A minimum wage: Does it help or hurt the unskilled worker?

[OtherCheek]

The minimum wage: Does it help or hurt the unskilled worker?

Business owners are encouraged to answer.

If you have a job "X". And it takes either ONE skilled worker to do X, while it takes 2 unskilled workers to do "X", at what point on the wage scale will the employer decide to hire the 1 skilled worker instead of 2 unskilled workers?

If the skilled worker is paid $25.00 / hr. And the unskilled workers each are paid $8.00 / hr, and provided benefits cost the employer $5.00 per hour per person, the difference is $30.00 for the skilled vs $26.00 for 2 unskilled. But if there is a training expense involved, the advantage may actually fall toward hiring the one skilled worker.

The point being, raising the minimum wage too high will not really help unskilled worker with finding work.

[Crow]

The minimum wage: Does it help or hurt the unskilled worker?

Business owners are encouraged to answer.

If you have a job "X". And it takes either ONE skilled worker to do X, while it takes 2 unskilled workers to do "X", at what point on the wage scale will the employer decide to hire the 1 skilled worker instead of 2 unskilled workers?

If the skilled worker is paid $25.00 / hr. And the unskilled workers each are paid $8.00 / hr, and provided benefits cost the employer $5.00 per hour per person, the difference is $30.00 for the skilled vs $26.00 for 2 unskilled. But if there is a training expense involved, the advantage may actually fall toward hiring the one skilled worker.

The point being, raising the minimum wage too high will not really help unskilled worker with finding work.

Maybe in some industries it's different, but the difference between what a skilled and an unskilled worker can produce generally isn't usually how quickly they can work. It's usually the types of work they are capable of (and/or may legally) producing.

Say that you can hire ten people off the street for the price of one skilled person. Are you going to consider hiring the unskilled instead of hiring a pilot to fly your jet?

Or, you have two people you can hire to wash cars. One is a skilled auto mechanic, one is a person with no particular skills who will work for one fourth of the wage the auto mechanic wants. Which way are you going to jump?

If it's a job that's not all that demanding in terms of the skillset involved, training would be worthwhile. If it's something that demands a set of skills that you can't train for fairly rapidly, or can't train for at all, or is someone you will need only for a short period of time, hiring a skilled person would be the way to go.

[Pilgrim]

The minimum wage: Does it help or hurt the unskilled worker?

Business owners are encouraged to answer.

If you have a job "X". And it takes either ONE skilled worker to do X, while it takes 2 unskilled workers to do "X", at what point on the wage scale will the employer decide to hire the 1 skilled worker instead of 2 unskilled workers?

If the skilled worker is paid $25.00 / hr. And the unskilled workers each are paid $8.00 / hr, and provided benefits cost the employer $5.00 per hour per person, the difference is $30.00 for the skilled vs $26.00 for 2 unskilled. But if there is a training expense involved, the advantage may actually fall toward hiring the one skilled worker.

The point being, raising the minimum wage too high will not really help unskilled worker with finding work.

There is a disconnect in your scenario. Why would you hire skilled labor for unskilled work? Or conversely, if anyone can do that work they are skilled by definition? Am I missing something here?

[OtherCheek]

There is a disconnect in your scenario. Why would you hire skilled labor for unskilled work? Or conversely, if anyone can do that work they are skilled by definition? Am I missing something here?

Possibly speed of getting the job done might make a skilled (experienced) person more desirable than an unskilled (inexperienced) person even though the wage is double the price.

[Dee Dee Warren]

A skilled person might be a better hire since they have shown ambition and dedication.

[Conductor42]

As long as the minimum wage isn't unreasonably high, then it really doesn't hurt. But increasing the wage to a liberal utopian "living wage" is economic suicide.

[CodewordConduit]

As long as the minimum wage isn't unreasonably high, then it really doesn't hurt. But increasing the wage to a liberal utopian "living wage" is economic suicide.

