From: Charles Hixson (charleshixsn@earthlink.net)
Date: Mon Apr 07 2003 - 09:29:02 MDT
Lee Corbin wrote:
>Damien S. writes
>...
>
>>Lee Corbin writes:
>>
>>
>>
>> ...
>
>Yes, well, thanks anyway. Like I said before, I'm trying
>to figure out the most plausible set of assumptions held
>by people who favor the existence of minimum-wage laws.
>
>Here is the current set:
>
Here are my thoughts
>1. Higher minimum wage does not eliminate the existence of
> jobs due to advances in technology.
>
What a job is worth is decided by power politics. Technological
innovations change the balance, and render some jobs obsolete while at
the same time creating new jobs. N.B.: one of the currently more
common innovations is "de-skilling" jobs, so that you can pay people
less to do them. Cf.: MacDonalds, et al. No chef's need apply. Or
waiters. (Some jobs are so de-skilled, that they are then delegated to
the customer.)
>2. There is no supply and demand relationship affecting the
> value of worker efforts, (and hence their retainability).
>
At any particular time, there exists a supply and demand for every
particular set of job skills. But if you aren't particularlly skilled
at negotiating, then you won't come off as well. So skilled negotiators
can get work at HR jobs, and everyone else looses. (Even management.
The skill at negotiating doesn't extend to evaluating job skill.)
Thus there is no *simple* supply and demand relationship.
Retraining workers isn't necessarily to the benefit of the employer, but
may be done anyway. Managers get increased status from having more
employees under them, so they will attempt to increase their number in
many different ways. And workers benefit from being employed, so they
will attempt to continue to be employed whether it is to the benefit of
their employer or not. Small businesses are very different from large
organizations here, and any model that covers both of them will need to
be quite complex.
>3. Jobs are givens: in black and white terms, society needs
> to perform and will perform a job X, or it will not.
>
??? I don't find this clear at all. Many jobs are make-work. Many
legally mandated jobs serve no necessary purpose, but it does get the
forms filled out. And many necessary jobs aren't funded by anyone.
E.g., in the downtown areas of many cities the outsides of the buildings
are dirty, and there is litter in the streets. (Well, OK, necessary is
to strong a word for that.) Hospital emergency rooms are often very
understaffed. Etc.
>4. Saving money, especially by the rich, has no salutary
> side-effects.
>
What is money? A bank is legally allowed to loan what? 3/2s as much
money as it has on deposit? Anyway, some fraction greater than one. So
if the rich were to deposit their money into a bank, they would increase
the amount of money in circulation. If they invest it in a
manufacturing facility, then they are encouraging the manufacture of
whatever they have invested in (and will probably take other measures to
encourage it's success). Perhaps if they invest it in land, and then
hold the land undeveloped? But in that case they are probably
encouraging various species of wild animals to survive.
I think that if they invest in anything beyond precious metals (i.e.,
bars of metal, not paper) that it will have numerous side effects. Some
are almost bound to be good. And some won't be. If a bank has more
money to lend, is that good or bad? Probably both.
>5. The number of employers and number of jobs are fixed.
>
?? Neither is fixed. Both vary wildly over time and with legal
demands. E.g., government regulations that encourage monopolies
decrease the number of employers. This, of course, depends on how
employer is defined. If each separate hiring unit is an employer, then
the number is closer to being fixed (though still quite fluid). And the
number of jobs also varies wildly. What people want *may* be fairly
fixed, but what they can choose, and what they can afford varies wildly
with government regulations and economic conditions (and of course,
those aren't independant variables, but there's a long lag between them).
>
>Lee
>
>
>
Do I favor minimum wage laws? Yes/no. I favor a linear tax rule with a
baseline: tax = rate * income - povertylevel
In this equation rate and poverty level are legally defined constants
(i.e., they vary over time, but they are constant for individuals at any
particular time). And income should include all sources of cash. No
exceptions. Thus if your rate * income is less than povertylevel, the
government will pay you. This isn't exactly a minimum wage, but it's
what I favor instead.
However, given our current setup, I favor a minimum wage that will allow
a person to live "adequately" on 40 hours a week work. "adequately" is
necessarily dependant on local cost of living factors. If a job will
not allow a person to live, then it can't reasonably be called a job.
The trouble with the minimum-wage setup is that there is a sharp
dicotomy between full support an no support, so many inhomogeneities and
unfairnesses are inherrently designed into the system. And it's set so
low that nobody can live on it, so they do something else on the side.
They have to. Now counting transportation, I work 10 hours a day at my
single job, so I certainly couldn't hold down two.
The design of the system inherrently means that during periods of
inflation the minimum wage will lag behind (as is what happened during
the last 30 years). By now it has lagged so far behind that is probably
*does* do more harm than good. As originally instituted, it was
beneficial, but at that point it really did permit a person to live on
the income from his job.
Earlier this morning I was mentally comparing the tax structure, patent
laws, copyrights, and social conditions with those of the 1950s. We
have gone drastically downhill. The only gain (I admit it's a large
one) that I noticed was increased interracial justice. But there have
been a tremendous number of very bad decisions made since then, and only
a couple of them affect that area (and are thus "justified" by trying to
find answers to hard questions). E.g., one of the deleterious decisions
made was that cities couldn't impose a residence requirement on those
seeking assistance. This meant that if one city were generous to those
of it's citizens in need, people from all over the country would swamp
it, and local taxes and infrastructure could not possibly pay to
continue the services. (This was a part of the cause of the "Summer of
Love" that swamped San Francisco. That was the event that turned
"Hippie" into a perjoritive term for those who don't evaluate everything
on a cash basis. The natives were basically artists and craftsmen, the
influx was basically freeloaders. And there were so many that there was
no possible way to support them [and, admittedly, little reason--they
weren't the same people].) But if there had been a residence
requirement for assistance, as there had been until it was ruled
illegal, this wouldn't have happened (or at least would have been quite
brief).
-- -- Charles Hixson Gnu software that is free, The best is yet to be.
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