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How much is an hour worth? The war over the minimum wage

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  • How much is an hour worth? The war over the minimum wage

    Some economists say it should be raised. Others say it’s already too high. But what if both sides are missing the point?

    Peter C Baker writes about the war over minimum wage and the value of work in this week's Guardian's edition of the "Long Read".

    Read more here: https://www.theguardian.com/news/201...e-minimum-wage

  • #2
    Neither side is missing the point. The problem that some people don’t earn enough money is clear. The debate is on whether raising the minimum wage is an effective solution to alleviate the problem or not. It will be interesting to see how things play out in Seattle in the long term.

    We live in a global economy. Goods made in low wage countries can make it difficult for domestically made goods to succeed and for Americans to be employed in manufacturing, especially with good wages. Matters are made even more difficult when these foreign countries are protectionist. Do you think Trump is right in pursuing more fair trade agreements?
    Last edited by Mikepetersson; 04-15-2018, 11:38 AM.

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    • #3
      Originally posted by Mikepetersson View Post
      Neither side is missing the point. The problem that some people don’t earn enough money is clear. The debate is on whether raising the minimum wage is an effective solution to alleviate the problem or not. It will be interesting to see how things play out in Seattle in the long term.

      We live in a global economy. Goods made in low wage countries can make it difficult for domestically made goods to succeed and for Americans to be employed in manufacturing, especially with good wages. Matters are made even more difficult when these foreign countries are protectionist. Do you think Trump is right in pursuing more fair trade agreements?
      Why not lower the price of rent and loaf of bread rather than raising the min wage?

      Comment


      • #4
        Originally posted by Mikepetersson View Post
        Do you think Trump is right in pursuing more fair trade agreements?
        I've been for fair trade and open borders for over fifty years now. Adam Smith and all that.

        Comment


        • #5
          Originally posted by Mikepetersson View Post
          We live in a global economy. Goods made in low wage countries can make it difficult for domestically made goods to succeed and for Americans to be employed in manufacturing, especially with good wages.
          Right, those countries can make it cheaper, so we buy from them rather than a more expensive producer in the US.
          Matters are made even more difficult when these foreign countries are protectionist.
          It makes it harder to see in those countries, as they make their consumers pays extra, right?

          Do you think Trump is right in pursuing more fair trade agreements?
          Why have agreements, why not just allow free trade?

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          • #6
            Originally posted by Mel View Post

            Why not lower the price of rent and loaf of bread rather than raising the min wage?
            Those are options and there are others too. But, who in the free market is going to be willing to supply bread at unattractive margins or rent places at below market rates? The government can provide assistance but there is still a cost for this that someone has to pay.

            There isn’t an easy answer. Perhaps the most practical way for people to increase their wages is to gain skills that others are willing to pay more money for. One doesn’t have to stay working a minimum wage job forever.

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            • #7
              Originally posted by Mel View Post

              I've been for fair trade and open borders for over fifty years now. Adam Smith and all that.
              Open borders? Kind of hard for wages to increase when the supply of workers willing to accept low wages increases.

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              • #8
                Originally posted by Mikepetersson View Post

                Perhaps the most practical way for people to increase their wages is to gain skills that others are willing to pay more money for. One doesn’t have to stay working a minimum wage job forever.
                Then who will scrub hotel toilets and wax the hospital floors? Someone has to do the dirty work and a clean hotel toilet is as important as a plane that arrives on time. What more, a sterile operating room is more important that a train that arrives on time.

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                • #9
                  Originally posted by Mikepetersson View Post

                  Open borders? Kind of hard for wages to increase when the supply of workers willing to accept low wages increases.
                  I don't understand. If I move to Spain to live a higher standard of living who am I hurting?