I would like minimum wage to be enough to cover rent and basic comfort enough for one person and two dependents, with enough left over to save for a house deposit within ten years, in a forty hour work week. Worked out on an average or something. I don't know whether this makes me a liberal utopian, and I freely admit that it's just my unsupported opinion. Is it fair or naive do you think?

[Conductor42]

I would like minimum wage to be enough to cover rent and basic comfort enough for one person and two dependents, with enough left over to save for a house deposit within ten years, in a forty hour work week. Worked out on an average or something. I don't know whether this makes me a liberal utopian, and I freely admit that it's just my unsupported opinion. Is it fair or naive do you think?

I can empathize with that. I've been in places where the minimum wage wasn't nearly enough to cover the cost of living for one person on their own, let alone dependents. IMO, the desire for a higher minimum wage is usually a symptom of underlying problems rather than a cure for them. I believe that their should be a proper a government "safety net" of sorts to help those who are not self-sufficient with their needs for a long enough time to get whatever training and/or education they need to support themselves.

I'd say I'm more of a moderate on the minimum wage... I just don't believe in sudden, fairly large increases to it because it'll cause economic havoc - it'll cause more problems than it solves. Businesses and the economy at large need time to adjust to new minimum wage increases.

[Philosophickle]

I would like minimum wage to be enough to cover rent and basic comfort enough for one person and two dependents, with enough left over to save for a house deposit within ten years, in a forty hour work week. Worked out on an average or something. I don't know whether this makes me a liberal utopian, and I freely admit that it's just my unsupported opinion. Is it fair or naive do you think?

I'd say it's morally questionable.

I'd like to live my life free of work obligations, a paycheck of a bazillion dollars a day (mostly so I can stop working to pay Darth's mom for child support) and 15 hours a day to read. But sometimes our resources are better served trying to make ourselves more marketable than lobby to make it illegal for people to choose what they pay their employees.

[CodewordConduit]

I'd say it's morally questionable.

I'd like to live my life free of work obligations, a paycheck of a bazillion dollars a day (mostly so I can stop working to pay Darth's mom for child support) and 15 hours a day to read. But sometimes our resources are better served trying to make ourselves more marketable than lobby to make it illegal for people to choose what they pay their employees.

Philo, I know, I know that your heart is in the right place. I just think that you base your philosophy on the assumption that somebody, somewhere gives enough of a crap to support yer unskilled worker (maybe she has a kid) as she works for a pittance in order to keep the basics going.

Without the government support I get, I would have nothing if I didn't pretend to love a man and have sex with him enough to keep a roof over my head, and my further education funded. That is the honest truth mate, and it's maybe why I sound so bitter about all this libertarian stuff sometimes. If I was truly selfish, sure, I could be living rather well right now, but I would probably be dead inside.

No word of a lie, neither of my parents has taken the young 'en on a single over-nighter in the past year, nobody could or would drop her off or pick her up from school while I worked full-time, and her father has issues, to put it mildly. In a sick way, the government agencies are more of a family than my actual family; and the thought of a libertarian society scares me a lot.

I would survive, but would have to lie, cheat and manipulate to do it, until I broke even. Which would be a bit crap, when all's said and done.

[Philosophickle]

CC, I completely agree. If the only thing that changed in our society was dropping the minimum wage, a lot of people would get screwed; the state-enforced, price-setting practice of wage fixing is a surface malady of a deeper problem that begins and ends with central planning. Unfortunately, in times of economic shortfall it's the poor that get the brunt of the impact because companies cannot afford to pay them at the set wages dictated to them by the state (I imagine a sub-min. wage job is better than no job at all). Prices want to come down, CC, which makes a sub min. wage job more potent. But the govt. won't let prices fall. it sucks, and I empathize and admire you for being a single mother at this age.

I know some of what this is like because I'm in a field where a small conclave of like-minded charlatans own my job prospects. If I offer my services as a teacher for less than what a professor makes (and their salaries are quite bloated), not only will I be laughed out of the interview, but I will be blackballed by academic thugs.

