P.S. Please don't send me a link to Edgar the Exploiter. I already watched it; and I think it's quite good animation. But it doesn't respond directly to my arguments. Neither does it include an explanation of how Edgar sets his own salary, or how he sets wages relative to other costs of production and investment.
"And though they ought not be permitted to extort interest or control of property from their fellow citizens, their tacit readiness to contribute to the preservation of the foundations of enterprise itself ought to be reflected by some tangible measure. "
Why not? What if the ones "extorting", that's an arbitrary notion in the first place, are the same onese who defended the nation? Or what if they both did? How do you know that in the absence of the sovereign that the property would have been confiscated (see anarcho-capitalist theory)? Indeed considering the traditional tax structure, haven't they already paid their dues? Finally isn't saying that "X is your property" whilst at the same time saying that people must do Y and throwing them in jail or using force against them if they don't, really even more explotitative. Finally, what in the world makes you think that interest is equivocable to exploitation?
"And by extension, with a minimum wage in place, why is the unemployment rate in every low-wage industry not always at zero, given that the minimum wage is above the market price? "
Here you are in no way attacking the argument on theoretical grounds. This is the same as saying "why is it that gasses don't act like the theory of ideal gases say that they should?", the answer is that the market is imperfect, tending towards, but never reaching, perfection, I.E general equilibrium.
" In the absence of such welfare programs, if the prevailing market wage for low-skilled workers is below a level sufficient to provide a subsistence living for such workers, to what fate do we leave these workers--these presumed patriots?"
Welfare living is usually a fair deal above subsistence. It's also important to remember that labor has disutility and so living on welfare at a reduced overall income is worth more than working at a minimum wage job.
In a just society"
The concept of a just society is entirely arbitrary. It inevitably comes down to the domination of man by man through the use of state activity
"And when the argument is made that these citizens, if they don’t like this “deal,” are free to find a better one in some other country, is that the answer of a just society?"
Strawman, I've never heard someone argue that person X could emigrate to another country used.
"Is this not a form of employer extortion in its own right--knowing that the options are actually quite limited? And if the value of money itself is subjective--as are all things--must economic valuation always determine market price, to the exclusion of a subjective moral valuation? "
The nature of man himself is subjectivity. If you don't like subjective valuation of goods and services, then you not only hate man, but you hate the universe itself, for the inevitable lack of a final moral standard is what leads to the subjectivity of market phenomena
"For it stretches the bounds of credulity to assert that the salary of a CEO is naturally 500 times greater than the company’s lowest-paid laborers, either because the market “demands” such an arrangement, where in other companies it apparently does not; or because this ostentatious disparity reflects an objectively-demonstrable, just valuation of their unique contributions toward the survival of the enterprise -- as though CEOs and their innate business acumen weren’t themselves often wrong and easily replaced. "
Men are inherently inequal. Are the politicians you wish to elect so much greater than other men that they should be granted thousands of times more control over how force is used than their fellow citizens? The answer is that if CEO's aren't worth that much more then the market should decrease their wages, but it could well be that a person whose actions control the course of the company and ever laborer within it, are indeed more valuable than the laborer who can make an infinite number of mistakes with only cents lost to the company.
"honest labor"
What's that?
"Is hungry ambition then a prerequisite for one’s very survival as a “civilized” citizen in a just society? "
This is where I draw the line sir. Where in the developed world, even in the hyper-statist model that we currently see, where the hell do you see "hungry ambition" as a prerequisite for survival?? You can live off of the "welfare" with a standard of living that KINGS would have felt unimaginable hundreds of years ago. Furthermore if one goes to a community college for four years then one can easily support oneself quite comfortably. Is force over other people's bodies and property a prerequisite for a "civilized society"??
You have written a very nice polemic expressing the popular sentiment regarding why we need to have a minimum wage. You have utterly failed to address the problems with the minimum wage or even to honestly confront why the government really implements a minimum wage in the first place: ask yourself how the government benefits from a minimum wage... think.
