Minimum Wage to be restored??!

SupaNova

the goverment needs to 1st tackle the sheltered sectors of the economy like , health providers ( GP,s , dentists etc ) , electricity providers and other monopoloys or protected professions , this way , the hit for someone on the minimum wage is greatly cushioned , once they know that they have a choice when going to a GP of paying 35 euro or 65 euro or getting thier electricity at a cheaper competitor , they can feel more secure on a minimum wage job , time theese protected elites were brought into the real free market

Agree with this, however, wages are only part of competitiveness...rates, insurances, energy costs, etc all need to be lowered and only then will true competitiveness be seen....

Agree, but as always worrying about political careers is more important than doing whats in the best long term interests of the country.

irishh_bob

Denerick wrote: »

About time. I'm acutely aware that those most willing to give the 'competitiveness' spiel haven't worked minimum wage jobs in a long long time.

Economically speaking it was an absurd idea, these people live on the breadline as it is and barely save any money whatsoever, every penny is pumped directly back into the economy from low paying jobs. Cutting these people is absurd. If the government were seeking to restore competitiveness they could tackle some of the major cartels in this country. For example barristers and solicitors effectively collude to inflate their fee's and their income, adding absurd costs to business and individuals.

while fees for the the higher echelons of the legal sector have remained high , the cost of hiring a regular small town solicitor has reduced dramatically , ive seen three different solicitors in the past year and each one of them charged me 100 euro for an hour long consultation , i thought this was very reasonable , a GP would make double that easily in an hour , people talk about the legal profession in terms of them making out like bandits but they are in the happeny place ( on average ) compared to the medical fraternity who have been completley shielded from the rescession , my local GP has actually put up his prices since 2009 , hows that for contempt

Elexis

Lockstep wrote: »

The fact you take a controversial issue and simplify it as a basic economic law shows you are approaching this with a very blinkered mind.

I understand that it is a controversial issue. I am basing my position on empirical data and the common sense fact that as labour costs rise, employers tend not to hire more workers. They tend to hire less workers/reduce hours/fire workers. To make such a claim is to deny that economics has any scientific legitimacy or that human beings are in any way rational. The Card and Kreuger study that your rely on is flawed and lacks credibility.

Lockstep wrote: »

Out of interest, have you read the report yourself (seriously though, don't rely on Wikipedia in debates)
First of all, to disregard the Card/Krueger report as using distinctly narrow and isolated makes a mockery of the support that has been given to it by economists such as Borjas and Krugman. Few would deny that an overly-high minimum wage increases unemployment, but that's not what's on the cards here. Likewise, Doucouliagos and Stanley did their own research based on 64 minimum wage studies and found that once errors and selection bias were accounted for, the minimum wage actually increased employment. Publication Selection Bias in Minimum-Wage Research?
A Meta-Regression Analysis
Also, Dube, Lester and Reich did a 16 year study on minimum wage effects across US counties and found it had very little significant impact on unemployment. MINIMUM WAGE EFFECTS ACROSS STATE BORDERS:
ESTIMATES USING CONTIGUOUS COUNTIES)
Essentially, the effects of the minimum wage are very controversial. For you to try and pass off your opinions as fundamentals of economics is very disingenuous.
What is your evidence for stating that the current Irish minimum wage is well above the market rate?

I think the best way to demonstrate why the minimum wage creates unemployment is to examine the demographic which relies on minimum wage jobs the most and then to examine its level of unemployment in relation to ordinary unemployment. Young people, i.e. under the age of 25, rely on minimum wage jobs the most and teenagers make up a large majority of these workers (link).
Let's look at the U.S. Teenage unemployment tends to be over twice as high as ordinary unemployment there. Although naturally higher because young people are just entering the labour market and searching for jobs, the unemployment rate only became so drastically high since the 1950s when minimum wage laws began to increase sharply. Such a high unemployment rate amongst teenagers was never experienced before and has essentially been the sole experience ever since. The unemployment rate for teenagers in Europe is likewise bloated and excessively disproportionate to ordinary unemployment. It doesn't take a $15 per hour wage to create the negative effect which we are discussing. It has been a product of the minimum wage for many years. You simply have to look at the mass ranks of teenagers who very much wish to get a job but whose services have been priced out of the market by their own soft-hearted, soft-headed governments.

