@jrwel14 Companies would higher workers at the least they could and workers would want the most they can get. This leads to an agreement of a price in which the worker is willing to work and the Company is willing to pay for his skills. The important thing to note here is that if companies were to pay their employees 2 dollars an hour they would have to sell their products much cheaper. Otherwise they would be unable to sell to as many people.
@YaHuWaHservant The important thing to note is that people, especially conservatives don't mind CEOs making millions more. But, get upset when minimum wage is increased.
@jrwel14 Minimum wage being increased means more people being unemployed. We could make the minimum wage in the United States 20 dollars tomorrow. We would have massive unemployment and businesses would move entirely to another country in order to get a better profit. Not to mention the small businesses unable to stay open or start. So if the conservatives "don't mind CEOs making millions more. But, get upset when minimum wage is increased." Then the liberals like higher unemployment/prices
@jrwel14 You say conservatives like "don't mind CEOs making millions more. But, get upset when minimum wage is increased." Which means Liberals like the opposite. The opposite being the minimum wage increased and CEO's making less money. The consequence of that is higher unemployment and higher prices. Which means either 1) Liberals are for it or 2) Liberals are too ignorant of economics to be allowed to make policy decision. Lastly, I have read Truman's speech.
@crazypants88 So, pay them more than minimum wage. But conservatives would rather pay CEO s more and the workers less. They need to study the father of modern day econonics, Adam Smith. Who said it's the base, NOT the top that makes capitalism work.
@crazypants88 Adam Smith IS considered the father of modern day economics and capitalism. So bosses, Thank your workers for making your company possible. Bill Gates can't run Microsoft by himself. Which is what Adam smith was refereing to.
In any case no one's saying that workers are not necessary for a functioning business, the point of contention is that artificially raising wages will not result in the desired result.
It will result in less employment and it will be much harder for unskilled workers to be employed since the MW is often higher than what the average unskilled worker is valued at.
@jrwel14 A worker should be paid whatever rate the worker and the employer agree on.
I'm not advocating lower wages, if I had magic wand and could make everyone rich and happy, I would. But the fact of the matter is MW hurts poor, unskilled workers the most by reducing their employability (i probably just made that word up).
At best MW helps only a few workers but at the detriment of other workers.
@jrwel14 You're just spouting class envy, wage jealousy. Get off your ass, build a business and try to become one of those wealthy instead of sitting there feeling sorry for yourself expecting nanny government to whip out it's tit and feed you whenever you cry.
@RacerXGTO You're just a stupid fool! Do very well trading options and the Forex. So, why make less money working for somone else? Buffet and J.P. Morgan said that class warfare is being done BY the rich against the middle class!
@jrwel14 Apparently you don't understand that wages are determined by supply and demand. The more workers you have, the less the wages will be. The less workers you have, the more wages will be. Minimum wage causes the latter, which results in widespread unemployment among unskilled workers and a greater letter of poverty.
@jrwel14 Explain to me something. If employers are greedy scoundrels who are looking to solely exploit the hell out of you, why are 90% of employees in America paid above the minimum wage?
@jrwel14 "simple. Employers pay just enough to keep their workers from quiting. Basic fact!" You just made Milton Friedman's point. Thanks for playing.
If minimum wage laws are abolished some employer could pay you $1.00 an hour. How could someone live off of that? I still don't understand how abolishing the minimum wage law is a good thing.
@AresCassell This is a very complicated area of economics, and a lot of factors come into play. You are right it would be very difficult (if not impossible) to completely live off of $1 an hour. If jobs were created that paid that little (in relation to current monetary value), they would only be filled up by those who could work with $1 an hour (I'm 18 years old with no work experience and can't find a job anywhere- I'd love to get the experience for that).
@AresCassell [continuing my last comment] This would help decrease the current 24ish percent (I think?) teen unemployment, and give experience to those who have none. After this experience is gained, the individuals could work their way up to higher paying jobs much easier than if they had no experience. Hope this summarizes the theory a bit (and thanks for asking an intelligent question respectfully).
@AresCassell no one is willing to work $1 an hour, that's why they won't pay you $1 an hour because no one is willing to work. They need to raise the wage so that more people are willing to work. It's supply and demand. The supply of labor is the people and the demand for labor is businesses. When supply and demand meet, that is the equilibrium price for wages. The minimum wage is above the equilibrium. Therefore there are a surplus of workers in the market causing unemployment.
Oh but see, minimum wage 'trickles down/up/sideways/whatever' when you pay people more money because consumers now have more disposable income. Oh no wait. Wealth vanishes into the ether when it reaches 'bottom' or something.(???)
That trickle down voodoo economics bullshit sure worked out great! Good thing we have people trying hard to perpetuate that nonsense thirty years into the economic shitter!
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
@amiraliagh Thanks a lot for the insight! Yes I do see now. However a final scenario. Now let us say hypothetically, that an individual lives in a community where all the employers choose to underpay their workers not because of their skill level but because they want more profits for themselves. Thus, they can pay an adept worker only 10 percent of the total net inflow and be the highest payer in the whole community or probably gang with other business owners to push down the wage.
@amiraliagh so that all the business owners profit and there is no other business to go to to seek a higher justification for their skill. How do we solve this then?
@Duske3000 This just wouldn't happen, because if it's known by the people that a group of employers are keeping wages lower by a secret agreement than the people would strike and refuse to work. Remember Rosa Parks and the bus boycotts. Now just imagine the boycotts that will emerge when you start to mess with people's money! Now lets say the employees don't know this agreement amongst employers. They obviously know their paycheck and if they decide to keep working than who's to blame? They have
@Duske3000 the right to quit and boycott. Besides, the lower wage cost to the employer is beneficial to the community. The business owners are buying supplies from somewhere if they have more money to spend than they engage with more business benefiting the employees of those businesses. So the money is constantly spread around.
I understand what he is saying and I really do admire and respect Milton Friedman. However, if there was no minimum wage law, my employer can hire people and pay them less than their skill level as well. Isn't that a bad thing as well? Please respond.
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
@Duske3000 Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants?. the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
@Duske3000 It could be a bad thing, but the competition in a free market would eliminate that. Example: If the worker is truly deserving of better pay, he/she could just as easily quit and have someone else hire them for a wage they justify to be fair. If they can't find an employer willing to pay their ideal wage, than the worker is not worth what they justify themselves to be (the demand for that worker is not there).
@goatnuts8288 Thanks for the reply and different point of view! I now know how to answer some socialist at least. By the way, please look at my latest reply to amiraliagh and tell me what you think about my final problem with minimum wage.
You can live very well in the U.S making just 1 dollar above minumum wage or more. I currently make 25 an hour and I've got over 100k in the bank saved up.
There are a couple guys in the comments talking about the "Australian" economic model.
The Austrian Economic School, named so because its founders were from Austria, is not to be confused with the current economy of Austria, a person from Austria,Australia, Nicole Kidmen, Crocodile Dun Dee, Russell Crow, Kangaroos, Koalas, or Qantas air lines.
There's a reason we passed minimum wage laws in the first place. We had to because people were living below the poverty line. People don't understand minimum wage. If you look at the people on minimum wage, most work extremely hard. That doesn't mean there aren't some people using it to their advantage, but that's nothing to base policy on, just like welfare.
@thomascapitalmgt Apparently you're incapable of reading. I never said those people were unemployed, I said they were living below the poverty line. Feel free to call me an imbecile though, I know I'm not, so knock yourself out.
I'm not familiar with the Australian model but it could very well be that it does not work. Many people here think it is great even though it keeps wages down because they are too dogmatic to criticize it.
@nathfrancis01 If you are not familiar with the Australian model how can you say that it doesn't work. The Australian economy is booming. Australia pulled through the global recession better than most countries. No point complaining about something when it isn't an issue here.
@Kiwichico Lmmaaooooooooo You are the fucking stupidest person in the world! Buahahahahahahaha You get a 'like' for being such an idiot, congratulations!
Minimum wage is a disaster but not for the reasons that Friedman suggests and I would argue that in the UK at least, many of the people who supported minimum wage were not well meaning. For example most supermarkets pay minimum wage, competition for aquiring labour is removed there is no financial incentive to work in one supermarket as opposed to another and therefore wages stagnate. I worked in a factory last year and my father worked there in the early eighties and was paid more than me.
ask anyone in the UK, minimum wage created our Welfare State, everyone on minimum wage, everyone needing to suppliment their income through welfare. Don't do it.
Another effect of a minimum wage is that that to hire those that are deemed skilled lower comparable to the minimum wage, employers had to lower the salary of a skilled worker and thus having to pay a skilled worker a lower wage comparable to his or her skill.
