General Question

politics234's avatar

Why would it be bad to get rid of the minimum wage law and leave it up to the market?

Asked by politics234 (13points) 1 week ago

I am doing a debate on why the minimum wage law should stay and not leave it up to the market but I need a little help

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23 Answers

rebbel's avatar

The market, possibly (probably), will lower the the wages (everything for profits), for example by hiring less qualified people, or minorities, who might be willing to take on anything as long as it pays something (especially if unemployment numbers are high).

LostInParadise's avatar

A minimum wage is required so that a person has enough for rent and food.
Minimum wage helps the economy by increasing demand for goods.

JLeslie's avatar

Too many companies have monopolies in their local market and will try to get away with paying as little as possible. Even if they are not a monopoly they collude with other companies or at minimum the entire local marketplace is paying similar wages so employees have very little choice except to accept the pay, refuse to work, or form a union to give labor more power. It’s very difficult for most employees to refuse to work and be earning nothing.

The minimum wage is the government stepping in to help protect the worker.

*If you don’t understand any of the vocabulary words I used don’t use them until you do, that can be more research for you.

elbanditoroso's avatar

If the market were fair and people were honest, then yes, capitalism and supply/demand would be a good way to set wages.

But the labor market is not fair, corporations are not honest and just, so we need laws and minimums.

Think back to why unions and guilds came into being – because corporations are not just and honorable, and employees had to band together for justice.

Same principle.

Kropotkin's avatar

Wages are more about social power and bargaining power.

The lockdowns during the pandemic demonstrated and identified which jobs are more needed than others to keep everyone alive. Practically none of these are well-paid.

Labour shortages can put pressure to increase wages, but an “essential worker” who is making deliveries or picking crops isn’t suddenly remunerated better than a middle-manager or a marketing consultant, even though society can probably get by without the latter.

gorillapaws's avatar

In many labor markets there is a monopsony. This basically means the “free hand” grabs you by the balls and squeezes hard because there aren’t many employment options, and moving is unaffordable to people earning minimum wage. Why haven’t real wages increased in decades? If the free market is so effective at pricing labor, shouldn’t the middle class be enjoying a massive share of the wealth that’s being generated in these historically high stock valuations? The minimum wage sets a floor not a ceiling. All indications suggest this would create a downward spiral in wages, further weakening the economy.

kritiper's avatar

The market doesn’t pay wages, the business owner does. And he/she won’t pay any more than they absolutely HAVE to. And they’ll ALL do it. (Because a business owner is usually Republican and Republicans don’t care about lowly workers, only themselves, generally speaking.)

Blackwater_Park's avatar

Right now what the market will bear are wages that are already higher than minimum. Minimum wage is so low that it’s just not worth it for most people. It is truly shocking just how many jobs are out there that are completely unnecessary and just how many of the jobs that are necessary will be automated in the near future. Ray Kurzweil believes we’ll have U.B.I. sometime in the next decade and I’m beginning to believe this may just be the case.

LostInParadise's avatar

I did a Web search and found this , which is a fairly unbiased discussion of minimum wage. Note that $15/hour for a two-person family unit, like a single mother and child, is below the poverty level. For a single person, $15/hour is a little bit above the poverty level.

gorillapaws's avatar

Also, since automation was mentioned, any job that can be automated will be automated, regardless of how low the wages are. Slamming wages to the floor to outcompete automation is a fools-errand and will still lose to automation.

RedDeerGuy1's avatar

It might allow zero wages, and perhaps negative wages. On the flip side it should be ok for consenting adults to decide what one gets paid.

In addition why are vollenteers exempt from minimum wage laws?

Inspired_2write's avatar

I agree that minimum wages be inacted as long as its MORE than the standard of living that is set for each territory,Sate,Province etc
To meet MORE than the basic needs for food, clothing, upgrade training allowed for keeping current in jobs that could be obsolete in the future.

ragingloli's avatar

You leave things up to “the market”, you end up with company towns and slums, assassinated union leaders, and child labour.