                  Comment


                  • #10
                    Originally posted by mikeofallbirds View Post
                    Right, those countries can make it cheaper, so we buy from them rather than a more expensive producer in the US.
                    Exactly. If U.S. wages increase we’ll be buying even more offshore goods. Or, automation may replace some of these jobs that are now at higher wages.
                    Last edited by mikeofallbirds; 04-15-2018, 07:12 PM. Reason: Fixed end of quote by switching \ to /

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                    • #11
                      Originally posted by Mel View Post

                      Then who will scrub hotel toilets and wax the hospital floors? Someone has to do the dirty work and a clean hotel toilet is as important as a plane that arrives on time. What more, a sterile operating room is more important that a train that arrives on time.
                      The people who don’t increase their skill set. Or, younger workers entering the work force, who will do those jobs until they also move up.
                      Last edited by Mikepetersson; 04-15-2018, 06:55 PM.

                      Comment


                      • #12
                        Originally posted by Mel View Post

                        I don't understand. If I move to Spain to live a higher standard of living who am I hurting?
                        The person who already lives in Spain that the employer would have paid a higher wage to until you entered the labor force willing to do the job for less.

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                        • #13
                          Originally posted by Mikepetersson View Post

                          The person who already lives in Spain that the employer would have paid a higher wage to until you entered the labor force willing to do the job for less.
                          Why the assumption that I would be getting paid less? I would be getting paid the same as this other person and I would be moving to Spain to a job that would increase my standard of living.

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                          • #14
                            Originally posted by Mikepetersson View Post

                            The people who don’t increase their skill set. Or, younger workers entering the work force, who will do those jobs until they also move up.
                            And the people who can't increase their skill set? What should they be paid?

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                            • #15
                              Originally posted by Mel View Post

                              Why the assumption that I would be getting paid less? I would be getting paid the same as this other person and I would be moving to Spain to a job that would increase my standard of living.
                              You said you were for open borders. My interpretation of this statement is that you mean anyone in the world could move and work anywhere. In this scenario people would leave poorer countries and move to richer ones on a large scale. These masses of people would need jobs when they arrived and would become desperate for work, taking any job they could find, depressing wages.

                              Comment


                              • #16
                                Originally posted by Mel View Post

                                And the people who can't increase their skill set? What should they be paid?
                                As in a disability? If yes, they should be receiving assistance. Or, did you mean something else?

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                                • #17
                                  Originally posted by Mel View Post

                                  Why the assumption that I would be getting paid less? I would be getting paid the same as this other person and I would be moving to Spain to a job that would increase my standard of living.
                                  If the pay rate was actually being set by market forces, an increase in supply (not just you but others who might move) would generally lower the marked wage.

                                  LOts of employment won't strictly follow markets. Workers often are not commodities. An employee who has learned your business can be far more valuable than one who hasn't. It is culturally hard to adjust wages with a market, to tell workers you're paying $0.20/hr less this week because of the unemployment rate ticked up a little bit.

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                                  • #18
                                    Originally posted by Mikepetersson View Post

                                    As in a disability? If yes, they should be receiving assistance. Or, did you mean something else?
                                    "Assistance"? In the modern world, less and less actual work is needed to accomplish the tasks necessary for infrastructure and for pretty much any private sector job. Automation builds things that skilled workers used to assemble. Improved tools and machines reduce the number of skilled workers needed for specific processes. This is happening, has been happening for some time, and seems likely to accelerate. Increased productivity means fewer jobs.

                                    A disability is not the only reason for someone not being able to get into a better-paying job. If there is no job, period, anywhere, should people receive assistance? If living costs are lower somewhere else, should people be assisted to move there?

                                    It's complicated, I think.

                                    Loren

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                                    • #19
                                      Originally posted by Loren View Post
                                      A disability is not the only reason for someone not being able to get into a better-paying job. If there is no job, period, anywhere, should people receive assistance? If living costs are lower somewhere else, should people be assisted to move there?

                                      It's complicated, I think.

                                      Loren
                                      I agree it’s complicated. Lots of options to address the problem and potential positive and negative results. If someone is of able mind and body I do believe they can progressively increase their wages with persistence over time. There are sometimes difficult periods in life.

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                                      • #20
                                        Originally posted by Mel View Post
                                        Some economists say it should be raised. Others say it’s already too high. But what if both sides are missing the point?

                                        Peter C Baker writes about the war over minimum wage and the value of work in this week's Guardian's edition of the "Long Read".

                                        Read more here: https://www.theguardian.com/news/201...e-minimum-wage
                                        One's time is worth what the market bears.

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