What's Wrong With A Living Wage?

[laughing dog]

Yes, whatever is best for consumers in the long run....

Um, one would think from observation that is not the only goal for companies.

 

[PyramidHead]

It's just shuffling money around.

We raise the minimum wage, and businesses have less money (because they have to spend more of it on wages), but also MORE money (because consumers have more cash to spend on their products, even if the prices go up).

We lower the minimum wage, and businesses have more money (because they don't have to pay their workers as much), but also LESS money (because consumers don't have as much cash to buy their products, even if the prices go down).

What's the difference?

 

[prideandfall]

It's just shuffling money around.

We raise the minimum wage, and businesses have less money (because they have to spend more of it on wages), but also MORE money (because consumers have more cash to spend on their products, even if the prices go up).

We lower the minimum wage, and businesses have more money (because they don't have to pay their workers as much), but also LESS money (because consumers don't have as much cash to buy their products, even if the prices go down).

What's the difference?

one of them involves "businesses" which are inanimate globs of abstract consumer organization having "more money" which really doesn't involve anyone within the species benefiting in any measurable way.
the other involves people having more resources which directly increases their quality of life, thereby fundamentally accomplishing the entire point of civilization in the first place.

so, even on the most shallow of levels, there seems to be a huge difference.

 

[PyramidHead]

It's just shuffling money around.

We raise the minimum wage, and businesses have less money (because they have to spend more of it on wages), but also MORE money (because consumers have more cash to spend on their products, even if the prices go up).

We lower the minimum wage, and businesses have more money (because they don't have to pay their workers as much), but also LESS money (because consumers don't have as much cash to buy their products, even if the prices go down).

What's the difference?

one of them involves "businesses" which are inanimate globs of abstract consumer organization having "more money" which really doesn't involve anyone within the species benefiting in any measurable way.
the other involves people having more resources which directly increases their quality of life, thereby fundamentally accomplishing the entire point of civilization in the first place.

so, even on the most shallow of levels, there seems to be a huge difference.

I tend to agree that consumers should have more money, but to play devil's advocate, how is "consumers having more money because of higher wages" materially different from "consumers not having to spend as much money because of lower prices (from lower wages)"?

 

[prideandfall]

I tend to agree that consumers should have more money, but to play devil's advocate, how is "consumers having more money because of higher wages" materially different from "consumers not having to spend as much money because of lower prices (from lower wages)"?

well, if you assume a hypothetical wherein everything else about the world and the economy stays exactly as it is right now and yet either every person has more money or everything is cheaper, there wouldn't be much difference.
but in a market that is within a decadent and consumerist society such as the US, any given company (or in fact all companies) needing to pay out more to its employees is going to result in an economic circle jerk of low and middle class people blowing money all over town.

when company's make more profits that gets funneled to managers/owners/executives, who just horde the money and/or spend it on niche products that don't do fuck-all for the local or national economy.
when the worker's wages are up, it gets spread around copiously and fuels the engine of the country's economy - which just seems like the better option for everyone IMO.

 

[DBT]

I think the gap (gulf!) between high income earners and the average wage (not to mention minimum wage rates) has been widening for decades. So for the business and corporate sector to cry about a miniscule pay rise in an absurdly low minimum pay rate is a bit rude.

 

[untermensche]

I think the gap (gulf!) between high income earners and the average wage (not to mention minimum wage rates) has been widening for decades. So for the business and corporate sector to cry about a miniscule pay rise in an absurdly low minimum pay rate is a bit rude.

The profits of corporations are rising. They set new records every year.

The pay of most corporate workers has been stagnant for decades.

The underlying assumption is that the rise in profits has absolutely nothing to do with the work that produced it.

The underlying assumption is absurd. The system is a game rigged by those who control it like a bunch of petty dictators.

To even begin to talk about it as if it is nothing but a rigged game is to leave reality.

 

[Jayjay]

It does not follow from this that employers as a class should be imposed upon to be the welfare-providers and have to turn their business into a babysitting center instead of an enterprise to serve consumers. Such penalty imposed onto this one important segment of the economy, driving up its costs and penalizing production, only makes the economy worse and reduces the standard of living and increases the social problems you're trying to address.

