August 3, 2006
The Fort Wayne News-Sentinel asks, ["Why bother?"][1]Those who advocate an increase in the minimum like to talk about a "living wage." Where in this country is $7.25 an hour any more a living wage than $5.15? According to the Center for Economic and Policy Research, increasing the minimum to $7.25 would affect 4.4 percent of workers, giving them an average increase of 79 cents an hour, which would be an extra $1,580 a year. That would go a long way in San Francisco, wouldn't it?All this talk of a "living wage" is small minds with small solutions. If we raise the minimum wage to $7 or $9, we'll just have to come back in a few years and do it again because of inflation. And besides, that's for pikers.We don't need a "living wage." We need a "Living Large Wage."We need a minimum wage of $500/hr. That's right, a cool million a year.The advantages of the "Living Large Wage" are overwhelming:1) Everyone gets a raise but fatcat corporate CEOs - and they don't need a raise anyway.2) It solves unemployment, permanently. At a million a year, millions of people will retire to a life of luxury after just a few short years, freeing up those jobs for others. No more need for affirmative action or unemployment insurance. In fact, after a few years we may need to open the borders. I'm mean, someone's gotta work and we'll all be retired in Florida.3) It solves the Social Security problem, permanently. Social Security and Medicare revenues would skyrocket. And besides, who cares about getting the $1000 a month or whatever from SocSec when you're pulling in that every 2 hours by working?4) It solves the budget deficit. Income tax receipts would skyrocket. With everyone paying the millionaires' surtax, that would mean something like $360k/year PER WORKER in Federal government revenue. And the states would love it too.5) It's good for the economy. With all this new money, we're going to need new houses, new cars, more boats and more bling. Consumer spending drives GDP, and it would be set on a rocket course.6) It gives both parties a new lease on life. Democrats would have millions of new rich to hate, tax, and punish, and the GOP would have people who care about cutting taxes because they would actually have to pay them. Everybody wins.Of course, I have only one thing to say to those who complain that this plan might have unforeseen economic consequences or that it may not work in reality as well as it seems to work on paper:It's obvious to me that you just hate the poor. [1]: http://www.fortwayne.com/mld/newssentinel/news/editorial/15189061.htm
Comments
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OtherJoel (anonymous) says...
Well there's a slight misrepresentation there, because living wage advocates push for something in the neighborhood of $11 an hour, not the proposed $7.25. It is indeed higher than the current rate, but few would call sufficient for a living wage. Not that I agree with the macroeconomic effects of such a dramatic hike (honestly, I don't know where I stand), but I get how the argument for a $2 hike would have minimal impact.
The comparison to 1985 is problematic. I think it's likely that the reason so many people earn above the minimum wage now is because the minimum wage in 1985 was probably worth more in real dollars than it is now (although I admit that I have not checked the math). So something like our $7.25 an hour wage hike will increase the percentage of people earning minimum wage, although several of them will see no change in their paychecks.
I don't know -- I just know that now I'm going to Mickey D's and supplement a (likely slightly over) minimum wage earner's paycheck.
August 3, 2006 at 12:54 p.m. ( permalink | suggest removal )
lazz (anonymous) says...
At risk of the CERTAINTY of making a huge error in here somewhere, I'm going to make a few assumptions, based on my mad skills at deciphering irony/satire/exaggerated argument, and trying to de-rust my memory tubes ...
Bill, do I recall that you're something of a libertarian, or at least that your ship of choice sails in similar winds? I think we discussed this once or twice before ... and as I recall, we had much agreement ...
if that's the case, I stand with you on SO many issues of smaller and lesser government ... but minimum wage ain't one of them. And without even getting in that argument itself, it's always been my take that libertarians or far-right conservatives pick this topic for the wrong reasons and with the wrong outcome. In the wrong hands, it can carry the lingering odor of a lot of -isms that a refined person of great intellect and powers of persuasion such as yourself would unquestionably abhor...
And even IF a libertarian doesn't hold with a minimum wage, doesn't arguing for its demolition diminish the potential for other, more important issues? On the scale of big-government sins, enforcing a miniscule minimum wage for unskilled workers seems likely to be catalogued somewhere in Volume 3,456, of 3,457 ...
And if my history and deciphering are off-base, apologies.
August 3, 2006 at 1:16 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"it can carry the lingering odor of a lot of -isms ..."
Oh, you'd be surprised at how little I care about being called names. Some of them may even be true, you never know ;)
"And even IF a libertarian doesn't hold with a minimum wage, doesn't arguing for its demolition diminish the potential for other, more important issues?"
I think this question illustrates the difference between Libertarians and, frankly, everyone else. People in the GOP for example will support it at x price but not y price, based on what they expect the economic effects would be (they are virtually nil, fwiw). Dems will support it at y but not at z (the Living Large Wage). All three numbers are completely arbitrary because as OJ points out, a living wage in Lawrence is not the same as Indiana. But both parties agree that it is the government's job to set the rate, whatever they decide it ought to be.
Having said that, they have no argument for why the government can't set a price for your house, coffee, grilled cheese sandwiches, garage-sale clothing or baseball cards. There's no reason they can't set a maximum wage of $10/hr or make you sell your used car at 1/10th of its book value.
