• Due to a glitch in the old vBulletin software, some users were "banned" when they tried to change their passwords at the end of February. This does not apply after the site was converted to Xenforo. If you were affected by this, please us viua the Contact us link in the footer.

Should minimum wage rates be abolished?


Amnesiac

Well-known member
Joined
Oct 27, 2011
Messages
1,035
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
 


factual

Well-known member
Joined
Feb 5, 2005
Messages
8,761
No. In fact the reverse. Minimum wage should be increased to help the poor.

There is little evidence that this is bad for jobs.
 

cabledude

Well-known member
Joined
Jan 23, 2011
Messages
6,362
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
What do you think?
 

TommyO'Brien

Well-known member
Joined
Jan 14, 2009
Messages
12,222
Absolutely, totally and unambiguously NO.

A society of standards should never tolerate or facilitate exploitation. The minimum wage is not going anywhere. It is as fundamental a part of society as the right to a pension, the right to social welfare and the right to education. We are never going back to the days when those things did not exist.

Get over it.
 

jo9jo

Well-known member
Joined
Mar 25, 2011
Messages
4,895
Reducing/eliminating the minimum wage would lead to many workers being under the breadline and their wages would need to be supplemented by the taxpayer.

I.e., their jobs would be subsidised by the tax payer.
This 'saving' would land in the packet of the employer.

No way should the minimum wage be reduced.
 

USER1234

Well-known member
Joined
Jan 31, 2009
Messages
9,418
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
NO

because it would lead to people who are desperate for a job with no choice but to take extremely poor paying job which amounts to virtual slavery
 

Red_93

Well-known member
Joined
Mar 20, 2010
Messages
4,678
I assume many of those who would be in favour of minimum wage abolition would also be in favour of the abolition of most if not all social welfare and housing and the privatisation of health and education?

That is to say, they would like to see those less fortunate than them rot in the street.
 

duthealla

Well-known member
Joined
Aug 31, 2011
Messages
1,821
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
Conventional, and basic firs year economic theory says that in a highly stylised world with all things being equal minimum wages leads to excess supply with not enough demand ie people hiring.

Problem is that is first year economics to give a hint about price floors and so on. Some light is added with the following report which ultimately found that in the UK the minimum wage increases didnt impact employment.

This 295 page report would appear to contradict the expected result from a simple price floor model you'd see in a first year econ book but maybe thats because its just a simple stylised, incomplete, first year teaching tool rather than the final answer.

I dont by the way expect this in any way to change the opinion of those who know just know those three lines on a little diagram tell more about the real world than those 295 pages.

http://www.lowpay.gov.uk/lowpay/report/pdf/DTi-Min_Wage.pdf
 

Amnesiac

Well-known member
Joined
Oct 27, 2011
Messages
1,035
No. In fact the reverse. Minimum wage should be increased to help the poor.

There is little evidence that this is bad for jobs.
That's not really true. Both sides of this debate have presented a lot of evidence. There is no consensus.

What do you think?
I think the theoretical argument against minimum wages is sensible. I have yet to heard a convincing alternative explanation. I'm not a labour economist, and I don't know the empirical work at all. I do know that this is a very contentious debate.
 

dancl2000

Well-known member
Joined
Sep 17, 2011
Messages
517
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
What's the basis for conventional economic theory saying minimum wages should be abolished ? economic theory has a pretty shaky tie in to reality so i wouldnt assume anything it recommends is a good idea

without a minimum wage, in a market where there are more labourers than employers, then wages will go down, possibly below poverty levels. why would we want to allow that ?
 

momentimori

Well-known member
Joined
Jan 29, 2011
Messages
614
Conventional economic theory argues that minimum wage rates prevent lower-skilled workers from obtaining jobs. If your work is less valuable to an employer than the cost of employing you, then you won't be hired. In this way, minimum wage rates harm the very people they are designed to protect.

Do you agree with this thinking? Should minimum wage rates be abolished?
That assumes the minimum wage is above the market rate.

In the real world without perfect competition employers generally have the benefit of asymmetrical information, ie their business and capital costs, and potential employees need the job more. This means the employers are collecting significant economic rent.

