What is your opinion about minimum wage?

[bazera]

I was discussing the issue of minimum wage with my libertarian friend the other day, and she was telling me how it would leave people unemployed and was not a good strategy overall. And I saw a logic behind that as well

I've also heard from @Leo Gura that it's not that simple and there are advantages too.

 What do you guys think about it?

[Hansu]

Minimum wage is good tool to fight against companies that need to compete by taking advantage of the people who are desperate enough to live with any salary in a job that can be done by anyone with 2 weeks of training. Jobs like burger flipping at McDonalds cant pay a decent salary unless every other fast food joint pays a decent salary too.

However, minimum wage limits job opportunities for mentally or physically handicapped people. It also comes to question how long it takes that a burger flipping machine replaces the human flipper, and too high minumum wage would certainly speed up that process.

[RareGodzilla]

Yes there needs to be a minimum wage that guarantees a worthy lifestyle. Otherwise buisinises can always just import workers and artificially lover wages under their normal market value. If workes are imported from the third world they should have the same conditions. They are just as human as citizens. 

[ivory]

The current minimum wage is absolute horse shit. If you work 40 hours you should be able to pay rent, have medical insurance, and pay for food. Period. But from a strategic perspective I would not know how to implement this. Businesses would fail if they had to pay their employees a higher wage. The only option would be for businesses to raise prices and who knows what the impact would be.

[universe]

On 13.10.2019 at 9:52 PM, ivory said:

The current minimum wage is absolute horse shit. If you work 40 hours you should be able to pay rent, have medical insurance, and pay for food. Period.

What is the minimum wage in your country? These things you list are so basic, cant imagine you cant afford it with a full-time job.

[ivory]

@universe I believe the average minimum wage is $7.25 per hour. But I live in California where it's $12.00 per hour.

[Hansu]

@ivory

How much is the rent for a basic, about 40m^2 or 430ft^2 apartment in California when its approx 12 miles away from the border of a city centre?

12 dollars/hour for burger flipping sounds a lot to me so I'd guess rents have to be expensive

 

Edited October 15, 2019 by Hansu

[universe]

So you cant live + pay insurance on 2k $ a month? I mean I know that california is expensive but that sounds really high.

[ivory]

To give you an idea, I live 4 miles away from downtown and 8 miles from the beach. The average rent here is $1600 to $1800 per month for a 1 bedroom apartment. If you're making minimum wage, this is not a good area to live. So people making less live closer to the desert or in more ghetto neighborhoods. I'm in the clear because I make good money. I am pretty blessed. I also have a roommate which saves me quite a bit of money. My health insurance, which is pretty decent with a $5000 deductible, runs me about $550 per month and I spend about $300-350 per month on groceries. My expenses, in total, run somewhere between $2000 and $2500 per month.

[Hansu]

@ivory

Yikes, 12.5 dollars an hour does not sound that much anymore

Even if rent was only 500 a month, another 500 dollars on healthcare really changes the perspective

 

[Forestluv]

6 hours ago, universe said:

So you cant live + pay insurance on 2k $ a month? I mean I know that california is expensive but that sounds really high.

Inland like Fresno, maybe. Anywhere near the coast? No way. Unless you are SINK and live with roommates or DINK living together.  The average 1 bedroom in Santa Cruz is $2,325 and 2BR is $3338. Santa cruz is mostly nice, yet has run down areas too. Its not upscale like carmel. 

[roar]

@Spacious Where are you from?  From memory, minimum wage in Norway is around USD20 (for burger flipping, I would guess).   Norway is the only oil economy here.  For that reason the other countries are a little lower, but still probably above USD15.   Did you get your facts from mr. Peterson, as he is very uninformed/lying about the nordics ?

[Hansu]

1 hour ago, roar said:

@Spacious Where are you from?  From memory, minimum wage in Norway is around USD20 (for burger flipping, I would guess).   Norway is the only oil economy here.  For that reason the other countries are a little lower, but still probably above USD15.   Did you get your facts from mr. Peterson, as he is very uninformed/lying about the nordics ?