You are ignoring human nature if you think that poor people will just commit suicide by starvation just so that the consumers can save a few pennies.

No, many of them will then be able to get hired at a low-wage job which is now illegal, because employers will be able to expand production if they are allowed to reduce their labor cost.

Only up to a point. There is a level at which the low-wage jobs cost more to the society than the money they save to the consumer. And you are forgetting that the reverse is also true: if prices were raised, many consumers would still be able to buy the products.

Did those same poor people "commit suicide by starvation" when they were replaced by robots/machines, or when new technology made their jobs less valuable and reduced their incomes by putting them into lower-level jobs?

This process of mechanization has had the exact same impact on the low-level workers as that of replacing them with cheap labor or reducing their wage level as a result of the lower costs.

Replacing workers with automation is a qualitative change. Replacing them with other workers is quantitave. If a robot is better at doing a job than a human, then that's a fact. But why is one equally capable human willing to do a work for less than another human? If the only reason is that he's more afraid of losing his job than the other guy, then that's just creating an artificially low price for labor by means of intimidation.

It is not true, as you are implying, that all "poor people" will resort to crime instead of doing something to improve themselves or finding other non-criminal solutions. You are slandering all poor people by insinuating that they will all commit crimes if they can't get the high-paying job they think they're entitled to.

It's a fact that propensity to crime correlates with income level. And I am not slandering anyone, merely pointing out that harsh circumstances will make people behave outside social norms.

This doesn't make them "scum", and that you'd think that it does tells more about your attitude about the poor than it does about mine.

You're the one who called them "rabble":

You need to learn not to take everything literally. I was using it as sarcastic term that someone who lives in a gated community might perceive the poor masses outside.

The problem with your argument is that you think it costs nothing to keep people unemployed and below subsistence wages. In reality, that is not the case. At some point, the cost saving that you get from lower wages is less than the externalized cost of having a poor underclass that you have to keep in line by combination of welfare and police. What you save as a consumer is offset by what you lose as either taxpayer or from having to maintain private security to keep out the rabble from your gated community.

In addition to calling them "rabble" you falsely accuse the poor of being prone to crime, while the truth is that most of the poor do not commit crimes, and when they lose their job, or their wage level decreases, they do not typically go out on a crime rampage as you are insinuating, and it is not necessary to pay employers to babysit them in order to scoop them up off the streets and keep them out of mischief. That you believe this shows your own hidden deep contempt for poor people and your attitude that we need to shake down employers to pay the costs for keeping these rabble out of trouble.

The employers cannot be shaken down. If the employees want more than he can pay to stay in business, he will go out of business or find something else to do. The employer is just a middle-man between the producer and the consumer.

Why do you think the employer allowed to shake down employees, but not vice versa?

I notice you dodged the question: who's going to pay for the societal cost associated with a poor, oppressed underclass?

Again, I don't accept your premise that they are the "scum" (my term) or the "rabble" that you called them, because you are wrong to insinuate that all poor people are going to go on a crime rampage when they can't get the higher-paying job they think they're entitled to.

Anyone who would go on a such a crime spree is "scum" or "rabble" or whatever term you prefer, because they are assaulting the well-being of others instead of doing what they can to improve themselves and fix their problems, and the vast majority of poor people do not do such a thing, as you're accusing them of doing.

Denial is not an answer. It is a fact that people have to eat, and poor people are more likely to commit crimes. Who pays for their food? Who pays for the additional police needed? Basically what you are saying is that everyone can fix their own problems, and if you just push them against the wall hard enough that they will. And you are half right: but sometimes the solution they come up with to fix their problems is not the solution you envision.

Remember Jurassic Park? "Life finds a way".

. . . or the employees are a part of a strong union and are able to negotiate collectively.

To the detriment of consumers, who are always better served by competition rather than price-fixing or wage-fixing.

The whining crybaby consumers you mean?

So then you are saying here that the "living wage" theory is based on the idea that serving consumers is not what businesses are supposed to do because the consumers are whining crybabies to expect companies to serve them with better products and lower prices. And you are acknowledging that "living wage" is detrimental to consumers, but they are obligated to bear this sacrifice, because for them to expect better service at lower prices makes them crybabies.

