Renegade

You have to be earning 120K+/year to pay 33% of your income in tax. I suspect you have miscalculated by looking at your marginal rate rather than the real percentage of taxes that you pay. Yes, I'm probably overestimating, not because I'm using my marginal rate, but because: 1. I'm going by memory. I don't have the figures in front of me. 2. The 33% guestimate is based upon the tax which is being withheld, not the amount adjusted at year-end.

What is more relevant to me is my personal "Tax Freedom Day", not the average one that the Frasier Institute calculates. For me the breakdown is approximately: 33% to income taxes, 4% to sales taxes, 5% to house and educaion taxes, 4% to CPP and EI. Which bring the total take close to 50%. I'm sure there are other taxes I may have missed, but those are the big ones. For me, it's not far off from the Frasier numbers. And yes, I think that amout is too high.

Leafless, None of the links you provided even mention SSM or provide any backup to your claim. At least the third link, was relevant to the issue. Thank-you.

Huh? How does SSM do that? I didn't see any relevant support in the link you provided to support your claim that "Homosexuals are responsible for a much larger percentage of child abuse". Care to be specific?

Leafless, it is hard for me to believe you seek to quote a bigoted Ukrainian politician as reinforcement for your own belief system. Would you agree with Grach when he states that "the rights of these people should be protected"? Maybe you should consider quotes from Borat for inspiration. His quotes on homosexuaity are likely to resonate well with you.

Why? And what is the cost of living? Is it the cost of living of someone with 5 kids, or is it the cost of a living of a student living at home with the parents? No I can't, and even if I could I wouldn't accept such a wage because I can command a higher wage. The choice should be mine to accept or decline it. The employee can refuse by seeking out an employer who values his skills at more than $5/hour and would offer him a correspondingly higher wage. Even if the worker temporarily accepted the work at $5/hour, the are free to look for better paid employment. An employer who offers positions at $5/hour either would have to be willing to withstand high employee turnover or raise wages to the level where employees are retained. As to your second question, that "he has to eat, doesn't he?", of course he does. If $5/hour doesn't pay enough so that he eats or can sustain himself, he will soon be incapable of working, thus the employment situation will terminate anyway. It is in the employers advantage to offer wages enough to sustain the employee otherwise the employeer would constantly be sourcing new employees. This natural pressure for a stable situation does not requre minimium wage legislation. No, I wish wages were high so that no one needed to be on welfare, however I don't think wealth can be leglislated. The availability of welfare also sets a floor rate under which, no rational person would accept a lower wage. Thus minimium wage legislation is unnecessary, and if the wage is set high enough can be disruptive. I also object to govenment interferring in the free ability of individuals to decide for themselves what wage they will or won't accept. One of the things that government and many people overlook is that employers have a choice. They can decide that the minimium cost of labour is too high, and they can persue lower cost alternatives, such as automation, offshoring, or driving additional productivity out of existing staff. All of these are worse alternatives for the potential employee than accepting a lower wage. ----- Something you have said before, I'm curious about: Why do you think that no or low minimium wage would work in China or North Korea?

Do I think an individual would have input into the conditions a company offers? No not at all, nor should they. But an individual does have input into the decision on whether he/she accepts the company's offer. That is the difference between a free market and slave labour. An individual is free not to accept the work, a slave isn't. No human being in their right mind would willing work for less in compensation than their skills can command. If they are only being offered positions which command a wage less than minimium wage, that is an indication that there is very little market value for their skills. The solution for them is to upgrade their skills or make other changes to make them more valued to employers. The solution is not to mandate that employers pay them higher. There is no question that minimium wage causes unemployment, so it is not logical to say that you need a minimium wage when unemployment is high. What exactly do you mean by "exploit"? If there is a willing exchange of labour for compensation between one party and another party is that exploitation? In areas like Alberta which suffers from labour shortages, labour commands considerably higher rates than they otherwise would. In this case do you consider the employer exploited? Here are some good articles which explode the myths expoused on minimium wage: The Minimum Wage Vision A Glimmer of Hope: The Unusual Backlash Against Minimum Wage Minimum Wage, Maximum Folly

