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Mythology of the Minimum Wage
Ludwig von Mises Institute ^ | May 03, 2006 | DW MacKenzie

Posted on 05/03/2006 12:06:45 PM PDT by Marxbites

The economic case against minimum wage laws is simple. Employers pay a wage no higher than the value of an additional hour's work. Raising minimum wages forces employers to dismiss low productivity workers. This policy has the largest affect on those with the least education, job experience, and maturity. Consequently, we should expect minimum wage laws to affect teenagers and those with less education. Eliminating minimum wage laws would reduce unemployment and improve the efficiency of markets for low productivity labor.

(Excerpt) Read more at mises.org ...


TOPICS: Business/Economy; Constitution/Conservatism; Government; Politics/Elections
KEYWORDS: beltway; congress; dc; economics; fairness; finance; minimumwage; myth; senate; senator; washington
When will the DC pinbrains ever get it right?

Senator Turbin is a prime example.

1 posted on 05/03/2006 12:06:48 PM PDT by Marxbites
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To: Marxbites

If the minimum wage is the key to getting people out of poverty in a land of plenty, why don't these bleeding heart liberals propose to raise it to $100 an hour?


2 posted on 05/03/2006 12:08:57 PM PDT by libertarianPA (http://www.amarxica.com)
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To: libertarianPA

" $100 an hour"

I need at least 1 million dollars a year to live well, so I propose that be the minimum wage.


3 posted on 05/03/2006 12:10:26 PM PDT by dynachrome ("Where am I? Where am I going? Why am I in a handbasket?")
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To: libertarianPA

Better yet, why are they and their offices NOT subject to the minimum wage (not that anyone in a Congressional office makes less than that mind you . . .)


4 posted on 05/03/2006 12:10:50 PM PDT by ConservativeBamaFan (Ted Kennedy's car has killed more people than Dick Cheney's quail gun.)
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To: dynachrome

Be prepared to pay $100 for a McDonald's cheesburger.


5 posted on 05/03/2006 12:13:21 PM PDT by Extremely Extreme Extremist (FR's most controversial FReeper)
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To: ConservativeBamaFan

I like the system in the Texas legislature... amateur politicians that meet once every 2 years, and receive a salary of $7,200.


6 posted on 05/03/2006 12:14:41 PM PDT by Lunatic Fringe (http://ntxsolutions.com)
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To: Marxbites

It's considerably more than the minimum wage - add required benefits and cost of OSHA regulations to the mix and you'll find the wage itself is only a minor part of the problem. The problem is the government tampering with the market for "higher" motives.


7 posted on 05/03/2006 12:15:27 PM PDT by Billthedrill
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To: Extremely Extreme Extremist
Be prepared to pay $100 for a McDonald's cheesburger.

Expect a lot more automation in the production of a McDonald's cheeseburger.

8 posted on 05/03/2006 12:16:00 PM PDT by sionnsar (†trad-anglican.faithweb.com† | Iran Azadi 2006 | SONY: 5yst3m 0wn3d - it's N0t Y0urs)
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To: Marxbites
>Mythology of the Minimum Wage



Remember that one
where Minimum Wage becomes
a swam to seduce

Tyndareus'
wife? Remember what that caused?
Nothing but problems . . .

9 posted on 05/03/2006 12:18:35 PM PDT by theFIRMbss
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To: Marxbites
Raising the min. wage is stupid and only hurts those that proponants claim to want to help.

Most earning min. wage are teenagers or semi retarded persons working in "Charity" type jobs like Goodwill ind.

The only ones that benefit from raising it are unions that get an automatic raise when it goes up.

We need to make every state a "right to work" state, and outlaw the communist unions.
10 posted on 05/03/2006 12:22:49 PM PDT by Beagle8U (Juan Williams....The DNC's "Crash test Dummy" for talking points.)
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To: libertarianPA

If raising the minimum wage was the key then why didn't it work the other 40 times it has been done.


11 posted on 05/03/2006 12:24:52 PM PDT by TASMANIANRED (The Internet is the samizdat of liberty..)
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To: Beagle8U
Most earning min. wage are teenagers or semi retarded persons working in "Charity" type jobs like Goodwill ind.

Well said. The last info I read said that only 7% of minimum wage earners are heads of families and the sole source of income. So, we're supposed to inflate prices and retard job creation for 7% of all minimum wage earners???
12 posted on 05/03/2006 12:27:49 PM PDT by libertarianPA (http://www.amarxica.com)
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To: Marxbites

Great article!


