Class Warfare Blog

May 2, 2013

The Minimum Wage Debate Recast

There are a number of efforts afoot to raise the federally mandated minimum wage. One is to about $10 per hour and another is to $15 per hour. If the min wage had been adjusted for productivity since the 1960s, it would be well more than $25 per hour according to one economist.

The classical argument goes: these people are suffering! Let the market decide. It is not enough to live on! It wasn’t intended to. Besides if the min wage is raised, jobs will be lost.

The last argument (min wage goes up, number of min wage jobs goes down) is a typical argument—wrong, but typical. The argument is based on a closed system. There are only so many dollars to page min wage workers, and if you increase the amount you have to pay each worker, the number of workers must decrease. Sounds logical, doesn’t it? But it is wrong. Can you see why?

Consider that the productivity of min wage workers has increased substantially over the last 50 years. Each min wage worker is making more money for his employer than ever before. Since the employer now has more money, the min wage worker should get more, no? No, the business moguls, say, that argument doesn’t apply. That money can’t be used for increased wages.

Yo, dude. You can’t have it both ways. Actually that isn’t true—there are having it both ways. If a min wage worker makes more money for his employer, the employer gets to keep that money. If the min wage worker gets higher pay, that money has to come out of the pocket of another min wage worker (who gets fired). This is what they are doing. This is what they openly argue.

Think about what these assholes are saying when they say: let the market decide. They are saying there is enough supply of desperate people who will work for lousy wages because it is the only job they can find. If one quits, they can be replaced with another just like them. There is no high falutin’ economic argument about the worker’s productivity not being great enough to pay for their wages. They are not saying they can’t afford to pay them better, by either taking a slightly lesser profit or raising prices ever so slightly, they are saying if people are desperate enough to take such jobs, they deserve to be exploited.

That’s why I refer to them as assholes, as indelicate as that term is.

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22 Comments »

  1. Nah, asshole is being far too kind

    Comment by john zande — May 2, 2013 @ 11:20 am | Reply

    • Ah certainly do not want to get … ah reputation … for being crude. Lordy, lordy, we do have some standards. Which leads me to agree that you are right.

      Amoral assholes. “Let the market decide (with me distorting the market in my favor as much as is possible).” Pricks! etc.

      How’re things Brazilian? Claudia and I would love to visit. (All we need is the money.)

      Steve

      Comment by stephenpruis — May 2, 2013 @ 12:44 pm | Reply

      • Great! This time of year is gorgeous, although a little rain wouldn’t go astray. More money also wouldn’t go astray 🙂 Here, though, you don’t say “I don’t have enough money,” rather (twirling your fingers) “I don’t have enough time.” It’s something you hear quite regularly. Can you believe i’ve never even been to Rio?

        Comment by john zande — May 2, 2013 @ 12:51 pm | Reply

        • What? You have an intense desire to get mugged? (We Chicagoans are still cross that we lost out on our Olympic bid. Actually we expected to lose in the second round of voting and losing in the first was shocking!)

          I have only seen Rio in movies and cooking shows, probably not it’s “best side.”

          Get out, young man, and see the world! (Before the greedy assholes finish ruining it!)

          Comment by stephenpruis — May 2, 2013 @ 1:07 pm | Reply

          • Oh, there’s plenty of stuff to explore down here in Sao Paulo state. No need to ever leave. The beaches and islands here are Brazil’s little secret…. drop dead gorgeous.

            Comment by john zande — May 2, 2013 @ 1:13 pm | Reply

            • Claudia’s ex-husband lived in Sao Paulo for a while (in an enclave totally isolated from real Brazilians, of course). Isn’t Sao Paulo in the top ten in population? It’s big, I remember that.

              Comment by stephenpruis — May 2, 2013 @ 1:16 pm | Reply

              • Yes, Sao Paulo is the 2nd biggest city in the world. With the 6 satellite cities it’s 20 million. I lived there for 6 years…. horrible place. Sao Paulo state, though, is quite wonderful. You just have to get out of the city.

