Thoughts on Minimum Wage Laws

I agree the Constitutionality of such laws (indeed most of the laws that congress passes) is very much in doubt. Minimum wage laws are basially a job protection scheme by the Unions to protect their turf. What they dont realize is that they are losing it anyway, as the non-skilled jobs - instead of going to Union labor - are going overseas. Back in the 30s, when economies were not global, Minimum wage had the desired effect for Unions. Now, as you correctly point out, it just means fewer jobs here. Not more Union ones.

Unions are using the same game plan from 70 years ago - not realizing that the game has changed.

I'm most definitely not a fan of minimum wage laws, or of the ideas of universal health care and other similar government mandates that burden companies with additional expenses and make employers potentially over-compensate people that could have worked a little harder when in school, or could work a little harder in their current jobs, or just a bit harder in the job market job search to find something that pays them a little more, and helps them work their way up and out of the low end jobs that typically are paid minimum wages.

If you are making minimum wage, you should look in the mirror and ask yourself why?  In most cases you have just as much to do with your compensation as does anyone else.  Demanding that the government fix it because you aren't smart enough to look elsewhere is stupid.

While I agree MWL's are mostly a "Feel Good" proposal, I think they do have some purpose. That purpose is to keep companies from underpaying people that we all know they would start doing in a heartbeat if the law was removed. Microcenter for example offered a friend of mine a position there at $4.00 an hour +1% Commission, their way to circumvent the MWL and underpay their employees.

Big companies like Target hire all new employees at minimum wage, automatically, regardless of experience of background. They've had this practice for years, and as MW goes up so does their starting wage. Circuit City recently fired 4,000 of their highest paid employees so they could hire a bunch of minimum wage workers. Over the last 3 years Radioshack has been quietly firing higher paid workers and managers and replacing them with minimum wage clerks. Keeping in mind all of these firings were based solely on pay, not on qualifications or lack of. Another trick they love doing is having only part-time designated employees but still working everyone full time just so they can avoid paying benefits.

In states with poor economies often the only jobs available are minimum wage jobs, and even those are scarce, so MWL's at least make those somewhat attractive. Not everyone working in minimum wage positions warrants it, or deserves it, often you will find professors, engineers, programmers and other professions working at places like Target these days. Our country is in the middle of a big job shift, shifting people from higher end jobs down to lower end service jobs, and the net result won't be very good for us.

This brings to mind a recent issue of USNews headlined with the title "What America Needs to Learn from Everyone Else". Basically it detailed that as a country we are falling behind in almost everything from medical breakthroughs, technological breakthroughs, mass transit, environmental issues, on and on. It is an interesting read to say the least, pointing out that the US continues to riser higher in infant mortality (now 14th), and we're starting to fall behind on life expectancy (50's on the list, down near Chile, Cuba, Slovenia). Quality of life we're actually slipping to new lows.

My opinion: Our corporatism form of government doesn't work, and this fact will become more prevalent as the years go on. We're becoming a third world nation. Too much of the wealth in this country is horded by too few, and it is causing a breakdown of basic systems.

I remember some years ago having a debate on Usenet about minimum wage laws around the time they had last raised it and I said "I predict that in 10 years, you'll see a lot of these jobs being automated or sent overseas. So if you find yourself checking yourself out at the grocery store in a self service line, remember this." Of course, back in the early 90s, I got flamed and patronized on the reasons why grocery store check out lines couldn't be automated (impossible to stop shop lifting was the basic argument).

Google Groups indexed all of Usenet, didn't it? If you tell me the username you used to use, I think it would be fun for me to go try to dig up the thread and see what other predictions were made and how you used to handle yourself in a flame war.

as the non-skilled jobs

think you're the one who hasn't realized the 'game has changed

You missed an important point (see above).  Skilled jobs do not need unions as they can control the market through certification (and do to a degree).  Non-skilled thinks they do just so they can jack up (artificially) their wages - which as we see today, does not work.

