THIS IS COPIED FROM ANOTHER THREAD AND IS ROMEKB8's POST IN REPLY TO ME ABOUT THE MINIMUM WAGE. IT IS NOT ME ARGUING AGAINST MYSELF, IT IS NOT AN ALTER EGO, IT IS MERELY AN EXCERPT OUT OF ANOTHER THREAD
Posted by Rome KB8 copied here for the purposes of not derailing a thread and allowing a more comprehensive debate. Finding time to debate is difficult for me as ever so this is some weeks delayed. I will reply in kind it won't be double posting (unless someone beats me to it)
Originally Posted by Denny Crane!
No actually if you looked at what I said I was looking at it from the point of view of the people I knew who worked before and after the minimum wage and who it benefited? It has not created an increase in disposable income or had a marked effect on poverty precisely because it didn't hit those in true poverty.
It's not intended to work for the unemployed poor. It, along with the working tax credits, is designed to help the working poor. It's designed specifically to create a substantial difference between working, and being on welfare.
So... no increase in disposable income for low paid workers, no decrease in poverty and distorted RPI around essentials that directly has a negative effect on low income workers.
Lies, damn lies and statistics. My attempts to research the true changes in well being and poverty in this country in the last decade and a bit have fallen flat due to a single fact. For every fact, or statistic, showing poverty has decreased and giving a reason why.. there is another one showing the precise opposite. The fact is people can make statistics say whatever they want them to. But that's a rally counter productive and cynical opinion to hold.
The only bit I'd agree with you on is the RPI. It's a reflection of the mass consumer culture and debt/credit/mortgage culture, as opposed to a direct failure of minimum wage. On the first two points, there is evidence to suggest that poverty for the working poor has decreased and it is directly linked to the working tax credits and minimum wage. Disposable income is related to many factors beyond raw wage or salary, and almost all the time nothing to do with wage and salary.
I wonder though what you're suggesting. Are you saying that if we abolished the minimum wage now... and employers started paying people £3 odd an hour... that would somehow improve the poverty situation? Improve incentive to work? Bring more people out of poverty? Increase disposable income? It's all well and good you finding statistics to show that the economy is uncertain, wild and uncontrollable that RPI is a mess and disposable income is all over the place... but why has it led you to the conclusion that lower wages and further wage competition is going to be beneficial?
The problems with wage reflected economic condition is the economic culture we have. I agree on that point. People don't save as much as they used to, thanks to credit they buy more stuff and more expensive stuff then they would normally do. People get mortgages they can't really afford. etc. etc. That all naturally reflects upon incomes. That however is also a consequence of personal responsibility failure... as opposed to the minimum wage. They earn more... but what they do with it is nothing to do with the principle of the policy. That's not the point of it.
The point of it was to provide a fair and liveable wage in relation to inflation, and the market trends, economic conditions etc. and let people and the economy do the rest.
The minimum wage is one of those counter productive ideas, great on paper and bad in reality. Unless beyond your wink and a nudge towards common sense can offer up some kind of argument that proves it was a good thing.
It's not counter productive.. it's just not perfect and the sole solution to fair wages and creating equality and alleviating poverty.
One thing you really haven't considered is this, you think I'm looking at this from a managers or owners point of view. Go back to the time it was instituted and imagine how old I was... just entering the work force and on low wages. I didn't cross to the dark side for a few years.
The minimum wage popped up in 1998... how old were you then?
There is no scaremongering, I'm not saying it drove jobs away (though I could make a case that it played a small part in certain areas) I am saying that it didn't achieve what it set out to do.
Sure it did. It ended a lot of exploitation in the labour market, rewarded the working poor in relation to the unemployed poor giving a positive incentive and it levelled the playing field, well at least it was supposed to, in terms of immigration and labour competition.
A fair wage? What does this even mean? Do you think the numbers mean anything? Is a dollar an hour a poor wage in poor rural china. It is all relative to the price of essentials, housing and other commodities necessary to life.