A minimum wage helps reduce this massive imbalance of power and reduce economic exploitation of the vulnerable.
 

human 19

Well-known member
Joined
Feb 3, 2011
Messages
1,179
NO

because it would lead to people who are desperate for a job with no choice but to take extremely poor paying job which amounts to virtual slavery

and would further decrease the monetary difference between having a job and claiming unemployment assistance.
Employers would be much quicker to reduce wages, and by further, than the government to reduce social welfare payments
 

TommyO'Brien

Well-known member
Joined
Jan 14, 2009
Messages
12,222
I assume many of those who would be in favour of minimum wage abolition would also be in favour of the abolition of most if not all social welfare and housing and the privatisation of health and education?

That is to say, they would like to see those less fortunate than them rot in the street.
The truth is that many who oppose the minimum wage oppose all social protections. They argue that the rich are too overtaxed, the poor live in the lap of luxury and want to turn the world back to the mid 19th century.

It ain't gonna happen!
 

Red_93

Well-known member
Joined
Mar 20, 2010
Messages
4,678
The truth is that many who oppose the minimum wage oppose all social protections. They argue that the rich are too overtaxed, the poor live in the lap of luxury and want to turn the world back to the mid 19th century.

It ain't gonna happen!
If we look at this on a practical level, were we to abolish the minimum wage, more people would be pushed into welfare dependency, and then there would be calls to cut social welfare. This in turn would push people more and more into the poverty trap. Vicious circle. Very dangerous game.
 

CookieMonster

Well-known member
Joined
Feb 19, 2005
Messages
34,712
The truth is that many who oppose the minimum wage oppose all social protections. They argue that the rich are too overtaxed, the poor live in the lap of luxury and want to turn the world back to the mid 19th century.
Yes, that's exactly the argument. Thank you for telling us all what it is. We'd never have known without you.
 

duthealla

Well-known member
Joined
Aug 31, 2011
Messages
1,821
The truth is that many who oppose the minimum wage oppose all social protections. They argue that the rich are too overtaxed, the poor live in the lap of luxury and want to turn the world back to the mid 19th century.

It ain't gonna happen!


Maybe you should have a word with some of your fellow FGers.
 

fiobi

Well-known member
Joined
Jun 15, 2010
Messages
320
Yes they should for those under the age of 25 because for under 25,s the government have already decided that they can reduce their SW entitlement to 100 to 150 pw but anyone in this group cannot be offered a job unless the employer can pay whatever the agreed min is for that profession. For example an electrician gets a minimum of about €21 ph or a building labourer would get about €16.69 ph which for someone who is 18 with no work experience is a lot more than SW. Why can't they be allowed to take a job at €12 per hour? We really need to get the under 25,s into work so they get experience or we will have a lost generation

The Labour Court Home Page
The Labour Court Home Page
 

Amnesiac

Well-known member
Joined
Oct 27, 2011
Messages
1,035
That assumes the minimum wage is above the market rate.

In the real world without perfect competition employers generally have the benefit of asymmetrical information, ie their business and capital costs, and potential employees need the job more. This means the employers are collecting significant economic rent.

A minimum wage helps reduce this massive imbalance of power and reduce economic exploitation of the vulnerable.
This is a decent argument. Candidate employees may feel under duress to take jobs at very low wages because they need the job quickly. The employer can exploit their dominant position.

However, this doesn't strike at the core of the argument against. What happens to individuals with skills that command less pay than the minimum wage (plus employer PRSI contribution, etc.)?
 

CookieMonster

Well-known member
Joined
Feb 19, 2005
Messages
34,712
If we look at this on a practical level, were we to abolish the minimum wage, more people would be pushed into welfare dependency, and then there would be calls to cut social welfare. This in turn would push people more and more into the poverty trap. Vicious circle. Very dangerous game.

Well the counter to that is that if we abolished the minimum wage employers could employ low skill worked according to their value, rather than with reference to a higher rate of pay with no link to the value of the work being done, and thus the cost of their products would be lower and so on and so on having the result in lowering the cost of living and reducing the need to subsidise wages through welfare etc.

The factor that doesn't account for is societal risk, would there be those who fall though the net. But that pretty much happens anyway but without a minimum wage it's up to guessing if it would be to a greater or lesser degree.
 

USER1234

Well-known member
Joined
Jan 31, 2009
Messages
9,418
All abolishing the minimum wage would do is drive more people into poverty and cause even more people to immigrate out of this country faster!!!
 

Popular Threads

Most Replies

Top