The blunder of minimum wage

realitykeeper

The problem with price fixing is that the commodity that is being price fixed is eventually rendered obsolete and it is therefore either no longer used or it has to be sold very cheaply. In other words, people will simply not pay the price.

We have seen this already with the flight of manufacturing jobs to China where labour is not price fixed. Of course some will argue that in the west, the quality of this particular commodity is very good and so it is worth the higher price but this is not always the case so the low quality labour in the west is a product which is only purchased with great reluctance in the private sector and at great expense in the public sector where tax payers money is seen as no object.

Am I wrong?

Victor

Milk used to be price fixed - it didn't stop people drinking it.

CalamariFritti

It's a social rather than an economical measure. It makes sense to me not allowing a situation where market pressure leaves people in full employment below the poverty line needing second and third jobs just to keep their head above water. Unbridled market sounds good to some but when its all said and done you can't just leave the people on the lowest rung of the jobs ladder to the sharks.

Greybottle

If you pay people the bottom rate so that they can compete with manufacturing jobs in China, you remove the disposable income that allows them to buy the manufactured products in the first place.

A decent minimum (or even better, a living) wage has an enormous amount of advantages and has contributed greatly to our economy.

Jawgap

realitykeeper wrote: »

The problem with price fixing is that the commodity that is being price fixed is eventually rendered obsolete and it is therefore either no longer used or it has to be sold very cheaply. In other words, people will simply not pay the price.

We have seen this already with the flight of manufacturing jobs to China where labour is not price fixed. Of course some will argue that in the west, the quality of this particular commodity is very good and so it is worth the higher price but this is not always the case so the low quality labour in the west is a product which is only purchased with great reluctance in the private sector and at great expense in the public sector where tax payers money is seen as no object.

Am I wrong?

Yes.....yet again.

It's a complete non-sequitur......price fixing doesn't contribute to obsolescence, social, technical, economic and political change does. Assembly type jobs might shift to the lowest wage regions, but skilled manufacturing is more rooted. As an economy we don't want the low-skilled assembly jobs anyway.

CalamariFritti

We are on a development where our technological advances will ultimately lead to a society where stuff will be done for us. It will be eventually impossible to measure someone by what they produce. Automation, IT, robotics, AI all that good stuff is making this happen. We are still at an early-ish stage of that, but yet we're already far enough into it that these developments threaten to warp the fabric of our production and consumption society. And we can't just declare sections of our society obsolete. Its not just the right thing to do, which it is, but a more mundane reason is that it keeps social peace, it keep society intact. Minimum wage is a lever of that early-ish stage.

Edit: Another even more mundane reason is - and someone already said it - you also need people who can afford to consume all that stuff that we're making cheap. What good is it to our great corporates if they can make stuff for nothing but nobody consumes it? Again, things would simply break down.

realitykeeper

Victor wrote: »

Milk used to be price fixed - it didn't stop people drinking it.

Milk producers are now losing a lot of money because they cannot get a good price as this documentary shows.
https://www.youtube.com/watch?v=7KPWLSVn0ko

realitykeeper

CalamariFritti wrote: »

It's a social rather than an economical measure. It makes sense to me not allowing a situation where market pressure leaves people in full employment below the poverty line needing second and third jobs just to keep their head above water. Unbridled market sounds good to some but when its all said and done you can't just leave the people on the lowest rung of the jobs ladder to the sharks.

Taking your first point about it being a social rather than an economic measure, that is fine but unfortunately the social measure has economic consequences which in turn will lead to social consequences.

realitykeeper

Greybottle wrote: »

If you pay people the bottom rate so that they can compete with manufacturing jobs in China, you remove the disposable income that allows them to buy the manufactured products in the first place.

A decent minimum (or even better, a living) wage has an enormous amount of advantages and has contributed greatly to our economy.

Not so. Low pay makes things possible while high pay for doing nothing is only great as long as it lasts but that cannot continue.

This notion that high pay is good is a bit silly. If the government gave everyone in the country a thousand euro, some people would think that was good even though the government would have to borrow the money in order to do that. It is possible that everyone in the country thinks that everyone else will pay the money back but they will somehow be exempt. Its a bit like when Irish people were bidding against each other and pushing property prices higher while German investors sat back and watched their investments grow. Not that I begrudge the Germans their profits but the Irish did come out of it looking rather foolish.