Empirical evidence goes to show the minimum wage does not cause unemployment to increase. If workers are being paid more they are also spending more, and this increase in consumer consumption causes the economy to grow.
You're just not going to convince these libertarian ideologues of anything.
The reason is that the crowning achievement of the Austrian School of Economics (of which the Chicago School is an off-shoot) is the wholesale rejection of empiricism.
That's why libertarian thought is so bankrupt. The entire edifice upon which all their ideas and arguments rely is based on absolutely NOTHING but philosophical conjecture.
Wow! you are one pathetic son of a bitch. You created your retarded account just to troll on youtube. Get a life you pathetic piece of shit. If your mom had spent that money she spent on crack and sent you to a private school, you wouldn't have to be on welfare and a negative impact on GDP.
@crazypants88 Because they're bullshit unnecessary jobs that do nothing to increase output. I don't understand how this is meant to refute my point in any way.
Not to the people who employed them, not to the people who staffed them and not to the people who paid for services.
It refutes your point because it shows that increasing the MW does destroy jobs that aren't valued at the MW rate. If employers find they can only charge so much for a service or good until people simply aren't willing to pay for them, they can't keep those people employed anymore.
@crazypants88 Unnecessary to able-bodied individuals - and to those who aren't able-bodied there will still be assistance. So the minimum wage gets rid of the shit jobs, but it also other creates ones via increased consumer spending. Otherwise unemployment would have increased.
Also how many fucking people were employed as ushers and bag packers, you pillow biter?
@proofbyevidence No, value is subjective, that's why these jobs were valued, just not by you. People obviously valued them, why else would they be employed by them, employ them or even buy their services? Because they don't value them?
Why would consumer spending increase? Those who were employed by below MW jobs will by and large not have jobs since they aren't valued at the MW rate.
Obviously not many ushers now, when they were commonplace they were usually staffed by young unskilled labour.
@crazypants88 The minimum wage doesn't get rid of unskilled labour jobs. Those who were ushers could still be employed to perform unskilled jobs that are deemed essential by the firm; they are not doomed to unemployment because they can't get a job as an usher anymore. I don't understand how you cannot grasp the idea that the minimum wage has not caused unemployment to rise.
@proofbyevidence Ok let's pretend the MW, like you say, doesn't destroy jobs. Why only have it at 7 dollars, why not 50 or 200, why ever stop raising it? Since it doesn't cause unemployment there should be no reason to stop raising it.
The MW does effect unskilled labor if it's set above what the job is valued at. Here's simple analogy: Would you buy a 300 dollar apple? I'm guessing not or at very lest you wouldn't buy as many apples as you used to.
Employers are the exact same way. If you raise the MW you're essentially turning these workers into 300 dollar apples as no one can afford to employ them at a rate higher than what they're valued at. Employing them would lead to their bankruptcy if no one is willing to pay the new inflated prices.
@crazypants88 If the base wage for everyone were paid more, then they all can afford to pay for the 300 dollar apples. Of course this wouldn't work if the pay scale for everyone wasn't relative, that is if they were getting paid the same as a qualified or skilled person. I'm no economist but I imagine the the minimum wage would be set on the consumer price index in order to keep a decent standard of living as well as being relative to other pay scales.
@Kiwichico Let's assume that's right and it does in fact not create unemployment? Why is not viable to raise it even higher? If the MW is as harmless as you people say it is, why not have it at 100$ or 200$?
The MW rate, while being a base wage, will not raise those worker's wages who are valued below the MW rate, they'll become unemployed since they cost much more to employ than not to employ, with very exceptions. Those exceptions are only possible through price increases
@crazypants88@crazypants88 I agree minimum wage can create unemployment if price of the product does not move. It is not viable to raise it higher as the pay has to be on par with skilled work.
@Kiwichico It does create unemployment but it's not the price of the good or service that decides that. It's how much the employer values/get's from that person's labour. If the minimum wage rate is higher than what the employer values his employees, then they will most likely loose their jobs.
@crazypants88 Sorry I thought I just reiterated what you just said that is they cost more to employ so become unemployed with the exception of rising the price.
@crazypants88 If people were paid next to nothing like $2.50 cents for their labour and the price of a bag of apples was set at $4. How could they afford it?
@Kiwichico Who would accept that wage? Wages aren't just determined by employers, they're also decided by employees who have to consent to that wage and by supply and demand. If there's a high supply of unskilled labor (which there always is) then that type of labor will be cheap. That's why jobs with high prerequisites usually have high incomes.
@Kiwichico No that's not what I said. I said unskilled labor is more abundant therefore will always be cheap. That doesn't mean that they don't have to consent to a job, which they do AND the wages would have to in competition for his competitors because if he pays 1 dollar/hour and his competitors pays 3 dollars/hour then his workers are going to start working for his competitors. Like I said it's three factors that decide wages ( four if you supply & demand as two separate concepts)
@crazypants88 Still can't afford those apples. Ah I thought you meant high supply of labour, limited number of jobs. Maybe I should have said that they will have to accept the cheap labour that is under the minimum of which one can survive on but then again I guess they are getting some money rather than nothing.
@crazypants88 The $4 dollar apples that I mentioned before. We have some idea of the cost of living through the consumer price index. Yes its true dropping the MW could lower the prices but if there is not much competition in the market due to the cost of setting up business is high, regardless of the labour costs, then there could be a drop in price but not a significant drop as the cost savings would mean more profit or used for new investment.
@Kiwichico Right and in that context I asserted that they would be able to afford an apple since a) employers aren't the only ones who decide wages, meaning if potential employees felt a wage was too low they wouldn't accept it and b) that prices for goods and services that require cheap labor (apple picking be one of them) would drop so current prices are not exactly representative of what assert will happen. I don't know if that makes sense, if it doesn't tell and I'll try to rephrase it
Since without the MW it becomes viable for entrepreneurs to start making things such as plastic cutlery, cheap furniture etc etc much more cheaply. Those items would especially help the poor and since there's now many more supplying cheap goods and services it would follow that they would drop in price due to competition.
@crazypants88 Yes that can be true but if they are already offering cheap goods under a minimum wage and then take it away. Depends if the price drops enough to compensate the drop in wages.
@Kiwichico That's what you're misunderstanding right there. Wages will not drop because workers are only paid if they bring in more than what they're being paid. So all jobs who didn't bring in more than what they got paid were let go when the MW was raised. The reason people on MW have that wage is because they happen to be valued at the same rate that the MW wage is at.
I'll concede that there are jobs that did get a pay raise with the MW but that's only because people valued them enough to pay more. I doubt they would get a pay decrease and even if they did, a pay decrease does not equal decrease in buying power, which is what matters as opposed to the amount of money.
Even so unskilled labor is cheap, employers will still be competing amongst themselves for labor, that's why employers also have an incentive to offer as a high a wage as they can.
Bottom line: artificially raising the lowest wage possible does not raise the wages of the workers working those jobs.
@crazypants88 Its true employers will be competing amongst themselves for labour but only if there are a lot players and the capital costs of entering the market are low. Big chains, factories that need a lot of capital will dictate the wage not the employee, so if these type of companies can offer a wage at the lowest value regardless of whether an employee can have a decent living, they will do it.
@Kiwichico No that's wrong, they'd especially be competing if there was a low number unskilled labor.
That's why jobs with prerequisites have usually high incomes, because there's a low supply therefore there's a high demand for them. If you haven't I'd recommend reading a bit on supply & demand, honestly not trying to be rude or anything, just think it's an important concept to know of when you're talking economics.
@crazypants88 Wait I thought we both agreed there is a high number of unskilled labour. I didn't say there was a low number of unskilled labour. I said there was a low number of businesses. Captial costs are relevant Porters Five Forces.
@Kiwichico Oh yeah there is a high number of unskilled labor, I was just demonstrating that employers compete more and more for employees the more skilled they become. They don't have to compete as heavily when the labor they need is so abundant. They still compete mind you.
Capital costs are irrelevant in the context of whether or not employers compete for labor.
@crazypants88 I agree skilled workers are in higher demand. And that was the point I was trying to make that they don't have to compete as heavily if there is an abundance of labor. Thanks for the debate.
@Kiwichico Well you did originally say that would only be competing for labor if there were "alot of players" which was false, they always compete for labor.
@crazypants88 You mentioned that people can negotiate their wage with employers caused by employers competing for labour. Say if we have 50 businesses each offering 20 unskilled jobs giving 1000 jobs. And say the labor pool for unskilled workers is 10000 to choose from. Of these 50 businesses the setup cost is very high so little chance for entry. How are the employers competing for labor when supply is so much larger than demand.
@Kiwichico Sorry for the late reply, thought I had responded to this but my comment doesn't seem to have registered.