As soon as one accepts the principle that government ought to control the price of labor, then government can (ought to) control the price of everything, because there's nothing magical about labor - and as soon as inflation gets out of control, they will control the price of labor. Freedom to buy and sell, then, becomes a gift of government rather than a right of individuals.
So it's not a small thing when one looks at the effects upon the powers of government or the rights of people that must be swallowed in order to mandate a minimum wage.
Of course, the issue of "isms" always comes up and debate is cut off exactly as I did it above and for the same reason. That kind of goes back to Chris Tackett's post on debates - people really don't want to debate, they simply want to win. If calling people an -ism helps win, they'll use it whether it's accurate or not.
Ask Mitt Romney.
August 3, 2006 at 1:57 p.m. ( permalink | suggest removal )
OtherJoel (anonymous) says...
I see. You're a proponent of ismism.
August 3, 2006 at 2:02 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
An ismist?
August 3, 2006 at 2:10 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
An ismistic.
August 3, 2006 at 2:17 p.m. ( permalink | suggest removal )
lazz (anonymous) says...
Ismian American is the preferred nomenclature, dude ...
I see the LOGIC of your argument, Bill, but sound logic doesn't necessarily mean sound reasoning. Sorta the difference between law students, lawyers and judges arguing about the application of law vs. actual justice ...
I hardly think that the government establishing minimum, poverty-level wages can REASONABLY be extended to gub'ment control of garage-sale baseball cards ... and in so making that argument, it opens up everything else to ridicule or suspicion. It's just a political reality --- trying to argue that poor people should not have minimum wage protection unnecessarily tarnishes the rest of the agenda ...
but, that's just the way I see it ...
put another way: The half-dozen or so times I've visited a libertarian info table, or chatted with a libertarian with the intent of perhaps joining the cause, there's invariably been one such deal-breaker. So obviously this doesn't mean libertarians are wrong, it means I'm not a libertarian, but it's frustrating personally because many of my sympathies are in your arena ...
August 3, 2006 at 2:25 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
"All three numbers are completely arbitrary because as OJ points out, a living wage in Lawrence is not the same as Indiana."
Thats what drives me nuts about the "living wage" discussion. Define living.
August 3, 2006 at 2:26 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
"..trying to argue that poor people should not have minimum wage protection..."
But here's another take I've had for a few years. Is it really a protection? I have have seen more than one case where wages are kept artificially low to the minimum wage. Sort of like companies paying mileage according to what the IRS is allowing for write-off. Theres a remove from negotiations that may seem to benefit the poor, but I belong to the school that says poor does not (necessarily) equate to stupid.
August 3, 2006 at 2:39 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"I hardly think that the government establishing minimum, poverty-level wages can REASONABLY be extended to gub'ment control of garage-sale baseball cards ..."
And obviously they wouldn't do that since there's no reason to - baseball cards are simply not important enough economically. But price floors on commodities and price controls (and price gouging legislation) on other items are important enough. It's a little ironic that the same government that mandates minimum wages artificially raises the price of the food purchased with those wages, no? It's even more ironic that the government would rather you have nothing than pay too much for something.
http://www.washingtontimes.com/commen...
But libertarianism is not 'an agenda,' if by that you mean a list of things that the government ought to do to make us all healthy and happy. It's a set of principles, the main of which is maximum liberty consistent with non-violence. Limiting the right to bargain for labor (which is exactly what a minimum wage is) does not tarnish the agenda, it destroys it.
That being said, I'm at cross-purposes with the Libertarians on issues as well (abortion and borders being the main ones). That just means they're wrong, that's all.
August 3, 2006 at 2:51 p.m. ( permalink | suggest removal )
lazz (anonymous) says...
bill, what's the Libertarian positions on abortionand borders?
August 3, 2006 at 4:02 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
On abortion: "oppose government actions that either compel or prohibit abortion, sterilization or any other form of birth control."
On borders: "Repeal all immigration quotas."
http://www.lp.org/issues/platform_all...
August 3, 2006 at 4:14 p.m. ( permalink | suggest removal )
OnShakedown (Chris Tackett) says...
thetom: "Thats what drives me nuts about the "living wage" discussion. Define living."
it's tough to define what the living wage is. But i'd say the basic point is that a person working an honest days work, 40 hours a week, 52 weeks a year shouldn't be living in poverty, which is what is currently taking place for millions of Americans.
I don't know if it should be 7 or 8 or 11, but it SHOULD go up with inflation, which is currently doesn't do. I think local cites and states should decide what they think it should be for their area, but there should be a base set by the feds.
August 3, 2006 at 4:42 p.m. ( permalink | suggest removal )
Todd (anonymous) says...
Libertarians (myself included) think you should reap the rewards of your efforts. That means if you agree to "work hard" for beans then beans you shall get. Freedom doesn't just apply to happy/fun things you know.
I despise property taxes. When I put effort into repairing/upkeep on my property then my taxes go up even though my use of city services hasn't. I repair my sidewalk and paint my house does that mean it's not more expensive to teach kids or fix a road? Just because some fools start a bidding war for investment properties near me doesn't mean it takes more money to run the city all of a sudden.
