Ontario raising minimum wage to $15

[Loren Pechtel]

If you really believed that, then I imagine you would not favor a government imposed minimum wage. After all, as you note, there are competitors waiting to pick up those workers who refuse to work below a certain minimum.

That's not what I "noted" at all.

I said there are competitors waiting to pick up workers whose employers REFUSED TO PAY THEM above the minimum, particularly after the employer goes out of business and leaves his competitors with a bigger share of the market.

You're still basing it on the assumption that destroying bad jobs makes good jobs appear.

Simple example: When Radio Shacks all around Chicago started going out of business, their employees started looking for new jobs. Sales at Best Buy, Target, Walmart and even Walgreens electronics all spiked as Radio Shack stores closed (though not as much as you'd expect since online retailers picked up a lot of the slack). The result was that all of those stores went on hiring drives that also coincided with the summer boom.

As you say, not as much as you would have expected. Some sales--and some jobs--simply went away.

In reality, NO business ever goes out of business just because the price of wages increases. If you're in such financial trouble that a 30% spike in payroll is going to put you into bankruptcy, the minimum wage is the LEAST of your problems.

In reality few businesses could survive a 30% spike in payroll if they couldn't pass the costs along to the customer. Lets look at my former employer--manufacturing (in other words, lot of material costs) with a lot of automation (in other words, lots of capital cost) and it was still about 40% of spending was on payroll. 30% of 40% = 12%. Oops, that's higher than the 10% profit they were making.

And they were in a better position to take such a price hike than most businesses.

 

[Loren Pechtel]

I support UBI, and I think it is the best way of reaching more equal economic footing for all, and has the possibility of nearly eliminating poverty in any society in which it might be enacted. This thread, however, demonstrates the case of the perfect standing in the way of the good. There is very little chance of UBI being enacted in Canada, much less the USA, any time soon. That is simply the political reality we currently have to deal with. Minimum wage, on the other hand, has already been enacted in most civilized countries, and it is simply a matter of increasing MW to a rate that makes it good enough as a substitute until UBI can gain the political traction to become a reality. If we refuse to raise the MW because there is a better idea out there, when there is no chance of that better idea coming to fruition any time soon, then the perfect has become the enemy of the good.

Yet another incarnation of the infinite pool of profit to fund every leftist dream. You simply assume that business can afford what you want.

And it's not a matter of political will for UBI--the economy isn't ready for it yet.

 

[DBT]

Workers need to form strong unions, stick together and ensure that collective bargaining power and collective action, withdrawing labour and services where needed, raises incomes and working conditions to decent standards. If a business cannot afford to pay their workers a decent wage, they should not be in business, their business is not viable. Many businesses can in fact pay more but do not because individual workers often have little bargaining power and low wages become entrenched.

 

[Loren Pechtel]

Workers need to form strong unions, stick together and ensure that collective bargaining power and collective action, withdrawing labour and services where needed, raises incomes and working conditions to decent standards. If a business cannot afford to pay their workers a decent wage, they should not be in business, their business is not viable. Many businesses can in fact pay more but do not because individual workers often have little bargaining power and low wages become entrenched.

So the workers are better off unemployed than in a bad job?

 

[Jolly_Penguin]

Workers need to form strong unions, stick together and ensure that collective bargaining power and collective action, withdrawing labour and services where needed, raises incomes and working conditions to decent standards. If a business cannot afford to pay their workers a decent wage, they should not be in business, their business is not viable. Many businesses can in fact pay more but do not because individual workers often have little bargaining power and low wages become entrenched.

Low bargaining power because they need money to fulfill the basic cost of living. That changes with Universal Basic Income. Suddenly the employers need to entice even the most basic of workers to work for them and will pay sufficient wages to do so.

 

[DBT]

Workers need to form strong unions, stick together and ensure that collective bargaining power and collective action, withdrawing labour and services where needed, raises incomes and working conditions to decent standards. If a business cannot afford to pay their workers a decent wage, they should not be in business, their business is not viable. Many businesses can in fact pay more but do not because individual workers often have little bargaining power and low wages become entrenched.

So the workers are better off unemployed than in a bad job?

It's not one or the other but about increasing worker bargaining power and improving pay and conditions....pay and conditions that have been eroding away over decades because of apathy....and perhaps, given no union support, standing alone, fear of losing the job. The key point is to regain what has been eroded away, to improve but and not send all businesses to the wall (which is ridiculous).