I'm not sure I understand your question, yes the the cost to setup a business is a barrier to entry but that doesn't mean that it's impossible to enter, there are a myriad of barriers to entry. But again I don't see the point your trying to make, so it would be appreciated if you could maybe explain this.
@crazypants88 I didn't say there is one barrier of entry, by saying "say" means I was giving one scenario. The point is extreme excess of labour little or no competition for employers. Like in India and a lot of Asian countries are a perfect example of excess labour and next to nothing pay.
@Kiwichico Competition between employers isn't solely based on how many or how few workers are available, it's also based on what the workers demand. Also if there's a excess of labor, that would of course attract other entrepreneurs to capitalize on the low worker costs, therefore bringing it undoubtedly into an equilibrium.
@crazypants88 I think we are going around in circles, because earlier on I had agreed to what you said to others being able to enter the market under ideal circumstances but I was focusing more on scenerios such as in China, India and Africa of where locals find it difficult to enter the market. So I'm just going to leave with the point that we both agree on as you quoted "They don't have to compete as heavily when the labor they need is so abundant."
If workers are paid more, the employers have less to spend or invest on their own. Any increased consumption on the part of workers after a wage increase are offset by decreased investment or consumption on the part of employers. You have committed the oldest fallacy in all of economics: the free lunch fallacy. P.S. Most studies have showed that minimum wages increase unemployment, especially among poor black teenagers.
Ayn Rand was a moron who thought she could survive on her own genius but when cancer threatened to wipe out the little bit of wealth she managed to put away for her old age she changed her name and applied for welfare benefits. The queen of the Libertarians, a stupid bitch preaching to the ignorant. She had a modicum of success on her own but like other so called self made successes, when she failed and she turned to the state to keep her ass off the street.
@logtype47 She used a system which she paid into. Just because you're against the system doesn't mean you shouldn't use it when you've already been forced into paying more than your fair share. Ayn Rand was also vehemently against Libertarianism. It's not surprising someone who feels the need to be so incredibly rude is also distorting facts.
@logtype47 Except that in order to meet the conditions to be on welfare you would have to be a person who does not pay enough into it to justify your use of it. This is not the case for things like roads or social security. Welfare redistributes wealth away from the productive. A wealthy and productive man accepting social security or the use of public roads is just taking back part of what has been taken away from them, i.e. getting (part of) what you have been forced to pay for.
@mrrobotica If what you're saying is true, why then have republican elected officials created legislation that prevents records about them having taxpayer sponsored government health care from being released to the public. They obviously see the hypocrisy in fighting against government programs while benefiting from those same government programs.
@logtype47 Part of the reason may be that they would appear to be hypocritical although I would still disprove of them giving off the message that taking out of something you have been forced to pay into and oppose is wrong. I don't approve of this and if this is their reason I think they should be honest and explain to people how it isn't hypocritical to oppose something you have been forced to pay into and used. They may even believe they're being hypocritical in which case they're irrational.
@mrrobotica Regardless of your opinion of their actions, the Republican legislators are rather astute and understands quite well the hypocrisy of receiving government health care while fighting against the common man receiving it as well. Sorry but this is a no brainer. It's rather obvious.
@logtype47 And they would be wrong. Wealthy people (as elected Republicans generally are) don't benefit from things like social security. They're just cutting their losses by not refusing it when they're already forced to pay more than their fair share into it. Would it be hypocritical for a wealthy Canadian who pays half his salary in tax, largely because of health care, to both accept treatment from a hospital and be against universal health care?
@mrrobotica FYI. The wealthy in this country receive the lion's share of government welfare. See: Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
A bank would not lend enough money on an unsecured loan to raise enough capital. More discretionary would go to the person earning more money. If you are earning $2.50 an hour you choices are limited to what you can do with it.
I personally think Marketing is like an election campaign. A bigger exposure outweighs any small competitors, even if a smaller competitor is offering a better quality good.
MW depends on how you look at people. Do you see them as machinery or skilled workers offering improvements. Not having mw means bigger businesses can make it harder by rising the barriers of entry through more intensive marketing and more capital invested. Less competition higher prices.
@crazypants88 If you are already a big business and can save on labour costs then you can redirect this into a marketing and capital expenditure like a lot of the big chains. Small business can't compete on that scale.
@crazypants88 Also if someone is on minimum wage they would never be able to raise enough capital to start a small business. Prices might be high under a minimum wage but at least the individual on minimum wage has more discretionary power for their spend.
@Kiwichico Minimum wage increases entrance costs. Instead of having to pay a worker the market value of his labor a start up company would have to pay him more, something established businesses may be able to do but would block any up and comers.
@mrrobotica The point is the competition becomes unbalanced. Sure labour costs may make it easier to enter for small businesses but they would struggle to compete with the bigger chains who can now easily expand their operations and offer their products at a much lower price due to economies of scale.
@Kiwichico There is nothing wrong with out competing any potential competitors simply by operating efficiently and offering a good service. That is not a coercive monopoly. There is nothing wrong with maintaining a monopoly through constantly offering the best service anyone can offer. You're basically protesting companies being efficient.
@mrrobotica Monopolies are not efficient hence state ownership being sold by governments and the fall of communism. Monopolies have been discouraged by many governments, so yes I protesting against monopolies. A competitive market forces companies to be efficient.
@Kiwichico A monopoly that maintains it's place in a free market must be efficient and offer a good service or else new competitors would be sure to invade it's industry. There is nothing inherently inefficient about a monopoly, it is coercive monopolies, monopolies immune from competition, which are inefficient and are able to offer a bad service for high profit. Every single coercive monopoly in history has been created by government.
@mrrobotica Monopoly practices are not encouraged see United States vs Microsoft "The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system sales and web browser sales". Microsoft operates in a free market. It doesn't matter how efficient a small business is they can't operate on the same scale eg chains. And if someone is given a decent wage then they operate more than just being a machine by offering a better service.
@Kiwichico Monopoly practices not encouraged? The US state is itself a monopoly and it supports a myriad of different cartels and monopolies. The Federal Reserve being one of them.
Microsoft does not operate in a free market, a free market is defined as a market without government interference, I'm fairly certain Microsoft owes most of it's success through copyright enforcement of it's pattens, that's the opposite of a free market.
@crazypants88 Its true in theory its not suppose to be encouraged but in practice it can tend to end up that way. Like Microsoft it is suppose to be in free market. Patents in itself shouldn't restrict competition of which the government was suggesting they were doing. For example you can have a patent for the invention of 4G but its use can not be controlled by one company.
This is such bullshit. I enjoy alot of Mr. Friedman's workt he has to know that the minimum wage law is about decency and having a certain standard of living in this country.
As he said, at $2.5 the law may say you have to hire there but who says you have to hire someone at $2.5 who you judge to have $2 skills? Whats stopping you from waiting for someone with $2.5 skills?
Milton seemed insinuate paying whites at $2.5 and blacks some amount less. Geez, theres already enough social tension
@fububalla Appeals to some kind of fairness, fairness is a completely subjective concept mind you, is in no way a refutation of what Friedman said.
Do you buy apples if they're 50 bucks a piece? I'm assuming not, the same for employers, a person brings only, say 2 dollars/hour or is valued at that then a MW increase is the vast majority of time not going to increase said worker wages, he's going to lose his job. So much like the 50 buck apples,
@crazypants88 depends on the industry. For example in most service jobs, I doubt the business risks losing business or decreasing production and service because of an increase in Min Wage. For example, if MW went up to $11 from like $7 right now, would MCD have massive layoffs? I can't see it, they may try to trim around the edges. But in manufacturing your analogy holds more true because its easier to quantify the production.
@fububalla Yes they do, it doesn't make any difference what industry it is in. If a person's labor is only valued as so much increasing it will not increase his wages, the few times it does it inevitably raises prices as that extra income has to come from somewhere, therefore reducing or even negating any increase in buying power.
If I have a person employed to organize folders, if I'm mandated to raise his wage I'll just get rid of him and have one of my other workers whose labor...
Businesses aren't social welfare. You shouldn't have employees that you don't need. So if you don't need someone to organize folders then you shouldn't have had them in the first place. But you do need someone to run a factory line. And if you can to meet demand of a 10,000 units and it take 10 employees to do that you aren't going to cut one because you have to pay him a dollar more an hour. Furthermore, . . .
Yes they would or at least they would not hire as much. I mean would people buy as many burgers when they're more expensive? No, that's why eventually they would get rid of employees, not all, but there would definitely be fewer people employed.
People buy what they need and what they want. A person can fry 100 hamburgers an hour. The cost of 2 cents per burger will raise his wage by 2 dollars but be unnoticed by the consumer.