13 posted on 05/03/2006 12:34:26 PM PDT by Frank_2001
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To: ConservativeBamaFan
Better yet, why are they and their offices NOT subject to the minimum wage (not that anyone in a Congressional office makes less than that mind you . . .)

Actually, I bet there are a fair number of interns and campaign staff and volunteers that work for free. How about members of congress be required to pay the minimum wage for all of these people WITHOUT the option of raising their congressional operating budgets to pay for it (just like a business can't simply wave a wand and raise revenue to pay for increased minimum wage). Let's see how fast those ranks shrink and how loud the politicians scream when they can't afford to run a campaign or a congressional office.

14 posted on 05/03/2006 12:36:25 PM PDT by dl5192
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To: libertarianPA
What I stated was a fact (as you noted) and charity type jobs depend on ..well.. charity.

Increase the costs and you are limited by the amount of charity money you have.

Some of those that had a job that helped their feeling of self worth, will lose their job.
15 posted on 05/03/2006 12:36:34 PM PDT by Beagle8U (Juan Williams....The DNC's "Crash test Dummy" for talking points.)
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To: Marxbites
It's amazing to me that the libs think some magic number will make the value of entry level labor worth more. Money is just a symbol, it lets you trade your labor for an amount of goods and services. Your labor is worth what someone will trade in goods and services for your labor. My guess is minimum wage earners will always have trouble supporting a family on their salary, won't be purchasing Tiffany diamonds, etc, because no one would directly give someone with no skills that level of compensation. Setting some "magic number" you have to pay them means either inflation rises (so they get the same level of goods and services) or nobody hires them (because nobody will trade that level of goods and services for low skill labor.) Rocket science this isn't.
16 posted on 05/03/2006 12:39:30 PM PDT by justanotherfreeper
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To: Marxbites

The minimum wage is the new slavery.


17 posted on 05/03/2006 12:41:16 PM PDT by Phlap (REDNECK@LIBARTS.EDU)
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To: justanotherfreeper

Good on ALL of you! Thanks for your considerable logic.

Yesterday I posted an article on the Rockefeller created CFR, and how they've positioned their members in every Whitehouse & Cabinet (ex-Ronnie) since WWII, and all I got was tinfoil hat crowd flames and the idiot treatment.

What gives here at FR, too few with too little self serving non-public education???


18 posted on 05/03/2006 12:48:02 PM PDT by Marxbites (Freedom is the negation of Govt to the maximum extent possible. Today, Govt is the economy's virus.)
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To: Marxbites

Congress should enact a law that mandates no person shall receive public assistance in any case in excess of 80% of minimum wage, including benefits, regardless of family status. No one on the dole should ever do better than someone who at least goes to work every day.


19 posted on 05/03/2006 1:07:51 PM PDT by AbeKrieger (I miss President Reagan.)
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To: libertarianPA

This states that only 520,000 Americans even make minimum wage. 7% of that 36,400. Nationally, hardly anyone at all. And legislation gets passed based on this. Pathetic.

http://www.freerepublic.com/focus/f-news/1621782/posts


20 posted on 05/03/2006 1:12:19 PM PDT by L98Fiero (I'm worth a million in prizes.)
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To: AbeKrieger

I totally agree in principle, but there should be no minimum wage nor redistribution of incomes. They are BOTH beyond Govt's constitutional power.

Charity is most appreciated and most rewarding and therefore best advanced when done a the local and personal level. Those who receive are more likely to try harder to better their situations to endevour to lessen the burden on those who have been charitable to them.

It's all boils down to the perverse incentives of Govt intervention and their usually harmful unintended consequences, like even more people on the dole, and the better ability to improve one's self when Govt is limited and less costly that then allows of asset accumulation.

It goes to DC to enrich elites and their corp cronies or it stays in the hands that earned it and enriches themselves and is productive versus destructive.


21 posted on 05/03/2006 1:21:18 PM PDT by Marxbites (Freedom is the negation of Govt to the maximum extent possible. Today, Govt is the economy's virus.)
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To: L98Fiero

Thank goodness for Walter Williams.

I found the article from which I got the information. My mistake - it's acutally 7.8%.

So, I guess it IS a crisis

http://www.mises.org/fullstory.aspx?control=1603


22 posted on 05/03/2006 1:50:30 PM PDT by libertarianPA (http://www.amarxica.com)
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To: Marxbites
Minimum wage laws raise the costs of American products and services, and raising the minimum wage also shifts up other wages for more valuable employees as well. Most everything ends up costing more.

