Minimum Wage Proposal $10.00 hour

[theloniusfleabag]

Dear ClearWest,

Let's say you make $10/hr right now. Tomorrow, the socialists decide to be 'generous' and make the minimum wage $15/hr. Your boss legally has to be paying you $15 an hour-- If your boss can't afford that, or if he/she doesn't think you're worth that, you'll be out of a job.

I agree. As an employer, I could not pay $15/hr in my small business and still be viable. I would have to lay off/ let go of some staff and make the remainder worker harder, plus work more hours myself. Right now, My wife and I pay $8/hr plus a profit sharing bonus, which is often double what the hourly wage works out to. Both ourselves and our employees like this system, but it would be jeopardized by a static (and high) minimum wage.

I do believe that there should be some level of 'minimum', but I think $5-$8 is high enough. Right now, in Calgary, the point is moot anyway. There are some fast food restaurants offering $14/hr to start. Burger King in Country Hills had a sign on their drive-thru window..."Work 1000 hrs and get a bonus $1000 cash!" Others have offered trips to Mexico, or cash bonuses, if you stay 6mo-1 year.

[Renegade]

True thats the theory but in practise a 10 cent increase in something worth $100 is not going to stop someone from purchasing it. Certain increases in prices can be passed on to consumers without effecting demand. It would also depend on the elasticity of the product in question as well.

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.

I know. I dont think there really is a good way to guage what is overpaid. Each person is going to have a different opinion of what amount of production from a person is sufficient for their pay. The guage I am using is whether or not the company is willing to pay or not. If the company is willing to pay a certain wage then they are of the opinion, for the most part,that they are not overpaying their employee.

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?

Still stands that the company cant overpay to the point they are losing money, unless there is a government subsidy and then that is a political not an economic decision. If the company cant find a worker to work for less than they are not overpaying. If there are agreements in place that dont allow the company complete flexibility to find cheaper labour that is because they have decided the stability of the current labour warrants an increase in labour costs.

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.

-I just dont see anything bad with having an $8hr minimum wage

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?

[Charles Anthony]

I dont think there really is a good way to guage what is overpaid.

Why should there be a guage?

If an employee wants a higher wage, that employee should ask for a raise -- or refuse the job initially and look elsewhere.

If an employer (and all other employers next door) can not afford (or is unwilling) to pay the higher wage, so be it.

When I walk up to the vending machine, what is the point of insisting that the soda is worth only 0.06$ (0.05$ aluminum deposit and 0.01$ fluid) since I am willing to pay an extra $0.94 for the soda. Should I demand a guage to scale down my overpayment?

I am completely ignorant of the cost structure involved with providing 24hour always cold and fresh cans of soda at every street corner.

Try to use the minimum-wage logic elsewhere throughout our commercial transactions.

Still stands that the company cant overpay to the point they are losing money, unless there is a government subsidy and then that is a political not an economic decision. If the company cant find a worker to work for less than they are not overpaying. If there are agreements in place that dont allow the company complete flexibility to find cheaper labour that is because they have decided the stability of the current labour warrants an increase in labour costs.

Wait a minute. What you just described sounds like a free market without a minimum wage.

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.

No. It is still all agents: employers, employees and consumers -- we should not forget the supply companies who deal with the employers too! -- that will lose.

Effectively, a price or wage control reduces the volume of trade in the market and thus, there will be losers all around.

The only winner will be the employee who keeps his now-higher-paying job. A gain which is at somebody else's expense.

While there is an argument for having a minimium wage, it is not the one you are making.

Uh.... what would it be?

[Renegade]

While there is an argument for having a minimium wage, it is not the one you are making.

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.

[Charles Anthony]

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.

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.

[geoffrey]

How does this minimum income work CA?

[Renegade]

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.

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.

[Charles Anthony]

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.

You are talking about a specific policy proposal. Welfare can also be a type of "minimum income" too.

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.

Wrong. People who are put out of work pay for it too.

Tax-payers paying for welfare spreads out the cost over the greatest number of people.

In the case of a minimum wage, a small number of people end up subsidizing what is "conceivably" everybody's collective "social contract" obligation. That is not fair.

How does this minimum income work CA?

I am referring to a general handout of any kind including welfare or baby bonus or whatever other free-lunches we get these days.

Mind you, I am not saying I endorse such handouts but rather, I am saying that they address the problem more efficiently.

If you accept enforcing our "social contract" obligation to help our neighbors, I would rather we left the labor markets alone (no wage restrictions and no price controls) and just forced eachother to pay for welfare. It would cost each of us much less if we all pitched in to the welfare pot and nobody would be denied the opportunity to employ someone. It would also "conceivably" be more fair -- albeit in a kleptomaniacal way.

[Renegade]

If you accept enforcing our "social contract" obligation to help our neighbors, I would rather we left the labor markets alone (no wage restrictions and no price controls) and just forced eachother to pay for welfare. It would cost each of us much less if we all pitched in to the welfare pot and nobody would be denied the opportunity to employ someone. It would also "conceivably" be more fair -- albeit in a kleptomaniacal way.

Are you saying that you support the concept of welfare?