As we've seen in other areas like coffee production, the cost increase of a penny for a cup of coffee dramatically raised wages in South America. People are willing to may a little more for wage justice. Most people don't want to exploit other human beings like you do.
@gamenode Stop with the lame ass personal attacks, they achieve nothing and just paint you in a bad light. Should I call you a fascist as you're advocating taking people's freedom to contract away from them? Regardless I'm not going to because I make my case with argumentation alone. Also personal characteristics in no way effect my argument.
2 cents per burger? Whatever, as long as production costs are lower than than the profits, the employee has a job.
And it's pretty clear by the huge profit margins companies are making that production costs ARE lower than profits. Still, U.S. companies are purging jobs. They aren't doing it because it's too expensive to hire anyone. They are doing it because no one can afford to buy anything. Low wages strip people of buying power.
Furthermore, 10 employees working 40hrs each at a dollar more an hour is only 400 more a week. If they produce 10,000 units then the cost per unit is only 4 cents per unit.
Yes prices will rise but by just 4 fucking cents. And for 4 fucking pennies you would reduce the standard of living of your employees so you can drive a fucking Mercedes to work and send your kids to private school.
@gamenode I'm not sure I understand your argument.
As far as I understand you're in no way debunking the fact that employers can only pay what they value a labor at. They can increase the wage, true, but that might result in fewer people buying their burgers as their now more expensive, fewer people buying burgers, less profits, less profits mean they aren't using their resources efficiently, therefore they might very well be inclined to letting some workers go.
Boo hoo. Maybe they would make more profits if they didn't pay the executives so much. Who says shareholders have to make a 20% return on their investment every year? Why can't they be happy with 15% or even 5%. Why is it that only the rich should profit and only the poor should make sacrifices.
Prices don't have to go up if the CEO drives his own car to work instead of taking the company helicopter.
@gamenode I'm starting to think you're actually retarded. Have I not explicitly stated that the VAST MAJORITY OF BUSINESSES AREN'T MEGA CORPORATION that are rolling in cash. Well I have and you have in your usual fashion ignored it as puts a hole in your whole worldview.
The vast majority of businesses aren't mega corporations but the vast majority of jobs are either at mega corporations or controlled by them. You cannot deny that when a mom and pop shop 10% of workers off 1 or 2 people might lose a job but when GE does it 20,000 people lose a job. That kind of lay off is how companies manipulate supply and demand. You need to look up the Hawthorn Effect to see how business can manipulate employees to keep them in low wage jobs.
@crazypants88 So why didn't you just get the guy who you're paying more than MW to do it in the first place? Sounds like you have an inefficient business my friend. 2ndly, now that you are tasking the above MW worker more, how long do you think it be until he DEMANDS a higher wage?
You guys have no balance between economics and the psychology of economics. You just spew your ideological theory. But thats what youtube is fore.
@jrwel14 "simple. Employers pay just enough to keep their workers from quitting." Haha! @YaHuWaHservant isn't the irony unbelievable! hahaha!
GodDamnit7711 5 days ago
@GodDamnit7711 That's the facts. Employers do just that!
jrwel14 5 days ago
If, Milton had his way. Companies would pay their workers 2.00 an hour.
jrwel14 1 week ago
@jrwel14 Companies would higher workers at the least they could and workers would want the most they can get. This leads to an agreement of a price in which the worker is willing to work and the Company is willing to pay for his skills. The important thing to note here is that if companies were to pay their employees 2 dollars an hour they would have to sell their products much cheaper. Otherwise they would be unable to sell to as many people.
YaHuWaHservant 1 week ago
@YaHuWaHservant The important thing to note is that people, especially conservatives don't mind CEOs making millions more. But, get upset when minimum wage is increased.
jrwel14 1 week ago
@jrwel14 Minimum wage being increased means more people being unemployed. We could make the minimum wage in the United States 20 dollars tomorrow. We would have massive unemployment and businesses would move entirely to another country in order to get a better profit. Not to mention the small businesses unable to stay open or start. So if the conservatives "don't mind CEOs making millions more. But, get upset when minimum wage is increased." Then the liberals like higher unemployment/prices
YaHuWaHservant 1 week ago
@YaHuWaHservant Liberals like no such thing. You also need to read Truman's labor day speech.
jrwel14 1 week ago
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@jrwel14 You say conservatives like "don't mind CEOs making millions more. But, get upset when minimum wage is increased." Which means Liberals like the opposite. The opposite being the minimum wage increased and CEO's making less money. The consequence of that is higher unemployment and higher prices. Which means either 1) Liberals are for it or 2) Liberals are too ignorant of economics to be allowed to make policy decision. Lastly, I have read Truman's speech.
YaHuWaHservant 1 week ago
@jrwel14 Nevertheless that's the result of minimum wage.
crazypants88 5 days ago
@crazypants88 So, pay them more than minimum wage. But conservatives would rather pay CEO s more and the workers less. They need to study the father of modern day econonics, Adam Smith. Who said it's the base, NOT the top that makes capitalism work.
jrwel14 5 days ago
@jrwel14 Adam Smith might be the first or one the firs economist but he's not the father of modern day economics nor were all of his views valid.
It's like saying you should study Sigmund Freud if you want to get a grasp of modern day psychology.
Also paying more than MW would just result in higher prices and unemployment for those workers valued at below the new mandated going rate.
crazypants88 4 days ago
@crazypants88 Adam Smith IS considered the father of modern day economics and capitalism. So bosses, Thank your workers for making your company possible. Bill Gates can't run Microsoft by himself. Which is what Adam smith was refereing to.
jrwel14 4 days ago
@jrwel14 Fair enough I guess he is.
In any case no one's saying that workers are not necessary for a functioning business, the point of contention is that artificially raising wages will not result in the desired result.
It will result in less employment and it will be much harder for unskilled workers to be employed since the MW is often higher than what the average unskilled worker is valued at.
crazypants88 4 days ago
@crazypants88 Guess the average unskilled worker should be paid 1920s rates.
jrwel14 3 days ago
@jrwel14 A worker should be paid whatever rate the worker and the employer agree on.
I'm not advocating lower wages, if I had magic wand and could make everyone rich and happy, I would. But the fact of the matter is MW hurts poor, unskilled workers the most by reducing their employability (i probably just made that word up).
At best MW helps only a few workers but at the detriment of other workers.
crazypants88 3 days ago
@crazypants88 While CEOs and such can't be paid enough by Conservative beliefs!
jrwel14 2 days ago
@jrwel14 You're just spouting class envy, wage jealousy. Get off your ass, build a business and try to become one of those wealthy instead of sitting there feeling sorry for yourself expecting nanny government to whip out it's tit and feed you whenever you cry.
RacerXGTO 1 day ago
@RacerXGTO You're just a stupid fool! Do very well trading options and the Forex. So, why make less money working for somone else? Buffet and J.P. Morgan said that class warfare is being done BY the rich against the middle class!
jrwel14 1 day ago
If conservatives had their way. Minimum wage would be less than 1 dollar while letting CEO's make millions more than they do now.
jrwel14 1 week ago
@jrwel14 Apparently you don't understand that wages are determined by supply and demand. The more workers you have, the less the wages will be. The less workers you have, the more wages will be. Minimum wage causes the latter, which results in widespread unemployment among unskilled workers and a greater letter of poverty.
boshembechle 1 week ago
@boshembechle You need to read Truman's Labor day speech.
jrwel14 1 week ago
@jrwel14 Explain to me something. If employers are greedy scoundrels who are looking to solely exploit the hell out of you, why are 90% of employees in America paid above the minimum wage?
boshembechle 1 week ago
@boshembechle simple. Employers pay just enough to keep their workers from quiting. Basic fact!
jrwel14 1 week ago
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@jrwel14 "simple. Employers pay just enough to keep their workers from quiting. Basic fact!" You just made Milton Friedman's point. Thanks for playing.
YaHuWaHservant 1 week ago
No mw is a joke. The workforce wages would be similar to China's w/o a mw. I do think it should be lower to $6/hr though.
timoback3000 1 week ago
If minimum wage laws are abolished some employer could pay you $1.00 an hour. How could someone live off of that? I still don't understand how abolishing the minimum wage law is a good thing.