Jaxk's avatar

I’m not able to give you great arguments for your side of the debate so I’ll give you some food for thought. Most arguments for the minimum wage are centered on a living wage for employee. That’s not what employers are paying for. They pay wages to get work done. A unit of work is worth a dollar value. The more difficult, complicated, or skillful the work, the higher the dollar value for each unit of work. Not every job is minimum wage. The market has already adjusted the wage for most work units. If you are a brain surgeon, a unit of your work is worth more than minimum wage but if you decide to take a job as a K-Mart Greeter, your unit of work will be worth much less even though your skills are still are much greater. It’s not about the person, it’s all about the value of the job. The market will adjust the wages to compensate for the value (it already does that).

seawulf575's avatar

I’m with @Jaxk on this one. The argument that minimum wage is supposed to give a living wage is a false assumption. Minimum wage jobs have always been unskilled, entry level jobs that are geared towards kids entering the work force or oldsters that are looking to supplement their retirement or to have something to do. The wages for these jobs are lower because really anyone can do them. As your jobs gain in complexity and focus, the wages go up. They have to because more companies are vying for the narrowing work force. To lure the workers, companies offer better wages as well as other benefits. If Company A has a skilled job they need to fill and they are offering $15/hr and Company B has the exact same job to fill and they offer $17/hr, most applicants will go to Company B because they can make more money for the same job. If Company A wants to compete, they will need to increase their offer or make it more appealing through some other means…better benefits, bonuses, etc.
The living wage argument starts with the assumption that all jobs are equal and are all for supporting a family of 4 or more. That argument leads to other what-ifs. What if I have 3 children instead of 2? Isn’t the wage I need to survive more? So shouldn’t my wage be $3/hr more? After all, the job wages are supposed to be a living wage, right?

product's avatar

^ @Jaxk and @seawulf575 – We all know how “the market” is supposed to work in a purely capitalist nightmare. Save the pedantic “well, actually” explanations. Things like minimum wage act more like safety valves for capitalism. They are allowed to exist to protect the capitalist – not the worker. That is why they are so low and don’t really provide a living wage. But it’s just enough that people feel that there is some shred of humanity in the economic system they are engaging in.

If there were no minimum wage, and the rich could pay workers $1/hr people might start to question the relationship between capital and labor. There might be more people who realize that wage labor is the purest form of theft, and they might demand something better.

So, yes – you are technically correct that in the desired hellscape world of your preferred economic system, “minimum wage” wouldn’t exist. Neither would any rules regulating the relationship between capital and labor. But you should be thankful that they do. They help keep the real workers from having actual demands that would threaten the obscene wealth (an safety) of those who exploit them.

seawulf575's avatar

@product I’m not disagreeing that human greed exists. And if you suddenly did away with minimum wage, you would find that some business owners would drop their pay significantly. But minimum wage was not put in place to protect the capitalists (the business owners) they were put in place to eliminate the gross abuse of wages that had been seen. However the rest of your arguments fall apart when confronted with the reality we are seeing today. Minimum wage is still low, yet there are many places that are offering far above minimum wage because they aren’t getting workers in at minimum wage. It is exactly what @Jaxk and I were saying. You have to increase the incentive to get people to work.

Another part of our arguments that you entirely failed to address is the jobs that actually are minimum wage. Are they really jobs that were designed for a bread winner to keep a family of 4 afloat? Or are they jobs that are entry level, no skill, no education jobs, designed for high turnover?

product's avatar

@seawulf575: “Are they really jobs that were designed for a bread winner to keep a family of 4 afloat? Or are they jobs that are entry level, no skill, no education jobs, designed for high turnover?”

This is your framing, and I’m not going to play. Labor is labor. If I sell my body to do a task that makes you money, then that job is valuable. I’m not a adherent to capitalism or markets, so you might get more traction with people who share your love of the current economic system.

The fact is that the people who work these so-called “no skill” jobs are attempting to keep a family of 4 afloat.

Anyway, go off on your “incentive to get people to work” fantasy if you want. This is just right-wing fan fiction, so have fun.

Kropotkin's avatar

Only apologists for capitalism like @seawulf575 and @Jaxk imagine that the most pitiless drudgery, the most menial and tireless work that no one really enjoys doing, should also be rewarded the very least because of bullshit classist concepts like “entry level” and “low skilled”.

seawulf575's avatar

@product once again, you are starting with the flawed assumption that jobs are for the good of the person doing them. They aren’t. They wouldn’t exist except for the company that needs that job done.
And I noticed you avoided the question about what minimum wage jobs really are. What are they based on. You go into bleeding heart explanations about the workers that have them, but you start with the false narrative of it being a job to keep a family of 4 afloat. Be honest, though I suspect you can’t, aren’t most of the minimum wage jobs really entry level jobs that are basically transient in nature? People go into and out of them regularly.

seawulf575's avatar

@Kropotkin Sooo…you believe a teenager starting off asking if the customer wants to make that order medium or large should be paid the same as a medical doctor? After all, capitalism is flawed, right? You believe that that teenager is trying to support his family on a part time job that requires no skills, no education, and really only a minimal amount of dedication? Is that what you really believe our society should be?

