"They'll just raise prices if thy raise the minimum wage."

[Heywood]

Why do you think individuals are incapable of negotiating a fair wage?

Lack of resources.

Not a good answer. To negotiate, all you need is something the other guys wants(your labor), a mouth, and a brain.

I'll help you by providing a better answer.

If individuals are incapable of negotiating a fair wage it is because labor rates are set by the market....and not individuals.

[Fidel_Castronaut]

Lack of resources.

Not a good answer. To negotiate, all you need is something the other guys wants(your labor), a mouth, and a brain.

I'll help you by providing a better answer.

If individuals are incapable of negotiating a fair wage it is because labor rates are set by the market....and not individuals.

Parsimony in economics arguments always make me laugh, so thanks for that. I'd probably give it a 3rd, for effort. No, lack of resources is very much a solid answer, regardless of whether you want to assess the (in)flexibility of labour markets.

---

Also HW, FWIW, I do agree with a lot of issues you raise regarding minimum wage legislation. I don't live in the US and I'm not (overly) familiar with the economic systems at play there, but in the Uk there have been mixed results, some positive some negative.

[Rahul]

You CANNOT have slavery back...no matter how much you want it.

Sorry. You are just going to have to join the 21st century.

Holy shit, min. Haha


You told a black guy from Mississippi that he couldn't have slavery back.

Good shit.

[Crossless2.0]

You CANNOT have slavery back...no matter how much you want it.

Sorry. You are just going to have to join the 21st century.

Holy shit, min. Haha


You told a black guy from Mississippi that he couldn't have slavery back.

Good shit.

[kılıç_mehmet]

I've been hearing about the minimum wage being so low that people with a full time job still need assistance or multiple jobs to make a living wage, but I've had people say we can't raise the minimum wage because stores and such will just raise prices.

I tried to tell them that everyone shouldn't have to raise prices because workers who get more money will be able to buy things in greater quantity. That wasn't very convincing, so i was wondering if anyone who knew more about economics could tell me how this works. How do we get the government to pay people more without employers jacking up the prices?

You can set up a price ceiling, while raising the wages for workers. With my very crude and rudimentary knowledge of basic economics I can try to provide an explanation.
For example, once the income of people rise, the demand for goods and services will also rise, at least according to what I was taught in the economics class I took a couple years back.
Similarly, once the demand for goods and services rises, the price will go up, however....you set up a price limit, so it won't venture above a certain limit.
The trick here is to set up the price ceiling in a way that it won't cause a shortage of goods and services, as if you set the price ceiling below the equilibrium price, you will experience a shortage of goods, the demand increases with the rise of income, yet higher minimum wages means that people will either produce less or hire less people, which can either mean that the supply will fall, or the demand will remain constant.

The price ceiling must be set up in a way that it won't cause a shortage, which would pretty much mean that the prices will still go up, but in..say, more illegal ways, for example, sellers will hoard their stuff, and sell it for the highest bidder, or to people they want to sell it to.

So, what is the solution? Its simple. There must be more production. The higher the supply, the lower the prices. You wouldn't even need to raise the wage in that way, since a person's money would be able to buy more than it previously did.
If you raise the minimum wage, you would have a new equilibrium price, somewhere above the old one, so if you have a price ceiling without an equal increase in goods and services, you will have a shortage, no matter what.

---

The only reason labor is "priced out" of the market is to increase bottom lines. Big business does not care if their employees are homeless or destitute. They want cheap labor, demonstrated by the fact unions and regulation became a necessity.

I'm unsure how raising minimum wage by a few dollars to a living wage is in any way comparable to raising minimum hourly to $1000. Is there a point to that kind of hyperbole, or do you honestly believe if companies are obligated to pay a fair exchange for their labor, and unable to fire employees to hire cheaper labor they will simply opt out of hiring labor?

Well, in my opinion, the companies make their money by the use of labor. I don't think that companies owe anyone more than anything that they have promised-and what the employees have accepted.
This includes the profits.
However, a state owes its citizens, especially its workers, who are the arms and legs of a nation, decent and humane living standards. They must be strong and sturdy. So, improve the lives of your workers, and you improve the quality of the whole nation. The state must be there to keep the companies in line.
Other than that, I do not expect companies to care about anything else than their profits. This is what they should be worried about. The state must regulate them in a way that they will survive and thrive all the while ensuring a fair treatment for the workers.
It all depends on the state. We can yell and curse at the companies all day long. However, a company is not a charity, and we must acknowledge this fact. The state on the other hand is obliged to ensure the well-being of its citizens, not the companies, although screwing over the companies certainly will not be the most correct way to handle things either.

---

To better illustrate I made this graph(couldn't be bothered with excel, so I made it with paint). Here, the black lines represent the initial supply and demand lines, and red represents the final supply and demand lines.
Here, I draw a supply and demand graph for a normal good.

I know that this calls for a more macroeconomic approach, but this is the best way of expressing my opinion on the subject. As you see, the intersection of the initial supply line with the new demand line creates a new equilibrium price, higher above the initial equlibrium price.