August 3, 2006 at 4:55 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"it's tough to define what the living wage is. But i'd say the basic point is that a person ... shouldn't be living in poverty"
But you think it's tough to define a living wage, try to find an objective measurement of poverty.
August 3, 2006 at 6:04 p.m. ( permalink | suggest removal )
ladylaw (Terry Bush) says...
As happens all too often, I tend to see both sides of this coin.
Bill knows that my sympathies are with him on almost any topic of choice. But, I'm a recovering bleeding heart liberal - and so I want to HELP everyone, but especially those who (through no fault on their part) are less fortunate!!
However, I have begun to realize that many (if not all - the child labor laws come to mind) laws that were designed to "help" have, in reality if not design, ended up hurting the very people they were designed to assist. Instead of keeping big bad business from abusing the poor, and turning those without more resources into indentured servants, the abuses Lazz points out have occurred.
Government's have proven to be pretty inept at social engineering. And those who are powerful almost always have ways of staying in power (or getting more powerful, at the expense of everyone else).
Thus, more and more (and under Bill's tutelage) I am beginning to believe that we need to return to the the original and VERY limited role of the US Government; to provide roads, militia, protection from criminals and others of similar ilk, and in some cases (maybe) schools. I think a lot of hard core libertarians are pretty nutty...but still.. (sorry Bill) I can even get on board with the Libertarian's plank about abortion and boundaries. If the theory is that government should stay out of most aspects of a person's private choices, why stop with killing our own children and/or who we let in as neighbors? Personally, I am very anti-abortion and anti-open borders. But, in my perfect libertarian world, those who favor abortion would soon die out b/c of that attitude and those who favor open borders would soon die out b/c they let in too many bad people...while me and mine would have 12 children per family and our own private and well armed enclave to protect against the brigands from other lands.
As we all know - there is no perfect world or solutions. It's all theory until it gets tried. So, time for facts now; what does history tell us about how well the concept and use of a minimum wage law has worked? Come on Bill - you are the historian.... What good things, and bad things, resulted from the government setting one?
August 3, 2006 at 6:33 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"What good things, and bad things, resulted from the government setting one?"
Of course, it depends upon what you mean. If you look at the minwage as a price control, it has worked very well for some just as all price controls do. The most notable winners are skilled labor who would make more than minwage anyway (think unions) because it reduces competition by reducing the pool of available jobs. It's like setting a minimum price of a cup of coffee at $2. Starbucks will gain, the guy who operates the .50 tar coffee machine will lose because while people will pay $2 for Starbuck's, they won't pay it for the tar at work. So it reduces consumption in the case of coffee, employment ni the case of labor. But the expensive coffees and labors gain.
tt.. asked if it really was protection. Of course not, because it only protects those who already have jobs. Put it this way: when are you guaranteed the minwage? When you get hired. When do you get hired? When your labor is worth more than the minwage. In short, the minwage protects the wage of those who are already worth that, but those who are worth less (think teens) go without. Not only that, they never have the opportunity to learn the skills to be worth more.
OK, that's the theory. What's the reality? The reality is that those things probably happen marginally but only marginally. The minwage is so low as to be negligible because business has adjusted to it. The reason 97% of people make more is because anyone worth only $5.50 really isn't worth hiring and so won't get hired - people get hired in at minwage but quickly move up because if they are worth keeping, they are worth more than $5.50.
But there are always a few on the bubble and they are hurt by raising the wage, especially as it pushes into the realm of skilled labor - if you have to pay $11, you take the most skilled, poor and unskilled be damned. My suspicion is that the proponents of a raise know that and figure it's a small price to pay. Sorry, my cynicism showing.
So good things, in short: less competition and better job security for skilled labor, a steppingstone for the marginally employable. The bad things: unemployment for the unemployable, continuous meddling, pandering, centralizing, and power-broking by political powers-that-be.
" I think a lot of hard core libertarians are pretty nutty.."
I agree that Libertarians are pretty nutty because they tend to be academics whose ideas are never tested in the real world. Minarchists are the worst, because they are purely theoretical.
August 3, 2006 at 7:32 p.m. ( permalink | suggest removal )
ladylaw (Terry Bush) says...
Hmmm. Is less competition a good thing? For whom? Those who don't have the skills or whatever it takes to compete? And we want them to do what - be able to provide a service/product that isn't up the standard that would exist without the leg up?
And how is unemployment for the unemp0loyment even possible, let alone a bad thing? Isn't that a double negative? If people aren't employable in the first place, for whatever reason, how can anything add to that unemployability (is that a word?).
Meddling by lawmakers and policy wonks; now there's a self-defining sentence and an ill that won't ever die out.
One of my favorite parts of a favorite book has some pretty apt and funny descriptions of how "winning the war" can end up causing the warriors all kinds of headaches they did not foresee or ask to have dumped at their doorsteps (Moon is a Harsh Mistress); those who fought to be free of tyranny, end up giving other tyrants room to spread. Isn't it amazing (sarcasm) how extremely EAGER many people are to tell OTHER PEOPLE how to live their lives, but the same people resent like heck anyone's attempts to meddle in their lives?