 

[Loren Pechtel]

So the workers are better off unemployed than in a bad job?

It's not one or the other but about increasing worker bargaining power and improving pay and conditions....pay and conditions that have been eroding away over decades because of apathy....and perhaps, given no union support, standing alone, fear of losing the job. The key point is to regain what has been eroded away, to improve but and not send all businesses to the wall (which is ridiculous).

What you are missing is that good jobs already destroy bad jobs. Bad jobs can't exist unless there is a shortage of good jobs. Destroying the bad jobs doesn't magically make good jobs appear.

 

[DBT]

It's not one or the other but about increasing worker bargaining power and improving pay and conditions....pay and conditions that have been eroding away over decades because of apathy....and perhaps, given no union support, standing alone, fear of losing the job. The key point is to regain what has been eroded away, to improve but and not send all businesses to the wall (which is ridiculous).

What you are missing is that good jobs already destroy bad jobs. Bad jobs can't exist unless there is a shortage of good jobs. Destroying the bad jobs doesn't magically make good jobs appear.

It has very little to do with ''good jobs'' or ''bad jobs'' but improving wages and conditions for those who have seen their pay and conditions eroding away over a period of decades regardless of who they work for or if they have good jobs or bad jobs. Jobs need not be destroyed in order to achieve that.

 

[Bomb#20]

I support UBI, and I think it is the best way of reaching more equal economic footing for all, and has the possibility of nearly eliminating poverty in any society in which it might be enacted. This thread, however, demonstrates the case of the perfect standing in the way of the good. There is very little chance of UBI being enacted in Canada, much less the USA, any time soon. That is simply the political reality we currently have to deal with. Minimum wage, on the other hand, has already been enacted in most civilized countries, and it is simply a matter of increasing MW to a rate that makes it good enough as a substitute until UBI can gain the political traction to become a reality. If we refuse to raise the MW because there is a better idea out there, when there is no chance of that better idea coming to fruition any time soon, then the perfect has become the enemy of the good.

Well, in the first place, UBI has been de facto enacted. As a matter of policy we don't let people starve in the streets. We have a hodge-podge of social services -- food stamps, homeless shelters, child-support enforcement, EITC, and so forth -- that collectively amount to a UBI of sorts. When somebody starves in the street it's because drugs and/or mental illness are keeping him from seeking out available help. If there's no political will for a formal UBI yet, that won't stop us from adding the next social program that evolves us a little closer to a formal UBI. The perfect UBI isn't standing in the way of an imperfect UBI.

In the second place, a minimum wage cannot ever be a good enough substitute for a UBI, because by definition it provides nothing to jobless people. If you want a wage law to substitute for a UBI then you need to make the government hire anyone willing to work and hire managers with the expertise to find all those people something useful to do.

And in the third place, this thread hasn't demonstrated that increasing the minimum wage is a good. It's perfectly possible to make a rational case for a higher minimum wage, by doing it the obvious way: a cost-benefit analysis. But the arguments for it in this thread haven't been cost-benefit analysis. At best they've been folk-economics; at worst they've been religious dogma and tribalism.

They already do supplement low wage work via housing support, heating support, food support, health care support. And that still isn't enough!

How about instead of corporations getting all of this subsidization for their employees from the taxpayer, the corporations pay their workers a wage that no longer requires all these taxpayer supplied subsidies.

I know, I know, costs will go up (and baby Jesus will be bawling). But we are already paying more in taxes because of this, to subsidize corporation pay to their employees!

There's no rational reason to think subsidizing a low wage worker means we're subsidizing his employer. It's like claiming a jobless guy's welfare check is a subsidy to the grocery store and demanding that any grocer who sells him some food be required to supply him all the rest of the food he needs at her own expense.

Why should the employer pay more than the labour is worth to them? Why should the employer be responsible for the living standards of the employee?

This issue was addressed with the 13th Amendment in the United States, which indicated that there was a bare minimum for employment.

No, how much an employer should pay was not addressed by the 13th Amendment. It did not indicate that you could keep your slaves against their will provided you paid them at least such-and-such. The 13th amendment addressed involuntary servitude, and indicated it should not exist in the United States. The conviction that whether somebody is a volunteer is the same question as whether somebody's labor-to-money exchange rate pleases a third party is a religious belief.