AresCassell 2 weeks ago
@AresCassell This is a very complicated area of economics, and a lot of factors come into play. You are right it would be very difficult (if not impossible) to completely live off of $1 an hour. If jobs were created that paid that little (in relation to current monetary value), they would only be filled up by those who could work with $1 an hour (I'm 18 years old with no work experience and can't find a job anywhere- I'd love to get the experience for that).
themeleed 1 week ago
@AresCassell [continuing my last comment] This would help decrease the current 24ish percent (I think?) teen unemployment, and give experience to those who have none. After this experience is gained, the individuals could work their way up to higher paying jobs much easier than if they had no experience. Hope this summarizes the theory a bit (and thanks for asking an intelligent question respectfully).
themeleed 1 week ago
@AresCassell It is for conservatives. They only care about the wealthy.
jrwel14 1 week ago
@AresCassell no one is willing to work $1 an hour, that's why they won't pay you $1 an hour because no one is willing to work. They need to raise the wage so that more people are willing to work. It's supply and demand. The supply of labor is the people and the demand for labor is businesses. When supply and demand meet, that is the equilibrium price for wages. The minimum wage is above the equilibrium. Therefore there are a surplus of workers in the market causing unemployment.
amzinasain 1 week ago
Own your own business, then debate the minimum wage. Until then you're nothing more than an arrogant ignoramus.
treysparker 2 weeks ago
It is one of the most stupid thing that i ever heard.
ju282828 2 weeks ago
@ju282828 How? What part of his argumentation is faulty?
crazypants88 2 weeks ago
Remind me how the minimum wage is advantageous for trade unions?
xXvolhvXx 2 weeks ago
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crazypants88 2 weeks ago
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xXvolhvXx 3 weeks ago
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xXvolhvXx 3 weeks ago
Oh but see, minimum wage 'trickles down/up/sideways/whatever' when you pay people more money because consumers now have more disposable income. Oh no wait. Wealth vanishes into the ether when it reaches 'bottom' or something.(???)
That trickle down voodoo economics bullshit sure worked out great! Good thing we have people trying hard to perpetuate that nonsense thirty years into the economic shitter!
Parpyduck 3 weeks ago
@Parpyduck There's almost a 100% correlation with all the people who post on this video and are for the minimum wage.
All they use are assertions. They very rarely argue their point.
Friedman made an actual argument, if you want to actually debunk him, argue your case. It only seems fair.
crazypants88 2 weeks ago 5
@Parpyduck
Its cute how you think we've had free market capitalism in recent decades.
The reason why trickle down economics doesnt appear to work is because we havent had it.
treysparker 2 weeks ago
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
amiraliagh 1 month ago
@amiraliagh Thanks a lot for the insight! Yes I do see now. However a final scenario. Now let us say hypothetically, that an individual lives in a community where all the employers choose to underpay their workers not because of their skill level but because they want more profits for themselves. Thus, they can pay an adept worker only 10 percent of the total net inflow and be the highest payer in the whole community or probably gang with other business owners to push down the wage.
Duske3000 4 weeks ago
@amiraliagh so that all the business owners profit and there is no other business to go to to seek a higher justification for their skill. How do we solve this then?
Duske3000 4 weeks ago
@Duske3000 This just wouldn't happen, because if it's known by the people that a group of employers are keeping wages lower by a secret agreement than the people would strike and refuse to work. Remember Rosa Parks and the bus boycotts. Now just imagine the boycotts that will emerge when you start to mess with people's money! Now lets say the employees don't know this agreement amongst employers. They obviously know their paycheck and if they decide to keep working than who's to blame? They have
goatnuts8288 3 weeks ago
@Duske3000 the right to quit and boycott. Besides, the lower wage cost to the employer is beneficial to the community. The business owners are buying supplies from somewhere if they have more money to spend than they engage with more business benefiting the employees of those businesses. So the money is constantly spread around.
goatnuts8288 3 weeks ago
I understand what he is saying and I really do admire and respect Milton Friedman. However, if there was no minimum wage law, my employer can hire people and pay them less than their skill level as well. Isn't that a bad thing as well? Please respond.
Duske3000 1 month ago
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@Duske3000
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount
amiraliagh 1 month ago
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@Duske3000
Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants? the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
amiraliagh 1 month ago
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@Duske3000 Negotiation between the employee and employer would settle the matter, now what if the employer decides to pay less than what he deserves? then he should reject the offer. the question looming in the back of ones mind would be what if the emploee can't find a job that pays him the amount he wants?. the answer is he just happens to think he has the skills for the amount requested but he doesnt really have, becasue if he had, other employers would hire him for that amount.
amiraliagh 1 month ago
@Duske3000 It could be a bad thing, but the competition in a free market would eliminate that. Example: If the worker is truly deserving of better pay, he/she could just as easily quit and have someone else hire them for a wage they justify to be fair. If they can't find an employer willing to pay their ideal wage, than the worker is not worth what they justify themselves to be (the demand for that worker is not there).
goatnuts8288 4 weeks ago
@goatnuts8288 Thanks for the reply and different point of view! I now know how to answer some socialist at least. By the way, please look at my latest reply to amiraliagh and tell me what you think about my final problem with minimum wage.
Duske3000 4 weeks ago
How about a maximum wage???????
1963danno 1 month ago
Milton Friedman gets Owned -> /watch?v=FXLWd_avNT8&feature=channel_video_title
diogotomediogo 1 month ago
You can live very well in the U.S making just 1 dollar above minumum wage or more. I currently make 25 an hour and I've got over 100k in the bank saved up.
DarkosApprentice 1 month ago
@DarkosApprentice how long have you been saving for?
mauiwowie11 1 month ago
There are a couple guys in the comments talking about the "Australian" economic model.
The Austrian Economic School, named so because its founders were from Austria, is not to be confused with the current economy of Austria, a person from Austria,Australia, Nicole Kidmen, Crocodile Dun Dee, Russell Crow, Kangaroos, Koalas, or Qantas air lines.
Hope that clears things up.
Woodchuckk 1 month ago 12
Parth here from waktech nign0G wigw0G
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PGX17g 1 month ago
There's a reason we passed minimum wage laws in the first place. We had to because people were living below the poverty line. People don't understand minimum wage. If you look at the people on minimum wage, most work extremely hard. That doesn't mean there aren't some people using it to their advantage, but that's nothing to base policy on, just like welfare.
1019079 1 month ago
@1019079 Are you complete incapable of LISTENING. Minimum wage CAUSES unemployment you IMBECILE!
thomascapitalmgt 1 month ago
@thomascapitalmgt Apparently you're incapable of reading. I never said those people were unemployed, I said they were living below the poverty line. Feel free to call me an imbecile though, I know I'm not, so knock yourself out.
1019079 1 month ago
@thomascapitalmgt being employed at a shit wage hardly helps. well, it helps the capitalists i suppose.
nerfmyaccount 1 month ago
Minimum wage, "That kind of a wage"
Are you kidding me?
cz85combat9 1 month ago
I'm not familiar with the Australian model but it could very well be that it does not work. Many people here think it is great even though it keeps wages down because they are too dogmatic to criticize it.
nathfrancis01 1 month ago
@nathfrancis01 If you are not familiar with the Australian model how can you say that it doesn't work. The Australian economy is booming. Australia pulled through the global recession better than most countries. No point complaining about something when it isn't an issue here.
Kiwichico 1 month ago
@Kiwichico Lmmaaooooooooo You are the fucking stupidest person in the world! Buahahahahahahaha You get a 'like' for being such an idiot, congratulations!
AwesomeDudeGreat 1 month ago
@AwesomeDudeGreat Ah another troll.
Kiwichico 1 month ago
@Kiwichico troll >>>>>>>>>> "Australian model" Fucking idiot.
AwesomeDudeGreat 1 month ago
@AwesomeDudeGreat troll!
Kiwichico 1 month ago
Minimum wage is a disaster but not for the reasons that Friedman suggests and I would argue that in the UK at least, many of the people who supported minimum wage were not well meaning. For example most supermarkets pay minimum wage, competition for aquiring labour is removed there is no financial incentive to work in one supermarket as opposed to another and therefore wages stagnate. I worked in a factory last year and my father worked there in the early eighties and was paid more than me.
nathfrancis01 1 month ago
@nathfrancis01 then why does it work in australia?
Kiwichico 1 month ago
ask anyone in the UK, minimum wage created our Welfare State, everyone on minimum wage, everyone needing to suppliment their income through welfare. Don't do it.
lynxian1 1 month ago
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@lynxian1 then why does it work in australia
Kiwichico 1 month ago
Another effect of a minimum wage is that that to hire those that are deemed skilled lower comparable to the minimum wage, employers had to lower the salary of a skilled worker and thus having to pay a skilled worker a lower wage comparable to his or her skill.
AlexDerossard 1 month ago
@AlexDerossard perhaps this may apply to chefs
Kiwichico 1 month ago
BORING BULLSHIT A WANNABE POLITICIAN
SidPointSeven 2 months ago
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OCCUPY WALL STREET
occupytheworld22 2 months ago
This is just stupid.