If minimum wages actually worked to the positive, then why stop with a low minimum wage? Logically, we should set the maximum possible minimum wage, whatever that comes to. Why $7? Why not $50? $500? $5,000,000,000... . Then we could all do one pico-second of work and retire forever on infinite wealth. (Of course, the union dues would be killer. )

The minimum wage laws were a spinoff of the corrupt deal that Gompers made with corporate Amerika to create an artificially high-paid tame union, so that the real union - the IWW - could be smashed. The industrial unions wanted the minimum wage specifically in order to exclude blacks, who were generally less educated and qualified, from extry level positions in the factories, etc.

And, every time the minimum wage is raised, the natural result is that the graphs of unemployment jump straight up in a quantum leap. However, adult skilled labor is scarcely affected - at least immediately, while the other end of the spectrum, the young black men, is devastated. Typically, unemployment rates among the lowest educated minorities doubles immediately after a raise in the minimum.

On a broader scale, the minimum wage, along with the "progressive" income tax, compulsory state indoctrination (euphemistically called "public schools"), the War on Drugs, and a host of other direct violations of basic human rights are the legacy of the proto-fascist "progressives," who championed the idea of the corporate mega-state, pretty much getting their original impetus from dictator Abraham Lincoln.

While I agree MWL's are mostly a "Feel Good" proposal, I think they do have some purpose. That purpose is to keep companies from underpaying people that we all know they would start doing in a heartbeat if the law was removed. Microcenter for example offered a friend of mine a position there at $4.00 an hour +1% Commission, their way to circumvent the MWL and underpay their employees.

Who decides if someone is "underpaid"?  That's just the thing - if your friend accepts a job at $4.00 then why does the government need to get involved.  I'd pay my workers a penny an hour if I could get away with it.  But I can't because the laws of supply and demand keep me from being able to do so -- people wouldn't work the jobs we need for a penny an hour.  It's considered pretty universally accepted that price fixing doesn't work on goods and services (the California energy debacle along with the huge gas lines in the 70s are two examples that spring to mind).  Yet people argue that price fixing wages is a swell idea.

Big companies like Target hire all new employees at minimum wage, automatically, regardless of experience of background. They've had this practice for years, and as MW goes up so does their starting wage. Circuit City recently fired 4,000 of their highest paid employees so they could hire a bunch of minimum wage workers. Over the last 3 years Radioshack has been quietly firing higher paid workers and managers and replacing them with minimum wage clerks. Keeping in mind all of these firings were based solely on pay, not on qualifications or lack of. Another trick they love doing is having only part-time designated employees but still working everyone full time just so they can avoid paying benefits.

How are these tricks?  Again - if the person accepts the job making less than they think they deserve who really is to blame?  If I offer you a penny an hour, you'd tell me to go to hell I assume.  It didn't require the government to be involved.

In states with poor economies often the only jobs available are minimum wage jobs, and even those are scarce, so MWL's at least make those somewhat attractive. Not everyone working in minimum wage positions warrants it, or deserves it, often you will find professors, engineers, programmers and other professions working at places like Target these days. Our country is in the middle of a big job shift, shifting people from higher end jobs down to lower end service jobs, and the net result won't be very good for us.

And that's the crux of the argument for federal minimum wage laws -- one that is pretty compelling.  Without a federal minimum wage, you could have parts of the United States that are like third-world countries.  Except -- in our modern economy, peope can move to places with better jobs and opportunities or companies can move to where the labor is cheaper.  But that was less so the case when this train got started.

This brings to mind a recent issue of USNews headlined with the title "What America Needs to Learn from Everyone Else". Basically it detailed that as a country we are falling behind in almost everything from medical breakthroughs, technological breakthroughs, mass transit, environmental issues, on and on. It is an interesting read to say the least, pointing out that the US continues to riser higher in infant mortality (now 14th), and we're starting to fall behind on life expectancy (50's on the list, down near Chile, Cuba, Slovenia). Quality of life we're actually slipping to new lows.