Sure, but like I said above... does all those on the minimum wage earning less somehow fix everything? The minimum wage on average full time hours is barely £10 thousand per annum... not taking into account tax, NI, necessities and bills. As you said earlier our labour market is very flexible now.. lots of people work part time or temporarily. part time work on the minimum wage is a LOT less than £10 grand. How is earning a LOT less than those already meagre and pathetic salaries going to be positive in any manner (beyond cost control for businesses)?
I know it's not perfect, it's not supposed to be, it's not magic dust. Maybe in many cases it hasn't worked well... poverty, job sources and employment opportunities depend on a LOT more than just salaries and how much one earns... but what I'm saying is there is no positives from abolishing it. Except for businesses and migrant workers.
What successes can you list them with evidence? Or is this all just hyperbole.
Sure, there are many sites explaining the thresholds for poverty, how many there are, what is considered poverty, and others showing the inner details of the minimum wage. Fact is this. Poverty levels, under every definition, are lower now than in the 1990's and 1980's. Many factors resulted in this conclusion, there have been setbacks and problems, and anomalies (e.g. failures to change to the demographic changes) but essentially there is a link between enforced fair reasonable wage and overall poverty levels.
Regardless my argument stays the same. Minimum wage is not a magic bullet, solution or superman, but there is no positives for the people earning it (or those on benefits, or the Treasury for that matter)... for it to be abolished. The minimum wage (and to a greater extent tax credits) is one of those equality measures which do not hold back the top bracket, but solely focus on giving a hand up, but not a hand out, to the bottom quadrant. Something I thoroughly believe to be a good thing. It fits in with aspiration and incentives as opposed to quashing them.
Actually economists have always been its biggest detractor.
Illegal immigration is just the reality of free movement of labour as desired by supply and demand. America is the best example.
Again can you give me a before and after shot of what changed for the better and the worse.
I'll try.. although I don't full understand this all. Bloody hate statistics. Focus on 1998/99 until about 2004/2005 (after that it seems to have gone tits up, mainly because of the highly paid public sector job explosion I'd say).
Spoiler Alert, click show to read:
Spoiler Alert, click show to read:
Spoiler Alert, click show to read:
And the number of people within the lowest 60% [source, graph 3 at the bottom]. Minimum wage + working tax credits introduced in 1998/1999. It wasn't ''OMG EVERYTHING FIXED!" but it had modest positive effects.
While I commend you on your graph-finding abilities, your alter ego is actually correct, and the vast majority of economists agree with him. It really is pretty simple. A minimum wage increases inflation (and unemployment) because the evil market will adjust itself to the new wage that must be paid to the Highschool-Kid-Who-Wants-Movie-Money type labor. He is an article explaining it fur ya: http://www.personalfinanceanalyst.co...-minimum-wage/
In a free economy, over time the supply and demand markets will automatically adjust to new equilibrium. In order to accommodate for the forced wage increase, other markets change. The higher labor costs are eventually distributed to everyone in the form of higher prices for goods and services. These higher prices affect the Consumer Price Index (CPI), which contributes to inflation rates.
So in the long run, the economy is basically right back where it began. The increase in wages eventually results in market adjustments… which results in higher prices… which results in inflation. So whether you are making a lower minimum wage a year ago and a higher minimum wage two years from now… it still buys the same thing because of the changes in prices and inflation.
EDIT: yeah I know you were not quoting yourself. I was just yanking your chain
Last edited by ♔DeusVult!♔; April 24, 2010 at 07:01 AM.
Reason: way too many simplys in one sentence, what was i thinking...
The minimum wage creates undue unemployment to those on the lowest tier of the labor market. Far from helping out the least capable it makes them more unemployable. The over valued jobs will go to less people and the selectivity for the positions increases. These unemployed people aside from being a welfare drag on the economy are also miss out on valuable work experience and networking and will continue to lose out.