[Charles Anthony]

Are you saying that you support the concept of welfare?

No. My sarcasm may not be obvious.

I do not support our concept of welfare because I do not believe anybody has an obligation to help anybody else. I just believe that welfare is a more honest and cheaper and fair method of helping people who lack income -- compared to minimum wage.

Our concept of welfare is theft. For the sake of argument, I am adopting the thieving mentality of a statist. The only objection I have with our concept of welfare is that everybody is forced to pay for it without choice. However, that does not seem to stop us from accepting most other policies. If our welfare was funded by the generous free-will donations of the public, I would not have a problem with it at all.

Do you believe people are obligated to help out their neighbor?

Do you believe people have the right to impose such an obligation on their other neighbors?

[margrace]

I agree, if Welfare is unacceptable, then free roads, which cost a fortune to build and maintain should have to be paid for everytime we drive on them. They also are a social program and a very expensive one.

[Renegade]

Our concept of welfare is theft. For the sake of argument, I am adopting the thieving mentality of a statist. The only objection I have with our concept of welfare is that everybody is forced to pay for it without choice. However, that does not seem to stop us from accepting most other policies. If our welfare was funded by the generous free-will donations of the public, I would not have a problem with it at all.

I couldn't agree more.

Do you believe people are obligated to help out their neighbor?

Yes, but only morally. Enforcement of that should be left to each one's own conscience.

Do you believe people have the right to impose such an obligation on their other neighbors?

No.

I agree, if Welfare is unacceptable, then free roads, which cost a fortune to build and maintain should have to be paid for everytime we drive on them. They also are a social program and a very expensive one.

Exactly! User fees are the fairest way to allocate cost of infrastructure. I'm glad to see you agree margrace.

[crazymf]

I think minimum wage should split when it gets too high, just like shares. For $9, I get a new Canadian employee. For $10, I should get him and his brother too.

[southerncomfort]

Our concept of welfare is theft. For the sake of argument, I am adopting the thieving mentality of a statist. The only objection I have with our concept of welfare is that everybody is forced to pay for it without choice. However, that does not seem to stop us from accepting most other policies. If our welfare was funded by the generous free-will donations of the public, I would not have a problem with it at all.

I couldn't agree more.

Do you believe people are obligated to help out their neighbor?

Yes, but only morally. Enforcement of that should be left to each one's own conscience.

Do you believe people have the right to impose such an obligation on their other neighbors?

.

I agree, if Welfare is unacceptable, then free roads, which cost a fortune to build and maintain should have to be paid for everytime we drive on them. They also are a social program and a very expensive one.

Exactly! User fees are the fairest way to allocate cost of infrastructure. I'm glad to see you agree margrace.

Welfare is fine on a temporary basis, not on a permanent basis. Yes, ser fees are fairer, why not, those who use services should pay for them. Does that mean that my road taxes will go down

[Jerry J. Fortin]

In my opinion minimum wage is income below the poverty line. If a person can live at that level of income fine, have at it. If not then I would suggest some upgrading to provide greater skills and employment options, this is a personal responsiblity. The government ought not to have to subsidize a citizen, nor should an employer. We should all pay our own way, if you want something you pay for it. Having said that I do think that there are some things that the government should do, such as provide education and healthcare. With respect to welfare, I have issues with that program. Employment insurance I can understand and willingly support, however welfare is another story altogether. In my opinion welfare should be rethought from the ground up.

[bradco]

"Wrong. People who are put out of work pay for it too. Tax-payers paying for welfare spreads out the cost over the greatest number of people.

In the case of a minimum wage, a small number of people end up subsidizing what is "conceivably" everybody's collective "social contract" obligation. That is not fair."

Regardless of arguments of fairness would it not make economic sense for someone to be producing something at a minimum wage vs. sitting on welfare producing nothing?

A minimum wage is just a moral value. Some people think the government should impose a level of income necessary for survival....others would rather have a fend for yourself society. I would rather see a society where we have an obligation to each other....not for exact equality but to at least make sure everyone can live. As long as the government's minimum wage is supported by the majority if you dont like it the doors always open....or you can try to get the government to change its policy (good luck)

The current minimum I dont think causes any excess unemployment...$8/hr seems pretty reasonable. As far as $10/hr goes....as I said before I feel that would cause more unemployment.

[Jerry J. Fortin]

I don't think raising the minimum wage would cause unemployment. I really doubt that it would put any company out of business. I think that theory is unfounded.

[Renegade]

Regardless of arguments of fairness would it not make economic sense for someone to be producing something at a minimum wage vs. sitting on welfare producing nothing?

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.

A minimum wage is just a moral value. Some people think the government should impose a level of income necessary for survival....others would rather have a fend for yourself society. I would rather see a society where we have an obligation to each other....not for exact equality but to at least make sure everyone can live. As long as the government's minimum wage is supported by the majority if you dont like it the doors always open....or you can try to get the government to change its policy (good luck)

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)

[Charles Anthony]

In my opinion minimum wage is income below the poverty line.

That is a mistake.

If the minimum wage earner works 24hours a day and seven days a week, his income will be high.