I read that article and calling is sensationalism would be about the most charitable description I could give it.  Every time I read some article saying how we should be more like Denmark or Norway I just scratch my head wondering if the authors realize how absurd that is.  The problem with statistics is that they are easy to manipulate to get what you want.  Take life expectancy. The difference between the United States (42nd overall at 77.12) and say Australia (79.75) is about 2 years. (my rankings are different because the list I'm using counts countries like Andorra and San Marino).  Anyway, what does life expectancy really say? We have huge chunks of our population that are sedentary, McDonalds eating slobs (like me).  So what does that really prove?  That we need more excercise?  Not to mention that in the United STates, we have significant racial minorities that, for various reasons, have significantly different life expectancies.  The average white American has a life expectancy of 79 for instance.  

That isn't to say that the US doesn't have things that can be learned from the rest of the world.  But some of the "lessons" in that article were silly (like the one making our city streets better for cyclists -- sure, cities seem great if you're living in Manhattan but most of the middle class in the United States live in the burbs). And nearly every country they list we should be more like have plumetting population levels (over half the tips come from countries that have significant population drops in progress -- not a ringing endorsement).

 

While I agree MWL's are mostly a "Feel Good" proposal, I think they do have some purpose. That purpose is to keep companies from underpaying people that we all know they would start doing in a heartbeat if the law was removed. Microcenter for example offered a friend of mine a position there at $4.00 an hour +1% Commission, their way to circumvent the MWL and underpay their employees.

Who decides if someone is "underpaid"?  That's just the thing - if your friend accepts a job at $4.00 then why does the government need to get involved.  I'd pay my workers a penny an hour if I could get away with it.  But I can't because the laws of supply and demand keep me from being able to do so -- people wouldn't work the jobs we need for a penny an hour.  It's considered pretty universally accepted that price fixing doesn't work on goods and services (the California energy debacle along with the huge gas lines in the 70s are two examples that spring to mind).  Yet people argue that price fixing wages is a swell idea.

Big companies like Target hire all new employees at minimum wage, automatically, regardless of experience of background. They've had this practice for years, and as MW goes up so does their starting wage. Circuit City recently fired 4,000 of their highest paid employees so they could hire a bunch of minimum wage workers. Over the last 3 years Radioshack has been quietly firing higher paid workers and managers and replacing them with minimum wage clerks. Keeping in mind all of these firings were based solely on pay, not on qualifications or lack of. Another trick they love doing is having only part-time designated employees but still working everyone full time just so they can avoid paying benefits.

How are these tricks?  Again - if the person accepts the job making less than they think they deserve who really is to blame?  If I offer you a penny an hour, you'd tell me to go to hell I assume.  It didn't require the government to be involved.

In states with poor economies often the only jobs available are minimum wage jobs, and even those are scarce, so MWL's at least make those somewhat attractive. Not everyone working in minimum wage positions warrants it, or deserves it, often you will find professors, engineers, programmers and other professions working at places like Target these days. Our country is in the middle of a big job shift, shifting people from higher end jobs down to lower end service jobs, and the net result won't be very good for us.

And that's the crux of the argument for federal minimum wage laws -- one that is pretty compelling.  Without a federal minimum wage, you could have parts of the United States that are like third-world countries.  Except -- in our modern economy, peope can move to places with better jobs and opportunities or companies can move to where the labor is cheaper.  But that was less so the case when this train got started.

This brings to mind a recent issue of USNews headlined with the title "What America Needs to Learn from Everyone Else". Basically it detailed that as a country we are falling behind in almost everything from medical breakthroughs, technological breakthroughs, mass transit, environmental issues, on and on. It is an interesting read to say the least, pointing out that the US continues to riser higher in infant mortality (now 14th), and we're starting to fall behind on life expectancy (50's on the list, down near Chile, Cuba, Slovenia). Quality of life we're actually slipping to new lows.

