An ultra-conservative's views on this and that

19 June 2015

Debunking the feel-good progressivism of the minimum wage

A blog I frequent has the requisite couple of "progressives" who challenges the blog's author on a regular or semi-regular basis.

Yesterday, the author used the example of a plumber to illustrate how wages should be set by market forces, and not by some bumbling government bureaucrats.  The gist of the post was how the plumber is a skilled laborer, one whom can charge more for the service of fixing a leaky pipe than a fast-food cashier or burger-flipper.

Enter Dog Gone and her cognitive dissonance:

What a bogus argument you posit.
First of all, plumbers earn more or less based on their level of expertise and licensing – which is largely the case due to their belonging to unions, not just that they are skilled.
OK, not all plumbers are unionized.  And even the ones that are, in fact, skilled laborers:  They spend years learning the trade, be it from vocational schooling, apprenticeship, or some combination thereof.  They have to acquire the skills somehow.  When they take their licensing exams, or whatever plumbers do to get licensed, they have spent considerable time learning their trade.  The licensing just says that knowledgeable people in their field have evaluated the plumber and deemed him or her as competent enough to upgrade your plumbing without flooding the basement.

That has no impact on people earning a minimum wage, as for example wait staff or other jobs, where due to job availability the workers in point of fact have skill levels that far exceed the requirements of those jobs. 
So you admit that the job requirements are low.  In other words, the job is a low-skill or unskilled labor.  Answer me this:  When an overqualified person takes a job, does the employer pay for the employee's skills, or the work product they produce?

There is in fact no justification for anyone to work a 40 hour work week, and not make a wage on which they can live. 
Which is why said person should learn a marketable skill and/or gain experience so they can justify the higher wage he or she earns, in line with the quantity and quality of the work product he or she outputs.

To contrast the base wage with other jobs is falsely to equate apples and oranges.
To compare low-skill and unskilled jobs with high-skill jobs is the false equivalency.

Over half a million or more workers earning minimum wage have college degrees — like you do. They are underemployed. Half are women, and half are over the age of 24. It is not accurate to characterize these jobs as entry level minimum skill any longer. Rather the current minimum wage, when adjusted for purchasing power (inflation etc) is LOWER than it was in the 1960s.
Why do progressives always whine about unfair life is?  Did they not hear or heed that lesson from their parents?  Yes, it sucks that people with college degrees are flipping burgers.  But I would ask what sort of degrees these people have that they can't effectively market themselves in an economic downturn.  I would ask if they had a plan "B" for when their niche degree failed to land them a good-paying job.  My ex-girlfriend sat for and passed the Minnesota Bar Exam in 2007, along with 600 other new lawyers.  She quickly learned that in the legal business, it's not about what you know, but who.  She clerked for a judge for a lot longer than is common before securing a junior prosecutor position, or associate position at a law firm.  Ultimately, she moved to Texas and is working as an insurance agent now, a far cry from her goal of being an intellectual property attorney.  She learned that in Minnesota, with some 500 new lawyers being admitted to the bar every six months, that supply simply outstripped demand for her skill set.

Conservative policies since then are largely responsible for the stagnation in wages and the increase in wealth and income inequality.
 Come now, you don't get to make blanket statements and then not back them up.  How are conservative policies at fault?  The sub-prime mortgage fiasco is partly the responsibility of reckless lending, encouraged by a meddlesome government that thinks it's unfair that some people can't buy houses.  Again, life is not fair.  In its attempt to create fairness, both the government "watchdogs" and predatory/reckless lenders not only failed to help people buy houses and stay in them, but the policies resulted in a sudden dumping of real estate on the market.  Great if you're a first-time home buyer with the means, lousy if you're a homeowner responsibly paying his or her mortgage, only to suddenly end up upside-down on the mortgage when your house loses a huge chunk of its value.

If you really believe in capitalism and free enterprise, you would demand that employers pay an adequate wage.
Who sets this adequate wage?  Who defines what adequate is?  The dollar value?  What criteria are used to determine this value?  What mathematical formula?  How much emotion goes into it?

The determination of this value, I've always felt, is a contractually-negotiated number between employee and employer.  That's what capitalism is.  That's what free enterprise is.  What makes the enterprise free is that the employer is free to decide what wage he or she is willing to pay to an employee for the work product, and the employee is free to negotiate for more or seek employment elsewhere.

Because when they do not, instead the balance of what is required comes out of your pocket, just a different pocket, in the form of health care subsidies, nutritional supplement subsidies,and other subsidies that we ALL pay towards. There is no legitimate reason that someone working at Walmart, making them quite large profits, should not be paid adequately, but instead have to rely on food stamps to make ends meet, for example.
Every time the minimum wage is raised, the employers operating on the thin profit margins have a couple of options:  Raise their prices, which endangers the business' life expectancy; Fire employees to cushion against the increased labor cost (and likely replace the employees with automation); or close their doors.  In two of the three scenarios, employees end up as beneficiaries of those same subsidies you're trying to get them off of, only now there's more of them.

We need to require that businesses operate with adequate wages. If they can’t then they need to revise their business model to pay their employees.
Wow, quite the arrogant statement.  What makes you an authority on how a specific business runs, and how many local, state, and federal laws they're required to comply with to stay in business?  But I'm not surprised:  Progressives are enigmatic mixture of arrogance with benevolence (in spending other people's money that is).

And before yo go off on your usual whine about teens and entry level jobs, other countries have show a better solution than stiffing workers on decent pay; they offer a ‘junior’ minimum wage for those who are teens, making a more competitive job market for people in those age brackets, without stiffing adults.
Other countries may be able to do that, but in this country, that's called age discrimination.  If a fast-food joint has a choice between a teen and a senior citizen, which do they hire?  The senior citizen who's likely to have a more business-like attitude and work ethic?  Or the teenager with the energy to work the longer or harder shifts and ability to learn how to more quickly work the cash register?

It’s been pretty clear that higher minimum wages result in economic growth and better stability, and that many businesses, like Costco, are thriving while doing so, even when they are in direct competition for the low-ballers like Walmart.
The thing is they are not in direct competition.  Wal-Mart and Costco cater to different groups of customers.  Here is an excellent dissection of that false equivalency, courtesy of Forbes:  http://www.forbes.com/sites/lauraheller/2014/06/29/walmart-and-costco-are-not-the-same/

No one wins with low minimum wages.
Well, an employer who requires unskilled or low-skill labor does.

It is another failure of conservative economic policy.
Paying people what they're actually worth, instead of what someone arbitrarily decides they're worth, is a failure?

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