- Capitalism and Alternatives -


Posted by: Red Deathy ( Socialist party, Uk ) on March 31, 1999 at 19:17:49:

In Reply to: minimum wages - sleight of hand posted by Gee on March 31, 1999 at 13:11:21:

: What the interesting Levy study (i wont rubbish it, it is relavent - although its a surbey of opinions not actual effects) shows is that small businesses wont sack people because of a smsll increase in labor cost It doesnt refute the earlier studies mentioned (thats mostly where I get it from) but does point out that demand is less elastic than assumed.

Or in other words- peopel won't be employed unless their employer makes a profit from them. the only real way to prevent job losses is for unions to enforce a minimum wage, but unfortunetly the sectors where such minimum wages are needed usually aren't unionised.

: In other words raising minimum wages a little bit doesnt result in mass unemployment, although it still has the effect of raising costs, prices and inhibiting hiring accross the board. Infact this last point is put forth by the Levy study, that bigger increases stop even small companies from hiring extra staff - which is not the intention (I hope) of minimum wage laws.

No, teh intention is:
1:Since real wage prices in some unskilled sectors fall through teh floor (i.e. the wage can't support the worker) legal means are needed to ensure that those workers get a living wage.
2:Some employers pay deliberately low wages, because they know the worker can suppliment it through the welfare system (thus ripping off the capitalists who paid the taxes).

: Because total employment tends to grow (due to wealth creation)

Thats one you'll have to work hard to proove, seems to me that more wealth creation means more mecha isation, means fewer skilled jobs, i.e. lower wages overall, and fewer workers needed to be employed. One reason for the 1.5 million prisoners in America- surplus population.

:and because inflation (also influenced by state, ie the hand that giveth taketh away!) diminishes the real value of a fixed minimum wage, a moderate increase of the minimum wage does not prompt employers to fire millions of workers. Nevertheless, employment will be much
: lower after employers have made their adjustments than it otherwise would have been.

Probably because some scab bosses decide its no longer worth their while to work in the sectors that need hyper-low wages to make their profits.

: In other words, minimum wage increases are a political slight of hand, hence they are never so audacious as to raise it to $10 an hour.

I actually agree, I see very little value in a minimum wage- what is better is working class organisation into large unions to drive up wages overall, and to enforce a living wage on small employers. the Government can't administer affairs on behalf of the working class.

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