Why should the employer pay more than the labour is worth to them? Why should the employer be responsible for the living standards of the employee?

1. Because the foundation of capitalist ideology is that the relationship between capital and labor is reciprocal and mutually beneficial.

The foundation of capitalist ideology is that when a laborer volunteers to pull weeds for a capitalist and the capitalist volunteers to pay the laborer $3/hr CDN (my first regular job), the two of us are better judges of whether that's reciprocal and mutually beneficial than some third-party philosopher-king wannabe who judges our arrangement not to be mutually beneficial using precisely the same judgment procedure as some different third-party philosopher-king wannabe uses to decide gay sex between consenting adults isn't mutually beneficial.

Why should the employer pay more than the labour is worth to them?

Because the labor is worth a lot more to the employees than it is to the employer.

When an employee volunteers to sell his labor for $3, that's empirical evidence that it's worth less to him than $3 is worth to him. What empirical evidence do you have for the hypothesis that it's worth more than $3 to him?

Those employees are people, and the United States of America describes itself as a government of the people, by the people, and for the people. Which means that in a disagreement between a corporation and a worker over the value of that worker's labor, the worker should be in a much stronger bargaining position.

It is unethical to compromise the financial security of a person to benefit something that is NOT a person. So if a company is not paying a fair price for an employee's labor, the company should be compelled to pay a higher wage.

Companies do not suffer or starve. Even their managers are, ultimately, just employees themselves. The only people who should have an advantage in deciding the value of wages are those who enjoy basic human rights guaranteed to them in the Constitution; corporations have no human rights in and of themselves and have no position to negotiate anything at all.

Wages paid by a company are wages paid by its owners. Shareholders are people. They have human rights too. You're dehumanizing your outgroup.

Why should the employer be responsible for the living standards of the employee?

Because the employees ... said so.

No, "the employees" didn't say so. If this were about "the employees" saying so then a minimum wage wouldn't even come up -- instead "the employees" would just all say they won't work unless the employer takes responsibility for their living standards, and that would end the matter. Workers are free to strike whenever they want for as much as they want.

Rather, it's only some employees who say so. The whole reason some employees want to raise the minimum wage is because other employees don't say the employer has to be responsible for their living standards. The whole point of a minimum wage increase is to get government to solve the union's age-old problem of stopping the scabs from crossing the picket lines. Pretending the scabs want this is self-deception. Why would they want it? A minimum wage increase gives some workers a higher living standard by forcing different workers to get a lower living standard.

So if argument from authority of employees is the correct way to decide who's responsible for what, why shouldn't it be the scabs who get to decide? Because they're scabs and union guys hate scabs?

In the end, the minimum wage increase turns out to be a really good way to specifically target employers who have a tendency to cheat their employees; companies who already pay a fair wage won't be affected much, if at all...

... it would only affect those companies that are screwing those workers who cannot afford to be that screwed. ... Only a certain small number of companies that refuse to pay people a living wage would be affected. The burden, therefore, is on those who are dependent on cheap, unsustainable labor rates. Other companies that already pay a living wage or better are not actually part of the problem.
... The people who insist on under-paying their employees are the problem, so we should simply make it illegal to pay people too little to live on.

Paying an employee too little to live on is labeled "cheating", "screwing", "under-paying" and "the problem", without any consideration of how much the employee is accomplishing for the employer in return. I.e., the argument is that paying an employee that little is immoral per se, regardless of whether he's a terrific employee or only a barely helpful one. Well then, if that's immoral, what is the moral thing for an employer to do instead, when she encounters a worker who will not increase her revenue by as much money as the worker needs? Should the employer hire the worker to do a job that will increase the employer's revenue by $20000, pay him $30000, and take a $10000 loss on the trade? Or should she not hire the guy, and get $20000 less revenue and $30000 less expense? Are both of those options more moral than paying him $20000 for the $20000 revenue increase he'll deliver, or only one or the other?

 

[Bomb#20]

It's not one or the other but about increasing worker bargaining power and improving pay and conditions....pay and conditions that have been eroding away over decades because of apathy....and perhaps, given no union support, standing alone, fear of losing the job. The key point is to regain what has been eroded away, to improve but and not send all businesses to the wall (which is ridiculous).

What you are missing is that good jobs already destroy bad jobs. Bad jobs can't exist unless there is a shortage of good jobs. Destroying the bad jobs doesn't magically make good jobs appear.