I read that article and calling is sensationalism would be about the most charitable description I could give it.  Every time I read some article saying how we should be more like Denmark or Norway I just scratch my head wondering if the authors realize how absurd that is.  The problem with statistics is that they are easy to manipulate to get what you want.  Take life expectancy. The difference between the United States (42nd overall at 77.12) and say Australia (79.75) is about 2 years. (my rankings are different because the list I'm using counts countries like Andorra and San Marino).  Anyway, what does life expectancy really say? We have huge chunks of our population that are sedentary, McDonalds eating slobs (like me).  So what does that really prove?  That we need more excercise?  Not to mention that in the United STates, we have significant racial minorities that, for various reasons, have significantly different life expectancies.  The average white American has a life expectancy of 79 for instance.  

That isn't to say that the US doesn't have things that can be learned from the rest of the world.  But some of the "lessons" in that article were silly (like the one making our city streets better for cyclists -- sure, cities seem great if you're living in Manhattan but most of the middle class in the United States live in the burbs). And nearly every country they list we should be more like have plumetting population levels (over half the tips come from countries that have significant population drops in progress -- not a ringing endorsement).

 

I agree completely, minimum wage is nothing more than a price floor. Any good economist that has read Milton Freidman knows that price floors lead to shortages. People just need to stop relying on the government for everything.

I am completely against the idea that minimum wage is not necessary. Minimum wage does NOT work in the current world labor market. That is not because it is wrong for an open market, but that we do not HAVE a truly open world market. A fair labour market cannot exist while the great disparities in exchange rates and cost of living exist. Fact is, I would not even be able to EAT on a wage that in some countries is able to cover a family of four. Is that my fault for being born in the wrong country? Yet due to the price disparities, it is profitable for business to export jobs to countries with vastly different economic conditions than those that exist here.

If a dollar a day buys food/housing for someone in a certain 3rd world country, is it fair to expect someone in the US to work for the same amount, when that would leave said person on the edge of starvation and certainly homeless (said person could eat dry ramen noodles, for example). Yes cheapskates like you think it is right somehow.

As you said, you'd get away with paying a penny an hour if you could. I have no respect for anyone that values other people that lowly.

A free labor market is fine - IF everyone is playing with the same market, but they are not. My theory for a solution? Unified currencies. Is that ever going to happen? Not while the Christian conservatives are in control, as a unified currency could be seen as a "sign of the apocalypse". China as well, would object, as would several other countries. Indeed, most objections would (naturally) come from the countries who benefit the most by the sharp disparities in exchange rates and labour values. Yet, if they refuse to play on a level playing field, why again are we even allowing them to have complete and open access to rape and pillage our economy?

As far as wages go - I'm currently working for a company that pays a contract wage based on the work I produce, all done over the internet. The pay scale is 0.12 per document I process. A few friends of mine signed up and quit because they could not produce quickly enough to make a fair wage, yet I've been able to earn about $10/hour doing this. Since I currently in grad school, the flexibility this offers me is ideal, as I can work when I choose and have no commitments. Now, this company COULD have offered a much lower wage per document - and many do. But they chose to offer a fair wage. Along with that choice - they required all applicants to have a bachelor's degree and pass a strict English test. They did not limit the part of the world anyone could work in, yet it turned out that the only applicants who were approved were from the U.S. and Britain. They also closed the gates on applications when they had just enough people to do the job. Thus they ensured they have a small, well trained pool of workers who are paid well enough to care about how they do their job. Contrast this with the widely publicized Mechanical Turk program that Amazon is offering now. That program allows bidding on menial tasks (much like the one I do, actually). However with their program, the wages are MUCH lower, as are the barriers to entry. The result is that you have thousands upon thousands of people competing for the few HITS that come up, many of which pay only 0.01 or 0.02 per task - significantly less than I make. Yet they have to run each task through 3 or 4 different people to double and triple check the quality of the results. The end result of Amazon's Mechanical Turk is mediocre work done by a huge taskforce of people consisting of teenagers, unemployed/unemployable and 3rd world workers, none of whom make a livable wage. Whereas the company I work with, who uses a similar concept, by limiting their workforce and paying a higher wage, needs a much smaller amount of QA (which is only triggered if the computer picks up certain red flags), and pays a fair wage, albeit to a smaller workforce. Since it is contract work - they are not bound by minimum wage laws. As a businessman, you should know that easy loophole and be abusing it at will. Yet they have chosen to value the work for what it is worth, and by doing so, have enabled themselves to be more selective in their workforce. In an ideal world, all businesses would pay a living wage. This is not, however, an ideal world, and it is full of cheapskates who would pay degreed professionals a penny an hour if it were possible to get away with it. Believe me, if you were paying a dollar an hour, there would be exactly two results. Your employees would starve, and then leave your company. The ones who stayed would be so bad at their jobs that you'd go out of business for gross incompetence. Yet in the end, if every businessman chose to do the same, the labour market would have NO CHOICE but to work for the guy paying 2 cents an hour, then they would have to employ their 4 year old child, slaughter the family dog for meat, and forgo any medical care. Sure, you'd find people desperate enough to do it, because you'd have them over a barrel. Additionally, but having such cheap labour, you would ensure that competition from local sources is nearly impossible, because if someone among those poor DID try to go into business for themselves, they wouldn't be able to earn a living wage themselves due to your monopoly on price. This is, of course, the road this country was heading down before our government wised up and realized that even a capitalist democracy needs some market controls.