As always, the central planner holds in his mind's eye a radically simplified and uniformitized idealization of the real world and real people that utterly fails to appreciate the intricacy and complexity of the human condition. The teenager mowing his neighbor's lawn suddenly becomes a tax-evader and the neighbor paying him becomes a felon illegally employing child labor at sub-minimum wages. The mildly mentally handicapped individual living with his sister and earning $40 of pocket money over the weekend and sense of self-worth and pride by cleaning out a horse-stall has joined the ranks of tax evaders and his sister the ranks of exploiters. These are the limit cases to which the law is rarely applied - why risk exposing the absurdity of such laws? - but the fact remains that they are actually illegal and there is a broad spectrum of circumstance between these limit cases and the Federally-mandated, uniformitized $7.25 per hour (or $8.40 an hour if you live in the wonderful state of Oregon).
A wide swathe of potential economic activity is squelched by the over-simplified, monolithic dictate of the minimum wage. The whole concept of targeted economic controls is flawed. Outlawing the mentally handicapped from cleaning a horse-stall for weekend pocket money means a commercial cleaner must be hired. On the surface, you can say "Aha! See, the commercial horse-stall cleaner has gotten work he otherwise wouldn't have gotten!" but the costs of raising the horse have also been increased, thus increasing the price that consumers must pay for all goods in which a horse is a factor of production. One intervention at one point in the economy has rippling effects throughout the entire economy. The more this mistake is multiplied, the more violently distorted the economy becomes.
Clayton -
The argument that an artificial wage floor will in turn keep the unemployment rate artificially high, by pricing low-skill workers out of the job market altogether, makes possible a prediction that all jobs paying above the market price in a low-skill industry ought to be perpetually filled.
Not quite. The criticism against minimum wage is that, ceteris paribus, it causes unemployment to be higher than it would have been otherwise. Whether the unemployment level absent minimum wage laws would be 0.01% or 10% is an empirical question.
...how is it that McDonalds cannot always fill the vacant positions at this artificially-high wage? And by extension, with a minimum wage in place, why is the unemployment rate in every low-wage industry not always at zero, given that the minimum wage is above the market price?
1). McDonald's "can" fill vacant positions at higher qages, but they choose not to because in most cases it wouldn't be profitable. If I calculate that I can spend $200,000 on workers wages, and minimum wage laws would require me to $250,000, then I can either reduce some other aspect of my budget, reduce the number of workers, or potentially operate at a loss.
2.) Unemployment is not caused solely by minimum wage. People are constantly changing careers, positions are created and destroyed, and matching person with position takes time.
For it stretches the bounds of credulity to assert that the salary of a CEO is naturally 500 times greater than the company’s lowest-paid laborers, either because the market “demands” such an arrangement, where in other companies it apparently does not; or because this ostentatious disparity reflects an objectively-demonstrable, just valuation of their unique contributions toward the survival of the enterprise -- as though CEOs and their innate business acumen weren’t themselves often wrong and easily replaced.
The salary of the CEO is set by the owner(s) of the company. This might be the CEO himself, some other individual, or a group of individuals like partners or board members. If the owner(s) thought that they could pay someone significantly less money and turn a higher profit, they would. Do you think the majority shareholders of [insert corporation here] want to spend the amount they do on the CEO's salary just because they think he's a great guy? Doubtful.
It is instituted both with a blind uniformity and a public transparency; and it helps those who are actively helping themselves. I say that a just society places a value on labor that reflects more than its marginal economic utility--that the moral value of labor ought to be added into the final figure--or else the society isn’t worthy of the loyalty of its citizenry.
Minimum wage laws do not help the business itself - it is in increase in expense. Society is diverse and values many different things. Many citizens are already unloyal, 1% of the U.S. population is in prison. More importantly though, the "moral value" of labor, whatever that might mean, does not appear to us as a dollar amount. Any sort of formula you come up with to determine how much extra everyone should be paid would have to be completely arbitrary. Furthermore, it would still be effected by market forces. Those higher salaries would still have to come from somewhere, either by raising prices, letting positions go, or in rare cases, lowering the wages of other employees.
Ultimately, notions of justice and morality effect the decision making process of market actors, but not the actual laws of economics.
they said we would have an unfair fun advantage
Clayton
The teenager mowing his neighbor's lawn suddenly becomes a tax-evader and the neighbor paying him becomes a felon illegally employing child labor at sub-minimum wages. The mildly mentally handicapped individual living with his sister and earning $40 of pocket money over the weekend and sense of self-worth and pride by cleaning out a horse-stall has joined the ranks of tax evaders and his sister the ranks of exploiters. These are the limit cases to which the law is rarely applied
These are not prohibitively-complex obstacles to overcome; since they don't even represent full-time labor.
why risk exposing the absurdity of such laws?
