Almalieque wrote:
Welcome to my point. The ultimate decision on pay wages comes down to what the employer can get away with. Just as a normal person wouldn't pay $5 for a pack of hotdog buns when there is an equivalent for $2, an employer would not pay a person $5 an hour, if they could get an equivalent for $2.
Uh... That was my analogy. So we're agreed that people don't pay more for something if they don't have to, and that includes wages for employees. Great! Progress.
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Gbaji wrote:
No. That's not remotely what I'm saying. That's just... did you read what I wrote? Because your response makes no sense at all.
What I'm saying is that people are more likely to accept a lower wage for the same job if they are receiving additional financial assistance than if they are not. They don't turn down a higher paying job, but if an employer offers them $X/hour and they know that this plus whatever assistance they're getting is sufficient for them to get by, they are less likely to risk not getting the job at all by demanding a higher wage. Thus, they'll accept a lower wage.
In order to blame the government assistance for enabling low wage paying jobs, you would have to argue that people turned down better paying jobs in order to receive government assistance. That is, unless, you are also advocating that a person would NOT work the same job without the government benefits. That is just as asinine, as minimum wage is better than nothing.
No. I've said this twice now. You even quoted me
and quoted me asking if you'd actually read it the first time.
I'm arguing that
people are more likely to accept a lower wage for the same job if they are receiving additional financial assistance than if they are not. What part of this is confusing to you? You need to earn $1000/month to scrape by. You fill out an application for a job. Your potential employer tells you that he'll pay you $800/month. If you're currently receiving $200/month in food stamps (for example), you'll take the job because it fulfills your earnings requirements. If you are *not* receiving any government assistance, you'll have to take the job because if you don't, the guy who is will.
The point is that the wages for that job are set at $800/month because there are sufficient workers in the market for whom that's a sufficient wage and they wont demand higher. This means that those for whom it isn't a sufficient wage are screwed. Get it? If there was zero financial assistance being provided to anyone looking for that job, the job would pay $1000/month. And I get that this looks at first glance like I'm saying that people would turn down that job, but that's not really how it would work. The market force of people looking for jobs that pay at least $1000/month will force the employer (who presumably needs someone to fill that job slot) to raise his pay to meet that need.
The larger point is that the market will adjust to this and a typical person looking for a job wont actually be forced to choose not to take the job that doesn't pay him enough, because the job will simply naturally be valued at a reasonable wage that will fill his needs. Your argument is like insisting that food prices will rise without end because people have to eat. Clearly, they don't though. Some force prevents food buyers from having to make a choice between starvation and paying more than they can afford for food. And guess what? They don't have to make that choice. The market forces exist naturally and keep food prices down at an affordable level.
Same deal here. Just as you don't have to run around town refusing to pay $100 for a loaf of bread (and going hungry because of that choice), the potential employee doesn't have to run around refusing to work for low wages (and going without sufficient income because of that choice). The market will adjust those things without you physically having to run around suffering because of it. What's bizarre is that we see this market effect working all around us every single day and yet some people have built entire socio-political agendas around the assumption that it wont happen.
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2. You are arguing that without GA (Government assistance), the lower wages would go up to meet the demand. I'm saying that is blatantly false, because your boss doesn't care if you have 5 kids, a spouse and a pile of debt. Your starting salary will be determined on what the employer thinks your worth is, which is mostly predetermined by the position/job that you are performing. If what you said were true, then we wouldn't be having this discussion because the corporations would raise the wages themselves to meet the demand now.
No. You apparently don't understand what I'm saying because you keep responding to me in nonsensical ways.
First off, I'm not talking just about government assistance. I'm talking about the wage effect when there are participants in the labor market who are receiving any sort of financial assistance. This includes dependents btw. It's really not speculation (or should not be one). It should be completely obvious that if you are competing for a job against someone who doesn't need as much money as you do, you'll lose (losing being defined as having to take lower pay than you need). Everything else being the same, the fact that someone is getting $X/month in financial assistance means that their personal wage "floor" is lower by that exact amount.
Secondly, you're still missing the point. Your (potential) boss doesn't care if you have 5 kids, a spouse, and a pile of debt, but
you do. Those facts will push you to obtain employment that will pay for your needs. And the degree to which that is "typical" of the labor force will determine to what degree that need does apply pressure on wages in the market. And guess what? Businesses (and especially "corporations") do raise wages to meet relative cost of living demands. If that wasn't true, and the only thing keeping wages up was minimum wage, then everyone would earn minimum wage.
What you mean to say is that it doesn't always increase to meet the demand of every single individual's needs in the labor market. That is true. But is not necessarily a flaw, nor should we chuck out the whole system because there are some exceptions where the rule doesn't generate a good outcome. I'd say someone with 5 kids and no ability to demand a sufficient wage to support them perhaps shouldn't have had those 5 kids in the first place. Wouldn't you agree?
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Have you worked fast food before? Because it doesn't work that way. The primary people who get paid more are shift/swing managers and maintenance. Contrary to popular belief, you don't get paid just to do fries. As a crew member, you are able to do all jobs for the same wages. You may primarily work front counter or the grill, but your wages don't change because you changed positions.