Lockstep wrote: »

Secondly, please don't put words in my mouth. I never said that it has no effect on unemployment. I even quoted Krugman who noted that as long as it's kept sensible, it doesn't lead to significant job losses. In effect, it must be a balancing act; ensuring that wages are increased to give a benefit to low earners while not being raised high enough to increase unemployment.

I didn't put words in your mouth. You put Paul Krugman's words in your own mouth. You wrote that "as long as the minimum wage isn't set too high then its effects on employment are pretty much negligible." What's too high? You quote Krugman who states that $15 dollars is when unemployment will "probably" occur. Our current minimum wage rate is well below this so you have been clearly arguing that the Irish wage rate does not have negative effects or that those effects are entirely insignificant. You have even suggested that an increase in the wage can actually increase employment. Despite all your rhetoric about this being a "nuanced" issue, you yourself have come down sharply on one side of he argument.

Lastly, I want to point out that the most organised interest which is in favour of a high minimum wage is not the International Organisation For Young And Unskilled Workers. It's the trade unions whose members do not earn anything close to the minimum wage. Why? Because with the minimum wage, unskilled workers are priced out of the market and the high earning unionised workers are able to remain insulated in many industries. Why do you think that a self-serving special interest whose members are not directly affected by a fluctuation in the minimum wage have for decades devoted large amounts of time and money to promote keeping the minimum wage as high as possible? I await Paul Krugman's response.

Elexis

Peter Schiff does a good video on the minimum wage here.

https://www.youtube.com/watch?v=I_IMuxMXd3E

Joey the lips

SupaNova wrote: »

Can you expand on why you would want a less attractive labour market? Or why you conclude that people wanting to do away with min wage want to do away with labour?

i never said i wanted a less attractive labour market so there is nothing to expand on.

and the arguement for why i think that those that want to do away with a min wage would have to form an opinion that labour will be to much because when the min wage falls below the labour rate no one will work

So that conclusion is obvious i imagine. However I could be wrong.

SupaNova

An additional reason i am glad the min wage is being restored is it now gives the possibility that the labour looks less attractive.

i never said i wanted a less attractive labour market so there is nothing to expand on.

Ok , so you meant less attractive looking? why would you want that?

and the arguement for why i think that those that want to do away with a min wage would have to form an opinion that labour will be to much because when the min wage falls below the labour rate no one will work

So that conclusion is obvious i imagine. However I could be wrong.

So you think if the min wage fell all the way to zero(in other words abolished) nobody would work?

donkey balls

When people say low skilled workers I presume they mean that they have very or little work experience/skills,Now take my industry(transport sector) there is companies paying there drivers the min wage(or a few cent more)to drive artic trucks yet if somone was to train as a driver your looking at 4/5k to get the different licences these days.
Some companies will pay a set wage for the day normally 80-100e now for that wage you could be expected to work upto 15hrs in a day which is less than the min wage,Some companies are using the R word as an excuse to cut wages while pocketing the difference I know of one large transport company who won a contract from a company that I once worked for they now pay the staff half the wage that my old company paid yet there tender was the same as my old company.

SupaNova

When people say low skilled workers I presume they mean that they have very or little work experience/skills,Now take my industry(transport sector) there is companies paying there drivers the min wage(or a few cent more)to drive artic trucks yet if somone was to train as a driver your looking at 4/5k to get the different licences these days.
Some companies will pay a set wage for the day normally 80-100e now for that wage you could be expected to work upto 15hrs in a day which is less than the min wage,Some companies are using the R word as an excuse to cut wages while pocketing the difference I know of one large transport company who won a contract from a company that I once worked for they now pay the staff half the wage that my old company paid yet there tender was the same as my old company.

Someone close to home drives trucks, and one of the companies he works with is guilty of some of the above, but i still find the 80-100e for 15hrs would be a very unusual case. And the 4 to 5k sounds pretty exaggerated. The person i know took only a few lessons and passed the driving test, and done likewise to get a bus license. Where i agree is that some companies are playing the R word.