So when you shop at the store you don't try to pay the least you can for the products and services you use?

Sorry but that's idiotic.

Value is relative.  If everyone was being paid 2 cents per hour, then products and services would cost only a few cents as well because of the same supply and demand factors.  I.e. if people can only pay 10 cents for a loaf of bread then bread is going to cost 10 cents.  That's how it's always worked.

150 years ago, 10 cents per hour wasn't uncommon. And a loaf of bread might only cost 2 or 3 cents.

Today, inflation has turned those cents into dollars. And people make 10 dollars per hour and that loaf costs a dollar or so instead of a few cents. 

I hope your college education isn't economics because if it is, you're getting ripped off. 

As my previous response implied, too many people fail to realize that there really is no distinction between the price of products, services, and labor.  They're all interconnected.  The market ultimately determines how much shoes and socks cost based on the purchasing choices of millions of people. And those purchasing choices are determined by how much they can afford.

As your response makes clear, you don't grasp the relationship between forcing employers to pay higher for their labor than their customers are willing to pay for with the end product causing those employers to seek lower cost labor.  Because Americans choose to buy $10 shoes made in China instead of the $50 shoes made in the United States, it's American consumers, not employers, who are outsourcing jobs. 

 

Just because it is the natural tendency of people to try to get the most for the least, does not mean that it results in a better society.

The "market" as you call it was once closed due to distance, and so prices were local. The cost of labour overseas was irrelevant if the labour being done was something that could not be exported. In a global market, however, this interconnection of which you speak is a myth. Yes, they're interconnected, in a sense. That is, you can buy and sell across borders easily. However many of the interconnections are severely imbalanced. Differences in cost of living and valuations of currency mean that when the "market" determines how much shoes cost based on a fair wage in Malaysia, shoe workers in Tennessee starve because that "fair wage" in Malaysia is not the same as a "fair wage" in Malaysia.

Ultimately, the world in which you envision is one in which the unfortunate who can't suck it up and suddenly become as smart as you perceive yourself to be, or as lucky as you have been in business, should simply die off. I see people saying that they can "do so much better" than the peons on minimum wage. Chances are, if you CAN do better, you ARE doing better. I can certainly make more than minimum wage. That isn't to say I want to see it done away with. The less capable in society CANNOT simply "grow a brain" and often, menial labour is all they will EVER be able to achieve. If they have to compete on a global scale (as is increasingly so) with workers whose cost of living is 25% of their own, they will NOT be able compete. Are you saying the American poor should move to a 3rd world country for a better standard of living?