We forever exposed to all the absurdities of laws and men; I would like a little exposure to morality mixed in as well.
why the government really implements a minimum wage in the first place: ask yourself how the government benefits from a minimum wage... think.
If you're asking me whether or not I think that all of the reasons that the minimum wage was instituted in the first place were noble, then I would answer: No. But nothing a collective does is done purely for noble reasons. But while we have a collective, a state, at all, improvements ought to be attempted. And placing a sound value on work, per se, is a productive, moral improvement over paying people not to work, e.g. welfare.
mikachusetts
If the owner(s) thought that they could pay someone significantly less money and turn a higher profit, they would. Do you think the majority shareholders of [insert corporation here] want to spend the amount they do on the CEO's salary just because they think he's a great guy?
I don't believe for a second that most CEO's are uniquely qualified to do what they do. Nor do I believe that most boards of directors do a diligent search for individuals with the skills to run a company at the lowest price. Like everyone else, they're unduly influenced by flashy resumes, familial ties, and the need to please shareholders with a recognizable name at CEO.
Many citizens are already unloyal, 1% of the U.S. population is in prison.
I specifically stipulated "law-abiding" citizens, meaning that those who go to jail would not be eligible for the minimum wage protection.
Any sort of formula you come up with to determine how much extra everyone should be paid would have to be completely arbitrary.
The CPI is a good start.
Those higher salaries would still have to come from somewhere, either by raising prices, letting positions go, or in rare cases, lowering the wages of other employees.
Or lowering the salaries of CEO's, executives, their bonuses, their golden umbrellas, etc.
That's why I'm not a libertarian.
I'm not saying that CEO's are uniquely qualified and that no one else can do the job. However, there is significantly less financial risk in hiring established CEO's with recognized names over someone unknown. The skill in demand here isn't just managerial and entrepenuerial know-how, its experience running a comprable sized company.
I'm having trouble finding where you stipulated that - but it doesn't matter. The point I wanted to make is that very few people are "loyal" to the state in the sense that you invoke - rather they are loyal out of convenience and necessity, and even then, "citiizens" will quickly disregard the law when it suits them.
The CPI is a good start to determine the dollar amount of "moral value?" So you're saying the CPI provides a formula that says something like "every hour of labor is morally worth X dollars." All the CPI does is give you statistics on current wages - not information on what they ought to be.
Its unlikely to happen unless the board honestly believes that they (1) won't loss their current CEO doing it, or (2) are willing to replace their CEO with someone who will work for less, and expect equal or greater profit. Neither of these things are going to be the case in a profitable enterprise. Also, a reduction in a CEO's salary, on its own, wouldn't be close to enough to cover a significant raise in minimum wage.
The CEO of Wal Mart makes just under 19 million a year, and Wal Mart has 2.1 million employees. Lets say 1 million earn minimum wage (I think its probably more, but I'm being generous). If you cut the entire salary of the CEO, it turns into less than $19 a year per minimum wage earner. Thats less than a penny increase per hour for minimum wage earners.
A $1/hour raise in minimum wage, for 1 million employees, costs $2.08 billion dollars ($1 per hour X 2080 work hrs in a year X 1,000,000 employees). Thats $2.06 billion MORE than the CEO's salary.
Ultimately, notions of justice and morality effect the decision making process of market actors, but not the actual laws of economics. That's why I'm not a libertarian. Because you don't believe it to be the case, or because you just want to oppose reality? they said we would have an unfair fun advantage "enough about human rights. what about whale rights?" -moondog | Post Points: 20
Ultimately, notions of justice and morality effect the decision making process of market actors, but not the actual laws of economics. That's why I'm not a libertarian.
Because you don't believe it to be the case, or because you just want to oppose reality?
while we have a collective, a state
The State is not a collective, it is an organization with telos (purpose, aims, ends) and unitary decision-making capability. We are not the State, the State is not us. The interests of the State are necessarily and diametrically opposed to the interests of all productive individuals under the umbrella of the State's authority.
