Jophiel wrote:
gbaji wrote:
The fact that many many Americans (most in fact) manage to earn more than minimum wage proves that your assumption is wrong
You obviously have no idea what my argument was. I had argued that companies, if able to replace their employees with lower paid employees,
do not necessarily turn this savings to higher wages for the remaining workers as you said they world ("the free market works!").
Saying they will "not necessarily" do so is so broad as to be meaningless. I agree that they will not necessarily do so. I just disagree on the frequency. I believe that most of the time, they will. You believe that most of the time, they wont. So let's start with at least agreeing on that, shall we?
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This is historically true, this is true based on contemporary examples, this is true based on people's experiences in industries on this forum.
No, it's not. For the exact reasons I've explained to you several times now. If this happened most of the time, then most of the workers in the US would be currently paid minimum wage. Not only is that not true, but the opposite is true. The overwhelming majority of US workers are paid more than the minimum wage. Thus, we must conclude that at least in the US, the labor market is such that workers can demand and receive higher wages based on the market value of their labor and that this market value is almost always greater than the mandated minimum wage.
Given that wages are always going to be the result of a conflict between the desire of the worker to maximize their wages and the desire for the employer to minimize wages, we can conclude two things:
1. Employers don't pay higher wages because they are being nice. They do so because market forces make them do so (hence "the market works!").
2. Anything which changes the equation will affect the result. The degree to which an employer will resist paying a higher wage is based on his own profit factors. So we must assume that anything which increases relative profit must also decrease that resistance.
What this means in this context is that an employer will be more willing to give in to demand by employees for higher wages if it's less of a burden on him to do so. If he's making more money, he's going to fight it less than if he's just barely getting by. Thus, assuming the labor market forces are the same, if something decreases his costs in some other area he will be more willing to allow an increase somewhere else. Like say, if he's able to pay his temp workers less money per hour, he will be more willing to pay his permanent workers a higher wage. This doesn't mean he absolutely will, but everything else staying the same, he's more likely to if he's saving money elsewhere than if he is not.
Make sense? My argument is the equivalent of saying that if you go into a store you're more likely to buy two pairs of jeans if they are half price, than if they are full price. Obviously, you might just buy the one pair for half price and pocket the difference, but assuming there's some inherent value in having another pair of jeans, you might buy the second one. Similarly, if there's some value in paying your employee more (and there must be otherwise no one would ever do it), there will be a tendency to do so if other costs are reduced such that it allows you to do so.
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No one ever said that no one could ever earn higher than a state mandated minimum wage.
Sure. But the fact that employers do pay more than the minimum wage means that employees have sufficient bargaining power to earn more than the government mandates. Your argument rests on the assumption that employees have absolutely no power to force employers to pay them a higher wage based on changing market conditions. Clearly that is not true, thus if market conditions change (like say the employer incurs a labor costs savings somewhere), employees can demand a piece of that.
If you'd prefer, I could talk about things like employee benefit packages, vacation time, stock options, etc. Same thing. It's not about them specifically, but the fact that they exist at all in our market means that employees do enjoy sufficient power to demand them. Employers don't spend money for a basketball court and gym because they just thought it would be nice. They do so because they want to make their employees happy. And they don't do that because they want to be nice. They're in it to make money, not be nice. Thus, we have to conclude that employers know that they will make more money making their employees happy than making them miserable.
That can only be true if unhappy employees have sufficient power to affect the profitability of an employers business. We can argue about the specifics of how this happens, but we should not have any disagreement that it
does happen. Yet it seems as though many of you base your entire position on issues like wage laws on the assumption that it doesn't. And yeah, I find that bizarre as hell. We're literally surrounded with examples of market forces naturally resulting in people earning good wages, yet some people ignore that and focus just on the failures (often without asking why they happen). I think that's silly.
Edited, Dec 4th 2013 5:48pm by gbaji