
companies to fail. Do you?

[yokes]

I really dont get your point.

Because the greedy arrogent businessmen exist minimum wage should be raised.

There are approximatly 2600 listed companies on the NYSE, About 3300 on the NASDAQ, not to mention the thousands of non-public companies. Are they all arrogent Greedy business people? When will the all go out of business?