All power is private, even if it wears a mask and presents itself as "public", "accountable to the common will", and so on. The President sits in his seat for just 4 years, maybe 8 years at a time. He does not act to consolidate the power of the Presidency, he acts to further his own personal interests where he can. So who is acting to consolidate the powers of the Presidency? Somebody certainly is driving this consolidation because the process of constructing a unitary executive has almost reached fruition, cf the recent NDAA. The answer is that the permanent power Establishment which always exists, no matter who is President. These are the party leaders, the big bankers and industrialists, the foreign sovereigns who lobby (formally or informally) within the US political system, and so on.
The civics class version of political power never existed, not in America, not anywhere. Look at the Whiskey rebellion. The government of the freest country on earth sends military troops to enforce a tax edict within a few years of the founding of this supposed "great experiment." Typical.
If you want to know how politics really works, you need to get your hands on Rothbard. The tribal chieftain who's blood-related to 75% of the clan he heads is long gone. The modern State which has arisen in his place and propagandizes itself to appeal to our vestigial memories of the beloved chief is not an organic outgrowth of society, it is a cancerous and criminal enterprise whose sole purpose is to leech. They live at our expense and the raison d'etre of the State is to enable the political class to live at the expense of the productive class (those who go to work, buy and sell in the marketplace, and start businesses with earned money).
You're not allowed to enslave people just because you got the ridiculous idea in your head to go and fight against some enemy. Why the heck do you gain extra rights for being stupid? Remember that being a soldier can be a job like any other with supply and demand. You get *paid* to be a soldier.
My point was that merit doesn't dictate CEO selection, or their salaries. Nor does it dictate the economic value throughout the entire salary structure of the typical company. It's mainly determined by relatively-arbitrary, shallow preconceptions about resumes and reputations, familial ties, and fear of the "financial risk" of taking a chance on promising but unproven candidates. The entire compensation system of the mid-sized company could be altered to adjust to accomodate a sufficient minimum wage; if only people were willing to place a moral minimum value on work, per se.
The ninth word in my OP was "law-abiding." And it was repeated often thereafter. I agree that under normal circumstances, self-interest far outpaces national interest. But my scenario was pne in which the sovereignty of the nation were in jeopardy. In that case, I suspect that we would "have eachothers' backs."
I meant that the CPI could be used to determine a level for the minimum wage that would provide an individual sufficient means to afford the necessities of life, as represented by a "basket" of goods and services that all independent Americans must have to get by. The moral value is inherent in this tribute by society to all citizens who work as hard as any other--a tribute to the value of honest work.
I understand that the salaries of executives alone wouldn't be enough to sustain a higher minimum wage. But as stated above, I believe that there is room throughout the salary structure of many companies to sufficiently reward hard work at all levels. I didn't really want to get into a detailed discussion of the wastefulness of advertising and the corruption of lobbying; but suffice it say that there's all sorts of room for cutting back here and there in mid to large companies. Most are grossly inefficient.
I'm not one who believes that the free operation of the laws of economics are the vehicle to a human utopia. I think that this would more likely lead to a planet Earth that resembled the DeathStar--completely economically developed to the last little profit. If a minimum wage slows the "progress" of turning the planet into an asphalt-covered strip mall, subsidizing work instead of slothfulness and dependency (welfare), then I can live with the inconvenience to CEO's and their stockholders. My sense of moral value ultimately outweighs my hunger for economic liberty and prosperity, which I believe is empty absent moral values. My vision of a perfect society isn't one that is so economically prosperous that no morality, through voluntary, responsible limiting of family sizes, or basic mutual appreciation is ever entertained, until it's too late.
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the free operation of the laws of economics are the vehicle to a human utopia
No one here believes that, either. The laws of economics are descriptive... they simply show what outcomes will arise from policy actions. If you cap rents, housing will not become cheaper, it will simply become more scarce. Numb-skulled policy initiatives result in blight. That's what economic law tells us. Ending numb-skulled policies will not give us utopia, but it will give us less needless blight.
The interests of the State are necessarily and diametrically opposed to the interests of all productive individuals under the umbrella of the State's authority.
This is self-evidently false, Clayton. You impute such evil in the midst of such order and relative prosperity. In one sense it's good that you take nothing for granted; but, for goodness sakes, stop and smell the roses once in a while. What are the elite waiting for? Why the protracted chirade? Why not just stockpile what they need and collapse the system?