Ok let me change the "want to" to "is willing to". The issue is the same. No one wants unemployment either. What anyone "wants" is relative to their other choices. People may "want" a job at $6/hour when their alternative is unemployment at $0/hour. So in a take it or leave it situation, why do you think an individual would not just leave it? You say it will never fly here. Why not? are you saying that individuals are not capable for deciding for themselves what the threshold at which they are willing to work?

bradco, your statement illustrates the issue at hand. While you personally, will not work for $8/hour, a minimium wage prevents someone who wants to work for $8/hour from doing so. As you indicated you are free to set your own minimium threshold at which you will work. For you that may be $14/hour, for another individual it may be $6/hour. A manadatory minuimium wage interferes with an individuals ability to decide for themselves. Let's look at the example you brought up. If you enjoyed being a ski instructor, and woudl do it for low or no pay, and a ski instructor job was availble on weekends for $5/hour. Would you want the government to interfere with your ability to take that job?

It of course depends upon the level of minimium wage and the level of welfare. If welfare rates are equal to or higher than the mimimium wage rate, it makes no sense for a worker to work at minimium wage rates. The minimium wage is not just a moral guideline, it is imposed on all employers. It seems a pretty poor justification to say, "It must be rigtht because the majority supports it, and if you don't like it leave". There are many issues in which the majority has a position but should not be implemented because the contrevene individual rights. (SSM, in Quebec language rights, etc)

I couldn't agree more. Yes, but only morally. Enforcement of that should be left to each one's own conscience. No. Exactly! User fees are the fairest way to allocate cost of infrastructure. I'm glad to see you agree margrace.

Are you saying that you support the concept of welfare?

What you are talking about is welfare providing a minimum income -- which affects markets in vastly different ways than a minimum wage. People do not need a minimum wage. People need a minimum income. By "attempting" to provide the need for income by fixing prices and wages, you are fouling things up entirely. There is no justification for minimum wage -- other than the justification to steal. If people need income, give them income but do not distort the labor market. I would say that, economically speaking, a minimum income also fouls things up. By setting a minimium wage, the government artifically fixes a minimium price for labour. By setting a minimium income, the government sets a floor for the price of labour, by essentially offering to "purchase" labour at the level of the minimium income. The big difference is that in the case of the minimium wage, it is ultimately consumers who pay the cost of that subsidy. In the case of minimium income, it is the taxpayer who bears the cost.

Uh.... what would it be? I'm no fan of minimium wage. As long as there exist a welfare system, you effectively have a minimium wage because the welfare system provides a floor rate under which a rational worker will not go. Regardless, let me try and defend why a minimium wage exist. With most materials the selling price of the material is at least has high as the cost, because it is not rational to sell it for less. Unfortunately with labour this is not necessarily true. Let say that a person agreed to work for $1/hour. It cost more that $1/hour to maintain a person, unfortunately that cost is not completely borne by the person. Society provides welfare and shelter systems which subsidize the cost of providing the labour, as a result it justifies that it sets a higher price for labour than the individual would himself.

Generally labour is one of the largest components that goes into the cost of a company's products. A significant increase in the cost of labour will likely be reflected in a more that 0.1% increase in the product price and will likely affect demand. Since that is your guage of what is overpaid, what happens when a company is willing to pay $4/hour for a certain task because that is all the task is worth to it. IN that case does not a minimium wage to $10/hour actually forces the company to overpay the worker? I think you miss the point I am making. Even in regulated companies, they can overpay and not lose money because they pass on that cost to the consumers. It is not the companies who bear the brunt of the overpayment it is the end consumer. This is essentially the situation in which government workers and regulated monopolies are in. If you compare wage rates, you will find their workers "overpaid" by comparison to similar work done in private industries. While there is an argument for having a minimium wage, it is not the one you are making. Any significant minimium wage will destroy jobs. Let's say you had a job for $8/hour and the government was considering raising it to $10/hour. Would you be delighted that the company was going to pay you more, or would you be fearful that your employer would not value your work at $10/hour and you might be out of a job?