C05597641 2 months ago
Empirical evidence goes to show the minimum wage does not cause unemployment to increase. If workers are being paid more they are also spending more, and this increase in consumer consumption causes the economy to grow.
proofbyevidence 2 months ago
@proofbyevidence, oh you do make a very good point.
You're just not going to convince these libertarian ideologues of anything.
The reason is that the crowning achievement of the Austrian School of Economics (of which the Chicago School is an off-shoot) is the wholesale rejection of empiricism.
That's why libertarian thought is so bankrupt. The entire edifice upon which all their ideas and arguments rely is based on absolutely NOTHING but philosophical conjecture.
MiltonAugustoPinoche 2 months ago
@MiltonAugustoPinoche I so totally agree with that.
Kiwichico 2 months ago
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@MiltonAugustoPinoche
Wow! you are one pathetic son of a bitch. You created your retarded account just to troll on youtube. Get a life you pathetic piece of shit. If your mom had spent that money she spent on crack and sent you to a private school, you wouldn't have to be on welfare and a negative impact on GDP.
LogicalFlawDetector 2 months ago
@proofbyevidence Why did jobs that paid below the MW rate disappear when the rates were raised?
Jobs such as bag handlers at grocery stores or usher at movie theaters?
crazypants88 2 months ago
@crazypants88 Because they're bullshit unnecessary jobs that do nothing to increase output. I don't understand how this is meant to refute my point in any way.
proofbyevidence 2 months ago
@proofbyevidence Unnecessary according to whom?
Not to the people who employed them, not to the people who staffed them and not to the people who paid for services.
It refutes your point because it shows that increasing the MW does destroy jobs that aren't valued at the MW rate. If employers find they can only charge so much for a service or good until people simply aren't willing to pay for them, they can't keep those people employed anymore.
crazypants88 2 months ago
@crazypants88 "...who paid for THOSE services"
crazypants88 2 months ago
@crazypants88 Unnecessary to able-bodied individuals - and to those who aren't able-bodied there will still be assistance. So the minimum wage gets rid of the shit jobs, but it also other creates ones via increased consumer spending. Otherwise unemployment would have increased.
Also how many fucking people were employed as ushers and bag packers, you pillow biter?
proofbyevidence 2 months ago
@proofbyevidence No, value is subjective, that's why these jobs were valued, just not by you. People obviously valued them, why else would they be employed by them, employ them or even buy their services? Because they don't value them?
Why would consumer spending increase? Those who were employed by below MW jobs will by and large not have jobs since they aren't valued at the MW rate.
Obviously not many ushers now, when they were commonplace they were usually staffed by young unskilled labour.
crazypants88 2 months ago
@crazypants88 The minimum wage doesn't get rid of unskilled labour jobs. Those who were ushers could still be employed to perform unskilled jobs that are deemed essential by the firm; they are not doomed to unemployment because they can't get a job as an usher anymore. I don't understand how you cannot grasp the idea that the minimum wage has not caused unemployment to rise.
proofbyevidence 2 months ago
@proofbyevidence Ok let's pretend the MW, like you say, doesn't destroy jobs. Why only have it at 7 dollars, why not 50 or 200, why ever stop raising it? Since it doesn't cause unemployment there should be no reason to stop raising it.
The MW does effect unskilled labor if it's set above what the job is valued at. Here's simple analogy: Would you buy a 300 dollar apple? I'm guessing not or at very lest you wouldn't buy as many apples as you used to.
contd.
crazypants88 2 months ago
@proofbyevidence contd.
Employers are the exact same way. If you raise the MW you're essentially turning these workers into 300 dollar apples as no one can afford to employ them at a rate higher than what they're valued at. Employing them would lead to their bankruptcy if no one is willing to pay the new inflated prices.
crazypants88 2 months ago
@crazypants88 If the base wage for everyone were paid more, then they all can afford to pay for the 300 dollar apples. Of course this wouldn't work if the pay scale for everyone wasn't relative, that is if they were getting paid the same as a qualified or skilled person. I'm no economist but I imagine the the minimum wage would be set on the consumer price index in order to keep a decent standard of living as well as being relative to other pay scales.
Kiwichico 2 months ago
@Kiwichico Let's assume that's right and it does in fact not create unemployment? Why is not viable to raise it even higher? If the MW is as harmless as you people say it is, why not have it at 100$ or 200$?
The MW rate, while being a base wage, will not raise those worker's wages who are valued below the MW rate, they'll become unemployed since they cost much more to employ than not to employ, with very exceptions. Those exceptions are only possible through price increases
crazypants88 2 months ago
@crazypants88 @crazypants88 I agree minimum wage can create unemployment if price of the product does not move. It is not viable to raise it higher as the pay has to be on par with skilled work.
Kiwichico 2 months ago
@Kiwichico It does create unemployment but it's not the price of the good or service that decides that. It's how much the employer values/get's from that person's labour. If the minimum wage rate is higher than what the employer values his employees, then they will most likely loose their jobs.
crazypants88 2 months ago
@crazypants88 Sorry I thought I just reiterated what you just said that is they cost more to employ so become unemployed with the exception of rising the price.
Kiwichico 2 months ago
@crazypants88 If people were paid next to nothing like $2.50 cents for their labour and the price of a bag of apples was set at $4. How could they afford it?
Kiwichico 2 months ago
@Kiwichico Who would accept that wage? Wages aren't just determined by employers, they're also decided by employees who have to consent to that wage and by supply and demand. If there's a high supply of unskilled labor (which there always is) then that type of labor will be cheap. That's why jobs with high prerequisites usually have high incomes.
contd.
crazypants88 2 months ago
@crazypants88 Like you said people who are unskilled will have to accept those jobs.
Kiwichico 2 months ago
@Kiwichico No that's not what I said. I said unskilled labor is more abundant therefore will always be cheap. That doesn't mean that they don't have to consent to a job, which they do AND the wages would have to in competition for his competitors because if he pays 1 dollar/hour and his competitors pays 3 dollars/hour then his workers are going to start working for his competitors. Like I said it's three factors that decide wages ( four if you supply & demand as two separate concepts)
crazypants88 2 months ago
@crazypants88 Still can't afford those apples. Ah I thought you meant high supply of labour, limited number of jobs. Maybe I should have said that they will have to accept the cheap labour that is under the minimum of which one can survive on but then again I guess they are getting some money rather than nothing.
Kiwichico 2 months ago
@Kiwichico I'm sorry, what apples?
Well the cost living isn't set in stone and even if it were not everybody works to live.
Before the MW priced low paying jobs out of existence they were usually staffed by teenagers who were just working to save money or for pocket money.
Dropping the MW would ensue in a lowering of prices, especially for cheaper goods and services.
contd.
crazypants88 2 months ago
@crazypants88 The $4 dollar apples that I mentioned before. We have some idea of the cost of living through the consumer price index. Yes its true dropping the MW could lower the prices but if there is not much competition in the market due to the cost of setting up business is high, regardless of the labour costs, then there could be a drop in price but not a significant drop as the cost savings would mean more profit or used for new investment.
Kiwichico 2 months ago
@Kiwichico Right and in that context I asserted that they would be able to afford an apple since a) employers aren't the only ones who decide wages, meaning if potential employees felt a wage was too low they wouldn't accept it and b) that prices for goods and services that require cheap labor (apple picking be one of them) would drop so current prices are not exactly representative of what assert will happen. I don't know if that makes sense, if it doesn't tell and I'll try to rephrase it
crazypants88 2 months ago
@Kiwichico contd.
Since without the MW it becomes viable for entrepreneurs to start making things such as plastic cutlery, cheap furniture etc etc much more cheaply. Those items would especially help the poor and since there's now many more supplying cheap goods and services it would follow that they would drop in price due to competition.
crazypants88 2 months ago
@crazypants88 Yes that can be true but if they are already offering cheap goods under a minimum wage and then take it away. Depends if the price drops enough to compensate the drop in wages.
Kiwichico 2 months ago
@Kiwichico That's what you're misunderstanding right there. Wages will not drop because workers are only paid if they bring in more than what they're being paid. So all jobs who didn't bring in more than what they got paid were let go when the MW was raised. The reason people on MW have that wage is because they happen to be valued at the same rate that the MW wage is at.
contd.
crazypants88 2 months ago
@Kiwichico contd,
I'll concede that there are jobs that did get a pay raise with the MW but that's only because people valued them enough to pay more. I doubt they would get a pay decrease and even if they did, a pay decrease does not equal decrease in buying power, which is what matters as opposed to the amount of money.
crazypants88 2 months ago
@Kiwichico contd.
Even so unskilled labor is cheap, employers will still be competing amongst themselves for labor, that's why employers also have an incentive to offer as a high a wage as they can.