                Comment by john zande — May 2, 2013 @ 1:58 pm | Reply

                • So, your wife got “posted” and you went along? Chicago is at about 10 million in a 50 mile radius and I find the city delightful. The county kind of sucks … midwest, flat, etc.

                  The thing that shocked me when we moved here six years ago is “no smog.” (Not 0, but none to speak of. We usually have gorgeous blue skies all summer.) That wind in “the Windy City” serves a purpose. Big city, fresh air … I thought San Francisco (surrounded on three sides by ocean and bay) was the only one. Maybe Brisbane, too.

                  Comment by stephenpruis — May 2, 2013 @ 2:52 pm | Reply

                  • Brisbane (my home town) has the same locked-in pollution problems as LA.

                    G’s Brazilian, and i followed her here to escape the life of publishing. I’d had enough and an ass you could bounce tennis balls off was all the excuse i needed to leave and see what other adventures could be had 🙂

                    Comment by john zande — May 2, 2013 @ 3:11 pm | Reply

                    • You go! John. When I was young it was called grabbing the gusto.

                      What did you do in publishing? (Claudia and I are our own in-house publishing company.) In house meaning she is working in the living room and I in one of our bedrooms right now. (We actually moved our bed into a corner of the living room so as to use the two bedrooms as offices.)

                      Comment by stephenpruis — May 2, 2013 @ 4:24 pm

                    • Mostly custom publishing, but the company i worked for also had a Melbourne newspaper. Technically we were the 4th largest publisher in Oz. I had four magazines under my umbrella, from Microsoft to the NSW Heritage Foundation. We were bought out in 2001 and although nothing changed for me (Fairfax just wanted the newspaper for the real estate classified revenue) I’d pretty much had enough of that world. G was in Oz visiting her sister (who’s married to a great of mine) and what was supposed to be a 3 month stay wound up being a year and half. By that stage I was SERIOUSLY through with publishing so off to Brazil I went!

                      What are you guys publishing?

                      Comment by john zande — May 2, 2013 @ 4:36 pm

                    • They were in it for newspaper adverts, ouch!

                      We are an *archery* publisher. We publish books and coach certification programs.

                      Here’re a couple of links:

                      http://www.amazon.com/Steve-Ruis/e/B002KXOUVA/ref=sr_tc_2_0?qid=1367546071&sr=1-2-ent

                      http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=AER+Recreational+Archery&rh=n%3A283155%2Ck%3AAER+Recreational+Archery

                      and seven of the books on this page are ours:

                      http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=Watching+Arrows+Fly&rh=n%3A283155%2Ck%3AWatching+Arrows+Fly

                      Very small potatoes. We also publish Archery Focus magazine ( http://www.archeryfocus.com), the world’s only archery education magazine. We have had quite a few articles written by Aussies, but I can’t remember one written by a Brazilian (maybe the language problem). We were actually publishing in English, Spanish, French, German, and Italian for a couple of years but lost our shirt, so that was a failed experiement. Especially since I had to lay out all of the translated issues! (Oh yeah, you can trust translators, and automatic spell checkers, and hyphenation dictionaries, argh!)

                      What are you doing now? Since you always seem to be at your computer, I’m guessing freelance or consulting.

                      Comment by stephenpruis — May 2, 2013 @ 9:05 pm

                    • Archery, huh? That’s so cool, and a good niche, too! Now, wouldn’t Paul Ryan be your hero? Just kidding! As you know your way around the rags you should consider custom publishing…. specific target audiences are gold mines for advertisers. You’d think our Microsoft magazine (circulation 200,000) was an easy one to fill, right? Desperately hard. The NSW Heritage Foundation (circulation 2,000) however sold itself. Those 2,000 were donors, and if you have enough money to donate to heritage preservation you have enough money to do just about anything… and that type of captured market makes high-end advertisers salivate.

                      Funny you bring up translation: that’s pretty much what I do now… coordinating it, at least as my Portuguese is truly atrocious. Our company works for the NYT’s translating content (articles and videos, which we burn) and distributing it to client companies here in Brazil. The cogs in the middle… nothing glamorous.