There's nothing magical about it. Destroying the bad jobs makes good jobs appear by cause and effect. Like pretty much everything else, unskilled labor is subject to the law of diminishing returns. When you raise the minimum wage from $9 to $10, you destroy any jobs that produce $9.50/hr in increased revenue. All the companies that already optimized their profits by hiring so many unskilled workers that their return on unskilled labor had diminished to $9 now have more workers than the number that maximizes their profits. They will lay off some workers, or simply not replace those they lose by attrition. The total amount of unskilled work being done will go down. That means the return on unskilled labor won't diminish as much as it used to. A worker who doesn't lose his job will now be increasing his employer's revenue by $10/hr instead of $9/hr. That doesn't mean he's doing anything different from before; it's just that when his employer utilizes less of that production factor her return will be greater on each unit she uses of it. That's what makes demand curves slope downward. Consequently, destroying some of the bad jobs turns other identical bad jobs into better jobs. A minimum wage doesn't make companies pay more than market rate -- it works by making the market rate for unskilled labor go up, by reducing the supply.

 

[Loren Pechtel]

What you are missing is that good jobs already destroy bad jobs. Bad jobs can't exist unless there is a shortage of good jobs. Destroying the bad jobs doesn't magically make good jobs appear.

It has very little to do with ''good jobs'' or ''bad jobs'' but improving wages and conditions for those who have seen their pay and conditions eroding away over a period of decades regardless of who they work for or if they have good jobs or bad jobs. Jobs need not be destroyed in order to achieve that.

In this context, high wages = good jobs, low wages = bad jobs.

- - - Updated - - -

What you are missing is that good jobs already destroy bad jobs. Bad jobs can't exist unless there is a shortage of good jobs. Destroying the bad jobs doesn't magically make good jobs appear.

There's nothing magical about it. Destroying the bad jobs makes good jobs appear by cause and effect. Like pretty much everything else, unskilled labor is subject to the law of diminishing returns. When you raise the minimum wage from $9 to $10, you destroy any jobs that produce $9.50/hr in increased revenue. All the companies that already optimized their profits by hiring so many unskilled workers that their return on unskilled labor had diminished to $9 now have more workers than the number that maximizes their profits. They will lay off some workers, or simply not replace those they lose by attrition. The total amount of unskilled work being done will go down. That means the return on unskilled labor won't diminish as much as it used to. A worker who doesn't lose his job will now be increasing his employer's revenue by $10/hr instead of $9/hr. That doesn't mean he's doing anything different from before; it's just that when his employer utilizes less of that production factor her return will be greater on each unit she uses of it. That's what makes demand curves slope downward. Consequently, destroying some of the bad jobs turns other identical bad jobs into better jobs. A minimum wage doesn't make companies pay more than market rate -- it works by making the market rate for unskilled labor go up, by reducing the supply.

In other words, by increasing unemployment. Same thing unions do.

 

[Bomb#20]

... when his employer utilizes less of that production factor her return will be greater on each unit she uses of it. That's what makes demand curves slope downward. Consequently, destroying some of the bad jobs turns other identical bad jobs into better jobs. ...

In other words, by increasing unemployment. Same thing unions do.

Sort of. They don't necessarily increase unemployment overall -- when wages rise it might cause new people to get jobs -- but they will increase unemployment among the particular people whom they stop from crossing the formal or de facto picket lines. New people who enter when wages go up are likely to be on average more skilled than the people who lose their jobs, since employers will be incentivized to substitute high-skill work for low-skill work. The bottom line is that there are winners and losers from a minimum wage hike or a union. How many there will be of each depends on the slopes of the various supply and demand curves. How overall utility is affected depends not only on the relative numbers of winners and losers but on how much the winners and losers respectively gain and lose. These are empirical matters. That's why making a case either for or against them takes a quantitative cost-benefit analysis.

 

[Don2 (Don1 Revised)]

Workers need to form strong unions, stick together and ensure that collective bargaining power and collective action, withdrawing labour and services where needed, raises incomes and working conditions to decent standards. If a business cannot afford to pay their workers a decent wage, they should not be in business, their business is not viable. Many businesses can in fact pay more but do not because individual workers often have little bargaining power and low wages become entrenched.

So the workers are better off unemployed than in a bad job?

Does McDs pay $15 per hour?