Lockstep

SupaNova wrote: »

Over the periods of time they were carried out their effect would have been minimal just like it is in WA today. Because the demand for labour during a relatively good economic period is high and the available labour supply is not large. During the current economic period the available labor supply is large and the demand to hire them at current minimum wage rates is low.

16 or so years may seem like a long time to conduct a study, but carry it out over the coming 16 years, and compare 2 similar countries one who keeps a high min wage and one who gradually lowers it. I would bet that the country who sticks with the high rate would suffer more.

If you want your claim to be taken seriously, you'd need to do more than just say what you 'bet' would happen. Please provide some data to support your opinion.

Keep in mind that I've listed 3 main sources here, not just the 16 year one (Card+Krueger's/Doucouliagos+Stanley)
Even during the boom, only 5% of people were on the minimum wage.

SupaNova wrote: »

I would also be very skeptical of Krugman, you should track some of his previous articles. Around 01 and 02 he suggested a housing boom would be good and could be achieved by keeping very low interest rates. I am also sure he is well aware of minimum wage effects in boom times will be minimal. The Nobel prize award has a lot more to do with politics rather than achievement, so it is annoying that any time someone mentions Krugman they always mention this as some sort of qualifier that he should garner great respect.

Sources? (both for Krugman wanting to stoke the boom and for the Nobel Prize being a politicised award)

Marsden

Elexis wrote: »

I

The people who need the lowest paid jobs the most are those who have not worked before, people who rely on family etc. for their incomes-in-kind and start at the bottom to gain experience and develop their skills as workers so they can get better wages in the future. By raising the minimum wage, you diminish their ability to do this.

What about the unskilled workers who have to support their own families on €300 a week. You couldn't afford to rent the smallest apartment in the worst part of Dublin while still providing food for your kids on this wage.

The minimum wage is there to protect the vulnerable in society and the only people who could possibly advocate keeping it low for the sake of the bottom line have no sense of compassion and no right to say what the lowest paid workers in the country should earn.

Lockstep

Elexis wrote: »

I understand that it is a controversial issue. I am basing my position on empirical data and the common sense fact that as labour costs rise, employers tend not to hire more workers. They tend to hire less workers/reduce hours/fire workers. To make such a claim is to deny that economics has any scientific legitimacy or that human beings are in any way rational. The Card and Kreuger study that your rely on is flawed and lacks credibility.

The empirical data is very mixed which is why it's such a controversial issue (plus, I'm really not a fan of 'common sense' arguments which is basically another name for opinion based arguments)
Out of interest, can you outline the main conclusions from the Neuman report? It costs $30 to access so I can't be looking at it right now!


Also, can you outline *why* the Card and Krueger report is so flawd?

Elexis wrote: »

I think the best way to demonstrate why the minimum wage creates unemployment is to examine the demographic which relies on minimum wage jobs the most and then to examine its level of unemployment in relation to ordinary unemployment. Young people, i.e. under the age of 25, rely on minimum wage jobs the most and teenagers make up a large majority of these workers (link).
Let's look at the U.S. Teenage unemployment tends to be over twice as high as ordinary unemployment there. Although naturally higher because young people are just entering the labour market and searching for jobs, the unemployment rate only became so drastically high since the 1950s when minimum wage laws began to increase sharply. Such a high unemployment rate amongst teenagers was never experienced before and has essentially been the sole experience ever since. The unemployment rate for teenagers in Europe is likewise bloated and excessively disproportionate to ordinary unemployment. It doesn't take a $15 per hour wage to create the negative effect which we are discussing. It has been a product of the minimum wage for many years. You simply have to look at the mass ranks of teenagers who very much wish to get a job but whose services have been priced out of the market by their own soft-hearted, soft-headed governments.

Keep in mind that they only started keeping the data in 1948 source so I'm baffled where your getting your claim "the unemployment rate only became so drastically high since the 1950s when minimum wage laws began to increase sharply" from! Can you provide any more evidence on the matter?
The above graph shows that teen unemployment correlates with employment in general; stands to reason really as they're unskilled, inexperienced and only just entering the labour force.