                      Comment by john zande — May 3, 2013 @ 8:18 am

                    • Ah, you hold the whip! On, you translators ! Portuguese is a tough language, well, nothing is really tough compared to English.

                      Your idea regarding capitive audiences is very good. I’ll have to think about that.

                      Almost all of our publishing is now print on demand. I haven’t visited a printer in over ten years. The advantage for us is books do not go out of print. The archery industry is notorious for having its books come . . . and go. I spend much of my time, like you with the whip in hand. Of course, nudging authors or translators to stay on schedule is a touchy thing. I have this one older coach who basically has written his book but it just sits there. He doesn’t like email (or other electronic communication) so I have to send him letters through the post! I am so out of shape for that kind of effort. We don’t even send contracts by mail. we email them, they sign, and fax or mail them back, we sign and then fax them the final version.

                      Wow, I just realized that your wife works for Reuters and you for the NYT. Publishing gliitterati, you are. (Okay, maybe not major glitterati, but certainly minor glitterati.) Interestingly, the best straight news I get here more often than not has a Reuters byline. Such, is the sorry state of the corporate news business in this country. The focus here is on distractions rather than core issues.

                      Steve

                      Comment by stephenpruis — May 3, 2013 @ 8:47 am

                    • Ha! Not even minor glitterati… just the dude juggling madly in the middle of lumbering idiots 😦

                      Comment by john zande — May 3, 2013 @ 9:43 am

  2. This post made my hackles rise—then I console myself with the thought that most people are products of their indoctrination. So rather than start a war here I’ll just state that—according to your definition—I am an ‘asshole’.

    Comment by Argus — May 4, 2013 @ 5:25 pm | Reply

    • A gee, that’s no fun. The data show that there isn’t much linkage between min wage and anything else. Study after study seems to come up with something different. I guess I am a pragmatist. My idea is to cut in the employees for a fraction of the earnings. If the company does better, the employees do better. If the company does worse, the employees do worse. Management and employees are both on the same side and if they both had a stake in what was going on (a fixed stake that couldn’t be diddled by either party) then all could just shut up and do their jobs.

      Comment by stephenpruis — May 4, 2013 @ 9:07 pm | Reply

      • If I had to invoke force in the market I’d agree with you to the degree that whatever bonus the FatCats get the Little Guys should get also, proportionately per capita. A good idea?

        Possibly not … not if the FCs are doing all the innovating, sales, researches and responsibilities while the LGs are just organic robots.

        Every case on its own merits, then?
        No … can’t be done. Too many unaware indoctrinated would-be do-gooders for that … dammit, you’re edging me towards a post I’m not really ready for yet. But that’s just me, a typical self-centred AH …

        If we want to be really pragmatic—how about:
        “Instead of attendance money, folks get paid for what they actually produce/do (be it ideas or GOOD packing-from-the machine)?

        Directly proportionately to value-added by their efforts to their raw materials?

        Comment by Argus — May 4, 2013 @ 9:41 pm | Reply

        • That’s exactly what I am suggesting. But you slant the discussion. One’s workers aren’t meat robots but resources. They can assist in implementation of innovation. They can recommend innovations. And do not over value innovation and capital, etc. Value everything as to what it produces.

          I have friends in sales and they play these games with management. Every so often management changes the commission structure because, well, those damned sales people are making too much money. After an adjustment period, the sales people will be back to making pretty much what they were making before if not more. Then management …etc. If the sales people were given a base salary and a percentage of what the company actually makes, then the games would stop. Management then would just have to make sure that sales don’t drive the company where it doesn’t want to go (over concentrated, etc.)

          Many people over value capital. Right now capital is a very low cost because there is so much available at such low rates. Other times it is different. Raising shareholder value in a public company as the only goal of the company overvalues capital a great deal.

          See, we can discuss this civilly.

          Comment by stephenpruis — May 5, 2013 @ 7:03 am | Reply

          • (Civil? I love it when gentlemen dispute—you get such a better class of insult) … but seriously:

            If workers are ‘resources’ it could be said that you dehumanise them. To the level of organic robots, in fact—which, face it, often they are. So we are agreed, despite your apparent misgivings. The rot became visible when they stopped having “Personnel Department” on the door and replaced it with “Human Resources”.