 

[Jolly_Penguin]

There's no rational reason to think subsidizing a low wage worker means we're subsidizing his employer. It's like claiming a jobless guy's welfare check is a subsidy to the grocery store and demanding that any grocer who sells him some food be required to supply him all the rest of the food he needs at her own expense.

That's a great analogy.

 

[Crazy Eddie]

They are paying what THEY have decided the work is worth. The workers disagree with that decision, and the minimum wage is what happens when the workers WIN the argument.

The work is worth whatever both the employer agrees to pay and the employee agrees to work at.

The employees don't generally have that much say in the matter. Really, applying for a job or even a promotion means you take whatever salary your boss offers you or you find a different place to work. If ALL employers are offering an unacceptable salary, you have no choice but to take the unacceptable salary.

Again, the minimum wage reflects the collective decision by the workers that salary offerings IN GENERAL are too low. The government acts on behalf of those workers to raise those rates above what an individual worker would be able to argue for on his own.

If the government steps in and forces a different number, they are forcing one party to subsidize the other beyond what the work is actually worth.

Nope. They're just siding with the workers' belief that the work is worth a lot more than the employers think it is.

Only if they will agree to work at that rate. They are not forced by the employer to take the job.

Nor can they force the employer to give them a better rate, especially in the absence of a minimum wage. Which means they will be forced to choose between "work for two pennies at a terrible company, work for one penny at an awesome company, or don't work at all"

All three options lead to the same conclusion: continued poverty sustained almost entirely by Basic Income.

The minimum wage would provide a Basic earner an opportunity to save some money and reinvest in himself and/or his family and improve his financial situation in the long run. Ultimately, the minimum wage accomplishes this for a larger number of wage earners than Basic does, and Basic Income does not accomplish this at all for the majority of workers.

Neither UBI or minimum wage guarantees eventual liberation from it. Why are you equating minimum wage to long-term employment?

I'm not. I'm saying a higher minimum wage makes long term employment an economically valid strategy. In the absence of a minimum wage, it doesn't matter how long you stay at a company; a certain (fairly large) segment of the workforce will continue to see their wages shrink as employers try to squeeze more productivity out of them for the same or less money.

Are unskilled minimum wage jobs not especially vulnerable to lay-off and automation?

No. Because the whole point of unskilled labor is that it is cheap and plentiful and has low cost of ownership. Automation is expensive to implement and more expensive to maintain, so complex automation systems generally augment SKILLED labor in ways that make skilled workers more productive than they already are.

Consider a simple example: i can pay a 20 year old with no work experience $30,000 a year to bus tables, wash dishes, serve food and mop the floors every night. I could also buy a single robot from Honda for a $5,000 monthly lease that includes maintenance and tech support. In the end, it's actually cheaper to pay the 20 year old. "But wait, couldn't you replace each of his tasks with smaller, cheaper machines?" you ask.

Well, I buy a roomba for $300, he no longer has to spend 30 minutes cleaning the floor, so I've just saved about $1,950 worth of labor costs per year. Assuming nothing goes wrong with the roomba and it never has to be repaired (which it definitely does every now and then) I'm only saving $1600. What about the dishwasher? Well, he spends A total of 48 minutes every day loading an automated dishwasher... I can't actually eliminate his job because it's already automated! What about serving food? Again, I have these nice iPad kiosk things that take people's orders, so all he has to do is bring out the food, and I don't have a robot capable of reliably doing that...

But we haven't gotten into the intangibles yet. The fact that I have this 20 year old working in my restaurant means I have a worker who is being trained on ever more complex tasks. Not only is he learning about the restaurant industry through his work, because so much of his job is automated now, he has time to do some light prep-cook work and help out in the kitchen. Spend some time as a prep cook and he can help out as a line cook, and can also get his hands dirty on some of the random tasks that pop up with running a business. I can get this kid to dump that huge tray of shrimp that went bad in the freezer; I can't convince a dish-washing robot to do the same.

The only thing the 20 year old asks in return is a living wage while he's coming up through the ranks. It costs me an extra $15,000 a year more than I might have otherwise preferred to pay, but my business is making revenues of something like $80k a month, you know what? If I can't afford to make his payroll, I deserve to fail.

In any economic that includes basic income but no minimum wage, the rate employers would most prefer to pay is always exactly "zero."

