The Minimum Wage and the Value of Labor

Economics Economics Questions
21

Smiling Dave

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

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

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

Charity is a possibility; and abstinence.

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

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

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

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

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

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

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

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

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

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

So that blind uniformity thing ain’t exactly so

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

and it helps those who are actively helping themselves.

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

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

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

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

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

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

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

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

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

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

I’ll read the Samoa thing later.

22

clayton

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

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

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

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

23

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

24

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

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

Then you and I have nothing further to talk about.

Clayton -

25

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

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

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

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

Very interesting morality you got there.

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

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

26

Wheylous

DLD, all morality is subjective, not objective

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

27

Smiling Dave

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

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

28

Clayton

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

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

Then you and I have nothing further to talk about.

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

29

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

Clayton -

30

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

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

31

Not only you’re not a libertarian, you seem to be a controlling megalomaniac with a God-complex. It doesn’t even occur to you that the universe may not abide by your purely subjective preferences about what is “just”, “good”, or “moral”.

Who’s stopping you from persuading like minded people to voluntarily contribute their property toward whatever goal you perceive to be “moral” or “good”? How do you reconcile your “morality” with forcing others to share it at a point of a gun? How exactly do you “organize” someone else’s business so that the CEO gets paid less and the janitor gets paid more? Why should any of those people be concerned about your opinion or your sense of “morality”?

This OP of yours eliminated whatever little hope I had about your ability to reason or think logically.

32

Clayton

Guilt is by action only. Collective guilt is caveman morality

That’s where we differ: I believe that guilt can be by inaction too. One isn’t purged of all moral responsibility because he didn’t choose to be in his milieu, didn’t choose his company. Moment to moment, it still matters what one does. As I wrote to Wheylous:

There are real trade-offs in the real world. If a man exercises his individual freedom and turns his back upon someone trapped under a fallen tree, he is immoral. For a truly moral person it makes no difference whether someone would have forced them to do the right thing anyway. This is the common complaint of a selfish brat, who objects to a moral act because of the conditions imposed for doing it. Just do it.

33

So what would you have done to someone who decides they don’t like your morality? It seems the only options you have offered so far is murder.

34

You’re evading the argument - of course inaction is tortious or immoral wherever there is a duty to act. I am using the word “action” in the sense of human action: individual choice. Emphasis on individual. And emphasis on choice. You are not morally guilty for anything that is outside of your control for anything which is not your choice. To say otherwise is to deny the golden rule. And, to say the same thing again, you are not morally guilty for anything which is done by another, precisely because it is outside of your control and is not your choice. To deny this, you must deny the golden rule. At the point where you deny the golden rule, all possibility of communication has broken down between you and me.

Guilt (righly understood) can never be by association - morally or legally. Only the individual who has the power to make a difference in the state of affairs - and either exercised that power contrary to his obligations or failed to exercise that power consistently with his obligations - is guilty. When his power to choose is removed, he cannot possibly held guilty. To hold someone responsible for something they had no power over is like punishing a dog for getting sick. It’s just cruelty and the attempt to civilize it or dress it up in flowery language makes me angrier than just about anything. Don’t even try to pull that bullshit with me. If you espouse cruelty and double-standards, have the balls to just come out and say it, don’t hide behind duplicitous language.

Clayton -

35

Disbelieve it all you want - it’s still true.

What do you think morality is?

36

It appears to me that DLD is trying to impose positive obligations on all of humanity. For example, he seems to consider everyone to be a priori obligated to “help out” others when the others are “in need”. He seems to expect the rest of us to treat him as an authority on this matter, because… well, just because.

Ladies and gentlemen, I present to you: the statist.

37

Clayton

You are not morally guilty for anything that is outside of your control for anything which is not your choice.

Since when does “guilt by association” mean guilty by coincidence? If I am in a situation where I can do or say something in protest of an immorality, and I do not, then to some marginal extent I’ve become less moral myself.

you are not morally guilty for anything which is done by another, precisely because it is outside of your control and is not your choice.