            So the world is awash in ‘capital’ but simultaneously going down the tubes. Why is that?
            I’d say that Capital cannot be over-valued, and left to its own devices will find its own true values and uses. Doesn’t happen. Why is that?
            Do we perhaps need a sound money—real money?

            Management is apparently shooting off its own feet merely to keep the blasted sales department from becoming too prosperous? Something is amiss, and badly—that’s a bit like pouring herbicide on the best potatoes for growing too well. Your management needs shooting—the best potatoes should be getting all the fertiliser you can spare.

            SO: why tolerate it?

            If you are any good but not being rewarded accordingly … why sit there bleating when you could simply say “Sod you, Jack~!” and toddle off with your skills to where they would be better recompensed? Or does management (as bad as it is) have your measure, and trims the sails of the sales as it wishes?

            IN A FREE environment people would go to where they get the best deal … doesn’t happen. Why not?

            Are the ‘workers’ chained to their desks, their lathes, their cars? By personal miscalculation, perhaps; in which case they really should stop whimpering and just get on with it, grateful for their chains.

            Comment by Argus — May 5, 2013 @ 3:08 pm | Reply

            • Too much to comment on. Let me just address this one: “IN A FREE environment people would go to where they get the best deal … doesn’t happen. Why not?” The answer is two basic issues: time and transportation costs. People are severely restricted ordinarily in what jobs they can take. If the job is more than a two hour drive away, then one in general must move to a location closer to that job. The costs of moving are quite large (especially if your mortgage is under water), I can attest to this myself. The other factor is time: your doctor tells you your sick and you must go to hospital. The doctor’s hospital, the one he is registered with, is quite expensive. How much comparision shopping can you do? How much do you have the time to do? This is more severe when it comes to emergency room services.

              Another barrier is simple knowledge. While economists like to build perfect knowledge into their definitions, very imperfect knowledge is what we get. You may recall the outrage of car dealers when the information about what they cars cost them became avaialble. And it became known that manufacturer’s kicked back the “transportation costs” that we were also billed when we bought a new car.

              There is no such thing as a free market. The definitions of economists cannot be met in any real world. Well-regulated markets are the ideal, in my opinion, in which the ills are suppressed and the gains are increased. But regulations are subject to manipulations and there we go. The majority of the tax code should not exist as it is in the form of special tax considerations for small groups of people. Tax manipulations are invisible to people, so I would like to see them all done away with. If we, in the form of our government, want to help a business, it should be out in the open: technical help, leases of land, cash disbursements, all publically reported. I have no idea what GE’s tax breaks are, for example, and they are massive as are the oil companies’.

              And I put up another post on this topic today, one you might agree with (maybe not).

              Steve

              Comment by stephenpruis — May 6, 2013 @ 8:28 am | Reply

              • All valid points, Steve. But (always a but after such, ever notice?) but … you let the ‘F’ word slide from your lips. Shame~! You use it as if one can be partially Free—much in the manner of one can be partially deceased. As you say, a huge topic.

                We need a revolution. Peaceful, a revolution in thought. Won’t happen, though, so “Those who make peaceful revolution impossible will make violent revolution inevitable”.

                Government isn’t the solution, it’s the problem. Every regulation you try to bring in—to make your life easier or better—is yet more government. Eventually you’ll be hanging so many shackles around the necks of the producers that the only people who will be in paid employment are the regulators. I was a slow learner but for the first four decades of my life thought (aye, and raged) much like you.

                You make a most powerful valid point: “There is no such thing as a free market” and continue from there by blowing your own discussion out of the water—you seem to hold ‘economists’ in unjustifiably high esteem. Our problems are caused both by economists and politicians, in bed together, feeding off the enslaved productive.

                Project both human nature and ‘regulation’, what do you get, eventually?

                Ouch. It’s an unstoppable juggernaut—why loose it on innocent people?

                Comment by Argus — May 6, 2013 @ 3:48 pm | Reply


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