The term crybabies was what you ascribed to the workers who are selling their labor. Their desire to get more pay for their labor is no different from the consumer's behaviour to expect better products or service at lower prices.

There's a big difference: The consumer shops for the lowest price but does NOT demand that laws be passed imposing any price level onto sellers or other consumers. But the wage-earners demand labor laws forcing the employers to pay higher prices for labor.

Whether it's companies demanding corporate welfare, or wage-earners demanding "living wage" laws or other labor laws driving up the labor cost, it is only crybabies who go whining to the state to force someone to pay them a higher price or protect them against having to compete or to provide them with a subsidy or demanding a bailout.

The "crybabies" are those who get what they want by running off to the government and demanding some form of subsidy or interference into the buying and selling which pays them an unearned gain or profit at someone else's expense.

A "crybaby" is someone who tries to improve his condition by assaulting others and making them worse off by imposing high costs onto them.

What consumers demand is a competitive marketplace where all the producers have to compete, and where there are safeguards against fraud, but not where the state interferes to set any of the prices or give preferential treatment to any particular class of buyers or sellers.

(Actually there are a few cases of crybaby consumers -- e.g., the gasoline tax is too low in most places. And there might be some other examples.)

And this is my point exactly. Gasoline should be taxed to pay for the externalities that their usage causes. At some point, forcing prices down for certain consumer goods and services will cause externalities in form of class of underpaid poor people who have little means to better themselves. And just like with gasoline tax, asking consumers to pay slightly higher price for a Big Mac is a small price to pay for improved social cohesion.

And who is saying anything about a state imposing higher prices? That's precisely where unions come in. It should not be the state mandating a minimum pay, it should be unions negotiang a fair pay with the employers on an equal footing. Of course unions in the real world are also lobbying the government, but so are big corporations.

Why should the employer be allowed collective negotiation, but employees shouldn't?

Employers are NOT allowed collective negotiation for any prices, either the prices they pay or the prices they charge for anything. Price-fixing is illegal for them, but is allowed to wage-earners, who alone are allowed to engage in price-fixing.

All buyers/sellers are allowed to shop around, check to see what others are paying or charging, and can seek ways to circumvent the laws against price-fixing. But no one is legally allowed to practice anti-competitive price-fixing except wage-earners.

By collective negotiation, I mean that a single corporation is a collective. If corporate HR can negotiate with 10 employees with one voice, why shouldn't those 10 employees be allowed to pool their resources and negotiate as one voice also?

Well, they ARE allowed to. And it would be impractical to try to prevent them.

However, the harm of it is that it unnecessarily drives up the labor cost, which is passed on to consumers in the form of higher prices. It's irrelevant who represents the employer -- if it's a committee, a collective. Whatever the structure or the process, anything that drives up the cost of production higher than necessary to get the production done is detrimental to consumers.

Any increase in the cost, such as labor cost, which is not due to an increase in quality or performance, is detrimental to consumers and a net loss to society. The ideal is perfect competition throughout all levels and transcending all the divisions, so that no one is able to gain a higher income except through improved performance.

Though this ideal is impossible, it's always best to move closer and closer to the ideal. Anticompetitive collusion should be prevented wherever practical measures to prevent it are possible.

Keeping people underpaid by way of threat of unemployment is just as anticompetitive as keeping them overpaid by threat of a union strike. The lower consumer prices achieved by such methods are illusory, because they were achieved by suppressing competition between employers for employees.

Free marketplace also means that you are free to cooperate with others for economies of scale, and that should apply just as well to employees as it does to employers.

But it does not apply to competitors cooperating together to fix their price/wage instead of trying to undercut each other in order to give consumers a better deal. Some cooperation is good, but not anticompetitive cooperation that benefits only the ones cooperating and drives up costs or drives down output to the detriment of everyone else.

Again, you are missing the point. A single employer is already a collective in most cases. When walmart is hiring 100 people, they don't have 100 separate negotiators each trying to entice the best employees out of the bunch with a better deal. No, they set a fixed wage, and if someone doesn't like it they pick the next person in line. If the employer is allowed to do that, and it would be hard to stop them, all I'm sayign is that the employees should be able to pick one negotiator on their behalf to get the best possible deal they can achieve.