As for not being able to afford stuff, that is not a problem, those who can afford it will buy it and the rest would go to the newly rich countries like China.

realitykeeper

Jawgap wrote: »

Yes.....yet again.

It's a complete non-sequitur......price fixing doesn't contribute to obsolescence, social, technical, economic and political change does.

But price fixing labour does bring about social, technical, economic and political change. China is no longer manufacturing only basic items but they have also been doing high tech stuff for a long time now and they are beginning to send their basic manufacturing to Africa. Europe will be left with nothing.

Jawgap wrote: »

Assembly type jobs might shift to the lowest wage regions, but skilled manufacturing is more rooted. As an economy we don't want the low-skilled assembly jobs anyway.

The ruins of nineteenth century factories in the north of England are a sad reminder of byegone glory. The dole is only good as long as sterling remains a hard currency and those days are numbered. My concern is that people in this part of the world are so "entitled" that they will not understand the need to work hard at menial jobs, they will not make the connection between their poverty and their greed.

alias no.9

realitykeeper wrote: »

The problem with price fixing is that the commodity that is being price fixed is eventually rendered obsolete and it is therefore either no longer used or it has to be sold very cheaply. In other words, people will simply not pay the price.

We have seen this already with the flight of manufacturing jobs to China where labour is not price fixed. Of course some will argue that in the west, the quality of this particular commodity is very good and so it is worth the higher price but this is not always the case so the low quality labour in the west is a product which is only purchased with great reluctance in the private sector and at great expense in the public sector where tax payers money is seen as no object.

Am I wrong?

Labour rates in China are in fact set by government. It's so rigid that when western companies apply maximum limits to working hours as a so called ethical measure, it usually results in difficulties in retaining staff because the only way they can earn more money is by working more hours so they move to a company that lets them work as many hours as they can.

ZeroThreat

realitykeeper wrote: »

But price fixing labour does bring about social, technical, economic and political change. China is no longer manufacturing only basic items but they have also been doing high tech stuff for a long time now and they are beginning to send their basic manufacturing to Africa. Europe will be left with nothing.



The ruins of nineteenth century factories in the north of England are a sad reminder of byegone glory. The dole is only good as long as sterling remains a hard currency and those days are numbered. My concern is that people in this part of the world are so "entitled" that they will not understand the need to work hard at menial jobs, they will not make the connection between their poverty and their greed.

The past 100 years or so in the 'west' were a minor blip in the long term socio-economic history of civilization (in my opinon).

We're merely returning gradually to the norm of a few elite 'lords' at the top, while the vast majority return to becoming the uneducated and unwashed at the bottom, the relatively affluent middle will disappear to be replaced in the pyramid with a smaller group of 'enforcers' who get a few crumbs from milords table in return for bludgeoning the peasants into submission.

Princess Consuela Bananahammock

realitykeeper wrote: »

The problem with price fixing is that the commodity that is being price fixed is eventually rendered obsolete and it is therefore either no longer used or it has to be sold very cheaply. In other words, people will simply not pay the price.

We have seen this already with the flight of manufacturing jobs to China where labour is not price fixed. Of course some will argue that in the west, the quality of this particular commodity is very good and so it is worth the higher price but this is not always the case so the low quality labour in the west is a product which is only purchased with great reluctance in the private sector and at great expense in the public sector where tax payers money is seen as no object.

Am I wrong?

Yes, highlighted. The price of a product bears no relation to its importance.

realitykeeper

alias no.9 wrote: »

Labour rates in China are in fact set by government. It's so rigid that when western companies apply maximum limits to working hours as a so called ethical measure, it usually results in difficulties in retaining staff because the only way they can earn more money is by working more hours so they move to a company that lets them work as many hours as they can.

That makes perfect sense. If a person wants to work longer hours, that is their right. Western companies operating in China are still beholden to some extent to leftist forces in the west who try dictate that they should limit the hours of their employees. The solution would be for western business people to sever all ties to the west then remove the restrictions on hours employees can work.

realitykeeper

ZeroThreat wrote: »

The past 100 years or so in the 'west' were a minor blip in the long term socio-economic history of civilization (in my opinon).