And while we wait for that shoe to drop, shall we lay prostrate in anticipation of it--use it as an excuse to foresake morality altogether? I believe that welfare subsidizes dependency; and what we subsidize, we get more of. Yet I do not wish to foresake honest hardworking citizens, irrespective of the alleged futility of all state-based remedies, according to you. I don't worship at the feet of Rothbard, or any other economic purist: I care whether the man, himself, was an a$$hole, for instance. I don't want to live in a world where economic pursuits trump every other consideration.
I regret that mercantilism and colonization destroyed perfectly moral societies in the name of economic properity and liberty for the many. I regret that so many throughout history have been so feverish for gold, a stupid shiny metal, that we would actually still consider today basing all value upon it. So I don't care that the minimum wage won't maximize economic efficiency: I don't want it maximized--that's the worst goal in the history of Man. That it has brought more "stuff" to more people than any other system is no shining endorsement to me. I see the results: an overpopulated planet; and I long for solutions that will force people to appreciate what they already have.
Don't stomp on my being moral, Clayton, just because we're all waiting for the big shoe to drop.
"I see the results: an overpopulated planet; and I long for solutions that will force people to appreciate what they already have.
Don't stomp on my being moral, Clayton, just because we're all waiting for the big shoe to drop."
You're a joke.
The argument that an artificial wage floor will in turn keep the unemployment rate artificially high, by pricing low-skill workers out of the job market altogether, makes possible a prediction that all jobs paying above the market price in a low-skill industry ought to be perpetually filled. In other words, McDonalds would hire ten workers at five dollars per hour; but the minimum wage being seven dollars per hour, they only hire seven. But with three workers priced out of these jobs, how is it that McDonalds cannot always fill the vacant positions at this artificially-high wage?
And by extension, with a minimum wage in place, why is the unemployment rate in every low-wage industry not always at zero, given that the minimum wage is above the market price?
If the answer is that government provides a ready alternative to low-skill, low-wage labor in the form of welfare programs--food stamps, unemployment insurance, etc.--then the question must be asked: In the absence of such welfare programs, if the prevailing market wage for low-skilled workers is below a level sufficient to provide a subsistence living for such workers, to what fate do we leave these workers--these presumed patriots?
In a just society must all such persons struggle under debt, deprivation, and dependency to improve their station, gaining the skills to eventually earn a “living wage”--all the while, presumably, at the ready to act in the mutual defense of their fellow citizens’ property and liberty? Is it then still a survival of the fittest for all those citizens unfortunate enough to be born into poverty?
And when the argument is made that these citizens, if they don’t like this “deal,” are free to find a better one in some other country,
Is this not a form of employer extortion in its own right--knowing that the options are actually quite limited?
And if the value of money itself is subjective--as are all things--must economic valuation always determine market price, to the exclusion of a subjective moral valuation?
Furthermore, is there truly no peril here? Remember that this issue concerns the treatment of citizens who are seeking honest labor, not those who are content to free-ride off of society. Is hungry ambition then a prerequisite for one’s very survival as a “civilized” citizen in a just society? Is this where free markets force the hand of the invisible individual?
To control any other cost of production but labor would invariably result in favoritism for this or that industry and has led to a slippery slope of subsidies and tax breaks.
The federal minimum wage is unique in several ways: It is instituted both with a blind uniformity and a public transparency;
and it helps those who are actively helping themselves.
I say that a just society places a value on labor that reflects more than its marginal economic utility--that the moral value of labor ought to be added into the final figure--or else the society isn’t worthy of the loyalty of its citizenry.
And if the number of positions shrinks in relation to the height of the minimum wage, then one can expect that the fuller employment and the increased buying power of those who do have jobs will mitigate against any slowdown in economic activity;
furthermore, in the absence of welfare assistance, the shortage of low-wage job openings will act as a disincentive for single and teenage motherhood, and an incentive for furthering education and training opportunities. Is this such a bad thing?
So I say that, somewhere between purely-economic and purely-moral alternatives, this solution, and not wages of $3 per hour, would be the most “productive” one.
Of, all possible words to describe the effects of a minimum wage, "productive" is the very last one. At any rate, you might want to google site:mises.org minimum wage for more info. Like why labor unions want minimum wage, even though their workers make much more than minimum wage in the first place, and why the minimum wage was first instituted in the US [=to keep out blacks].
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