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An Argument for Raising the Minimum Wage

by: Richard John Stapleton
Monday June 9, 2014 - 22:44
8 comments

Yes, if you raise the minimum wage consumer prices will most likely rise, but so what? They should rise if you are to be honest about what goods should cost. Wages and prices for goods are as low as they are because companies are not paying their workers a living wage and are not paying the full cost of production. If workers are not receiving a living wage how are they staying alive?

They are staying alive because their wages are subsidized by the US government with food stamps and the like, or by parents or others. If workers are not paid a living wage the companies who hire them can sell more goods or services at lower prices, prices that are not covering the full costs of production, which for sure includes the living costs of workers.

Much hypocrisy is involved. People pontificate about the wonderful blessings of the market system for bringing about fairness, an efficient allocation of resources, etc., when were it not for charitable subsidies the entire system would produce much less than it does now. The market system looks much better than it is because of the aforementioned subsidies.

The government, parents and others subsidizing the low wages of workers in much of the fast food and retail industries enables companies in those industries to sell goods at artificially low prices, artificially making more food and other necessities available to everyone than would be the case if the full cost of production were included in prices, generating in the process excess gross profit to satisfy top management and investors, who do little work for their money, spending most of their time thinking, bullshooting, brownnosing, borrowing, buying and selling.

Raise the minimum wage and prices and sell less, and be honest about what is really going on. The increased income generated for workers caused by paying them a living wage will be spent somewhere, producing more jobs in companies and industries in which the extra pay is spent. Keeping wages below a living wage so children can work is a bad idea. Let children work fewer hours at a higher living wage hourly rate, if they must work to help support their parents or earn their own spending money. Let them devote most of their time and energy to playing and learning.

An Argument for Replacing Minimum Wages with Variable Living Wages

What is a living wage? A living wage is a wage sufficient to enable a person to get legitimate needs met. Abraham Maslow postulated a hierarchy of human needs, ascending from needs for food, clothing and shelter to needs for belonging, safety, love and self-actualization. The needs of a 16 year old are different from the needs of a 26 year old, or a 50 year old. Therefore a living wage would be different for different people. A living wage is a wage that enables a person to live and get needs met, not only needs for basic necessities but higher needs. Living wages would entail employers paying different wages for the same work, which would have to be negotiated based on knowledge of needs.

This procedure is more or less what Jesus Christ recommended in the Christian bible and in some cases it has been used in real businesses. On the other hand, it is absent in most large corporations today. The corporate wage today is generally the lowest price that can be paid for workers, who are considered commodities, based on supply and demand, the needs of workers being irrelevant in the determination of the wage price. Living wages could work if you had truly ethical, nurturing businesses run by people who truly cared about their employees, which for sure is not the case in today’s big-box corporate world.

Other Scenarios

Part of the problem today is the supply of workers is too great relative to demand for workers around Earth, inexorably driving wage prices down. The price of labor could be increased, given the existing demand for labor, by decreasing the supply of labor, which could be accomplished over time with more stringent birth control measures that would lower the labor supply through attrition, i.e. by natural death rates exceeding birth rates.

Or, the price of labor could be increased, given the existing level of labor supply, by increasing demand for labor, which would entail much greater rates of economic growth, which are not in the cards today, especially considering high rates of economic growth entail increased levels of environmental pollution, exacerbating global warming.

It seems Earthians must leave things as they are, with a high percentage of the human population not getting its needs met, continuing the existing level of dissatisfaction, agitation and violence, or they must try to increase need satisfaction for fewer humans by reducing the population with lower birth rates over time, or they must continue ruining their planet, polluting it continually attempting to increase economic growth to increase the demand for jobs and make more money (i.e., faith-based electronic digits in computers believed to be money) for the elite rich to continually add to their computerized financial accounts, which can be used to buy castles, mansions, private jet airplanes and the like.

If by some magic existing Earthian wealth were redistributed around Earth some classes would become better off and some worse off but the problem of how to price wages, salaries and profits would not be changed given the doctrines, dogma and processes of capitalism.

On the other hand, if minimum wages, or whatever kind of wages, such as variable living wages, were increased top managers sitting around bullshooting in corporate offices or flying around Earth in corporate jet airplanes and the elite rich in their mansions and penthouses might have to reduce their share of the pie in order for their companies to compete, and prices for their customers might not go up at all.

Here is my fantasy on how to solve the Earthian economic problem for the long term in my article “Toward the Creation of Spaceship Earth, Incorporated,” at http://www.modernwriters.org/focus/....

It’s hard to tell whom are the worst malfeasants causing today’s labor problem.

Richard John Stapleton is an emeritus professor of business policy, ethics and entrepreneurship who writes on business and politics at www.effectivelearning.net. He is the author of Business Voyages: Mental Maps, Scripts, Schemata and Tools for Discovering and Co-Constructing Your Own Business Worlds at http://www.amazon.com/Business-Voya....