You’re totally over-interpreting. When something immoral is done by another, this is not the end of the story. One can still call it immoral; call for action against it; and convince others of the immorality of it. That’s exactly what I am doing with respect to the minimum wage and welfare. It’s an ongoing problem; so the question of guilt is ongoing as well.

If you espouse cruelty and double-standards, have the balls to just come out and say it, don’t hide behind duplicitous language

What are you referring to? That I want to end welfare? Am I not on the von Mises forum? Is this really a shock to you? Or is it that you equate low-wage workers and welfare with a particular group, yourself? I’m not hiding any double standards: I want fewer dependent, irresponsible people, irrespective of race, religion or ethnicity, who feel no shame at bringing into the world children for which they cannot themselves provide. That is the primary source of poverty. And I want fewer people on Earth generally, because I don’t want a DeathStar for a planet. If the minimum wage discourages low-skilled people from being irresponsible, because they have no more opportunity to provide for more children except through charity, then it is more moral than welfare; and will decrease poverty in a single generation. If you find this fate for single mothers with no welfare cruel, then you have less faith in the generosity of private individuals and the potential independence of such women than I do–or than your love of individual freedom implies.

38

@ Autolykos

It should come as no surprise that DLD has not once tried to deny being a pychopath and that he wishes to murder those who do not bend to his belief of morality. I imagined that he would have tried to defend himself, but it seems he is comfortable with the knowledge that he is a pychopath. I always thought statists tried to deny the logical implications of their beliefs, but it seems we have a true specimen of evil in our midst.

39

Not at all. It is not a market price but a distorted market price further complicated by competition with welfare and unemployment “benefits.” The assumption that unemployment ought to be zero is only true if the market prices are at perfect equilibrium, which of course they never are although they tend to move in the direction of “equilibrium,” which is in constant flux anyway.

Government makes a horrible charity organization, right down there with mafia money-laundering “charities.” These insanely inefficient, centrally-planned, bureaucrat-controlled “welfare” programs suck resources away from private charities - which your pleas could also be used to help. Based both on general principles and the massive waste of resources that government endeavors entail, I disagree with the idea that the State can be the safety-net provider.

Help because I choose to donate money or other resources to a specific charitable organization? Absolutely.
Help by paying taxes under the guise that government is using it to “help”? Absolutely not.

40

That’s not up to you, is it?

This is indicative of the whole problem with your way of thinking, Daryl. I want there to be freely available energy (as in free, Zero-Point Energy) which physicists tell me is a physical impossibility, at least as far as we understand the physical world today. It’s not up to me. I have no say in the matter. Likewise, how many people there are on planet Earth is not up to you or me. It’s under no one’s control, not even governments:

Most of these things are not up to us. The existence of poverty is not up to you or me, unless you personally happen to be a billionaire (and, even then, there’s only so much you can do about it). The market rate for labor is not up to you and me, even if we employ the apparatus of the State to hurt some people and make an example out of them for thwarting our sense of what the market rate for labor “ought” to be. The substances that people ingest is not up to you and me … even if we use the same apparatus of State to hurt a lot of people who ingest the “wrong” substances.

People will do what they will do and there isn’t a damn thing you or I can do about it. To charge the taxpayers money in order to try to change things that you don’t like but which aren’t up to you is like investing money into researching unaided human flight (h/t Rothbard). You might as well just burn down the equivalent value of houses as spend the revenues on the charade of doing the research. Both are equally destructive courses of action.

The State and its panoply of ideological satellites employ slick-tongued apologists to concoct a billion different excuses for why the State has a moral duty to take money from the taxpayers and intervene in the peaceful industry of private citizens. But it’s all bullshit. The government just wants more money for itself and its wars and it will spend whatever it has to spend on the security and propaganda apparatus to ensure the smooth flow of revenue.

We need a little government like we need a little rape. There is zero room for compromise with the State. We don’t need even a tiny drop of government because the government is naught but a protection racket writ large. I like to call them the Day Mafia (kind of like the Day Walker, Blade, if you’ve seen that movie). They do in broad daylight what everybody else has to do under cover of night if they’re going to do it.

Clayton -