The Minimum wage

jamesmorgan

ukcarper wrote: »

I think you look at things in a much too simplistic and theoretical way.

Economics is a complex area. Whilst on the surface it appears to about money and markets, in practice it is mainly a study of human behaviour. Economists have often despaired at how they spend years calculating complex theories only to see politicians implement policies that fly in the face of even basic economic principles. The reason for this is that politicians only have to sell their policies to the average lay person. The average lay person has no real understanding of economics and simply uses intuition to guide their thought. Intuition tells them that without the minimum wage, employers will lower their wages to virtually nothing. Intuition tells them that you can implement the minimum wage with no negative consequences on the poorest people in society.

To counter this, economists have to try to convey complex theories in a simple way that the average lay person can feel some connection to. That doesn't mean to present an argument that can win a peer review debate - simply to present one that the average lay person understands and can lead them to put aside some of their intuition. Hopefully this can lead them to want to research more about the subject.

There are a number of excellent repositories of information that can provide a more academic analysis of this area. In my opinion, one of the best is the Ludwig von Mises Institute. They have written a wealth of papers on the minimum wage. Below are a couple of links that provide a sample of them:

http://mises.org/daily/2130
http://mises.org/daily/5311

Kennyboy66

jamesmorgan wrote: »

Economics is a complex area. Whilst on the surface it appears to about money and markets, in practice it is mainly a study of human behaviour. Economists have often despaired at how they spend years calculating complex theories only to see politicians implement policies that fly in the face of even basic economic principles. The reason for this is that politicians only have to sell their policies to the average lay person. The average lay person has no real understanding of economics and simply uses intuition to guide their thought. Intuition tells them that without the minimum wage, employers will lower their wages to virtually nothing. Intuition tells them that you can implement the minimum wage with no negative consequences on the poorest people in society.

To counter this, economists have to try to convey complex theories in a simple way that the average lay person can feel some connection to. That doesn't mean to present an argument that can win a peer review debate - simply to present one that the average lay person understands and can lead them to put aside some of their intuition. Hopefully this can lead them to want to research more about the subject.

There are a number of excellent repositories of information that can provide a more academic analysis of this area. In my opinion, one of the best is the Ludwig von Mises Institute. They have written a wealth of papers on the minimum wage. Below are a couple of links that provide a sample of them:

http://mises.org/daily/2130
http://mises.org/daily/5311

Next you will be all in favour of no legislation against child labour, or raging against the fact that Doctors have to complete a set period of training and exams.

Oh hang on.... that's exactly what the far right looney libertarian element actually espouses.... the market solves everything.

You'd get more sense out of Homer Simpson.

jamesmorgan

Kennyboy66 wrote: »

Next you will be all in favour of no legislation against child labour, or raging against the fact that Doctors have to complete a set period of training and exams.

Oh hang on.... that's exactly what the far right looney libertarian element actually espouses.... the market solves everything.

You'd get more sense out of Homer Simpson.

You are clearly a fan of Arthur Schopenhauer and his 38 ways to win an argument (http://www.mnei.nl/schopenhauer/38-stratagems.htm), although rarely have I seen so many techniques used within such a short amount of text.

I think this thread has now run its course for me and it's time to move on.

suburbanwifey

jamesmorgan wrote: »

You are clearly a fan of Arthur Schopenhauer and his 38 ways to win an argument (http://www.mnei.nl/schopenhauer/38-stratagems.htm), although rarely have I seen so many techniques used within such a short amount of text.

I think this thread has now run its course for me and it's time to move on.

:rotfl:Well said James! :rotfl:

StevieJ

jamesmorgan wrote: »

You are clearly a fan of Arthur Schopenhauer and his 38 ways to win an argument (http://www.mnei.nl/schopenhauer/38-stratagems.htm), although rarely have I seen so many techniques used within such a short amount of text.

I think this thread has now run its course for me and it's time to move on.

To put it rather crudely TFFT

ash28

Thrugelmir wrote: »

If business was all about the cost of employees maybe so, it isn't.

Employees, at least good ones, add considerable value to a business. All successful businesses now value their employees. As without them there is no business.

I agree absolutely that without good employees there is no business (a fact that many businesses forget) - for some the employee is nothing more than another commodity.

Perhaps my experience is a lot more limited than yours. I spent a good part of my working life advising companies on how they could reduce costs - usually labour and usually done through "improvements" - I did my last contract about 2 years ago.

In my experience, although obviously limited to the companies I worked for, and later on the companies I contracted to, one of the first ports of call when looking to reduce costs was labour, and it made no difference where or what it was - factory or office - never did retail other than some logistics/warehousing.

Sometimes it would be as simple as putting in procedures - you would be amazed how many companies don't know how long staff are away from work or when - sickness, training, time off in lieu, doctors appts, holidays etc and then wonder why they found it difficult to manage headcount and costs, wondered why their business planning models were always way out on labour costs and variances.

Perhaps because I worked at the cost reduction and the headcount planning end of business for so long it's made me a bit cynical about companies and their motives, even the companies I actually worked for as a permanent employee - Mars, Panasonic and Abbott Laboratories (American pharma company), all absolutely excellent employers with great employee benefits and I count myself fortunate to have worked for them, the bottom line was always cost reduction - of the labour variety. Although the labour rate rose virtually every year - they wanted the actual cost of the labour to the business to fall or at worst stay the same.

On the contracting side - I could write a book about some of those.

shortchanged_2

jamesmorgan wrote: »

You are clearly a fan of Arthur Schopenhauer and his 38 ways to win an argument (http://www.mnei.nl/schopenhauer/38-stratagems.htm), although rarely have I seen so many techniques used within such a short amount of text.

I think this thread has now run its course for me and it's time to move on.

:rotfl:

That's class and certainly describes the techniques of a few posters on here.

N1AK

Carl31 wrote: »

Would removing the minimum wage help this country out of the economic problems it has?
Maybe we are too far down the line now, as it would probably cause more harm than good removing it, but has it made employment too expensive for Business to operate in a competitive way

Personally I don't think outright removing the minimum wage is a great idea. If a company could employ someone at £3ph to pack boxes then they would effectively be getting subsidised labour due to the government provided benefits the employee would still need to live.

I'm not a massive fan of the living wage figures, or the daft sod who argued that the minimum wage should be enough for a single mum on it to be able to support a family without benefits (~30k pa) in the guardian. There is a balance between allowing wages to get so low that they don't provide enough value to support and requiring wages so high that there's no job creation.

N1AK

StevieJ wrote: »

You forgot d) Employer pays £6.30 and says to the worker 'don't worry the social will top it up with benefits' Subsidy for working people corrupts wage levels because the employer is under no pressure to pay the employees optimum wage rate, I don't understand why you can't see that?

I don't disagree with the statement. I do however think that it is much more of a fact of life than something that can be avoided. Anyone earning less than ~£30-40k per year is being subsidised by the state (in terms of defence, healthcare, infrastructure etc). Sure the subsidy is less obvious than the state giving them more money but ultimately the difference is minimal: The person isn't being paid enough by their employer to cover all the money spent by them or on their behalf.

I think it is impractical to expect everyone to earn enough to not require subsidy. The minimum wage, when set at the right level helps control the level of subsidy and motivates companies to use labour efficiently and effectively.