I guess that's my main reason for leaning away from any theory or platform for how to govern other people. I would rather see "natural selection" at work. But most of the time, people like me just sadly watch while we get more and more and more and more new laws...almost always aimed at the behaviors (or property) of OTHER PEOPLE. Meddling and tinkering.
I think the vast majority of people who are the most able and fit to lead are probably the least likely to desire that role. Perhaps they realize that anytime you have to make people "do the right thing" and punish those who don't conform, those so regulated are going to find all the loopholes they can, all the while whining loud and long about the situation.
August 3, 2006 at 8:59 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"And how is unemployment for the unemp0loyment even possible, let alone a bad thing?"
It's unemployment for the unemployable, which is not quite the same thing. Everyone is employable at some rate but unemployable at another because everyone has some skills and those can be valued more or less objectively.
Take a print shop, for example. Let's say that hiring an extra operator will allow the company to capture an extra $80 per day or $10 per hour in revenue. If the minwage is $6, someone gets hired for $6-$10 and the printing gets done. If the minwage is $11, the price is over the amount to be gained in sales, so the person may not be hired. The operator is employable @ $6, but unemployable @ $11. He's on the bubble and the minwage increase won't help him, it'll cost him a job. If he started at $6, he might become good enough to make $10 or $20 someday (raises don't come from the goodness of boss' hearts, from from knowledge, experience, and skill), but now we'll never know.
But let's say that a very skilled operator can produce $20 revenue in printing per hour. If the minwage is $11, she's good to go, because she probably makes more than that anyway. And her competition is reduced because no one who's not as experienced as her will compete for her job. That reduced competition is good for her.
Of course, it's theoretical reduced competition; in real life it's not that simple. But that's basically the GOP argument: the rate ought to be set taking into account the above.
The Dem argument is different and simpler: the operator works hard and should be paid more. The rest is mostly ignored because they assume the work must get done by someone regardless of cost.
My argument is a different one altogether; I think the print shop and the operator ought to freely negotiate. Maximum freedom for both.
August 3, 2006 at 10:26 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
Many business owners don't recognize the intangible benefits of paying workers well, and minimum wage proponents think that this can be fixed. It can not. I agree that both parties should be free to negotiate.
Unfortunately, my parallel theory - that in such an environment, the worst business owners will have the lowest paid employees and shittiest service, and their counterparts will quash them in competition because we the people will recognize and reward the higher functioning business - is currently being trounced all over the country.
August 4, 2006 at 6:46 a.m. ( permalink | suggest removal )
UKept (anonymous) says...
"Unfortunately, my parallel theory - that in such an environment, the worst business owners will have the lowest paid employees and shittiest service, and their counterparts will quash them in competition because we the people will recognize and reward the higher functioning business - is currently being trounced all over the country"
Herein lies the problem with removing the wage. In a consumer culture, as driven as we have been by advertising over the past twenty years, no one's going to give a damn if their McDonald's employee is surly or not as long as they get their $4.99 Big Mac value meal quick-like.
Additionally, fast food joints are designed like factories to provide maximum efficency with minimal training, and with almost no union protection and an incredibly high rate of turnover the industry could drive wages down signifigantly if there were no minimums. This leads to workers forced to take multiple jobs to survive, which in turn increases there chances of poor performance, which in turn restricts the possibiltiy of promotion, which keeps the wages down. Why pay Sally Xerox $20/hour when you can break her job into three parts and pay Bob, Sam, and Delbert $2. Even if they're each only 1/3rd as efficent as Sally, you're still saving money.
August 4, 2006 at 8:08 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"Why pay Sally Xerox $20/hour when you can break her job into three parts and pay Bob, Sam, and Delbert $2."
Of course, this is exactly correct. On the flip side, the net result of a higher minimum is that while Middle Class Sally's job is protected, Bob, Sam, and Delbert are unemployed and unemployable. That's why I say that the minwage benefits skilled labor rather than the poor.
August 4, 2006 at 8:11 a.m. ( permalink | suggest removal )
OnShakedown (Chris Tackett) says...
Bill: "But let's say that a very skilled operator can produce $20 revenue in printing per hour. If the minwage is $11, she's good to go, because she probably makes more than that anyway."
let's look at that in the reverse pov. What if a worker can only produce $1/hr. Do you support only paying him $1?
and as far as the def. of poverty goes, it is tough. Because some folks make due with less and don't want the "mainstream" lifestyle (whatever that happens to be). However, i think a pretty good basis would be having enough money to provide three solid meals/day, clothing, and the other bare necessities (safe and sanitary shelter, etc.) There has to be a way to break that down to a dollar amount based on the local economy.
August 4, 2006 at 8:26 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"let's look at that in the reverse pov. What if a worker can only produce $1/hr. Do you support only paying him $1?"
He's either going to get $1 or he's not going to work, because his labor is worth what it's worth - it doesn't matter in the least whether I "support" it and all the votes in the world won't change it. But in all probability he's not going to work at that for long because it doesn't take much to learn how to be worth more than $1. So he gets $1 and the chance for skills or he gets no dollars and no chance for skills. If he's retarded and can't ever learn to be more efficient, he may actually be making less than minwage under current law.