What I never see addressed by those arguing your position is the problem of the disparity in currencies in overseas markets. If goods/services were based on the same currency (whatever that currency were) with a TRULY open market (no tariffs, import taxes, etc), then wages WOULD reach an ideal state as you imagine. However, in the real world, there are artificial economic barriers that make the playing field extremely uneven.

Would you show up to a poker game where your opponents were all allowed to hold an extra card up their sleeve, but you weren't, and expect to win anything? Of course not, if you've got half a brain. What we're trying to right now is show up to the world economic "poker game" and play by an "open market" set of rules while a large portion of the world is still protectionist. That puts us at a severe disadvantage. As you said - nobody would pay $50 for a pair of shoes which they could get for $10 across the street. You wouldn't pay $60k for an employee in Michigan if someone in a 3rd world country could do the same job for $15k. But due to cost of living differences, the overseas worker often has an "extra card" up their sleeve. That $15k is WORTH a lot more there - artificially - than the $60k is here. And ultimately, that spells trouble for the entire U.S. economy.

If you want to take away minimum wage - and arguably that would be a good thing under the right circumstances to do so - it would NEED to be accompanied by a balancing of the so-called "open market". This could be achieved by reinstating protections on the domestic economy (tariffs, etc), OR by leveling the global playing field by requiring participants in the open market to play by the same set of rules. Give me a single currency or give me a protected economy. Trying to have an open market without addressing this issue is not going to succeed, with OR without minimum wage.

Btw, my college education is in History. I have researched and written much over various economic systems, and honestly, they all have their flaws. I'm no more a socialist or communist than I am a capitalist. I'm a REALIST. And what the reality is, is that most of our economic theory is currently based on an industrial revolution valuation of labor, which is increasingly getting farther from reality. Capitalism depends on labor having enough worth on its own merit to support the working classes. Communism depended on the worker having enough importance to wield economic power, and thus political power, over the ruling classes (which did not work). For a good part of the 19th and 20th centuries, this was the case. However, even capitalism as you and many envision it is failing modern society. Yes, you are successful. Many do become successful under capitalism, and in that sense, it is better than what came before it. However, the value of basic labor is dropping to the point, due to both technology and increasing populations, that those who are not intellectually capable of moving out of manual labor are increasingly finding themselves unable to make a living wage no matter HOW hard they work. Many of these give up, ending up on social welfare programs, which increase YOUR taxes. Cut them off, and watch crime skyrocket. People ARE being forced out of low-end jobs, and most of them do not have the capability to do any better. What do you propose we do with them? Seriously - I'd like to know. Maybe you can be the initiator of a new economic revolution.

I do grasp the problems which employers face. You must compete, and if your competitor is using programmers from Turkmenistan, you either have to offer a substantially better product, or find programmers in Rwanda who will work for even less than the Turkmenistani ones. I can see, unfortunately, the results of your struggle in the quality of my Object Desktop subscription. Since it is hard to afford to keep everything in-house, there are many components of Object Desktop which you have in the past outsourced (whether overseas or not I have no clue). The result is there is less consistency, less quality control, and a more difficult time updating some of the components. As an EMPLOYER, you simply have to play by the rules everyone else is playing by, which means cutting costs to match theirs. I do not begrudge you that. However, as a VOTER, you can choose to change the playing field for both you AND your competitors.

My two cents, as I said before, is that the only way to curb the tide of this problem is to balance the playing field globally. If we're going to have a free market, then everyone has to play.

And what the reality is, is that most of our economic theory is currently based on an industrial revolution valuation of labor, which is increasingly getting farther from reality.

There is a lot wrong with your post, but I will take this one first.  I am sure you are a fine historian, but a very lousy economist.  The truth is our economic theory has nothing to do with the industrial revolution. Simply put, our economic theory/reality is based on the individual maximizing their wealth based upon their greed.  Yes, greed.  They will try to maximize their wealth, and in so doing, provide the customer with what he wants at a price he wants to pay.  Thus the law of supply and demand.  The advent of minimum wages will not help that, only hinder it.  Artificially raising wages accomplishes nothing as then the final product price much be raised - and thus inflation.  SO to use Brad's example, the reason that a loaf of bread costs 2 dollars now is because wages are ten dollars an hour instead of ten cents.