So, shouldn't they be out looking for another job which does pay them what they think they are worth? If they don't find one, isn't that a clue that their worth has diminished over time? Partly, but I think Firestone is losing money, its either pay less or go out of business alltogether. Not sure about it but I think they allready laid off a lot of workers. I remember years ago at the Toronto Telegram, the union didn't want to believe that the Telegram couldn't meet union demands and would go under if the union didn't agree to some changes. The union didn't - the Telegram closed. There are many unions which tried to play chicken with a company regarding wage rates, to the detriment to both the company, the union and their members.

Consumer demand is not binary. It is a curve. Any increase in cost will be reflected in prices and will affect demand. Just because consumers are willing to pay the price, does not indicate that labour is not being overpaid. We still haven't established how you guage what is overpaid. Many CEOs are paid 10s of millions yearly. This, despite the fact that company performance is poor. The fact that consumers are still willing to buy the company's products is not an indication that the CEO is not being overpaid. In many cases that is not how monopolies work. The regulating bodies set the prices based upon the profit the company makes. Prices are set at cost plus a reasonable profit. Costs include the cost of labour, regardless of the fact that the labour is overpaid. It may or may not be easier. Certainly it is more disruptive, and it doesn't necessarily address the problem which you bring up. The only time it address the problem is if a worker is being paid under minimium wage and the real value (however we determine that) is exactly minimium wage. It doesn't address the situation where the value of the work is really under minimium wage and that is exactly what the worker is being paid. It doesn't address the situation where the worker is being paid something over minimium wage, however the real value is higher. In short it is a poor tool for addressing the problem you describe. Not at all. Setting a minimium wage does not prevent or preclude crime. Crime is a result of many different factors. It is likely that a society has to invest in crime prevention and retribution regardless of what the minimium wage is. The minimium wage is parts of North America is higher than much of Asia, yet in many cases the crime rate in parts of Asia is lower. As I said, crime is not just a result of one factor, so investment to discourage crime needs to take place anyway.

The problem is incomplete information. The way to solve it is by providing more complete information. For example if a maid is aware that the going rate for housework is $12/hour, she is unlikely to work for $8/hour. It is easy, efficient, and cost effective to publish average wage rates. Agreed. However since EI only pays a percentage of what the worker earns, it already is a financial disincentive in most cases. As well, the EI system does not pay out on voluntary moves to EI. You can generally always make more on crime than by working. The trick is to create a disincentive by increasing the risk associated with crime. Not so. In many situations the companies won't lose money because they can pass on the additional costs to the consumer. As one example take monopolies like utiliites. If they overpay they simply pass on the cost in terms of higher rates. The public sector is in a similar situation. No doubt it may be that CEOs and executives are overpaid as well. Unfortunately it is harder with executives to guage what constitutes being overpaid.

So, shouldn't they be out looking for another job which does pay them what they think they are worth? If they don't find one, isn't that a clue that their worth has diminished over time?

What is a worker's market value? Isn't it exactly what he willing agrees to work for and what someone else willingly agrees to pay him? Given you want to "protect" workers, would you also want to "protect" companies who overpay workers by setting a maximium wage?