So if the question is, do I support the right of a person to work, even if what their labor is worth falls below some arbitrary line? Of course. Maximum freedom. Then it's up to them to make themselves more valuable.
August 4, 2006 at 8:42 a.m. ( permalink | suggest removal )
quinno (Patrick Quinn) says...
The economics of the minimum wage are exactly as Bill posits; it boils down to price = marginal cost.
The difficulty of the libertarian position lies in the notion of "free" negotiations, because of course these negotiations are never free. One party to the negotiation possesses all the power and resources; the other comes hat in hand. In the absence of government-mandated minimum pay levels, every single capitalist in the country will pay starvation wages and let their employees be damned. The explanation for this is simple: Short-term greed. Examples are literally innumerable; the formation of the United Farm Workers offers a useful text.
The great error in libertarian thinking is the notion that American markets are free. They aren't free now, and they've never been free; in fact there probably does not exist a truly "free" market anywhere in the world.
One of the saddest manifestations of conservative economics is its seemingly infinite capacity to rationalize poor children and rich "capitalists." Had Dick Cheney and his employers at Halliburton ever faced the prospect of operating in a truly "free" market, they would've starved to death long ago.
August 4, 2006 at 9:25 a.m. ( permalink | suggest removal )
ladylaw (Terry Bush) says...
Chris: "let's look at that in the reverse pov. What if a worker can only produce $1/hr. Do you support only paying him $1?"
I support paying him whatever the person paying him wants. But in reality, if he can only produce $1 worth of widgets an hour, the employer who pays him $1 or more per hour is doing it out of some motive other then the desire to make a profit (at least at that point). P'raps it's the $1 an hour producer is a relative he's trying to help out. P'raps he has hopes that the worker's productivity will increase (soon or a lot). P'raps he is trying to get some kind of charity award or simply do a kindness. What his motives are really do not matter to me, as long as he has freely chosen to pay someone more then they make in return for him. It's his money, he can do with it as he likes.
But in a capitalistic society (yes, boys and girls, that is what we live in right now, supposedly), the employer who has a whole bunch of $1 an hour workers being paid $8 an hour will not stay in business for long (unless he has unlimited resources from another source). That is the problem, especially if you want to continue living in a society which has so many choices and such a high standard of living.
When we force employers to pay a specific wage to specific workers, we (the government is we after all) are setting the bar at what that worker's return value is worth. If the product or service that person provides consistently falls below (makes the employer less than) that bar/value, the employer is not only getting screwed, he/she is being forced to provide charity to other people. And when that happens to enough people, for long enough, the whole of society will feel the impact (businesses close and do not come back, people who get jobs at $1 an hour go unemployed, etc.).
I don't pretend to know all the answers or be an economist. But merely observing human nature often suffices. Most people who might otherwise be good and kind to their fellow humans often get resentful or worse if they are forced to work hard just so someone else gets to live in a manner they did not work to gain. Just ask any teenager who's siblings get fed but are not expected to do as many chores (yes, I know, it's not a perfect analogy).....
August 4, 2006 at 9:31 a.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
CAN produce and DOES produce are two different animals. Hell, from a purely economic standpoint, there's highly skilled people I've worked with that - left up to me - I would have paid to stay the fuck home. Shitty attitudes and that sullen bored look. Sitting in a corner conferencing on how stupid management is. How do you account for the employed unemployable? Getting 25/hr and doing 7/hr worth of work. But you have to keep them around for that few hours a month when the skills are key. You know what? Fuck them. And the half-assed cars they build. And the crappy attiude toward their call center victims (reference to my current favorite utility). And their billionaire philanthropist bosses who have screwed the world they profess to care about with poorly written software that costs us more than we can ever count.
Not that I have any baggage on this issue. Sorry for the off-topic rant.
August 4, 2006 at 9:32 a.m. ( permalink | suggest removal )
ladylaw (Terry Bush) says...
HAHA. Quinno and I posted at the same time, so I didn't get to read him first!
He is exactly right. We have always lived in a society that was not truly based upon free market. At least not for a very long time (I imagine the Old West had a pretty good system going). The problem with government controls is that the system begins to rely upon them so much that when/if you pull the "crutch" out, the whole darn thing can easily collaspe. Just look at how chaotic and awful it was right after we deregulated the airlines, and then the telephone systems. They went from having virtual monopolies to having to compete, and many companies simply did not make it. The ones that did have, to some extent, regained a monopoly. However, they are STILL heavily regulated industries. So there is no such thing as a truly free market for a lot of such providers of services (because their services are deemed "necessities" now; query; would we die without our phones and plane service?).
The free market theory is just that, a theory. It does not depend upon the good will of robber barons (like or worse then the ones PQ names). It depends upon there being enough choices, and enough options, that employees and consumers have collective powers; if they do not like how one company is acting, they can work for someone else and/or buy (or not buy) from someone else.
In truth, the rich get richer because they have the power and resources to outlast those who do not. But, I still believe that if the Boston tea party could work, and it did, a society of people who are determined to take back their country could tell those who robber barons, and everyone else who want to run EVERYONE ELSE'S LIVES, to back the hell away from the controls!!