We're merely returning gradually to the norm of a few elite 'lords' at the top, while the vast majority return to becoming the uneducated and unwashed at the bottom, the relatively affluent middle will disappear to be replaced in the pyramid with a smaller group of 'enforcers' who get a few crumbs from milords table in return for bludgeoning the peasants into submission.

You are right. That is obviously what the people want and it looks like they are going to get it.

realitykeeper

Princess Consuela Bananahammock wrote: »

Yes, highlighted. The price of a product bears no relation to its importance.

Important things are desirable but not at any price. Alternatives are sought when prices are fixed. Technology is a possible response to a price fixed labour market and closing a business or moving to a low pay economy are others. (Unless you live in Communist Venezuela where the state will take your business rather than let you close it).

It is silly to think high pay solves anything because everything purchased will be that much more expensive. Besides, looking at the long term trends, house prices have risen faster than pay levels and accelerating labour costs would lead to an even faster acceleration of house prices. Paying less is a very very good idea even if it can only be done by gradually decreasing pay over the long term.

uptherebels

realitykeeper wrote: »

That makes perfect sense. If a person wants to work longer hours, that is their right. Western companies operating in China are still beholden to some extent to leftist forces in the west who try dictate that they should limit the hours of their employees. The solution would be for western business people to sever all ties to the west then remove the restrictions on hours employees can work.

your confusing wanting to with having to. A guy in china working 80+ hours a week so that he can afford some thing approaching a comfortable life isn't what we should be aiming for.

Leftist forces? I can work as many hours as i want in a week. I just cant be forced to. Again this is a bad thing?

why would they cut ties with the west thats where they sell all their high end/ high margin products.

realitykeeper

uptherebels wrote: »

your confusing wanting to with having to. A guy in china working 80+ hours a week so that he can afford some thing approaching a comfortable life isn't what we should be aiming for.

Leftist forces? I can work as many hours as i want in a week. I just cant be forced to. Again this is a bad thing?

why would they cut ties with the west thats where they sell all their high end/ high margin products.

But you said yourself that Chinese workers were leaving companies that restricted their hours to work in companies that don`t. So they are choosing to do that. If people in the west truly cared about the length of the working week in China, they would complete, thereby offering employers the option of manufacturing more in the west and less in China. As it is, there is a great imbalance in the world`s economy because of the laziness and greed of "entitled" westerners.

Stheno

mod not a work problem moved to economics

Realitykeeper do not post such threads in work and jobs again

uptherebels

realitykeeper wrote: »

But you said yourself that Chinese workers were leaving companies that restricted their hours to work in companies that don`t. So they are choosing to do that. If people in the west truly cared about the length of the working week in China, they would complete, thereby offering employers the option of manufacturing more in the west and less in China. As it is, there is a great imbalance in the world`s economy because of the laziness and greed of "entitled" westerners.

But are they going to work more hours because their hourly rate is so low?
They do high value adding manufacturing here in the west - medical devices for example with the same companies having the low value adding operations in the east.
Westerners aren't lazy just not willing to work for pennies and in most cases not endless hours every week.
Just out of interest what job do you do and how much of your wage are you offering up so as to "compete"

Princess Consuela Bananahammock

realitykeeper wrote: »

Important things are desirable but not at any price. Alternatives are sought when prices are fixed. Technology is a possible response to a price fixed labour market and closing a business or moving to a low pay economy are others. (Unless you live in Communist Venezuela where the state will take your business rather than let you close it).

This doesn't deal with your initial staement that "the commodity that is being price fixed is eventually rendered obsolete". It may even be true in some cases, but is it universal? And if so, can you prove causation?

It is silly to think high pay solves anything because everything purchased will be that much more expensive. Besides, looking at the long term trends, house prices have risen faster than pay levels and accelerating labour costs would lead to an even faster acceleration of house prices. Paying less is a very very good idea even if it can only be done by gradually decreasing pay over the long term.