Elexis wrote: »

I didn't put words in your mouth. You put Paul Krugman's words in your own mouth. You wrote that "as long as the minimum wage isn't set too high then its effects on employment are pretty much negligible." What's too high? You quote Krugman who states that $15 dollars is when unemployment will "probably" occur. Our current minimum wage rate is well below this so you have been clearly arguing that the Irish wage rate does not have negative effects or that those effects are entirely insignificant. You have even suggested that an increase in the wage can actually increase employment. Despite all your rhetoric about this being a "nuanced" issue, you yourself have come down sharply on one side of he argument.

You said:

Making the claim that our current rate has no effect on unemployment is to make a mockery of economics

Nowhere did I or Krugman say this. What Krugman said was that as long as the MW is kept within a sensible margin, it won't lead to significant job losses.

I fail to see how its causing unemployment, given that so few workers are on the minimum wage.
Of course I come down on one side of the issue: that as long the minimum wage isn't overly high, that the job effects are very low, which is offset by the rates paid to workers.

Elexis wrote: »

Lastly, I want to point out that the most organised interest which is in favour of a high minimum wage is not the International Organisation For Young And Unskilled Workers. It's the trade unions whose members do not earn anything close to the minimum wage. Why? Because with the minimum wage, unskilled workers are priced out of the market and the high earning unionised workers are able to remain insulated in many industries. Why do you think that a self-serving special interest whose members are not directly affected by a fluctuation in the minimum wage have for decades devoted large amounts of time and money to promote keeping the minimum wage as high as possible? I await Paul Krugman's response.

Are you honestly claiming that high-paid union workers support the minimum wage because if it wasn't there, then somehow the unskilled workers would threaten their jobs? Unless you think a burger flipper earning €5 is somehow going to threaten a construction worker or teacher.
Please explain this logic.

The last time I saw a union defending the minimum wage was because they were defending minimum wage workers who were members of the union
(the Davenport Hotel case) whereas minimum wage workers have their own union (I worked at Penneys which is a closed shop; all workers are members of Mandate)

donkey balls

SupaNova wrote: »

Someone close to home drives trucks, and one of the companies he works with is guilty of some of the above, but i still find the 80-100e for 15hrs would be a very unusual case. And the 4 to 5k sounds pretty exaggerated. The person i know took only a few lessons and passed the driving test, and done likewise to get a bus license. Where i agree is that some companies are playing the R word.

It's a long time since I sat my transport managers exams along with the hgv lessons but i will take a guess at the costs these days.
Car lessons with theory exams probely about 500e
C licence with provisonal licence plus cpc exams and test about 1500e
E-C licence again with another provisonal depending on the student 1500-2000e
ADR licence(haz chem) 750e plus another 180e for exam fees this is just a rough guess.
I recently got a call from a company asking me would I be interested in working for them 100e a day before tax some they told me that some days I might only work 4hrs but still get the 100e and there would be days that I could work upto 12/15hrs for the same wage,Now I have been involved in the industry for a long time both as a manager and driver and I know that there would never be a 4hour day.

SupaNova

If you want your claim to be taken seriously, you'd need to do more than just say what you 'bet' would happen. Please provide some data to support your opinion.

It was a hypothetical and you can ignore that part. But i still hold to the point that 16yrs is not a long time, and a study over the next 16 year period would be completely different.

Sources? (both for Krugman wanting to stoke the boom and for the Nobel Prize being a politicised award)

Source is Paul Krugman:
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?pagewanted=1

He received his award in 2008(despite his comments regarding a housing bubble). He is a defender of keynesian economics and deficit budgets, and liked politically for this. I can't prove politics played a part in his Nobel Prize, so i will leave others come to their own conclusions.

Lockstep

SupaNova wrote: »

It was a hypothetical and you can ignore that part. But i still hold to the point that 16yrs is not a long time, and a study over the next 16 year period would be completely different.

In your opinion, but you admit that it's entirely hypothetical (ie: opinion based)

Source is Paul Krugman:
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?pagewanted=1

An often quoted/seldom understood piece, both Krugman and Kling responded to it.