Bottom line: artificially raising the lowest wage possible does not raise the wages of the workers working those jobs.
crazypants88 2 months ago
@crazypants88 Its true employers will be competing amongst themselves for labour but only if there are a lot players and the capital costs of entering the market are low. Big chains, factories that need a lot of capital will dictate the wage not the employee, so if these type of companies can offer a wage at the lowest value regardless of whether an employee can have a decent living, they will do it.
Kiwichico 2 months ago
@Kiwichico No that's wrong, they'd especially be competing if there was a low number unskilled labor.
That's why jobs with prerequisites have usually high incomes, because there's a low supply therefore there's a high demand for them. If you haven't I'd recommend reading a bit on supply & demand, honestly not trying to be rude or anything, just think it's an important concept to know of when you're talking economics.
Capital costs are irrelevant in this discussion.
crazypants88 2 months ago
@crazypants88 Wait I thought we both agreed there is a high number of unskilled labour. I didn't say there was a low number of unskilled labour. I said there was a low number of businesses. Captial costs are relevant Porters Five Forces.
Kiwichico 2 months ago
@Kiwichico Oh yeah there is a high number of unskilled labor, I was just demonstrating that employers compete more and more for employees the more skilled they become. They don't have to compete as heavily when the labor they need is so abundant. They still compete mind you.
Capital costs are irrelevant in the context of whether or not employers compete for labor.
It's of course relevant in economics in general.
crazypants88 2 months ago
@crazypants88 I agree skilled workers are in higher demand. And that was the point I was trying to make that they don't have to compete as heavily if there is an abundance of labor. Thanks for the debate.
Kiwichico 2 months ago
@Kiwichico Well you did originally say that would only be competing for labor if there were "alot of players" which was false, they always compete for labor.
Thank you as well, you've been very civil.
crazypants88 2 months ago
@crazypants88 You mentioned that people can negotiate their wage with employers caused by employers competing for labour. Say if we have 50 businesses each offering 20 unskilled jobs giving 1000 jobs. And say the labor pool for unskilled workers is 10000 to choose from. Of these 50 businesses the setup cost is very high so little chance for entry. How are the employers competing for labor when supply is so much larger than demand.
Kiwichico 2 months ago
@Kiwichico Sorry for the late reply, thought I had responded to this but my comment doesn't seem to have registered.
I'm not sure I understand your question, yes the the cost to setup a business is a barrier to entry but that doesn't mean that it's impossible to enter, there are a myriad of barriers to entry. But again I don't see the point your trying to make, so it would be appreciated if you could maybe explain this.
crazypants88 1 month ago
@crazypants88 I didn't say there is one barrier of entry, by saying "say" means I was giving one scenario. The point is extreme excess of labour little or no competition for employers. Like in India and a lot of Asian countries are a perfect example of excess labour and next to nothing pay.
Kiwichico 1 month ago
@Kiwichico Competition between employers isn't solely based on how many or how few workers are available, it's also based on what the workers demand. Also if there's a excess of labor, that would of course attract other entrepreneurs to capitalize on the low worker costs, therefore bringing it undoubtedly into an equilibrium.
crazypants88 1 month ago
@crazypants88 I think we are going around in circles, because earlier on I had agreed to what you said to others being able to enter the market under ideal circumstances but I was focusing more on scenerios such as in China, India and Africa of where locals find it difficult to enter the market. So I'm just going to leave with the point that we both agree on as you quoted "They don't have to compete as heavily when the labor they need is so abundant."
Kiwichico 1 month ago
@proofbyevidence
If workers are paid more, the employers have less to spend or invest on their own. Any increased consumption on the part of workers after a wage increase are offset by decreased investment or consumption on the part of employers. You have committed the oldest fallacy in all of economics: the free lunch fallacy. P.S. Most studies have showed that minimum wages increase unemployment, especially among poor black teenagers.
LogicalFlawDetector 2 months ago
Ayn Rand was a moron who thought she could survive on her own genius but when cancer threatened to wipe out the little bit of wealth she managed to put away for her old age she changed her name and applied for welfare benefits. The queen of the Libertarians, a stupid bitch preaching to the ignorant. She had a modicum of success on her own but like other so called self made successes, when she failed and she turned to the state to keep her ass off the street.
logtype47 2 months ago
@logtype47 She used a system which she paid into. Just because you're against the system doesn't mean you shouldn't use it when you've already been forced into paying more than your fair share. Ayn Rand was also vehemently against Libertarianism. It's not surprising someone who feels the need to be so incredibly rude is also distorting facts.
mrrobotica 2 months ago
@mrrobotica You do realize that by defending Ayn Rand's actions, you are making the case for the entire American populous to get on welfare.
logtype47 2 months ago
@logtype47 Except that in order to meet the conditions to be on welfare you would have to be a person who does not pay enough into it to justify your use of it. This is not the case for things like roads or social security. Welfare redistributes wealth away from the productive. A wealthy and productive man accepting social security or the use of public roads is just taking back part of what has been taken away from them, i.e. getting (part of) what you have been forced to pay for.
mrrobotica 2 months ago
@mrrobotica OK. Now you need to define welfare, because you obviously think it's a program design to narrowly help poor people.
The government pensions and medicare benefits that Republican legislators receive far exceeds the amount of money they contribute to the system.
logtype47 2 months ago
@mrrobotica BTW. Ayn Rand being against libertarianism is meaningless. Subscribing to the cult of personality is a fools game. I follow the logic.
logtype47 2 months ago
@mrrobotica If what you're saying is true, why then have republican elected officials created legislation that prevents records about them having taxpayer sponsored government health care from being released to the public. They obviously see the hypocrisy in fighting against government programs while benefiting from those same government programs.
logtype47 2 months ago
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mrrobotica 2 months ago
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mrrobotica 2 months ago
@logtype47 Part of the reason may be that they would appear to be hypocritical although I would still disprove of them giving off the message that taking out of something you have been forced to pay into and oppose is wrong. I don't approve of this and if this is their reason I think they should be honest and explain to people how it isn't hypocritical to oppose something you have been forced to pay into and used. They may even believe they're being hypocritical in which case they're irrational.
mrrobotica 2 months ago
@mrrobotica Regardless of your opinion of their actions, the Republican legislators are rather astute and understands quite well the hypocrisy of receiving government health care while fighting against the common man receiving it as well. Sorry but this is a no brainer. It's rather obvious.
logtype47 2 months ago
@logtype47 And they would be wrong. Wealthy people (as elected Republicans generally are) don't benefit from things like social security. They're just cutting their losses by not refusing it when they're already forced to pay more than their fair share into it. Would it be hypocritical for a wealthy Canadian who pays half his salary in tax, largely because of health care, to both accept treatment from a hospital and be against universal health care?
mrrobotica 2 months ago
@mrrobotica FYI. The wealthy in this country receive the lion's share of government welfare. See: Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
KPFK
logtype47 2 months ago
A bank would not lend enough money on an unsecured loan to raise enough capital. More discretionary would go to the person earning more money. If you are earning $2.50 an hour you choices are limited to what you can do with it.
Kiwichico 2 months ago
I personally think Marketing is like an election campaign. A bigger exposure outweighs any small competitors, even if a smaller competitor is offering a better quality good.
Kiwichico 2 months ago
MW depends on how you look at people. Do you see them as machinery or skilled workers offering improvements. Not having mw means bigger businesses can make it harder by rising the barriers of entry through more intensive marketing and more capital invested. Less competition higher prices.
Kiwichico 2 months ago
@Kiwichico That doesn't make any sense. How is marketing and capital investments barriers to entry?
Also dropping the MW would undoubtedly increase competition as it would be much easier to enter the market.
Especially if you're providing cheap goods or services.
crazypants88 2 months ago
@crazypants88 If you are already a big business and can save on labour costs then you can redirect this into a marketing and capital expenditure like a lot of the big chains. Small business can't compete on that scale.
Kiwichico 2 months ago
@Kiwichico Sure big businesses can spend more on marketing but how is that a barrier to entry?
crazypants88 2 months ago
@crazypants88 Also if someone is on minimum wage they would never be able to raise enough capital to start a small business. Prices might be high under a minimum wage but at least the individual on minimum wage has more discretionary power for their spend.
Kiwichico 2 months ago
@Kiwichico That's why the concept of lending came about.
Discretionary power? Why wouldn't he have that with out a minimum wage?
crazypants88 2 months ago
@Kiwichico Minimum wage increases entrance costs. Instead of having to pay a worker the market value of his labor a start up company would have to pay him more, something established businesses may be able to do but would block any up and comers.
mrrobotica 2 months ago
@mrrobotica The point is the competition becomes unbalanced. Sure labour costs may make it easier to enter for small businesses but they would struggle to compete with the bigger chains who can now easily expand their operations and offer their products at a much lower price due to economies of scale.