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An Argument for Raising the Minimum Wage
Tuesday June 10 - 16:14 - Posted by Tom - 43bb0e8f666f7876672334045ee73ed7...

Man - do you have a chip on your shoulder or what? You must have some evil rich friends that shoot the bull all day - all my successful friends just play poker and act like they are working...that’s how they went from minimum wage to rich.

It’s simple, you believe the government should dictate what someone should be paid and I believe someone should earn their pay. When govt forces a business to pay someone instead of letting the pay being agreed upon in the market place, you are forcing the business adapt (raise prices or cut profit).

As you know most businesses are small businesses - I don’t like the idea of cutting margins to the people who create the most jobs in America. Most will raise prices on the goods and services directly affecting the people you are advocating to help.

More jobs will help the poor - not raising the minimum wage.

For further support of not waging the minimum wage, please read the latest report from the CBO.




An Argument for Raising the Minimum Wage
Tuesday June 10 - 16:17 - Posted by 39bd451be6d88d9e0e70c0de763c37cf...

If only the members of the U.S. Congress could be forced to sit through one of Prof. Stapleton’s classes, the U.S. Economic crisis might be resolved.




An Argument for Raising the Minimum Wage
Tuesday June 10 - 22:49 - Posted by richard john stapleton - c8def9fb5cc210c223046715e1b7a6a1...

I don’t think I have a chip on my shoulder. I have probably wound up richer than I deserve. I am worried about those who should have a chip on their shoulders who have been sold down the river. If you have a better idea than I as to how to solve this problem what is it? My idea is not perfect, but it is something new that has a chance of working.



An Argument for Raising the Minimum Wage
Wednesday June 11 - 17:55 - Posted by 43bb0e8f666f7876672334045ee73ed7...

I apologize for the "chip" comment - it just comes across as if you are bitter towards the "rich" in the way you write - as if they squash the poor with no regard and with minimal effort to get there.

I’d love to hear a detailed explanation of how people have been "sold down the river". Most people I know work without a gun held to their head - they are free to develop skill sets and market those to employers.

You ask for a solution - we may define the problem differently. How would I solve the economy, the disincentive in America to work, etc.?

In regards to helping the poor (not even close to world standards but by govt standards) jobs and increase effort , my solution would be to eliminate the federal minimum wage. Let states determine if they want minimums. No minimums would instantly open up more jobs for people - giving them a chance to prove their worth and fight their way up the ranks.

I’m not a fan of government forcing wages on employers like you are - I am a fan of employees and employers agreeing on pay for work. If an employee has a great skill set and it is in demand, they will earn more - if not, why do they deserve a minimum? Giving a minimum and providing all of these subsidies creates an incentive NOT to work - when the incentive is gone, the effort is gone...creating a leech.

Let them leave for Seattle and make $15 an hour - thats just the minimum pay regardless of effort or skill. I’m sure Seattle will be the best place to live in America...its a great experiment to prove your case.



An Argument for Raising the Minimum Wage
Wednesday June 11 - 18:19 - Posted by richard john stapleton - c8def9fb5cc210c223046715e1b7a6a1...

workers have been sold down the river by having their good jobs outsourced to low wage countries and by having tax, trade and labor laws changed and undermined since at least 1980 to create the conditions causing their plight today, which have created an oligopoly in the US in which an elite rich have increased wealth, income and power and workers are left with less power and less opportunity to get their legitimate human needs met



An Argument for Raising the Minimum Wage
Wednesday June 11 - 19:44 - Posted by 43bb0e8f666f7876672334045ee73ed7...

So what opportunities are restricted from workers? Anyone physically and mentally able (the large majority of everyone) can develop their brain and skills in a multitude of industries and then market those skills for pay - the opportunity here is endless. It gets greatly restricted when the government interferes.

Why pay $10.10/hour to have someone take orders at a restaurant when an owner can buy a tablet to do it for $1000? There are a lot of people who would work for $7/hour if it meant they could keep their instead of losing it to a tablet. When the government interferes and dictates pay, business owners will rely on cheaper and cheaper technology to automate simply processes.

In my opinion, providing welfare programs teaches a form of dependency thereby weakening their work ethic and creating a leech (not all people on welfare are leeches but the continual state of being on welfare breeds leeches). You want to give fish - I want to teach people to fish.

On a side note, how many families do you personally know who live on minimum wage?



Says who?
Wednesday July 2 - 09:38 - Posted by gmathol - a61d50dbb96d373c7cba8e5a2081196e...

...a public employee? Or a so called entrepreneur? Sorry, this arguments are ridiculous!

Why should farmers feed you? Why don’t you grow your own food? You people who are living in the money economy and in big towns have no clue what happens in the real World - period.



A business small or large...
Wednesday July 2 - 09:34 - Posted by gmathol - a61d50dbb96d373c7cba8e5a2081196e...

...which can not provide minimum wage isn’t a business and it is something else.

PEOPLE HAVE TO LIVE!







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