August 4, 2006 at 9:38 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"In the absence of government-mandated minimum pay levels, every single capitalist in the country will pay starvation wages and let their employees be damned."
Why, then, do 97% of people earn more than the minwage? Benevolence on the part of their employers?
"The great error in libertarian thinking is the notion that American markets are free."
My argument is that they *ought* to be free, not that they are. The minwage is a price control, the existence of which proves that they are not free.
But the essence of my argument is that economic laws work whether governments want them to or not. As LL mentions, if a person's labor is worth $1 and they're getting paid more, it's for some benevolent reason, not an economic one. If something costs more than it's worth, people won't buy it, whether 'it' is bread or hats or labor.
But the great error in modern economics is in asking the question, "Where does poverty come from?" and trying all manner of legal remedies to banish it. Poverty is the natural state of mankind and legalities do not change that. What they ought to ask is where wealth comes from. And it comes from tools and freedom and production. To the extent that law forbids production, it reduces wealth. In other words, the more people you forbid from working while poor, the more poor you get.
August 4, 2006 at 9:47 a.m. ( permalink | suggest removal )
quinno (Patrick Quinn) says...
"Why, then, do 97% of people earn more than the minwage? Benevolence on the part of their employers?"
Point taken. I let my disgust w/ the wretched state of American society overcome my economics training.
It is nonetheless the case that this society grotesquely overrewards "capitalists" and penalizes labor. If every American w/ a net worth of $10 million were to be hanged tomorrow, the country...
wouldn't even notice.
Precisely ZERO productivity would be lost.
August 4, 2006 at 9:54 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"Point taken. I let my disgust w/ the wretched state of American society overcome my economics training."
Look, dude, I agree with you, which is the reason I think it'll all come down sooner rather than later. The termites who infest the upper levels of American management are far overpaid, but the reason they are is, for the most part, because of the institutionalization of capitalism, not its existence.
The Wall Street mutual funds own the companies - rather they vote the shares owned by the investors - and the management moves in the same circles as the politicians who set the rules. The SecTreas was not brought in because he knows about the US Treasury, after all, but because he knows Wall Street.
But if one thinks whatever rules are passed are going to hurt the termites, he's fooling himself. All laws will be to their advantage. The best the little guy can hope for is freedom, because he's not going to get a break from politicians.
August 4, 2006 at 11:53 a.m. ( permalink | suggest removal )
MyName (anonymous) says...
>>"Why pay Sally Xerox $20/hour when you can break her job into three parts and pay Bob, Sam, and Delbert $2."
>Of course, this is exactly correct. On the flip side, the net result of a higher minimum is that while Middle Class Sally's job is protected, Bob, Sam, and Delbert are unemployed and unemployable. That's why I say that the minwage benefits skilled labor rather than the poor.
What you're leaving out of the equation is other factors that force employers to make workers more productive. Having high labor costs (artificially high or not) forces employers to make the most of the labor they have through capital investment. That's why America has a much higher productivity rate than other countries with a lower average wage.
To continue the analogy, if forced to pay a minimum wage of $10 (for example), the average american employer would probably hire 2 people, buy a piece of equipment to make them more productive and have the productivity of 1.5 "Sally"s for the price of 1 Sally. Or, if the equipment doesn't exist at a reasonable price, ship the entire operation overseas. Of course, this makes it alot harder to start new companies in an established industry as capital investment is very costly.
I guess the question is: do you want 2 people making $10/hr (and one unemployed), or 3 people making $2 per hour? Of course, this is setting aside the philosophical debate over whether the gov't has the "right" to set labor prices for private businesses.
August 4, 2006 at 8:03 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"I guess the question is: do you want 2 people making $10/hr (and one unemployed), or 3 people making $2 per hour? Of course, this is setting aside the philosophical debate over whether the gov't has the "right" to set labor prices for private businesses."
Right-O.
What this whole excercise teaches is that *every* choice has costs, and if I can drag this back (again) to Chris' post on debates, it once again illustrates that there is no 'right' answer, because different people will weigh those costs differently based on personal circumstances. Middle Class Sally will judge the costs differently than No-Skill Bob, because as they say where you stand depends on where you sit. Some will focus only on the costs and some will ignore them entirely, but they are still there.
Improved tools, outsourcing, and disemployment of marginal workers always plays in in such ways as mental excercises like this can't possibly hope to account for and no person or committee can account for. All of us, unfortunately, are as ignorant as any of us.
America's productivity rate *is* much higher because of tools, yet our advantage in tools and technology is weakening. We've come through a generation where America owned pretty much the lion's share of world's capital, meaning that we could pay people $10 to do what an Asian did for $2. We were that much more efficient and transport costs acted as a vitual tariff as well. But such can't and won't last forever. Outsourcing is not a cause of that shift but a recognition that it has already taken place.
Technology, alas, is the great equalizer.
August 4, 2006 at 8:57 p.m. ( permalink | suggest removal )
godjilla (Jill Ensley) says...
Hoyt, "If something costs more than it's worth, people won't buy it, whether 'it' is bread or hats or labor."
Jesus, I was not even going to comment on this whole thing, and frankly, I probably won't even bother checking back at this point, but THAT is clearly bullshit. Your disconnect from even the TERM "poor" shows how far removed from this issue you really are, choosing, instead, to dismantle it with armchair economics and false academic thinking.