Yes, and the rate the employees would most prefer to receive is "infinite". The actual market rate is what the two agree on.

Nope. The "market rate" is what employers are offering on average. Employees generally do not have the kind of power to influence the market except collectively; an individual cannot really pressure an employee to raise his rate unless that employee is very, VERY uniquely qualified or the employer is very, very desperate.

And as I said earlier, the minimum wage is basically how the workers use the government as a giant collective bargaining tool. "This is the lowest rate any of us will ever accept. How much more are you offering than this?"

The same laundry list exists despite the existence of the current minimum wage as well.

The current minimum wage hasn't kept up with inflation in the last 30 years, which is part of what's exacerbating that problem.

The problem, btw, is called "poverty."

You say increase minimum wage, but that leaves out the unemployed as well as those being cheated illegally by employers. UBI would be an overhaul, increase, and broadening of what is now called welfare to make it universal.

Welfare needs to be overhauled and broadened, but it doesn't need to be universal. Like I said, that's a completely different can of worms.

Education should be subsidized heavily, and ideally it should be free for all citizens, especially if it is vocational and likely to create a workforce benefiting all of society.

Cool story, bro.

So if you want to start a thread about the utopian vision of universal basic income and free education for all, go ahead and do that. Basic income is NOT an alternative to a minimum wage increase and neither, frankly, is universal education.

This is like saying "We don't need gun control, we need universal healthcare!"

 

[Crazy Eddie]

"People having children before they have built their careers up" has literally NOTHING WHATSOEVER to do with the the median income for American workers failing to keep pace with inflation over the past forty years.

Not much maybe, but nothing whatsoever? You live in a system without UBI where raising children is expensive. Raising children is also time consuming. A single mother with 4 kids (and no UBI) is going to have to work, minimum wage or not. And minimum wage or not, she is going to have no free time to educate herself and position herself so that her labour is worth much

Which is why increasing the minimum wage solves that problem. Because if you increase her wages, her labor is worth much more than it would have been otherwise. That means she can afford to spend more time educating herself if she wants, or just work the job until her kids are old enough to go to boarding school and THEN go back to college and educate herself.

No, you need an actual UBI, paid to all as a right, and funded through taxes on all increasing based on profit and income. We are all responsible to lift us all up, not just those who decide to hire somebody.

Not suggesting that we don't need it. But Basic income in the absence of a minimum wage is no solution to this problem, as our current welfare system perfectly demonstrates. The amount of money you would need to make a universal income pay for anything beyond "abject poverty just this side of starvation" would FAR exceed the GDP of any country that tried it.

 

[Loren Pechtel]

In other words, by increasing unemployment. Same thing unions do.

Sort of. They don't necessarily increase unemployment overall -- when wages rise it might cause new people to get jobs -- but they will increase unemployment among the particular people whom they stop from crossing the formal or de facto picket lines.

Not to mention those they refuse to admit to the union.

New people who enter when wages go up are likely to be on average more skilled than the people who lose their jobs, since employers will be incentivized to substitute high-skill work for low-skill work. The bottom line is that there are winners and losers from a minimum wage hike or a union.

Correct--in both cases, the bottom of the labor market is being chopped off. The middle class benefits at the expense of the poor.

- - - Updated - - -

Not much maybe, but nothing whatsoever? You live in a system without UBI where raising children is expensive. Raising children is also time consuming. A single mother with 4 kids (and no UBI) is going to have to work, minimum wage or not. And minimum wage or not, she is going to have no free time to educate herself and position herself so that her labour is worth much

Which is why increasing the minimum wage solves that problem. Because if you increase her wages, her labor is worth much more than it would have been otherwise. That means she can afford to spend more time educating herself if she wants, or just work the job until her kids are old enough to go to boarding school and THEN go back to college and educate herself.

No. The value of her labor is independent of what you pay her. Set the pay higher than the value and the value doesn't increase, it's her employment goes away.

 

[Crazy Eddie]

"People having children before they have built their careers up" has literally NOTHING WHATSOEVER to do with the the median income for American workers failing to keep pace with inflation over the past forty years.

We have been over this again and again.

The problem is that as technology becomes more pervasive in the workplace more skilled workers spend less of their time on low skill tasks. This increases the value difference between skilled and unskilled workers.

Wages reflect this. High skill workers do better in this climate, low skill workers do worse. However, the median is below the mean so it's moving farther away from the mean.