Blackwater_Park's avatar

There is no shortage of higher paying jobs out there. There is a shortage of people skilled enough to do them. The fact remains that most “jobs” are on the chopping block. Particularly the lower paying ones. There will need to be a baseline income for people who are displaced by this. It’s coming and sooner than most think.

jca2's avatar

From today’s NY Times, author Paul Krugman:

All happy economies are alike; each unhappy economy is unhappy in its own way.

In the aftermath of the 2008 financial crisis, the economy’s problems were all about inadequate demand. The housing boom had gone bust; consumers weren’t spending enough to fill the gap; the Obama stimulus, designed to boost demand, was too small and short-lived.

In 2021, by contrast, many of our problems seem to be about inadequate supply. Goods can’t reach consumers because ports are clogged; a shortage of semiconductor chips has crimped auto production; many employers report that they’re having a hard time finding workers.

Much of this is probably transitory, although supply-chain disruptions will clearly last for a while. But something more fundamental and lasting may be happening in the labor market. Long-suffering American workers, who have been underpaid and overworked for years, may have hit their breaking point.

About those supply-chain issues: It’s important to realize that more goods are reaching Americans than ever before. The problem is that despite increased deliveries, the system isn’t managing to keep up with extraordinary demand.
Earlier in the pandemic, people compensated for the loss of many services by buying stuff instead. People who couldn’t eat out remodeled their kitchens. People who couldn’t go to gyms bought home exercise equipment.

The result was an astonishing surge in purchases of everything from household appliances to consumer electronics. Early this year real spending on durable goods was more than 30 percent above prepandemic levels, and it’s still very high.

But things will improve. As Covid-19 subsides and life gradually returns to normal, consumers will buy more services and less stuff, reducing the pressure on ports, trucking and railroads.

The labor situation, by contrast, looks like a genuine reduction in supply. Total employment is still five million below its prepandemic peak. Employment in the leisure and hospitality sector is still down more than 9 percent. Yet everything we see suggests a very tight labor market.

On one side, workers are quitting their jobs at unprecedented rates, a sign that they’re confident about finding new jobs. On the other side, employers aren’t just whining about labor shortages, they’re trying to attract workers with pay increases. Over the past six months wages of leisure and hospitality workers have risen at an annual rate of 18 percent, and they are now well above their prepandemic trend.

The sellers’ market in labor has also emboldened union members, who have been much more willing than usual to go on strike after receiving contract offers they consider inadequate.

But why are we experiencing what many are calling the Great Resignation, with so many workers either quitting or demanding higher pay and better working conditions to stay? Until recently conservatives blamed expanded jobless benefits, claiming that these benefits were reducing the incentive to accept jobs. But states that canceled those benefits early saw no increase in employment compared with those that didn’t, and the nationwide end of enhanced benefits last month doesn’t seem to have made much difference to the job situation.

What seems to be happening instead is that the pandemic led many U.S. workers to rethink their lives and ask whether it was worth staying in the lousy jobs too many of them had.

For America is a rich country that treats many of its workers remarkably badly. Wages are often low; adjusted for inflation, the typical male worker earned virtually no more in 2019 than his counterpart did 40 years earlier. Hours are long: America is a “no-vacation nation,” offering far less time off than other advanced countries. Work is also unstable, with many low-wage workers — and nonwhite workers in particular — subject to unpredictable fluctuations in working hours that can wreak havoc on family life.

And it’s not just employers who treat workers harshly. A significant number of Americans seem to have contempt for the people who provide them with services. According to one recent survey, 62 percent of restaurant workers say they’ve received abusive treatment from customers.

Given these realities, it’s not surprising that many workers are either quitting or reluctant to return to their old jobs. The harder question is, why now? Many Americans hated their jobs two years ago, but they didn’t act on those feelings as much as they are now. What changed?

Well, it’s only speculation, but it seems quite possible that the pandemic, by upending many Americans’ lives, also caused some of them to reconsider their life choices. Not everyone can afford to quit a hated job, but a significant number of workers seem ready to accept the risk of trying something different — retiring earlier despite the monetary cost, looking for a less unpleasant job in a different industry, and so on.

And while this new choosiness by workers who feel empowered is making consumers’ and business owners’ lives more difficult, let’s be clear: Overall, it’s a good thing. American workers are insisting on a better deal, and it’s in the nation’s interest that they get it.

Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman

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