Disregarding your inability to see things from that perspective, the simple fact that people CONSTANTLY buy things that are priced simply based on a name brand, advertising, etc.,and not the product (yes, Prada is big because it's "just a good product". Please.) shows how tight your blinders are on. By your argument, sweatshop workers are making JUST what they should be. That's what labor's worth, right? Given your argument, I'M making just what I should be. Yeah, well I call Shenannigans.
The question isn't where wealth comes from, I think that's clear...the question is why is it so much an aspiration that we ignore, and become apathetic to, the insanely large, growing gap between the rich and poor. Being "rich" is our greatest collective dream. Until we put a cork in our greed, reign in corruption, see this problem as EVERYONE'S problem, and start paying attention to what's really important, real progress won't be made. At this point, "Working poor" is only a start, and with the spectacle of the evening "news" programs, just something to keep us busy and entertained. I, however, will settle for the small step of raising the min. wage.
"Why, then, do 97% of people earn more than the minwage? Benevolence on the part of their employers?"
"Benevolence"? Oh please. Don't glorify. Considering the mim. wage hasn't changed in what, 10 years, can you imagine the majority of our society earning 5.15 an hour? Not that $7.25 is much better, but it's a start.
Ugh. Back to radio show and ignoring this discussion.
August 4, 2006 at 9:11 p.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"Given your argument, I'm making just what I should be. Yeah, well I call Shenannigans."
Then I have one simple question: Why do you go to work?
You may not like the fact that your employer believes that your labor is worth a measly $x/hr - it may be a great insult to your pride - but that fact that you work for $x/hr shows that you believe, every hour of every workday, that $x is worth the hour you spend earning it. If you did not agree, you'd work somewhere else.
"'Benevolence'? Oh please. Don't glorify."
But you didn't answer the question, Jill. The reason 97% of the people make more than minwage is NOT due to benevolence or the minwage, but to the market at work. When PQ said that every employer would pay starvation wages he was correct - the employer would pay that if he could get the skills he needs for that little, just like I'd pay .19 for a gallon of gas if I could, and I'll bet you would as well. And I was simply pointing out his desires are irrelevant. If I want gas, I pay the offer or go without. If employers want skills, they pay the offer or go without.
"Until we put a cork in our greed, reign in corruption, see this problem as EVERYONE'S problem, and start paying attention to what's really important, real progress won't be made."
Yup, until we change human nature... let me know when that's done, ok?
But your main point is perhaps the main point of the whole discussion: "people CONSTANTLY buy things that are priced simply based on a name brand, advertising, etc., and not the product..."
Then tell me why they pay more for something than it's worth to them. If the buyer judges that the $2 in her hand is worth more than the cup of latte, why in the world does she trade her money for it?
The mistake you're making is a common one, but it's a mistake nonetheless. Value is what buyer and seller agree it is, for their own reasons. Buyers of labor (employers) often base that value on what they can resell it for (in that sense it's objective, but follow the links and you'll always find subjectivity at the end of the chain). If somewhere down the chain, the employer is not getting $x for the result of the work, he simply won't hire someone for $x to do the work. The higher $x is, the more labor there is that doesn't get hired.
It may be "academic thinking" but the results are definately not academic.
August 4, 2006 at 10:18 p.m. ( permalink | suggest removal )
godjilla (Jill Ensley) says...
Yeah, so I lied....but I'm stuck in a radio station.
I knew that question was coming, and there are various reasons that people stick with low-paying jobs. Maybe some aren't as "inspiring" as "telling the man to stick it", but lack of finding a better job and the fact that your job is just flexible enough so that you can go to school are two major ones. And for your information, smarty pants, I quit my job. Not that it matters, they'll just get another warm body to replace me. My labor means just that much.
I LOVE that "human nature" stance, assures you of a long life on a pedastal without having to worry about looking at yourself or helping change minds. Mmm, comfy, like blanket.
"Then tell me why they pay more for something than it's worth to them." Oh, I don't know, because they've(WE'VE) been told, fed, subliminally injected that they DO want it, need it. And you're right, it is all subjective. But it's not as if we barter in this country. I can't go into the local coffeehouse and offer $1.50 for that latte. The best I can do is not go to overpriced coffeehouses. But eventually, the "cheaper" stores will raise their prices too. Prices and the cost of living inflate, the minimum wage doesn't, hasn't, and it should have long ago. There has to be a bottom line or thousands of people will fall below it, as they have. Tell me that's not wrong. Someone has the upper hand and it certainly isn't always the consumer. Capitalism isn't always the beautiful balancing agent some people make it out to be.
Mr. Hoyt, if we paid (and we are, in a way) the true worth of gasoline, it would be well over $3 a gallon, other countries do...we will soon, and that's fine with me.
August 4, 2006 at 11:38 p.m. ( permalink | suggest removal )
ladylaw (Terry Bush) says...