And so the ones making the lowest wage - minimum wage now - are no better off.  And wont be.  DO you even stop to wonder why with all the increases in minimum wages over the past 30 years - that we are still debating the issue?  Because all it does is move the decimal point. It does not make anyone richer relative to prices.

But I suspect your history is not in the dynamics of economics, or you would realize that the law of supply and demand is not a man made law, but a law of human dynamics that man has tried to circumvent throughout history, and failed to do so.  For the simple reason it is not man made and cannot be monkeyed with by good intentions.

ONe last thought on your long response.  Your analogy on the global economy would be appropriate only if the world was a homogenous body of labor and industry.  It clearly is not, as while the people in China make dollars a day (instead of 10s or 100s), they do not have the tools to or knowledge to create goods and services that require more extensive knowledge readily available in a high wage country.  So they can perform the unskilled jobs that Americans once did, but the American economy has moved beyond that stage and their work now requires skills and knowledge beyond that of most unskilled labor.  We can force them (the american companies) to do the same work as those in Malaysia, but then their skills would be wasted - and in order to survive - the fair wage would not be competitive.  Indeed, you hold the view that the unions do, not realizing that they millions of those jobs that have been lost to other countries have not resulted in a corresponding increase in the unemployed of this country.  They have learned new skills - primarily due to the availability of the services needed to train them by the employers you seem to hold in disdain - so that these same employers can maintain a competitive advantage in the new marketplace - the world.

History is not the study of some long dead cultures.  It is the ongoing study of man and his interaction with both the environment he lives in, and the culture he lives in - today.  If you are a student of history, you might want to look at what has happened to the work force in the first world countries since the industrial revolution, and then compare that trend with what is now happening in China and India.  And what happened in the last 50 years in countries like Korea and Taiwan (and to a lesser degree Japan).  What was going on 200 years ago is still going on today - just in different parts of the world.  Some of the world is still mired in pre-industrial society.  Some is in the midst of their own industrial revolutions.  SOme has progressed beyond it.  It is not a static environment that cannot change, and does not change.  It is constantly evolving.  But you are studying one point in time, and extrapolating that since it was so, it must always be so.

Just because it is the natural tendency of people to try to get the most for the least, does not mean that it results in a better society.

Who said "better"?  Better is a subjective concept.  I am talking about how the world actually works.  You tried to argue that if everyone made 1 cent per hour we'd all starve which is pure nonsense because prices would come down by the same proportion. 

Ultimately, the world in which you envision is one in which the unfortunate who can't suck it up and suddenly become as smart as you perceive yourself to be, or as lucky as you have been in business, should simply die off. I see people saying that they can "do so much better" than the peons on minimum wage. Chances are, if you CAN do better, you ARE doing better. I can certainly make more than minimum wage. That isn't to say I want to see it done away with. The less capable in society CANNOT simply "grow a brain" and often, menial labour is all they will EVER be able to achieve. If they have to compete on a global scale (as is increasingly so) with workers whose cost of living is 25% of their own, they will NOT be able compete. Are you saying the American poor should move to a 3rd world country for a better standard of living?

I'm still trying to decypher what you're getting at here.

Nothing you say here makes the case that the federal government should set price controls on labor (minimum wage).  I think you do a disservice by saying that chunks of our society are incapable of doing the most menial of jobs.  It almost sounds like you're sayign that the minimum wage was designed for the mentally retarded.

Btw, my college education is in History. I have researched and written much over various economic systems, and honestly, they all have their flaws. I'm no more a socialist or communist than I am a capitalist. I'm a REALIST

Please. You just said earlier that if everyone was paid 1 cent an hour that people would have to kill their dogs to avert starvation.  Your statement speaks to a complete lack of understanding of basic economics.

In 1900, the average wage was $1 per day.  A dozen eggs cost 20 cents.  Wages and prices are related. That you don't understand this relationship demonstrates that you are neither educated on economics nor a realist. It also doesn't say much for your knowledge of history.

