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The Minimum Wage and the Value of Labor

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DarylLloydDavis posted on Mon, Jan 16 2012 10:27 AM

 

If it may be assumed that all able-bodied, law-abiding citizens would act in defense of the sovereignty of their nation, then it could be argued that all such patriots will have earned a stake in the surviving property within that native land; for, without their compliance and support, the liberty upon which individual owners maintain any property might have been lost.  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. I propose that the establishment of a minimum wage, set at an amount that guarantees working citizens the ability to support themselves without onerous hours worked, or inhuman conditions endured, is the recompense for maintaining the status of a law-abiding citizen in a just nation.

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 that the answer of a just society?  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?  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.

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.
 
I won't respond to every post, as I'm more interested in gathering a diversity of opinion than in defending my own.
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Neodoxy:
"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.

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Clayton

No one here believes that, either.

You once admonished me to speak for myself. I suspect that you will soon receive a similar admonishment from some of the more zealous libbies on this forum--assuming the length of the OP isn't too daunting.

The laws of economics are descriptive... they simply show what outcomes will arise from policy actions.

Exactly so.  They are not inherently moral in the least.  Simple cause and effect.  I wish to add an element of morality to policy, rather than blindly arguing for the free operation of economic forces, as though cause and effect were inherently moral because it is natural.  

 If you cap rents, housing will not become cheaper, it will simply become more scarce. Numb-skulled policy initiatives result in blight. 

Blight is a bit overwrought.  There is quite a bit of room to adjust compensation for low-skilled workers without bringing on an economic collapse.  Just as there is profit to be made under capped rents, assuming real estate development isn't curtailed altogether.  And I don't prefer either apparent alternative to an increase in the minimum wage:  either keep subsidizing the shiftless; or just end the minimum wage and welfare, and let people scramble for the basics. How anyone can say with a straight face that low-skilled workers will be pleased to earn $3 per hour in anticipation of climbing toward a respectable wage...It's not just numb-skulled; it's immoral.

 

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there is profit to be made under capped rents, assuming real estate development isn't curtailed altogether

 How anyone can say with a straight face that low-skilled workers will be pleased to earn $3 per hour in anticipation of climbing toward a respectable wage...It's not just numb-skulled; it's immoral.

There are a couple problems with these evaluations.

First, the domain of morality is individual choice. What should I do? What should I not do? To speak of "public morality" is simply a category mistake. There is nothing "immoral" about someone earning $3 an hour because it simply isn't anyone's business except the individuals involved.

Second, let's say that we can speak of public morality. Your evaluations of what is "moral" and "immoral" suppose a completeness of knowledge regarding the state of affairs as they are and the state of affairs as they would be in a free market. In fact, you don't have this knowledge. You can poll your brains out but you still won't have this knowledge. The fact is that you are necessarily flying blind. You construct idealizations in your mind about the state of affairs as they are and the state of affairs as they would be in a free market and you reason about the relative morality of these idealizations. You are not reasoning about the morality of the state of affairs as they are versus the state of affairs as they would otherwise be.

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DLD, all morality is subjective, not objective.

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You speak of morality, so let me pose a question to you:

If you think an employer should pay employees $10 an hour, if he refuses to do so, would you kill him?  After all, this is the logical implication of the state - break my rules and you die.  You say this isn't true?  Well, then try not paying your taxes, and when the police come to arrest you, refuse.  See what happens then.

So which do you think is more moral?

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Smiling Dave 

everyone wants the same thing, mainly the best possible economic situation for all

A concern for all hasn't been my impression of libertarianism at this forum at all. And I'm interested in the best possible moral situation; which isn't the same thing.

And of course, a minimum wage will acheive the opposite effect of what you want, because it will leave people jobless and homeless and starving if they do not have the skills that deserve a minimum wage, because they will not get hired, obviously.

Charity is a possibility; and abstinence.

Do the math. They have fifty bucks they can invest in expanduing the firm. They have spent 49 of them on seven workers. How will they hire the rest with no money to pay them?

I'm arguing that they can't even hire the seven for $49.  Read closely before you get snarky.

 If people get paid less, the demand for food goes down Why is it that by some strange coincidence, in the poorest countries food is cheapest?

Really?  I think the demand for food is relatively constant.  And it's cheaper for you in poorer countries because of favorable exchange rates.  If it's cheap for them, it's not because they have less demand for food; it's because they produce little else.

Could you provide a link to someone who makes such an argument? The ony argument I hear against minimum wage is that it gets the opposite result of what we both want, as above

I was only trying to anticipate any arguments in advance; I wasn't accusing anyone of using it.

 So that the employer cannot extort anything, since his competition is constantly ready to pluck away his workers

I don't believe that it works nearly so seamlessly as that in reality.  There are limited opportunities, more workers than employers.

They will buy less than they would absent your meddling. In this context, it means if you meddle in the wage rate, setting it hire than what the market would, employers will hire less people, increasing unemployment.

I agree that fewer people will be hired at that wage, at least full-time, where the wage would likely apply.  But I'm not primarily interested in fueling economic activity at the expense of all other forms of morality.  I want to put downward pressure upon irresponsible, teenage and single-mother families--the greatest source of poverty anywhere.  Being rid of the minimum wage would just allow marginally more people to have marginally more kids in marginally more poverty.  I think the moral thing to do is to draw a line, the minimum wage; and say that if you cannot meet these basic skills, you cannot afford to have kids, absent  private charity.