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SupaNova wrote: »

He received his award in 2008(despite his comments regarding a housing bubble). He is a defender of keynesian economics and deficit budgets, and liked politically for this. I can't prove politics played a part in his Nobel Prize, so i will leave others come to their own conclusions.

The Nobel Prize in Economic Science was also given to Friedman and Hayek so justifying it as 'political' is bizarre.

That said, you've admitted you can't prove it so I will disregard your claim.

Chnandler Bong

_Cato_ wrote: »

Get rid of the minimum wage altogether.

And what exactly would this solve?:rolleyes:

The restoration of the minimum wage and the reduction in employers PRSI just cancel each other out so this announcement is just a publicity stunt.

But it is good news for the people that agreed to the 1 euro cut as this will have to be restored.

The next step now should be to cut social welfare for those on the dole for a year or more, they are jobs out there (albeit mostly minimum wage jobs), the gap between social welfare and minimun wage has to be widend further, its too easy for people to stay at home and do nothing rather than doing an honest days work for they're money.

SupaNova

An often quoted/seldom understood piece, both Krugman and Kling responded to it.

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2

Pretty weak rebuttals, mainly being i was joking. He made similar comments throughout 01 and 02 in interviews and articles. I guess it was a long running joke.

Its a case of backtracking on comments that hurt his credibility. Although some will just take his word for it because he supports their point of view.

The Nobel Prize in Economic Science was also given to Friedman and Hayek so justifying it as 'political' is bizarre.

I don't know about Hayek but you could make a case for Friedman.

deise blue

SupaNova wrote: »

Ok , so you meant less attractive looking? why would you want that?


So you think if the min wage fell all the way to zero(in other words abolished) nobody would work?

"The labour " in this instance is common parlance for unemployment benefit not the labour market.

nesf

Marsden wrote: »

What about the unskilled workers who have to support their own families on €300 a week. You couldn't afford to rent the smallest apartment in the worst part of Dublin while still providing food for your kids on this wage.

The Family Income Supplement would substantially increase their wage depending on how many kids they had.

deise blue

nesf wrote: »

The Family Income Supplement would substantially increase their wage depending on how many kids they had.

I thought that this FIS only applied for 1 year .

Marsden

nesf wrote: »

The Family Income Supplement would substantially increase their wage depending on how many kids they had.

True but the family income supplement will only give them 60% off the difference of their income to €500.

So reducing the minimum wage saves the employers a few euro's but for those in receipt of FIS will be claiming more from the government.

A paltry €40 per week doesn't save much for any employer and it harsh for any business owner to moan about having to give this measly increment to their staff.

And as for big business's like Tescos, if they could survive on 20 staff a day in a store and they suddenly had more wages to pay out due to a decrease in minimum wage they would not up their staffing levels, but would simply increase their profit margins.

goose2005

If we let "the market" set the minimum wage, all that means is that the rich and powerful get more so, and the poor and powerless less so. No company goes bankrupt over having to pay such small sums. Even if restored to 8.65, it's still smaller than the UK, Benelux, Australia, and not much higher than France, Canada or NZ, and all of those countries have better public services and lower prices (can recall reading that Irish groceries were the 2nd most expensive in the world behind Norway). Cutting a euro off shelf-stackers will make no difference, except to them and their families.

Tea_Bag

when will the minimum wage be restored? anyone got a rough date? thanks

passive

goose2005 wrote: »

If we let "the market" set the minimum wage, all that means is that the rich and powerful get more so, and the poor and powerless less so. No company goes bankrupt over having to pay such small sums. Even if restored to 8.65, it's still smaller than the UK, Benelux, Australia, and not much higher than France, Canada or NZ, and all of those countries have better public services and lower prices (can recall reading that Irish groceries were the 2nd most expensive in the world behind Norway). Cutting a euro off shelf-stackers will make no difference, except to them and their families.

How is it lower than the UK?
" * the main rate for workers aged 21 and over: £6.08"

And I guarantee you groceries in Australia cost significantly more than in Ireland. There are like 2 major supermarket chains with next to no competition.