One thing it doesn't raise the cost of as much is imported goods. So while inflation may not go up as much as the wages are increased, it's because we're importing more less expensive goods, shrinking the American economy, and losing American jobs.

When will the DC pinbrains ever get it right?

The purpose of implementing such socialist policies isn't to help workers it's to make them more dependent on the government.

Average wages for unskilled and low skilled workers have gone up considerably slower than inflation over the last decade.

It's obvious why. The low skill labor market is flooded. There is an overabundance of workers willing to do such jobs for relatively low wages.

The problem is the unregulated immigration of mass quantities of people willing to accept what we consider to be a very low standard of living.

Raising the minimum wage will make it even more attractive for immigrants to come here illegally and make the problem even worse.

So why are the Democrats, the socialists, and the communists pushing for amnesty for illegal immigrants and higher wage scales? It will unquestionably harm the blue collar workers they claim to represent, but it will give them more power.

So should we expect the Unions to break ranks with those undermining the livelihoods of their members? You can expect their leadership to talk the talk to keep their members paying their dues, but doing things to make the job market better and improve their members options is not in the Union's best interest.

Tight job markets do more to improve compensation, benefits, and work environments than Unions can achieve. Tight job markets make it difficult for the unions to justify themselves, and significantly reduce their power.

Tight markets also increase worker's job mobility which is something the unions are constantly working to limit through a variety of practices that they try and insist are in the workers best interests. Why do you think that Unions still push for pension plans that are tied to the employer rather than options like 401K plans that allow workers to not have their retirement tied to their employers. Unionized heavy industry has been going bankrupt for decades and is costing vast numbers of union members much if not all of their retirement savings. Yet the unions still negotiate for those kinds of retirement plans.

Who do you think benefits from the Union's policy of having workers have very limited job roles? It does let some workers do less while they wait on the 'proper' person for that task, but that's not much of a benefit for the worker.

It makes the employer hire more workers. However, it makes workers less efficient, which means the employer has to hire more to get the same work done, which means there's lower profit margins and they can't afford to pay the workers as much.

However, since the Unions usually get a percentage of wages, the Union really doesn't make more by forcing the company to inefficiently here more workers that they can't afford to pay as much. The benefit to the unions is that it decreases the flexibility of the workers. Their skills they learn on the job are specialized, so their value to other employers that don't need someone with those specific skills is much less.

Unions aren't going to fight giving amnesty to illegal immigrants. There likely among the largest supporters of it. It's hard to unionize these groups when the union can't leverage labor laws to their advantage because the workers are illegal. However, a flooded labor market of legal workers to exploit is a dream situation for unions.

23 posted on 05/03/2006 2:31:09 PM PDT by untrained skeptic
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To: dl5192
How about members of congress be required to pay the minimum wage for all of these people WITHOUT the option of raising their congressional operating budgets to pay for it (just like a business can't simply wave a wand and raise revenue to pay for increased minimum wage). Let's see how fast those ranks shrink and how loud the politicians scream when they can't afford to run a campaign or a congressional office.

You have my vote! ANYTHING that makes them have to operate in the real world would be better than the fiasco we currently have.

24 posted on 05/03/2006 2:39:07 PM PDT by ConservativeBamaFan (Ted Kennedy's car has killed more people than Dick Cheney's quail gun.)
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To: untrained skeptic

I totally agree. The progressives really stacked the deck in their favor when they began with the ICC to protect the bigs from small competitors. It's all been down hill ever since. Govt has just become the middleman puppet conduit of the elites draining the people's purse since industrialists and progressives started copying the bergeoning euro-dictators whose power and "advancement" (of the State that is) they so sorely envied.

Marx was truly enlightening eh? He enlightened the Euro's so that they are about back to the level statism had reached in the middle 30's.

I abhor the criminality of the unions, especially that corruption that kept the Rats in power 44/48 years between '32-'80, and which they continue breaking FEC rules.

And what union shriveling has been acheived in the private sector has been made up in the public. How 'bout a union military if it's good enough for the cops?

And I just loved the Che, Mexican and Hammer & Sickle flags at the recent alien protests. What better opportunity to round the MF'rs up than when they had barricades all around them? Idiots!


25 posted on 05/03/2006 5:33:33 PM PDT by Marxbites (Freedom is the negation of Govt to the maximum extent possible. Today, Govt is the economy's virus.)
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