Whereas, if the minimum wage earner only works part-time, his income will be low.

By forcing an employer to pay more for every employee, the employer can not give them as many hours or can not hire as many employees. I would like to stress: anybody who has ever worked a minimum wage job knows this. They live and breathe the fragility of work hours. They lose hours when minimum wage goes up.

The government ought not to have to subsidize a citizen, nor should an employer. We should all pay our own way, if you want something you pay for it.

If you support a minimum wage, you are NOT letting people pay their own way. You are FORCING employers to pay something without choice.

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.

Wrong. People who are put out of work pay for it too.

Tax-payers paying for welfare spreads out the cost over the greatest number of people.

In the case of a minimum wage, a small number of people end up subsidizing what is "conceivably" everybody's collective "social contract" obligation. That is not fair.

Regardless of arguments of fairness would it not make economic sense for someone to be producing something at a minimum wage vs. sitting on welfare producing nothing?

That is not saying people should be sitting on welfare. You do not understand what I said.

First answer this: who is responsible for helping other people?

1) everybody is responsible equally to help each other

or

2) only some people are responsible but not all

Which one is it???

If you think everybody is responsible to help each other, than a minimum wage is not fair. The minimum wage employer and the unemployed-potential-employees are paying ALL of the your collective responsibility. That is not fair.

If you think only some people are responsible but not all, why should it be the poorest of employers and employees????

A minimum wage is just a moral value.

No. It is a short-sighted and irresponsible way of "helping" other people. It actually does harm.

The current minimum I dont think causes any excess unemployment...$8/hr seems pretty reasonable.

Reasonable?? According to what criteria?

The first job I ever was minimum wage and it was less than half of that. According to me, $8/hr sounds too good to be true!

Excess unemployment?? How much is acceptable unemployment caused by government?

I don't think raising the minimum wage would cause unemployment. I really doubt that it would put any company out of business. I think that theory is unfounded.

Wrong. It is basic market economics. Here is a referrence:

To understand why minimum wage policies have such pernicious effects, one must understand how wages are determined in the free market. Consider, for example, the owner-operator of a small diner. To stay in business, he has to make sufficient profits to provide adequate support for his family. The market dictates how much he can charge for his meals because people can choose to eat at other restaurants or prepare their meals at home. The market also dictates what he must pay for food, restaurant space, electricity, equipment, and other factors required to produce his meals. Although the restaurant owner has little control over either the prices he can charge for his meals or the prices that he must pay for the inputs needed to produce them, he can control his costs by changing the combinations of inputs that he uses. He can, for example, hire teenagers to wash and slice raw potatoes for french fries, or he can purchase ready-cut potatoes from a large company with an automated french-fry production process.

Minimum Wages, by Linda Gorman: The Concise Encyclopedia of Economics

Here is a better referrence that cuts to the chase:

If the simple waving of a minimum-wage wand cures poverty, why set the rate at $10 an hour? Why not make it $50 an hour? At $50 an hour, everybody makes at least $100,000 a year!

Minimum Wage, Maximum Stupidity by Larry Elder -- Capitalism Magazine

The minimium wage is not just a moral guideline, it is imposed on all employers.

To be precise, it is prudent to note that it ONLY creates shortages for employers and employees at the low end of the economic spectrum -- nobody else is affected.

[bradco]

"Reasonable?? According to what criteria?

The first job I ever was minimum wage and it was less than half of that. According to me, $8/hr sounds too good to be true! Excess unemployment?? How much is acceptable unemployment caused by government?"

okay well you have fun working for $8/hr if you think its to good to be true. Personally, I cant see even bothering to work at that kind of wage. I wouldn't bother working for under $14/hr (except ski instructing which I do for fun, not money )

[Renegade]

okay well you have fun working for $8/hr if you think its to good to be true. Personally, I cant see even bothering to work at that kind of wage. I wouldn't bother working for under $14/hr (except ski instructing which I do for fun, not money )

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?

[Drea]

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.

No one wants to work for the lowest wage. No one would ever ask their employer "Can you please lower my wages, I'm makin' too much money. $8 an hour is simply way more than I need."

If there were no minimum wage there would be slave labour. Too bad buddy I'm gonna pay you $5 a day. Take it or leave it. While this may work in China or North Korea, it would never fly here.

[Renegade]

No one wants to work for the lowest wage. No one would ever ask their employer "Can you please lower my wages, I'm makin' too much money. $8 an hour is simply way more than I need."

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.

If there were no minimum wage there would be slave labour. Too bad buddy I'm gonna pay you $5 a day. Take it or leave it. While this may work in China or North Korea, it would never fly here.

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?

[Drea]

Do you really think an individual would have any input at all? I don't. Company ABC pays $5 a day -- put up with it or be unemployed. That is slave labour IMO.

No human being in their right mind would willingly work for poverty level wages. Those who currently work for wages at the poverty level do not do so out of choice.

In order to maintain a decent society and not exploit workers, we need a minimum wage set for us. Especially when unemployment is high.

[crazymf]

I pay double minimum wage for an entry level job, low physical level, mainly indoors.

I wish I could find people to work. That's reality nowadays.