The minimum wage creates undue unemployment to those on the lowest tier of the labor market. Far from helping out the least capable it makes them more unemployable. The over valued jobs will go to less people and the selectivity for the positions increases. These unemployed people aside from being a welfare drag on the economy are also miss out on valuable work experience and networking and will continue to lose out.
This is all a stab in the dark. You have no idea what scare stories were brought up when the minimum wage was introduced in the UK. You'd have thought the end of time was nigh. instead we had some of the lowest unemployment in recent times, lowest inflation, reduction in poverty rates.. etc. You cannot simply blame a minimum wage on all the faults of economies and labour markets. The explosion and expansion of public sector jobs and wages has something to do with altering the labour market. EU enlargement and free movement of labour has something to do with the labour market. Business taxes and regulations. Culture, as we've shown a lot more people do flexible working now. Structural global conditions such as the shifting of production to the third world, the rise of the internet. To blame minimum wage, or attribute far greater qualities to it, whether positive or negative, is not at all productive or even in the interests of proper economic scrutiny.
The issue as ALWAYS is ideological. what works, the human factors, indirect factors... it's always what our textbooks written by our chosen favourite academic theorists and proved by their pick-one statistics and elaborate language that matter most.
This is all a stab in the dark. You have no idea what scare stories were brought up when the minimum wage was introduced in the UK. You'd have thought the end of time was nigh. instead we had some of the lowest unemployment in recent times, lowest inflation, reduction in poverty rates.. etc. You cannot simply blame a minimum wage on all the faults of economies and labour markets. The explosion and expansion of public sector jobs and wages has something to do with altering the labour market. EU enlargement and free movement of labour has something to do with the labour market. Business taxes and regulations. Culture, as we've shown a lot more people do flexible working now. Structural global conditions such as the shifting of production to the third world, the rise of the internet. To blame minimum wage, or attribute far greater qualities to it, whether positive or negative, is not at all productive or even in the interests of proper economic scrutiny.
The issue as ALWAYS is ideological. what works, the human factors, indirect factors... it's always what our textbooks written by our chosen favourite academic theorists and proved by their pick-one statistics and elaborate language that matter most.
Relax. I certainty don't know when it was I blamed all the ills of the labor market on the minimum wage or made it some all deciding factor. However the minimum wage does make a hell of a difference to those on the margins of the labor market, namely the youth.
It's common sense really. Employers have a set amount of money to spend in labor, if you put a price floor for unskilled labor they will have to hire less and try to make up for the loss in productivity (less hands at work) by being more selective with who they hire.
Now If I wasn't going to get paid enough to live, why work exactly?
Although you bring up a good point. Why have welfare and social nets if we could just designate a minimum standard of living?
Exactly the question your founding fathers asked. Thomas Jefferson and Thomas Paine were in favour of guaranteed minimum income of some sort I believe.
Originally Posted by BNS
Relax. I certainty don't know when it was I blamed all the ills of the labor market on the minimum wage or made it some all deciding factor. However the minimum wage does make a hell of a difference to those on the margins of the labor market, namely the youth.
It's common sense really. Employers have a set amount of money to spend in labor, if you put a price floor for unskilled labor they will have to hire less and try to make up for the loss in productivity (less hands at work) by being more selective with who they hire.
There are different rates for the youth. The minimum wage for people under 22 is a LOT less than the minimum wage for people over 22. So if your argument is that due to the minimum wage businesses have to cut young employees in favour of older more experienced ones because of the increasing costs, then you've shot yourself in the foot a bit there. Actually the fact that youth unemployment is so large, yet the cost to hire them is so much lower than older people... points directly to my point that the minimum wage has very little, if almost nothing at all, to do with it.
The issues lie in culture, mentality, education, training, the nature of the economy, EU free movement of labour, qualification inflation, birth rates, the definition of ''youth unemployed'' (the upper age for leaving education was raised to 18 last year), benefit fraud (many people work in cash, on top of officially being counted as seeking work), apprenticeships, unpaid internships, etc. etc. I reiterate there are too MANY integrated relevant factors to simplify it so much.