Are you suggesting 0% inflation here?

realitykeeper

uptherebels wrote: »

Just out of interest what job do you do and how much of your wage are you offering up so as to "compete"

Lets just say whenever my co workers ballot for a pay rise, I always vote against it but I accept the pay rise if it comes (I am a pragmatist not a martyr). But please, lets not personalize this.

realitykeeper

Princess Consuela Bananahammock wrote: »

This doesn't deal with your initial staement that "the commodity that is being price fixed is eventually rendered obsolete". It may even be true in some cases, but is it universal? And if so, can you prove causation?



Are you suggesting 0% inflation here?

Where markets are driven by demand (as opposed to sentiment) you get a good measure of an item`s true value. This is one of the reasons I am opposed to casino capitalism. It seems to me that an awful lot of the speculation around things like property is often facilitated and even encouraged by state regulators rather than being constrained by the regulators.

Regarding the 0% inflation, have you ever thought about why the central bankers say 0% inflation and deflation are undesirable? Inflation is a way of paying off debt in an economy easily. My preference however would be for debt to be repaid the honest way, through hard work and restraint. Trying to use inflation to deflate debt is wrong and has repercussions which can lead to trade wars or worse.

Geuze

Low employment in Ireland is not due to the min wage.

Abolishing the min wage would not lead to a surge in employment.

Other factors cause low employment.

Princess Consuela Bananahammock

realitykeeper wrote: »

Where markets are driven by demand (as opposed to sentiment) you get a good measure of an item`s true value. This is one of the reasons I am opposed to casino capitalism. It seems to me that an awful lot of the speculation around things like property is often facilitated and even encouraged by state regulators rather than being constrained by the regulators.

Regarding the 0% inflation, have you ever thought about why the central bankers say 0% inflation and deflation are undesirable? Inflation is a way of paying off debt in an economy easily. My preference however would be for debt to be repaid the honest way, through hard work and restraint. Trying to use inflation to deflate debt is wrong and has repercussions which can lead to trade wars or worse.

Again, you're not proving your statement. How to obtain a good measure of something's value is not the statement you made in you opening post. You haven't mentioned the causes of or likelyhood of obsoletion of labour. And it's nothing to do with speculation.

dr.fuzzenstein

realitykeeper wrote: »

Lets just say whenever my co workers ballot for a pay rise, I always vote against it but I accept the pay rise if it comes (I am a pragmatist not a martyr). But please, lets not personalize this.

Oh no, let's.
Would you be happy to work in these conditions?

The investigator claimed that workers earn about $1.85 (AU$2.55 or £1.20) per hour and pull significant overtime hours to make enough money to cover living expenses. The report further claimed that the standard shift was nine hours a day, but that starting in September staff worked an additional minimum of 20 hours of overtime each week, usually split between an extra two hours each weekday and one 10-hour shift on Saturdays. With overtime accounted for, the factory's workers earn about $753 (AU$1,045 or £490) in monthly wages.

https://www.cnet.com/news/low-wages-and-long-hours-still-persist-at-iphone-factory-claims-labor-group/

Should this be the standard in a Western country? How would you go about bringing us down to the level of China? How does that work for goods where cost isn't flexible? Only Ireland or will you convert the rest of Europe too?

realitykeeper

dr.fuzzenstein wrote: »

Oh no, let's.
Would you be happy to work in these conditions?



https://www.cnet.com/news/low-wages-and-long-hours-still-persist-at-iphone-factory-claims-labor-group/

Should this be the standard in a Western country? How would you go about bringing us down to the level of China? How does that work for goods where cost isn't flexible? Only Ireland or will you convert the rest of Europe too?

A business either makes economic sense or it does not. Happiness in the workplace, pay and conditions etc are all dependent on whether or not the business can be sustained. This is why I have never understood why trade union people are appointed to boards of arbitration such as the Labour Court. It is doubly outrageous that such people get paid at the taxpayers expense when really, they have no business being there.

Standards cost money and must therefore be economically feasible. Ireland and Europe will pay dearly for our avarice. The enormous economic stimulus which came in the wake of the great recession was a once off. Next time, it will not work and the reality of that will be unimaginable for our population which is so spoilt.

Hakanx

I found a minimum wage job in England. How much should I charge at least? I don't have clear information about this.