Kiwichico 2 months ago
@Kiwichico There is nothing wrong with out competing any potential competitors simply by operating efficiently and offering a good service. That is not a coercive monopoly. There is nothing wrong with maintaining a monopoly through constantly offering the best service anyone can offer. You're basically protesting companies being efficient.
mrrobotica 2 months ago
@mrrobotica Monopolies are not efficient hence state ownership being sold by governments and the fall of communism. Monopolies have been discouraged by many governments, so yes I protesting against monopolies. A competitive market forces companies to be efficient.
Kiwichico 2 months ago
@Kiwichico A monopoly that maintains it's place in a free market must be efficient and offer a good service or else new competitors would be sure to invade it's industry. There is nothing inherently inefficient about a monopoly, it is coercive monopolies, monopolies immune from competition, which are inefficient and are able to offer a bad service for high profit. Every single coercive monopoly in history has been created by government.
mrrobotica 2 months ago
@mrrobotica Monopoly practices are not encouraged see United States vs Microsoft "The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system sales and web browser sales". Microsoft operates in a free market. It doesn't matter how efficient a small business is they can't operate on the same scale eg chains. And if someone is given a decent wage then they operate more than just being a machine by offering a better service.
Kiwichico 2 months ago
@Kiwichico Monopoly practices not encouraged? The US state is itself a monopoly and it supports a myriad of different cartels and monopolies. The Federal Reserve being one of them.
Microsoft does not operate in a free market, a free market is defined as a market without government interference, I'm fairly certain Microsoft owes most of it's success through copyright enforcement of it's pattens, that's the opposite of a free market.
crazypants88 2 months ago
@crazypants88 Its true in theory its not suppose to be encouraged but in practice it can tend to end up that way. Like Microsoft it is suppose to be in free market. Patents in itself shouldn't restrict competition of which the government was suggesting they were doing. For example you can have a patent for the invention of 4G but its use can not be controlled by one company.
Kiwichico 2 months ago
The fact is the Minimum Wage Law creates unemployment
diogotomediogo 2 months ago 4
This has been flagged as spam show
You are a commie.
No no no. If you make minimum wage, it is best you suck off the tax payer for medical, dental, education, child care, housing, and food stamps.
Because fuck man, it is best the capitalist max out profits with all the money they refuse to pay you, and make the tax payer cover your cost.
You think this is the good old days when a person could earn their way in life.
Fuck no man, if is all about capitalist profits!!!!
They mean more then you, or the tax payer...
MrAppleseed88 3 months ago
This is such bullshit. I enjoy alot of Mr. Friedman's workt he has to know that the minimum wage law is about decency and having a certain standard of living in this country.
As he said, at $2.5 the law may say you have to hire there but who says you have to hire someone at $2.5 who you judge to have $2 skills? Whats stopping you from waiting for someone with $2.5 skills?
Milton seemed insinuate paying whites at $2.5 and blacks some amount less. Geez, theres already enough social tension
fububalla 3 months ago
@fububalla Appeals to some kind of fairness, fairness is a completely subjective concept mind you, is in no way a refutation of what Friedman said.
Do you buy apples if they're 50 bucks a piece? I'm assuming not, the same for employers, a person brings only, say 2 dollars/hour or is valued at that then a MW increase is the vast majority of time not going to increase said worker wages, he's going to lose his job. So much like the 50 buck apples,
contd.
crazypants88 3 months ago
@fububalla contd
...a worker that's gotten his price artificially inflated is not very likely to be employed for long.
crazypants88 3 months ago
@crazypants88 depends on the industry. For example in most service jobs, I doubt the business risks losing business or decreasing production and service because of an increase in Min Wage. For example, if MW went up to $11 from like $7 right now, would MCD have massive layoffs? I can't see it, they may try to trim around the edges. But in manufacturing your analogy holds more true because its easier to quantify the production.
fububalla 3 months ago
@fububalla Yes they do, it doesn't make any difference what industry it is in. If a person's labor is only valued as so much increasing it will not increase his wages, the few times it does it inevitably raises prices as that extra income has to come from somewhere, therefore reducing or even negating any increase in buying power.
If I have a person employed to organize folders, if I'm mandated to raise his wage I'll just get rid of him and have one of my other workers whose labor...
contd.
crazypants88 3 months ago
@crazypants88
Businesses aren't social welfare. You shouldn't have employees that you don't need. So if you don't need someone to organize folders then you shouldn't have had them in the first place. But you do need someone to run a factory line. And if you can to meet demand of a 10,000 units and it take 10 employees to do that you aren't going to cut one because you have to pay him a dollar more an hour. Furthermore, . . .
gamenode 3 months ago
@fububalla contd.
... is valued above the MW rate to do it.
Yes they would or at least they would not hire as much. I mean would people buy as many burgers when they're more expensive? No, that's why eventually they would get rid of employees, not all, but there would definitely be fewer people employed.
crazypants88 3 months ago
@crazypants88
People buy what they need and what they want. A person can fry 100 hamburgers an hour. The cost of 2 cents per burger will raise his wage by 2 dollars but be unnoticed by the consumer.
As we've seen in other areas like coffee production, the cost increase of a penny for a cup of coffee dramatically raised wages in South America. People are willing to may a little more for wage justice. Most people don't want to exploit other human beings like you do.
gamenode 3 months ago
@gamenode Stop with the lame ass personal attacks, they achieve nothing and just paint you in a bad light. Should I call you a fascist as you're advocating taking people's freedom to contract away from them? Regardless I'm not going to because I make my case with argumentation alone. Also personal characteristics in no way effect my argument.
2 cents per burger? Whatever, as long as production costs are lower than than the profits, the employee has a job.
crazypants88 3 months ago
@crazypants88
And it's pretty clear by the huge profit margins companies are making that production costs ARE lower than profits. Still, U.S. companies are purging jobs. They aren't doing it because it's too expensive to hire anyone. They are doing it because no one can afford to buy anything. Low wages strip people of buying power.
gamenode 3 months ago
@gamenode By definition a company's cost of of production or just cost in general has to be lower than profits.
That's how businesses stay afloat, by not going bankrupt.
Yes they are doing it because it's too expensive to hire among other reasons.
"Low wages strip people of buying power." Because of...... yeah this what I'm talking about, make argument that back up your assertion, debating 101
crazypants88 3 months ago
@crazypants88
Furthermore, 10 employees working 40hrs each at a dollar more an hour is only 400 more a week. If they produce 10,000 units then the cost per unit is only 4 cents per unit.
Yes prices will rise but by just 4 fucking cents. And for 4 fucking pennies you would reduce the standard of living of your employees so you can drive a fucking Mercedes to work and send your kids to private school.
4 mother fucking cents asshole!
gamenode 3 months ago
@gamenode I'm not sure I understand your argument.
As far as I understand you're in no way debunking the fact that employers can only pay what they value a labor at. They can increase the wage, true, but that might result in fewer people buying their burgers as their now more expensive, fewer people buying burgers, less profits, less profits mean they aren't using their resources efficiently, therefore they might very well be inclined to letting some workers go.
contd.
crazypants88 3 months ago
@crazypants88
Boo hoo. Maybe they would make more profits if they didn't pay the executives so much. Who says shareholders have to make a 20% return on their investment every year? Why can't they be happy with 15% or even 5%. Why is it that only the rich should profit and only the poor should make sacrifices.
Prices don't have to go up if the CEO drives his own car to work instead of taking the company helicopter.
gamenode 3 months ago
@gamenode I'm starting to think you're actually retarded. Have I not explicitly stated that the VAST MAJORITY OF BUSINESSES AREN'T MEGA CORPORATION that are rolling in cash. Well I have and you have in your usual fashion ignored it as puts a hole in your whole worldview.
crazypants88 3 months ago
@crazypants88
The vast majority of businesses aren't mega corporations but the vast majority of jobs are either at mega corporations or controlled by them. You cannot deny that when a mom and pop shop 10% of workers off 1 or 2 people might lose a job but when GE does it 20,000 people lose a job. That kind of lay off is how companies manipulate supply and demand. You need to look up the Hawthorn Effect to see how business can manipulate employees to keep them in low wage jobs.
gamenode 3 months ago
@crazypants88 So why didn't you just get the guy who you're paying more than MW to do it in the first place? Sounds like you have an inefficient business my friend. 2ndly, now that you are tasking the above MW worker more, how long do you think it be until he DEMANDS a higher wage?
You guys have no balance between economics and the psychology of economics. You just spew your ideological theory. But thats what youtube is fore.
fububalla 3 months ago
@fububalla Because time is finite, at least my time is. I'm not going to get the