20 December 2006

The Minimum Wage

There's big talk recently about another minimum wage increase.
Blah, blah, blah....
Lotsa heat..... almost no light.
Foolish political games!

I have a market-based solution to low minimum wages:
Control our borders, arrest and deport illegal immigrants!

The laws of supply and demand cannot be repealed......
The pool of laborers willing to work for low wages and NO BENEFITS will quickly dry up. Employers will be
forced to pay higher wages to attract workers to those jobs. (It's already happening in some agricultural states, harvesting some crops.)
As wages for people at the bottom rung of the ladder increase, wages will have to rise all the way up the ladder.
(And as an added benefit, overall health care costs and the crime rate will go down.)

Minimum wages increase!
But does it materially change anything?


Anonymous said...

FACTS from the Economic Policy Institute

Hello GB and Merry Christmas to you,

I remember back in ECON 101 by raising the minimum wage you increase unemployment, so at first I though maybe its a bad thing.

But if it doesn't hurt employment so that everyone gets a piece of the pie then it should go up. There is so much power and ownership in such few hands that it seems like everyday you hear of a global company buying out a smaller one. Leaving less and less choices and more "streamlined" production equating to more profits.

Who sees the profits ? Shareholders and the exec's who get huge bonus's on "their" performance. Companies such as Southwest, Jetblue, Westjet here in Canada seem to have a bit better idea. The align the interests of the company with the interest of the employee and everyone wins. Wages aren't huge but they are decent and people are happy to work there.

I am off topic I guess and I really don't have a point except damn the man and all his money :) Its just seems weird what the end goal is for a company besides growth and more money. I mean if I was an exec making a couple million a year on top of my 20 million bonus plus all the perks....wait I get it in order to keep things going well for me I have to pinch pennies and get as much for next to nothing as I can so cheap labour is key, it's like a pyramid scheme meets the matrix. We give you employment so you can live to work.I am not versed in Economic ideas but Captilism kinda blows in that sense. Then on the other hand it leaves open opportunities for go getters with ideas to be at the top of the food chain.

Sorry to waste a few kb's of space here but I want others to post their thoughts and get this topic rolling :)

Again Merry Christmas GB !

Greybeard said...

Thanks, FD, and Happy Christ's Birthday to you and yours, too!

I've always thought the minimum wage issue was a red herring.
The "Swift" meat packing plant link I provided pretty much sums it up for me:
If people aren't lining up for jobs at a certain wage, companies will be forced to offer more money in order to get workers interested enough to apply.

And statistics-
Liars lie with them.
Here is a link, (my "Facts" vs. your "Facts"), that pretty much illustrates my argument.

I will agree with your point that some executive bonuses and other perqs are 'way out of hand, and the government may need to step in as they did to break up the oil monopolies 'way back when in order to get things under control.

Having said that though, I've read articles that indicate the middle class is growing at a healthy rate in the U.S. and around the world.

The amount of credit card debt frightens me. The Real Estate market and what is happening with mortgage rates scares me.
World events could quickly bring things crashing around our ears.

But, here in the U.S., unemployment is near record lows and employment is near record highs. Inflation has been virtually non-existent.
I'm still "hoping for the best, planning for the worst."

(And thanks for trying to prime the pump!)

Anonymous said...

Hello again !

I am having network issues here so I am unable to pull up that link. I had to reload this page 5 times to get it to load.

I was reading on one web site about all the major company exec's are dumping stock at a huge rate as they did before September 11th. They eluded that the economy is gonna tank bad so these guys are selling out before it happens. New York Post Article
Business Week Article

I agree about the huge credit card (me being one:)debt being a huge problem as well as people who are mortgaged to the yang. Anything changes slightly for the worse then this group of people are in for a world of hurt. My old roomate bought a 285,000 dollar 2 bedroom apartment in BC. His interest rate went up 1 percent and added 6 years to his mortgage at his current monthly payment. That's scary.

Like you said, Hope for the best and plan for the worst. I have recently changed jobs from the private sector to the government so hopefully I can more easily ride out the rough times ahead :)


Neil said...

Random, but....

You know what I always think about when I see a huge billboard or TV ad advertising a Big Mac? I think about how there is probably noone in this country that doesnt know what a Big Mac is. You could save a coupl eof million by not putting up that stupid ad for that pile of inhumane disgusting processed you know what, and give your employees an extra 50 cents an hour or so.

Pipe dream, I know. but it makes me wonder....

It also amazes me that people were so up in arms about the recent taco bell ecoli break out here on the east coast. Did we really thing people making $4.50 an hour were going to take such careful pride in preparing your fast food? Theres a reason I dontr set foot in such places...

Ok, im about as off topic as I can be now, so I'll shut up : )

Happy holidays, GB.

Anonymous said...

Merry Christmas to all.
GB the true market based solution would be to open our borders up through legal work visas. This would allow workers to compete for the jobs, employers to get the best worker for the price and most important the consumer getting the best value. At what point in time does one determine who should be thrown out. Maybe start with Mexicans, then latin Americans, you would have to include Poles, Jews, Russians and if you went back that far what about the Irish, Germans, French & English?
I think we need to get an American Indian perspective. As for the minimum wage how many years has it been since it was raised? GB could you imagine working 5 years without a raise?
Why would someone want to work if they didn't get a raise in 5 years? I don't mean be nasty but I live on the other side of the tracks, too often moneys tight.
Happy Kwanza

Greybeard said...

Thanks for your thoughts, Anon.

The subject of the post was raising the minimum wage.
The problem is not a lack of workers. The problem is a livable wage for people. Right now, folks can stay at home and live off welfare more easily than working at jobs like these at the "Swift Meat Packing Co."
If you read my link, you'll see that since they've raised wages, people are lining up out the door and down the block to apply for jobs at this factory.

It appears the workers are there..... they just need to be motivated to take these jobs.
They won't do it until the wages paid are attractive enough to motivate them.

Closing the borders would illuminate a worker problem, if we truly have one. If we find there is a worker shortage, and I agree there may be a certain few jobs that will go wanting without immigrant labor, THEN we can determine how our work-permit situation needs to be adjusted.

But first, we need to get law-breakers under control.

(Someone please.... invite me to a Kwanzaa celebration!)