So that blind uniformity thing ain't exactly so

I'm proposing that it can be, not that it is.  And if farmers have to be exempted, so be it; but I don't know how subsidies affects that situation, so I don't want to comment.

 

and it helps those who are actively helping themselves.

By now we know [hopefully] that this is false. No need to repeat the same argument.

I meant that in contrast to welfare, which is given to those who aren't helping themselves, or anyone else.

the moment you insist all employers pay sum arbitrary number that you decide is their "moral value", you are writing a death warrent 

Not an arbitrary figure: a figure tied to the Consumer Price Index. (see previous posts)

 Not to mention that the employer will start thinking about outsourcing his whole factory to a country that has no minimum wage

I'm in favor of economic self-sufficiency:  I don't want to internationalize economic development, until we live on the DeathStar.

As for furthering education and training opportunities, what is she going to live from while she is getting her education and her training?

If one generation of single mothers has to suffer so that future ones will learn to delay having children until they get educated, I'm OK with that.

Of, all possible words to describe the effects of a minimum wage, "productive" is the very last one

I put it into quotes to signal my understanding that it was not the most productive solution in the literal, economic sense.  But morally, I think it would be productive in any number of human ways.

I'll read the Samoa thing later.

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clayton

First, the domain of morality is individual choice. it simply isn't anyone's business except the individuals involved.

Is this the final criterion: individual freedom.  I say that your sense of morality is only valid in a theoretical vacuum.  I say that morality involves a judgment of all acts, yours and everyone else's.  And I believe in guilt by association, for those who stand by in freedom, even under our imposed social contract.  It would be one thing if this $3 per hour were actually a transaction taking place in a vacuum; but it doesn't--and never will.  There are all sorts of trade-offs taking place within this imposed system that could yield a little here and there, so that the low-skilled worker didn't need to accommodate all.

You construct idealizations in your mind about the state of affairs as they are and the state of affairs as they would be in a free market and you reason about the relative morality of these idealizations. You are not reasoning about the morality of the state of affairs as they are versus the state of affairs as they would otherwise be.

I judge things as I see they are; and they are immoral--economic activity at the expense of personal and moral accountability.  And I'm not arguing for a free market:  I'm arguing against it, in this case. More generally, I judge moderation to be more moral than greed.  So I'm willing to curb individual freedom--freedom to be greedy--by imposing a moderation upon those who would otherwise show no morality themselves--both employers and single mothers. I won't stand silently by, content with my own freedoms.  Wrong is wrong.

 

 

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You are a pyschopath.  Not only do you acknowledge your desire to curb freedom, the implications of doing so are indeed murdering those that oppose you.

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@Daryl: Please be careful with editing, you didn't bother to include ellipsis and this snipping out of context alters the meaning of the statements.

Is this the final criterion: individual freedom.

Of course not but individual choice is a brute fact and individual moral responsibility is the logical consequence of this brute fact if you adopt a theory of morality consistent with the golden rule.

I believe in guilt by association,

Then you and I have nothing further to talk about.

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1. I'm interested in the best possible moral situation

2. ...a minimum wage... will leave people jobless and homeless and starving......I agree that fewer people will be hired... Charity is a possibility; and abstinence.

3. I think the moral thing to do is to draw a line, the minimum wage; and say that if you cannot meet these basic skills, you cannot afford to have kids, absent  private charity.

4. ...If one generation of single mothers has to suffer so that future ones will learn to delay having children until they get educated, I'm OK with that...

Very interesting morality you got there.

So fewer people will be hired, meaning those patriots you were so supportive of at first will just have to live on charity and abstinence, but it's worth it, because future mothers will learn their lesson.

I think I have summarized your position accurately, and woe is the planet if it teaches people like you to read and write.

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Wheylous 

DLD, all morality is subjective, not objective

I don't believe that.   All value is subjective though.  And if some people place no minimum level of value on honest labor then I believe that their morality is deficient.  There are real trade-offs in the real world.  If a man exercises his individual freedom and turns his back upon someone trapped under a fallen tree, he is immoral.  For a truly moral person it makes no difference whether someone would have forced them to do the right thing anyway.  This is the common complaint of a selfish brat, who objects to a moral act because of the conditions imposed for doing it.  Just do it.

 

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Smiling Dave

So fewer people will be hired, meaning those patriots you were so supportive of at first will just have to live on charity and abstinence, but it's worth it, because future mothers will learn their lesson

You've been misreading the gist of my OP from the start.  But as for the single generation of no-skilled single mothers, I suspect that they'd be as well or better taken care of than in any ancap society.  And the line ought to be drawn somewhere.

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Clayton

 Please be careful with editing, you didn't bother to include ellipsis and this snipping out of context alters the meaning of the statements.

Sorry. I didn't mean to mislead: I was lumping together two parts into one quote.  I'll use ellipses next time.

I believe in guilt by association,

Then you and I have nothing further to talk about.

Over that?  I would have thought that obvious. Fair enough, Clayton.

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Guilt is by action only. Collective guilt is caveman morality.

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"Guilt is by action only. Collective guilt is caveman morality."

What part of anything he's said, done, or advocated, indicates that he doesn't hold such a morality or mindset?

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
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