I wasn't talking about anti-trust violations. Merely the employers using their leverage as bigger entities for whom an individual employee is merely a fraction of their work force, whereas employees usually have only one full-time job.

But this higher leverage of employers is simply a reflection of their higher value. Those of higher value always have more leverage than those of lower value. It's not because they're employers per se that they have higher value. Rather, it's because of their higher value that they are employers.

Apples and oranges. It makes no sense to compare employer value with employee value because what you are willing to take to sell your labor is different from what you are willing to pay to get a job done. And it completely misses the point, that in a given negotiation, an employer who has 10 employees only has to risk 10% of his work force if he fails to negotiate a mutually agreeable salary. The employee on the other hand risks 100% of his job in the same negotiation. If this is a reflection of higher "value" on part of the employer, then by your own reasoning, if those ten people formed a union, and negotiated each person's wage together, the unionization would increase the value of each worker. But somehow I doubt you really think so.

It is no more "wage-fixing" for employees to band together and demand a certain minimum wage, or none of them will work for the employer, than it is for the said employer to dictate a maximum wage and refuse to hire anyone who asks for more.

It's no more "wage-fixing" for an employer to do this than it is "price-fixing" for a customer to refuse to pay a price that is too high. Anyone is free "to dictate a maximum" or "minimum" price or wage or whatever and refuse to pay or charge higher or lower.

Exactly my point.

No that's not your point. Your point is that some workers should be able to dictate to the employer what is paid to OTHER workers, not just to themselves. You want these workers to dictate that the employer may not hire another worker who is willing to work for less. That is not what employers do when they set their own wage level and refuse to pay higher. That employer who refuses to pay you what you want is not trying to prevent some other employer from hiring you at that higher wage level.

The relative cost of finding that new employer is higher for the employee, than vice versa. That's the difference that should be evened out.

And I'm going to stop here becsuae the rest is just rehashing the same points. Dude, learn to write shorter posts.

 

[Underseer]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

 

[J842P]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

I find it hard to believe that if you removed food assistance and all other forms of government interference any significant amount of people would starve to death. Not in modern industrialized countries. Calories are just way too cheap. Sure, they wouldn't be eating healthy. They aren't eating healthy now. But starve to death? I doubt it.

 

[arkirk]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

I find it hard to believe that if you removed food assistance and all other forms of government interference any significant amount of people would starve to death. Not in modern industrialized countries. Calories are just way too cheap. Sure, they wouldn't be eating healthy. They aren't eating healthy now. But starve to death? I doubt it.

We have the school food programs because it has been proven that malnutrition can be a causative factor in low IQ. The right wing and the corporations complain they don't find the quality help they need. Actually at any point in life when you become malnourished, you lose some of your faculties. By paying the low paid unskilled workers next to nothing, you guarantee they will remain that. If you add in overworking them, you generate a perfect storm against yourself...stuck with an unskilled labor pool and forced to seek out educated people in foreign countries.

I agree with Richard Wolff that it is high time for democracy in the work place. It would be best for existing corporations if they paid their workers enough that they might better themselves in terms of skills. That way when the corporations laid them off, they would not have to pay out so much in unemployment claims and insurance. The real problem is that corporate leaders do not treat their organizations as if they were organic entities, treating them more like expendable commodities with no sense of actual connection to them.

Hence a worker becomes just a thing and not really a party to the enterprise. You pay as little as your can for them and when they break down or become uppity you go further afield for their replacements. A lot of these attitudes stem from the use of cheap hydrocarbon fuel and the notion there is a magical path to wealth if you are thrifty enough in the wage category. We are headed toward a brick wall when it comes to global warming and all that cheapness and facility of hydrocarbon fuels will soon not be available. This system we now have is predicated on the ability to go anywhere and hire anybody anywhere in the entire world. All this movement of goods and personnel will taper off dramatically as soon as we start to deal with our environmental threats.