Thanks August. Let me try and address a couple of similar points that you make at once. It is true that basicly the risk exist before birth, however, the way I see it it should not be the child that pays the "premium" so that society (or government) takes on that risk. It should be the parents who are required to pay that permium, because they make the choice and bear the responsibility of bringing the child into the world. I view it as similar to a person buying a puppy. They are required to provide a wholesome enviornment for thte pet, furthermore they are required to assume any risks caused by their ownership of that animal. (for example medical treatment of the pet). They can offset that risk by purchasing insurance, however the responsibility for the premium is their own. To be honest, as much as I'd like it to be voluntary, I can see an argument that it is compulsory. It is not completely true that no one knows if he/she is high-risk individual prior to birth. Their genetics and their enviornment are pretty much known prior to birth and both factor into an assessment of risk. Obviously much more is known after birth and as the child grows, so a more accurate assessment can be made. I could accept an argument for compulsion on the basis that some unforeseeable disasters are so large in scope that no individual can adequately assume the risk, so for fairness to the child, the risk must be passed to society. However, regardless of if the "insurance" is compulsory or not, the "premium" should be paid by either the individual or the parents as custodians for the individual and not borne by society at large. I have two theories: 1. When the state subsidizes child-rearing, they encourage more women who would otherwise be home bearing children, into the workforce. An example is a mother who has one or two children and puts them in subsidized care and re-enters the workforce. She is disincented from having further kids because it incurs incremental costs, however if she was home the short-term incremental cost would be very little. 2. It may not be a causitive relationship. Society grows richer as both spouses work, and birth rates decline. As society grows richer, it can now afford to subsidze the cost of child rearing.

Indeed, I agree that people generally have insurance to protect against unplanned and catestrophic events, but I would say that this is different than equality for equality's sake. More to come on the insurance analogy. It isn't so much the government's abilty to finance, it is the goverenment's power of force. It is not using its own financial means, it is basicly using force in order to redistribute wealth. There are other organizations which also do so. Charities come to mind. The main difference is that they don't employ force. Would we tolerate other organizations besides government using force to redistribute wealth? For example, would we want a utility to charge high rates in the "rich" area of town, and subsidize rates in the "poor" area of town? Would we accept as right, this kind of redistribution at an international level? Say the US, seized the oil wealth of Saudia Arabia and donated it to Somalia? Isn't the justificaiton the same? Personally I'd accept a scheme where risk of misfortune was shared in the same was as insurance. I don't think the way it is implemented today falls into that category. In insurance, you basicly pay for the carrier assuming the risk. The more the risk, the more you pay. There is no such analogy in society. People pass on risk to the government but essentially don't pay anythign to do so. One other difference is that insurance is generally voluntary. If I can cover the risk myself, I may opt not to purchase insurance, or purchase less. There is no such analogy in society. In short the insurance anlogy fails because high risk individuals assume all the benefits of insurance but may assume little of the costs. It is true the child suffers the luck of the draw in the parents it gets and has no choice in the matter. However the parents do. How about if we look at it a different way? If we want to ensure that all children get a relatively "fair" start in life, shouldn't we impose some obligation on parents, to only have children if they are capable of providing a adequate starting point?

No, I think it was an insignificant economic move. The dollar amount was so small it had no economic impact. You have yet to explain why you think it was a bad economic move.

How is that a bad economic move? You can argue that it is bad politically or "unfair", but I fail to see the logic that this is a bad move by an economist. What is the economic impact of this move?

Wilber, yes I agree the new legislation just concerns how income will be taxed. The reason everything else is being read into it is based upon your original statement, not on the legislation. Your statement was: Given that you think that taxing household incomes accross the board is fair, I'd like to understand your perspective: 1. If it is fair to use household income as the basis for income taxes, why does that same logic not apply to other areas where income is used as the criterion. 2. Are you advocating that people have the choice of either filing as individuals or households based upon which is most in their advantage? 3. Would you see a different set of tax rates depending upon whether income tax was applied at an individual level or a household level? 4. What constitutes a household? Is it based upon the people living in the same physical residence? Is it based upon their relationship by marriage or blood? Are two siblings living toghether a household? Remember, I'm asking this clarification based upon your perspective on what you consider "fair", not based upon what the legislation proposes.