Many do become successful under capitalism, and in that sense, it is better than what came before it. However, the value of basic labor is dropping to the point, due to both technology and increasing populations, that those who are not intellectually capable of moving out of manual labor are increasingly finding themselves unable to make a living wage no matter HOW hard they work. Many of these give up, ending up on social welfare programs, which increase YOUR taxes. Cut them off, and watch crime skyrocket. People ARE being forced out of low-end jobs, and most of them do not have the capability to do any better. What do you propose we do with them? Seriously - I'd like to know. Maybe you can be the initiator of a new economic revolution.

There is nothing in history to support your statements here.  Where to begin:

First, most people are successful under capitalism. One only needs to look at the standard of living of the average citizen in a capitalistic country versus ones using say socialism or communism.  It's not even close. 

Secondly, there's no evidence to conclude that reducing welfare payments increases crime.  On the contrary, the welfare reform of the late 1990s showed a different trend.  Forcing people to get jobs takes away a lot of idle time that is spent conducting illegal activities.

Third, you seem to have little knowledge of poverty.  People who are poor are not people who worked really hard and just "gave up".  There have been countless studies on this since the "Great Society" programs got started.  If you eliminate those who are disabled (mostly mentally), the chronically poor are almost always people who have made very bad personal choices (multiple children out of wedlock, drug use). The number of people who were just working their tails off who just "gave up" are so low that it's unmeasurable.

I do grasp the problems which employers face. You must compete, and if your competitor is using programmers from Turkmenistan, you either have to offer a substantially better product, or find programmers in Rwanda who will work for even less than the Turkmenistani ones. I can see, unfortunately, the results of your struggle in the quality of my Object Desktop subscription. Since it is hard to afford to keep everything in-house, there are many components of Object Desktop which you have in the past outsourced (whether overseas or not I have no clue). The result is there is less consistency, less quality control, and a more difficult time updating some of the components. As an EMPLOYER, you simply have to play by the rules everyone else is playing by, which means cutting costs to match theirs. I do not begrudge you that. However, as a VOTER, you can choose to change the playing field for both you AND your competitors.

A "VOTER" in the United States has very little power.  What do you really think you can do?  Raise minimum wage laws high enough and all labor is outsourced. 

Your Object Desktop example isn't relevant because labor on it is not price sensitive.  It's finding developers who have the capability to do the very unique things required to make the features of Object Desktop possible (I'd also argue that the feature set of Object Desktop as well as its value continues to increase at a pretty dramatic pace but that's a different story).  What drives development on that product has to do with what features people use the most.  If most people use WindowBlinds and IconPackager but almost nobody uses ObjectBar, then WB and IP get most of the attention and OB gets very little. That's how it should be IMO.

And in the case of Object Desktop, it isn't competition that drives its pricing. Its pricing is based on the "what the market will bear" principle.  The market determines the value of products and services and companies decide whether they can provide for that market at the price point that the market will stand.

 

It's probably more likely that the US dollar would fall and inflation would rise, depending on how much of the population is on minimum wage. If too many people were affected outsourcing would be unlikely because labour would become cheaper, not more expensive, compared to labour purchased with a weaker US dollar.

But excessive inflation is never desirable, so it's still a very bad thing.



Well it's never really been done, apart of course back in the really old days (ie pre-US days). It's historical fact that the various boni (conservative) attempts to remove state subsidies on grain in Rome tended to lead to rioting and crime waves on the enormous scale. Would it happen in a modern state? Who knows? It's never been tried. Your example isn't a complete removal, so it doesn't really count.

Anyway that doesn't really matter because minimum wage laws aren't really state welfare. They're more an effective political tactic that plays on consumer price memory to manipulate their ideals of success - someone whose first wage was 5 bucks an hour is going to feel 10 bucks an hour is a better wage on first thought. And that's a useful attitude to have in a populace. It implies success without actually having to provide it.