Similarly, if we intersect the initial demand curve(meaning, not raising the income of the buyers) with the new supply line we can see that the equilibrium price falls.
However, if we raise the two with an equal amount, the equilibrium price remains constant. From that point on, any rise in the supply or demand may shift the equilibrium price either downwards on the demand curve or upwards, creating lower or higher prices respectively.

Now, lets say that the goverment puts a price ceiling, represented by the green line. If we increase the demand(meaning, the income), without increasing the supply of the said good, the supply curve will fall short(meaning the quantity of the said product will not meet the demanded quantity), and we will have a shortage of the said good.

In both equilibrium cases, a price ceiling would only serve to decrease the consumer surplus of a company, nothing more.

By the way, feel free to correct me as you see fit.

[kılıç_mehmet]

Oh no! You mean the employers will have to pay people a fair exchange for labor?!

What you don't seem to understand is that a company can decrease its supply, meaning, employ less people and still make the same amount of money, since less supply with a constant demand means higher prices. Unless there is a price ceiling of course.

So that nice conservative couple who wanted to pay 4 day laborers $150 for 3 days of work to pour the cement pond in their backyard isn't going to have their dream come true? Oh no!

Labor is also a commodity. You pay for it. If the supply on that one decreases, the prices increase. If no one is willing to work for that amount of money, one would expect them to either increase the wages on that one, or do it by themselves.

Oh no! The rich won't have as many free lunches if there are government actions to make sure employees are paid a living wage for the work they do! What will happen then? Oh no!

Oh, I absolutely agree.

Look around Heywood, if they weren't greedy bastards they'd already be paying a fair wage.

Everyone is greedy my friend. Even the laborers you and I strive to protect. They are greedy too. A good state maintains a balance between the greed of the employer, and the greed of the employee, to satisfy both sides to a degree.

I am a libertarian and support a negative income tax(which method of providing a basic universal income).

Ditch food stamps, ditch unemployment, ditch social security, ditch housing assistance, ditch heating assistance, ditch Obama phones.....ditch all of it and the bureaucracy that goes with it. Give poor people money instead.

Liberaltards and conservotards like to run peoples lives and think poor people are second class citizens whose finances need to be managed by the government. Let people be free for God's sake.

Negative income tax? Well, my friend, where will this goverment get the money?
In my opinion, income tax should not be given away as currency, but as services that people pay money for. Like for example, healthcare and education. I'd say that these services are better off in the hands of the state.

Workers don't get paid more, not because the companies would lose profit but because the owners would have one less house in a foreign country in which to stash their gains made off corporate welfare.

And why would you say that these corporate CEO's should give off of a portion of their money to their workers? Are they obliged to do so by a law?
Then make a law, state, that a company should transfer a yearly percentage of its profits to its workers salaries as bonuses.
It shouldn't be too hard to make. And it certainly would not be an incentive for companies to fire people and thereby decrease their productivity.

They look for the cheapest possible labor, and then collect tax write offs for doing it.

That's what a company does. Why else do you think, do people get their shit produced in China and not at their home countries?
Increase your profits by decreasing your expenditures.
Here is where the state comes in. It is the state that must protect the interests of its working citizens. For example, enact a law that every company should hire a minimum number of native skilled workers. Sure, it would decrease the profits of the company a bit, but you can decrease the taxes that they pay in return.


In all, the problem here is not the CEO's, nor the companies. It is the state. The state must involve itself into the affairs of the private sector to protect the interests of its workers. However, balance must be maintained. Go too hard on the companies, and they'll simply take their business elsewhere, to some poor country that urgently needs some investments.

[John V]

If you're going to consider minimum wage, you should know who makes it. In 2012, only 2.8% of American workers were at or below (e.g. waitstaff) the federal minimum wage, and half of them are under 25 years old.

http://www.pewresearch.org/fact-tank/201...imum-wage/

Any worker with a bit of work ethic will get raises and make more than minimum wage. Back in the day, I started at minimum wage at a gas station. Since I showed up when I was scheduled, I was better than most of the people they hired, and soon got raises and benefits. I had to work overtime to make ends meet, but guess what - I was young and just starting out and that's the way it is.

[Foxaèr]

and that's the way it is.

I am honestly tired of this ignorant line. That line itself is why there are so many problems that never get fixed.

Just because that's the way it is does not mean the way it is happens to be the best solution for the way we live. Just because that's the way it has always been does not mean that is the way it should continue to be.

People need to wake up and realize that for a real change for the positive to take effect, they must stop relying upon the false belief that things are good the way they are.

[KUSA]

I haven't made minimum wage since I was 16. If someone has a problem moving past minimum wage I think some other issues are present.

[Chad32]

If you're going to consider minimum wage, you should know who makes it. In 2012, only 2.8% of American workers were at or below (e.g. waitstaff) the federal minimum wage, and half of them are under 25 years old.

http://www.pewresearch.org/fact-tank/201...imum-wage/

Any worker with a bit of work ethic will get raises and make more than minimum wage. Back in the day, I started at minimum wage at a gas station. Since I showed up when I was scheduled, I was better than most of the people they hired, and soon got raises and benefits. I had to work overtime to make ends meet, but guess what - I was young and just starting out and that's the way it is.

But why should it be necessary to get raises just so you don't have to work overtime, or multiple jobs, to make ends meat?