You'd have thought the end of time was nigh. instead we had some of the lowest unemployment in recent times, lowest inflation, reduction in poverty rates.. etc.
Although I'm curious, at the same time what were things like labor participation and economic business cycles looking like. In a vaccum, nobody really disagrees that if something costs more you get less. It's just we can all start pointing fingers and saying "ah ha" when the vaccuum is removed. ALthough, I don't know how that works in terms of saying the minimum was proven correct in the first place. Why? Cause nothing happened?
Sure I've been called a xenophobe, but the truth is Im not. I honestly feel that America is the best country and all other countries aren't as good. That used to be called patriotism.
Isn't that my point? There is no real proof or tool, beyond constant vigilance, to prove it has a detrimental effect on the British economy, or individuals on the scale attributed. America and Britain are different. Very, very different. I don't know if it will work for you... but in the UK there may not be that many godly positives from keeping it, but there are certainly no positive elements from abolishing it. Except as I said, for businesses and migrants.
Have any of you actually tried living on Minimum wage? It's almost impossible.
+ rep.
When I look for jobs I discount anything that is minimum wage because it is to low and living on a wage a couple of K above that per year is difficult enough.
Have any of you actually tried living on Minimum wage? It's almost impossible.
That's why many opt for welfare instead. Why work for not much when you get a lot more being on welfare. And the more kids you have the better house and more benefits you get. It's a win win really.
Working on minimum wage is a stepping stone to improve one's self. I've done it, and I worked hard to go somewhere else that I wanted to. These days, it seems there is always an excuse made for those who are too lazy too try. It's the white man's fault, its the government's fault, society's to blame. How about just get you lazy fat ass up and do some work, study at school, take care of yourself. Get off welfare and work for a living. People with no experience and no skills believe they are too good to work a minimum wage job, they want to be the boss from day 1, because at school and at home they been told that everything they do and say is very very special, and they are the best! Reality hits them like a brick out in the labor market.
There does need to be a minimum wage, otherwise big employers could easily collude to ensure that people were paid only enough to stop from starving. Actually, given the obesity epidemic, maybe that's a good thing.
Last edited by Simon Cashmere; April 25, 2010 at 06:45 AM.
Have any of you actually tried living on Minimum wage? It's almost impossible.
Well to be quite honest, I am "living" on minimum wage right now. I'm a college student with a (loooong) night job so I can pay rent, grocery, and gas. And yes all the money I spend is my own, my parents don't give me jack squat. I'm not gonna lie though, it is very much paycheck to paycheck, and I recently joined the army to avoid debt and be able to concentrate more on studying. So I don't know if that qualifies me as a minimum-wager in your book, but whatever.
Well to be quite honest, I am "living" on minimum wage right now. I'm a college student with a (loooong) night job so I can pay rent, grocery, and gas. And yes all the money I spend is my own, my parents don't give me jack squat. I'm not gonna lie though, it is very much paycheck to paycheck, and I recently joined the army to avoid debt and be able to concentrate more on studying. So I don't know if that qualifies me as a minimum-wager in your book, but whatever.
Minimum wage is a lot better in Australia than it is in the US, if that is where you are. It was $14.31 per hour something last I checked. In the US its $7.25 per hour. Given our dollar is about 90 US cents, that gives you a fair idea. For us, unlike the US, less sectors are covered by the minimum wage, many being unionised at least in terms of setting the wage rate. So the going rate for bar staff is often $20 an hour, although tips are far rarer.
I put myself through college, and its not easy, I know. One day at a time is the only way, and you'll be surprised how many days that adds up to after a while.
Also, well done for joining the Army. Hopefully you will get a lot more out of it than just paying for tuition.
Minimum wage
Originally Posted by Denny Crane!
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what works, the human factors, indirect factors... it's always what our textbooks written by our chosen favourite academic theorists and proved by their pick-one statistics and elaborate language that matter most.