So yes, let's start raising smarter better nourished children and employing people in such a manner that they can contribute to society as well as the bosses bottom line. These world spanning corporations will be the big losers in the end. The smarter ones can begin to cushion their landing by treating their labor force with more respect.

 

[barbos]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

Yes and the solution is to stop helping people with low wages. Helping unemployed is fine, but once you are employed you're out.
No help whatsoever and we will see how McDonalds will find someone to work for them with their current wages

 

[SimpleDon]

one of them involves "businesses" which are inanimate globs of abstract consumer organization having "more money" which really doesn't involve anyone within the species benefiting in any measurable way.
the other involves people having more resources which directly increases their quality of life, thereby fundamentally accomplishing the entire point of civilization in the first place.

so, even on the most shallow of levels, there seems to be a huge difference.

I tend to agree that consumers should have more money, but to play devil's advocate, how is "consumers having more money because of higher wages" materially different from "consumers not having to spend as much money because of lower prices (from lower wages)"?

It makes a big difference. Wages and profits trade off. Lower wages mean higher profits. Higher wages mean lower profits.

Wages are the primary component of demand. Workers spend most of their money. I think about 85% of wages are spent on consumption.

Profits are the primary source of funds for investment, capital, supply. Only about 15% of profits is spent on consumption.

You have to have a balance between supply and demand. We have had an excessive amount of supply and a shortage of demand for something like thirty years. We can see this in the constant chain of asset bubbles as the excessive amount of capital tries to find investments that provide a return. Also we can see the excessive amount of capital in the income and wealth distribution. Profits go overwhelmingly to the rich. Also you can see the excessive amount of excess capital in the profits earned by the financial sector, which were 40% of the total corporate profits in 2007. The shortage of demand, wages, shows up in as increased private debt. The decreased demand is why there are no opportunities in the real economy that actually makes things and forces the money into the various zero sum, paper so-called investments of Wall Street.

We need more demand in the economy. That means that we need higher wages and lower profits. Simple.

 

[Jayjay]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

Yes and the solution is to stop helping people with low wages. Helping unemployed is fine, but once you are employed you're out.
No help whatsoever and we will see how McDonalds will find someone to work for them with their current wages

That would only create a permanently unemployable class of welfare-recipients.

 

[Rhea]

Why should the employer be allowed collective negotiation, but employees shouldn't?

Employers are NOT allowed collective negotiation for any prices, either the prices they pay or the prices they charge for anything. Price-fixing is illegal for them, but is allowed to wage-earners, who alone are allowed to engage in price-fixing.

All buyers/sellers are allowed to shop around, check to see what others are paying or charging, and can seek ways to circumvent the laws against price-fixing. But no one is legally allowed to practice anti-competitive price-fixing except wage-earners.

No shit? I can negotiate my salary with each board member and shareholder independently? I don't have to speak through their collectivized mouthpiece in HR? That is fantastic news and I can't believe I didn't notice it before.

 

[Rhea]

It simply floors me that so many conservatives and libertarians (who are of course completely different) are in effect arguing for big government.

The ridiculously low wages paid by so many corporations mean that we have to spend billions of taxpayer dollars in order to make sure that people with full time jobs don't starve to death.

Even if we ended government food programs, those billions of dollars would have to be paid by someone (i.e. charities), or else our society will fall into chaos. So even if we stopped the food stamp program, we would effectively be "taxed" by some other means to make sure that millions of people with full time jobs don't starve to death.

So what we have here is basically a free handout to very successful corporations that goes straight from the taxpayer's pocket to these corporations' bottom lines, to the tune of many billions of dollars. This means more taxpayer money wasted, more government bureaucracy, more people dependent on the government, and for what? So that already successful corporations can get huge taxpayer handouts?

This is why we laugh when rightists (both kinds) claim to be for "small government."

Unless they really do allow themselves to think through that there is no big government to keep people from starving to death and those deaths are acceptable. Perhaps they look at the model in mega-urban India, for example, and see the garbage picker model and think that is a terrific plan. The dead ones are, like, "evolution" and perfectly okay because they are not of interest when they can't hold their own without public assistance.

Maybe they really think that?

That would only create a permanently unemployable class of welfare-recipients.

...with no welfare...