 

True.
In Finland we have these industry and position related TES contracts which specify the minimum wage, mandatory increases after gained experience and you cannot make a contract that does not meet the TES minimums. The minumum pay requirement in these contracts have three purposes: 1, to make low-skill work pay more livable wage. 2, to make important industries pay its workers honey compared to the degree or skill level required (Paper-, steel-, shipping-, dock-industriec, they have some of the highest pay in the country because of union extortion) and the reason number 3 is to make it less appealing to hire people from a foreign country to do the work specified in the second reason

Fun fact: Design engineers median pay is 3400 euros a month, and dockworkers median pay is 4300 euros a month. Guess which position does not require schooling after high school.

Edited October 16, 2019 by Hansu

[roar]

@Spacious Im just a newbie, but one of the reasons I joined this forum (its the only forum I have joined in this millennium..) is that devilry is not appreciated here.  You should really study the message of your sources, be that peterson or the economist.

[Bodigger]

3 hours ago, Hansu said:

 

True.
In Finland we have these industry and position related TES contracts which specify the minimum wage, mandatory increases after gained experience and you cannot make a contract that does not meet the TES minimums. The minumum pay requirement in these contracts have three purposes: 1, to make low-skill work pay more livable wage. 2, to make important industries pay its workers honey compared to the degree or skill level required (Paper-, steel-, shipping-, dock-industriec, they have some of the highest pay in the country because of union extortion) and the reason number 3 is to make it less appealing to hire people from a foreign country to do the work specified in the second reason

Fun fact: Design engineers median pay is 3400 euros a month, and dockworkers median pay is 4300 euros a month. Guess which position does not require schooling after high school.

Are there any incentives for companies to start a business or stay in Finland?   

[Hansu]

@Bodigger

@Bodigger

"Vain hullu ryhtyy yrittäjäksi" - "Only the mentally ill pursues entrepeurship" -Finnish idiom

I'd say that honesty, quality, ability to keep promised schedules and reliability of production are the Finnish strong points. When Mercedes opened their factory in Uusikaupunki in 2015, I would bet my ass it was because they wanted to have a reliable stream of quality cars with the expense of some profit

 

[roar]

Finnish sisu creates the highest quality society on earth.  Much more impressive than the rest of Scandinavia.  

[Hansu]

@roar

Lol, we do everything Sweden does with a few years of delay ?

[Bodigger]

2 hours ago, Hansu said:

@Bodigger

@Bodigger

"Vain hullu ryhtyy yrittäjäksi" - "Only the mentally ill pursues entrepeurship" -Finnish idiom

I'd say that honesty, quality, ability to keep promised schedules and reliability of production are the Finnish strong points. When Mercedes opened their factory in Uusikaupunki in 2015, I would bet my ass it was because they wanted to have a reliable stream of quality cars with the expense of some profit

 

So, in Finland it seems there is a unique work force huh.

[emind]

@bazera From my limited knowledge of economics (undergrad micro and macro), and, coming from a left leaning individual, I have come to think that the minimum wage does more harm than good under a free market system. Products and services organically reach an equilibrium point between supply and demand. This is the point at which economic efficiency is maximized, that is to say, the price (in this case the wage level) at which there are no people looking for someone to hire but unable to find them because the price is too high and they don't have the money to pay for it, and also the price at which there are no people unwilling to work because the price (again, in this case, the wage level) is too low. 

Classical economic theory dictates that this equilibrium is naturally reached without outside interference from the government (such as quotas, tariffs, or in this case minimum wage). It is out of the free flowing exchange of information between producers and consumers that the equilibrium price arises. 

And so, what the minimum wage does (according to the theory), is interfere and disrupt the natural equilibrium by making it mandatory for business owners (in this case the demand) to pay a higher price than they naturally would; a price at which way fewer people could be employed (due to increased costs for businesses). The minimum wage would undoubtedly help those employees who do happen to be lucky enough to get a job, because they would be earning more, but in aggregate, it would leave a lot more people unemployed. 

Now, with that said, take it with a grain of salt, because I have also heard of case studies that indicate that a minimum wage policy doesn't negatively affect employment. Some people suggest that it might be a spectrum; that you can increase the minimum wage to a certain extent without it affecting employment levels, but that there is a threshold past which it does in fact start  negatively affecting employment levels. In other words, it might not be as binary as much of the discourse suggests, maybe it's a continuum. 

Edited October 26, 2019 by emind