Minimum wage/Livable Wage

If the "fair market wage" for ordinary unskilled workers were 30 cents per hour, there would be externalities that would affect everyone negatively. Even you.

For example, once it becomes completely impossible to live on legal wages, even those who would much rather be law-abiding would resort to crime.

If you give businesses absolute freedom, they will immediately use that freedom to create barriers to entry and prevent competition.

There is no such thing as a "free market" without regulation, because abuse of power is gigantically profitable.

There are also no property rights without government and courts and police to enforce them. There is also no ability to contract (and be sure the other party lives up to the terms) without government and courts and so on.

 

I'm going to go ahead and concede those points. I'm not advocating no regulation or unlimited individual freedom. I'm advocating the minimum necessary regulation to keep a self sustaining system of checks and balances.

My thesis here is that monkeying with universal minimum wage regulation does more harm than good.

The threat of skilled employees walking away "at will" (or otherwise unionizing themselves) is a powerful check against unfair wages. These checks and balances exist independently of minimum wages and are already protected by laws.

 

Letting the market determine the floor for wages may work if the number of available jobs were more equal to the number of available workers. At current unemployment levels, it would allow companies to offer jobs to the lowest bidders. And "at will" would allow the dumping of higher wage workers in low skill positions in favor of cheaper labor. Contrary to the spin, "at will" and "right to work" are decidedly anti-worker.

Have you read through the thread, @Lendari? Just wondering.

There are many real world examples of minimum wage "monkeying" actually enhancing economies. Australia should be added to @Baraka Guru's list of success stories. Most opposition arguments are echoes of the opposition to the New Deal reforms that fueled American prosperity for half a century.

One could make a solid argument that more regulation is in order. It may not be beneficial to certain individuals, but the American economy as a whole is more important than the unfettered freedom of a few elites.

 

This is precisely why you need to let supply and demand determine wages. If you just legislate a "magic number" it won't hold up through recessions and depressions - it stand to reason that a minimum wage that is too high could even drive unemployment up. When the economy is doing well it will be to low.

This goes back to all my original points about regulation not adjusting to changing markets and having unintended consequences.

Hmm, don't confuse "at will employment" with being forced to join a union and pay them union dues. Unions are a powerful check, but can become monopolists themselves (one need look no further than the UAW and GM). The only reason I brought up unions is because as powerful as the threat is for an individual to walk away... the power is multiplied within the context of a union.

At will employment means that employment is not a contract or a forced arrangement. Both the employer* and employee retain the right to end the employment for any or no reason at any time. This ensures that the employee has the freedom to work in their own self interest (IE: walk away from an unfair wage) and the company derives satisfactory value from employing the person.

Hopefully I've made my point that equating employment to indentured servitude, forced labor or slavery is just not a logical or valid argument. All employment in the US is "at will" and thus it is logical to infer that it is mutually beneficial to both parties.

The notion that skilled, qualified, reliable people are a cheap commodity is also false. I don't care if you are talking about unskilled labor, master craftsmen, college graduates or MBAs. Hiring and retaining these people is a challenge at every single company I've ever worked for. Ask any CEO, VP, middle manager or line supervisor this question. I bet 9\10 would say they wish it was easier to find and retain good people. This is why lots of people earn *MORE* than the minimum wage.

Because "at will employment" guarantees that skilled, qualified, reliable labor has the right to refuse employment, get competing offers and leave at any time without reason or notice. Because the people that the company employs have the freedom to act in their own self interest.


* NOTE: Even though employers are legally allowed to terminate an employee for "no reason at all" most companies have more stringent management policies about firing people because there are tax penalties (the company will pay more taxes into the state unemployment fund) for firing people.