Gilla - Love you like whole wheat, but if you think Bill is some rich dude protecting his stash, that's about as funny as when someone on the boards called Snoop an old white guy. I won't rip Bill's life open (he can do that if he wants to do so) to display all the many sacrifices and financial burdens he's borne, but let me just witness to the fact that he is NOT RICH (As measured by this country's standards on material things). Nor does it look likely that he will be anytime soon! LOL.
Meanwhile, my dual nature is as usual not enjoying being on the fence. I do not like to see the powerful beating up on people without power, and would like to believe my elected officials hate that sight too. But my pragmatic side that tries to be fair must admit that most employers (and employees) do things out of self-preservation, not nobility. We've tried for decades to tinker with the rules so that both sides are more fair. And amost always the side with the most money has found, and driven mack trucks through, the loop holes in the rules. I'm not sure I'd like to see what those who have money and power would do if all the rules on them were suspended or eliminated (think what a work place would resemble without workers compensation, worker safety and other similar laws). But we have seen that employers sometimes "do the right thing" despite there being no law making them (think breaks, health and retirement insurance, etc. All of which are voluntary).
I don't know about anyone else, but I saw (and = sniff - had to pay over $3.00 a gallon for gas yesterday). So the future is here. So, theory or actuality; neither are perfect. Something has to give in order for the pressure to get some relief. I just know that burying silver in the back yard is looking more and more attractive.
August 5, 2006 at 7:55 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
"I LOVE that "human nature" stance, assures you of a long life on a pedastal without having to worry about looking at yourself or helping change minds."
Sorry, but it's simply a fact, and one that many have attempted to change through suasion and force, the rosary and the gulag. People act in their own self-interest, and they act to improve their own lives materially, often at the expense of others. If that could be changed, it would have been changed long ago.
But that's also a perfect example of how many in the debate don't deal with things as they are but as they wish them to be. Then they wonder why it never works out as they thought.
"There has to be a bottom line or thousands of people will fall below it, as they have. Tell me that's not wrong."
Which is fine, because I'm perfectly aware of the fact that 99% of people disagree with me on this. But the bottom line is that the bottom line does not make anyone's labor worth any more than it was worth before. It simply separates the have-nots from the have-mores.
August 5, 2006 at 8:23 a.m. ( permalink | suggest removal )
OldEnuf2BYurDad (anonymous) says...
He forgot #6:
6 ) We'd all live longer because no one would spend $400 on a Big Mac.
August 5, 2006 at 10:48 a.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
Armchair economics and academics removed from issues. Shenanigans. Uncorked greed. Blue skies. Poverty.
Oh me, why doesn't somebody DO something. I mean I could like get depressed or like, INDIGNANT or something. Where's my couch. Where's my TV. I'm upset. I'm all like give me twinkies.
August 5, 2006 at 12:55 p.m. ( permalink | suggest removal )
godjilla (Jill Ensley) says...
Finally a good point, you magnificent asshat. Debating topics on blogs with blowhards who spend too much time on the computer will hardly bring about any kind of change.
So, enjoy!
August 6, 2006 at 1 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
If I had a nickel for every time I've had this discussion with people who:
1) have never even been close enough to smell poverty
2) have never and will never run a business
3) always seem to think they are getting screwed by THEMAN whether its @ 5.55, 7.50, 12.00, or 25.00/hr,
I would have enough cash to give Mr Hoyts 500/hr to somebody else.
But take heart and rest assured of one thing. The 2x4s in the plywood Mcmansion of the middle management people who are tasked with the various programs the man uses to keep us all down? They're all crooked.
August 6, 2006 at 6:50 p.m. ( permalink | suggest removal )
BadEnglishMajor (Bethany Jones) says...
"If I had a nickel for every time I've had this discussion with people who:
1) have never even been close enough to smell poverty
2) have never and will never run a business
3) always seem to think they are getting screwed by THEMAN whether its @ 5.55, 7.50, 12.00, or 25.00/hr,
I would have enough cash to give Mr Hoyts 500/hr to somebody else."
You know, I find it ironic that everyone keeps saying he's rich, considering the fact that he has 8 kids and you honestly have no idea the kind of life he has lived and the jobs he has held. Maybe you should ask whether or not he's ever dealt with poverty in his own life before making assumptions.
August 6, 2006 at 10:43 p.m. ( permalink | suggest removal )
BadEnglishMajor (Bethany Jones) says...
"Mr. Hoyt, if we paid (and we are, in a way) the true worth of gasoline, it would be well over $3 a gallon, other countries do...we will soon, and that's fine with me."
Whatever, I hate you all, getting to pay less than $3 a gallon :-(
I can't remember the last time I paid less than $3.50....
August 6, 2006 at 10:49 p.m. ( permalink | suggest removal )
thetomdotdot (anonymous) says...
I find it ironic that NOBODY said Bill is rich.
August 7, 2006 at 7:19 a.m. ( permalink | suggest removal )
El_Borak (Bill Hoyt) says...
Well, someday they'll *all* say it ;)
Interesting Thomas Sowell column today on minwage and how a few Dems are starting to oppose it (at least in Chicago):
http://www.realclearpolitics.com/arti...
Quoth he: "There is nothing that politicians like better than handing out benefits to be paid for by someone else."
indeed.
August 8, 2006 at 8:43 a.m. ( permalink | suggest removal )