Uh... I was saying what would happen if we changed things, not how they are now. In jobs outside the gravity well of minimum wage laws and financial assistance, people who do tasks which require more skill or experience tend to get paid more than those who perform simpler tasks. But, as you just confirmed, in low wage and/or entry level jobs in our current workforce (that's inside the gravity well I spoke of), this doesn't tend to happen. The guy working the register (which presumably requires more skill and isn't something you put people on the first day) doesn't earn appreciably more than the guy who just learned how to operate the fryolater.
There's a host of reasons for this, but the most important point is that
it's not normal and it shouldn't happen that way. We cause it to happen because we've created an environment where all workers within that gravity well range are considered interchangeable and their wages reflect it. This is precisely what I was talking about when I said that upward mobility at the low end of the wage scale is flattened. The guy working the register *should* earn more than the guy working the fryolater. And in higher paying jobs (even just marginally higher paying), the equivalent situation does happen. All the time.
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Minimum wages prevent employers from paying nickels a day.
No, it doesn't. In precisely the same way that a "maximum loaf cost" law isn't required to prevent bread from costing $100/loaf. You've been taught this false belief your entire life, but it is really false. We don't need a minimum wage, and it's quite arguable that minimum wage laws contribute more to causing and perpetuating poverty than they help anyone at all.
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As you said, there is no regulation preventing employers from paying the more experienced and better employees more. If the employer believes that there exist such a person, then the employer believes that those wages are comparable for the job. If their concern is overpaying high school students, then don't hire high school students. It's really that simple.
Sure. And that does happen. But there's a constant flow of new/young workers entering the labor market, and they tend to have lower financial needs than everyone else who's already in the market. Put another way, every single year you work, your financial needs increase relative to this years crop of new workers. This isn't something you can legislate away. The only way to offset that is with upward mobility. You need to maximize the odds that the longer someone is in the labor market the more valuable their labor will be. My argument is that financial assistance retards that upward mobility at the lower income ranges, which is precisely where it is needed the most. You need to be able to have a clear market advantage against the teen who just entered the market this year. But the way our system is rigged, it makes it far more likely that unless you've managed to get out of those entry level industries entirely, your going to be viewed identically and have to constantly compete with their lower financial needs (and lose, as I mentioned earlier).
That's how people get sucked into poverty for their entire lives.
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You are living in this fantasy world where employers care about the well being of their employees more than money.
Nope. Not even remotely close to what I've been arguing. It's amusing though how no matter how many times I keep saying that's not it, you keep returning to that assumption. You've somehow fallen into this trap of assuming that no one will ever pay a higher wage unless they're doing it out of the goodness of their heart or are forced to by some government action. The fact is that there are market forces outside those which force employers to pay higher wages. We don't need the government to make this happen.
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They hire high school students BECAUSE they will work for minimum wage and not have high demands.
Yes. Duh. I've been saying that all along. See, the problem isn't that you and I disagree with this, but that you think that the only reason an employer would pay more than minimum wage is if the government forces them to (ie: raises that minimum). That's where I disagree with you, and at the risk of repeating myself, the proof that I'm right is in the fact that most people make more than minimum wage. An overwhelming majority of workers do. If you were correct, most people would make minimum wage, with perhaps a small number of super valuable people earning more.
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It goes back to buying the $5 buns instead of the equivalent $2 buns just because you have the money. The average person wont do it, so why should employers?
Sigh... You completely missed the point of that example. The average person wont do it
just because he has the money. The average person will buy the $5 buns if they are sufficiently better buns to justify the extra cost. I think your hangup is that you've taken the example too literally. What will actually happen is that there will be $2 buns, and $2.50 buns, and $3.00 buns, and $3.50 buns, etc, on up to $5. And based on the quality of the buns and the desire any given consumer has for higher quality buns, different consumers will purchase different buns. Similarly, in a free market, employers will pay very little for labor which gains them very little, and pay a bit more for labor which is more valuable to them, and a little more for the next step in value, etc.
The employer doesn't pay more for labor because he has the money, so the comparison you're trying to make doesn't work. The employer pays more because the labor is worth more to him. Just as a consumer will pay more for a higher quality bun. Is this really a hard concept to grasp? Again, if that wasn't true, there wouldn't be $5 buns for sale in the grocery store. They'd all be priced at the lowest level. But that's not true, is it? There's a wide variety of products in the store, for a wide variety of prices. Your argument basically rests on the assumption that no one will pay more than the minimum priced version of something. But that isn't true, is it?
The fact that consumers absolutely do choose to pay more for a better product means that employers will pay more for a more skilled/experienced employee. That's the analogy. You don't buy the higher priced brand because you have more money, or because you feel like helping out the store owner. You buy it because you believe its worth the extra cost. That's the market force which forces employers to pay their employees more money even in the absence of a wage law mandating it.
Edited, Dec 20th 2013 5:44pm by gbaji