From: Blunderov (squooker@mweb.co.za)
Date: Sat Oct 25 2003 - 17:12:44 MDT
> -----Original Message-----
> From: owner-virus@lucifer.com [mailto:owner-virus@lucifer.com] On
Behalf
> Of David Lucifer
> Sent: 25 October 2003 2229
> To: virus@lucifer.com
> Subject: virus: Re:Minimum wage
>
>
> [Blunderov] I am interested in your surprising, to me, assertion that
the
> minimum
> wage is not a good idea. Would you mind elaborating? (I must confess I
> don't at all know what the original purpose of the legislation was.)
>
> Am I mistaken in assuming that it was to guarantee a minimum standard
of
> living for those fortunate enough to be employed?
>
> [Lucifer] I think that was the intention. Nice idea, but the policy is
> fatally flawed.
>
> In general, buyers want to minimize the price they pay for goods or
> services while sellers want to maximize the price they can get for
same.
> This is true in labour markets as well. The price should be agreed
upon by
> both sides of the contract, not a 3rd party such as the gov't.
>
> The minimum wage does not raise the wage of those workers who for
whatever
> reason would sell their labour at less then minimum wage, it just puts
> them out of work. Employers won't magically come up with the money to
pay
> more than they think a position is worth, they just do without or load
the
> work on to other people. Everyone involved is worse off than they
would be
> if they were allowed to agree on a wage.
>
> Imposing a minimum wage makes about as much sense as making it illegal
to
> volunteer.
[Blunderov1]
I can see your point to some extent. But I'm troubled by the thought
that the market forces could, and probably would, be skewed by employers
colluding with each other to keep wages down - not in order to provide
the cheapest goods and services, but to maximize their own profits.
In short, does your argument not contain the assumption that the law of
supply and demand would be able to operate in a free and unbiased way if
a minimum wage was abolished?
And if this is in fact not so, ought (a value call, I know) not
governments to err on the side of the weak rather than the strong?
From my own experience I can say that the law of supply and demand does
not always operate in the fair and reasonable way that its prophets,
excuse the pun, would have us believe. Here in SA we have quite volatile
fluctuations in the price of fuel. When it is expensive it has the
effect, of course, of driving producer costs up. Yet when it comes down,
somehow the prices do not decrease to the quite the same levels that
would have prevailed had the input costs not risen in the first place.
This has the effect of consistently ratcheting the prices inexorably
upwards. Somehow the rich always do get richer.
I suppose the central question is whether it is true that more people
would have jobs without a minimum wage in place than with it? Or would
it be necessary, to this end, to implement a maximum working hours per
day law instead? In which case we would be back at square one -
government intervening in the market.
Perhaps one of the most important effects of a minimum wage provision is
that it imbeds, however tenuously, a concept of fair play into the
marketplace that might not otherwise exist?
I am not convinced that a completely unfettered free-market system is
what's best for human beings - I feel that markets should serve humans
rather than the other way round. (But I must be careful not to make a
straw man here - I concede that you did not advocate an unfettered
free-market system.)
A quotation, or something quite close, from the Bible (God damn the
pusher man) "Thou shalt not muzzle the ox that treadeth the corn". In an
unfettered free-market system I cannot help but suspect that this would
be a standard procedure.
Thanks for elaborating your point of view. It certainly challenged me to
think critically about something that I had never questioned before.
Best Regards
Blunderov
PS Would you consider a labour union to be a 3rd Party?
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