And Eurostat says our minimum wage is slightly higher than Benelux too... Where did you get your stats from?

deise blue

passive wrote: »

How is it lower than the UK?
" * the main rate for workers aged 21 and over: £6.08"

And I guarantee you groceries in Australia cost significantly more than in Ireland. There are like 2 major supermarket chains with next to no competition.

And Eurostat says our minimum wage is slightly higher than Benelux too... Where did you get your stats from?

Eurostat determine our minimum wage as being the 2nd highest in the EC but also point out that when minimum wages are adjusted for purchasing power ( one of the most important criteria in determining a countries minimum wage ) we do drop to 6th behind the UK.

Dannyboy83

I prefer the free market idea behind things, but our government don't subscribe to that system, so it's a pointless discussion in this vein.

I'm in favour of this decision.
Reordering the minimum wage only makes sense if you reorder everything else along with it - which they failed to do.
Lowering the minimum wage and continuing to pay astronomical wages to other areas of the economy simply creates an underclass and failing to reform social welfare sends out the message that there is no point in work.

I know of one company in Cork who simply cannot get Irish people to work for them, they pay minimum wage and the job is a tough one, the Irish people quit after less than a week. What have they to gain by working there and being taxed, when they make almost the same from the dole?

Were it not for the Polish and Lithuanians, that company would already be bankrupt.(flipside of the debate which you never heard about in these discussions)

dan_d

It's a good move from a political point of view - as in, they made a promise and they're following through.

From an economic and practical point of view, I don't think it's a good move. It does nothing for our competitiveness, or the many struggling businesses out there. I think it probably should have stayed at the lower price for the next while anyway.It doesn't make much sense to raise it now, from that point of view.

passive

deise blue wrote: »

Eurostat determine our minimum wage as being the 2nd highest in the EC but also point out that when minimum wages are adjusted for purchasing power ( one of the most important criteria in determining a countries minimum wage ) we do drop to 6th behind the UK.

Are you sure?

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:MW_PPS_January_2011.png&filetimestamp=20110210093304 I see us as fifth, a tiny bit ahead of the UK. In a scale on which we're in the absolute top group... Interestingly, doing the maths for that, that graph seems to be with the 7.65 rate from January 2011?

deise blue

passive wrote: »

Are you sure?

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:MW_PPS_January_2011.png&filetimestamp=20110210093304 I see us as fifth, a tiny bit ahead of the UK. In a scale on which we're in the absolute top group... Interestingly, doing the maths for that, that graph seems to be with the 7.65 rate from January 2011?

We were 5th , just slightly ahead of the UK prior to the € 1 reduction & of course the UK have recently confirmed that the minimum wage is to be increase by 2.5 % from October next .

SupaNova

I prefer the free market idea behind things, but our government don't subscribe to that system, so it's a pointless discussion in this vein.

I'm in favour of this decision.
Reordering the minimum wage only makes sense if you reorder everything else along with it - which they failed to do.
Lowering the minimum wage and continuing to pay astronomical wages to other areas of the economy simply creates an underclass and failing to reform social welfare sends out the message that there is no point in work.

I know of one company in Cork who simply cannot get Irish people to work for them, they pay minimum wage and the job is a tough one, the Irish people quit after less than a week. What have they to gain by working there and being taxed, when they make almost the same from the dole?

Were it not for the Polish and Lithuanians, that company would already be bankrupt.(flipside of the debate which you never heard about in these discussions)

Interesting points. But the wage increases and social welfare increases allowed on the back of a bubble cannot be sustained. If wages and welfare fell, the price of goods and services would have to follow making the pain less severe. I guess the big fear is that if wages fell prices would not follow.

The dole has to fall as well, so its not worth it to refuse a job and sit at home. That attitude of why work all week for slightly more than the dole wont do us any favors(its the attitude of long term "dolers"). No-one wants to drop their standard of living but they have to.

hatrickpatrick

Cillerz wrote: »

I'm completely against the minimum wage price floor. Okay maybe in today's terms it might actually be the right action. But in general I just don't see any good sides to it. The price should be left to the free market - let companies set their own wages. With a minimum wage, more people are demanding work and less are supplying it, leading to unemployment.

Ever heard of Foxconn, by any chance?
The minimum wage exists for a reason. It exists to prevent sweatshop labour.