Cool story, bro...

Except a minute ago you said "The problem is people having children before they have built their careers up." That has nothing to do with the median income failing to keep up with inflation, LP. Not least of which because Americans are having children later and later in life while long term careers for most workers are actually paying them less and less whether they have children or not. It isn't child care that's causing the stagnant wages, and even if it is, it wasn't a factor BEFORE the 1960s and it shouldn't be one now unless we're doing something very wrong.

Employers used to value brawn. Now they much more value brains and skills.

And yet even employees with brains and skills aren't earning a living wage in many cases. Strictly speaking, it's not even SKILLS that employers are coming to value, it's experience and access.

 

[Crazy Eddie]

In reality few businesses could survive a 30% spike in payroll if they couldn't pass the costs along to the customer. Lets look at my former employer--manufacturing (in other words, lot of material costs) with a lot of automation (in other words, lots of capital cost) and it was still about 40% of spending was on payroll. 30% of 40% = 12%. Oops, that's higher than the 10% profit they were making.

Thank you for illustrating my point: if your business has been run so incompetently that a %2 loss in a single year is going to drive you into bankruptcy, it's because you are a shit businessman who deserves to fail.

Also, I dare say your numbers are shit. I do the books for MY company too; $565,000 annual payroll for $1.3 million in revenue. A 30% increase would be a jump in payroll to $734,000. Fixed cost would eat up a lot of the difference and we'd still have a 2 to 5% profit. Assuming, of course, that ANY of our employees were earning only 70% of the minimum wage when in fact all of them make singificantly more already and a wage hike wouldn't affect our payroll even a little bit for at least another two years.

This for a small business with only 21 employees.

And they were in a better position to take such a price hike than most businesses.

If that's true, they would have survived just fine.

 

[Crazy Eddie]

Wages paid by a company are wages paid by its owners. Shareholders are people. They have human rights too. You're dehumanizing your outgroup.

Not at all. The basic right to property is and has always been limited by taxation and business regulation to serve the common good. The economic security of the lowest-earning workers is exactly the sort of common good that trumps shareholders' property rights.

Put simply: the right of people to provide for themselves and their families is superior to the right of shareholders to get a slightly larger return on their investment.

Why should the employer be responsible for the living standards of the employee?

Because the employees ... said so.

No, "the employees" didn't say so.

Yes they did. They got their elected officials to speak on their behalf in the form of "laws."

Paying an employee too little to live on is labeled "cheating", "screwing", "under-paying" and "the problem", without any consideration of how much the employee is accomplishing for the employer in return. I.e., the argument is that paying an employee that little is immoral per se, regardless of whether he's a terrific employee or only a barely helpful one. Well then, if that's immoral, what is the moral thing for an employer to do instead, when she encounters a worker who will not increase her revenue by as much money as the worker needs? Should the employer hire the worker to do a job that will increase the employer's revenue by $20000, pay him $30000, and take a $10000 loss on the trade? Or should she not hire the guy, and get $20000 less revenue and $30000 less expense? Are both of those options more moral than paying him $20000 for the $20000 revenue increase he'll deliver, or only one or the other?

It isn't a question of "morality." Suppression of wages impacts the labor market in ways that are unrelated to the performance or qualifications of any specific worker. Wages simply are not as fluid as this paragraph seems to be implying, nor is the relationship between work and revenue as clear cut as you are pretending.

Really, the issue with the minimum wage is the burden of inflation on workers at the low end of the spectrum. It isn't actually a moral question to be settled individually, but in terms of the Public Good. It is, in other words, similar to regulations on any other business practice: is your factory producing toxic waste that is polluting the neighborhood around it? Are your products consistently unsafe but you sell them anyway because you just assume most people know the risks? Are your workers experiencing conditions that significantly shorten their life expectancy or compromise their health? These are all things we do not allow in a civilized society. You cannot really make a moral case IN FAVOR of these things just on an individual basis, nor by appealing to the rights of shareholders, nor by appealing to unintended negative consequences. The public good of the community and the nation at large MUST take precedence over the good of the business and/or its shareholders.

In this case, raising the minimum wage is a public good for the labor market and for workers. Asking if accepting the lost revenue is the "moral" choice is a non-sequitor; you might as well ask if removing asbestos from your assembly plants is really worth the loss in productivity for the 2 months it'll take to strip it all.