[CodewordConduit]

CC, I completely agree. If the only thing that changed in our society was dropping the minimum wage, a lot of people would get screwed; the state-enforced, price-setting practice of wage fixing is a surface malady of a deeper problem that begins and ends with central planning. Unfortunately, in times of economic shortfall it's the poor that get the brunt of the impact because companies cannot afford to pay them at the set wages dictated to them by the state (I imagine a sub-min. wage job is better than no job at all). Prices want to come down, CC, which makes a sub min. wage job more potent. But the govt. won't let prices fall. it sucks, and I empathize and admire you for being a single mother at this age.

I know some of what this is like because I'm in a field where a small conclave of like-minded charlatans own my job prospects. If I offer my services as a teacher for less than what a professor makes (and their salaries are quite bloated), not only will I be laughed out of the interview, but I will be blackballed by academic thugs.

I could stomach the wage cuts for the poorest people if the same percentage cut was reflected across the board. In wartime Britain, everyone pulled together to do their bit, and there was a spirit of unity, which sadly has failed to resurface in these crappy times. Is it unfair for me to think this way, do you think?

(And thanks for your kind words. Lord knows, I appreciate them )

[supton]

I'm kinda thinking that min wage is a farce. Maybe I just don't have my facts.

I took a quick look for NH living wage, which is the state I live in:
http://www.livingwage.geog.psu.edu/states/33

Should a min wage be set for an individual, or for a two adult family with two kids? Should min wage vary from state to state, since some states (like the Northeast) cost far more than interior states? [In which case, maybe the Feds should bow out of it, and let the states deal with it?]

I've always had a two-fold objection to min wage increases. One, that extra cost will simply be reflected in higher costs in the goods sold that ultimately funded said employees paycheck. That is, if McDonalds has to pay its workers 10% more, then the price of a Happy meal must go up 10%. This then impacts the lower tiers of society more than the upper tiers (who either wouldn't imagine of going McD's at all, or who do so sparingly). Secondly, the value of work done sometimes just isn't there. Should I get $10/hour wrapping hamburgers in plastic?

These days, I think I have a third objection, related to the fact that our money is being devalued by inflation, but that's an argument from other issues. [Ie, min wage shouldn't have to go up, because your granddad's buck oughta be worth the same as your buck.]

[supton]

Philo, I know, I know that your heart is in the right place. I just think that you base your philosophy on the assumption that somebody, somewhere gives enough of a crap to support yer unskilled worker (maybe she has a kid) as she works for a pittance in order to keep the basics going.

Without the government support I get, I would have nothing if I didn't pretend to love a man and have sex with him enough to keep a roof over my head, and my further education funded. That is the honest truth mate, and it's maybe why I sound so bitter about all this libertarian stuff sometimes. If I was truly selfish, sure, I could be living rather well right now, but I would probably be dead inside.

No word of a lie, neither of my parents has taken the young 'en on a single over-nighter in the past year, nobody could or would drop her off or pick her up from school while I worked full-time, and her father has issues, to put it mildly. In a sick way, the government agencies are more of a family than my actual family; and the thought of a libertarian society scares me a lot.

I would survive, but would have to lie, cheat and manipulate to do it, until I broke even. Which would be a bit crap, when all's said and done.

I hear your point, and I wish to sympathize, and I'm sure you've thought about this by now: but I have to ask the question. Why should others be required to fund your mistakes? Or your parents mistakes? I understand how we would wish as a society to make sure no-one goes uncared for; but is this not enforced charity? [Is it charity if you'd go to jail for not doing it? Ie, if I don't pay my taxes that pay for your help, I'd go to jail.]

This isn't really getting into min wage, but your post reminds me of how much we now expect the government to take care of us, rather than looking first to ourselves, then to our family, then to our community, and then finally (last of all) the government. Instead today we automatically assume that the government should be the ones taking care of us -- and then we get mad when we disagree with whatever rule they come up with. [Ie, taxes go up this year, no more shampoo in your flight luggage, etc.]

[I should also point out that, in some ways, I don't care what the UK does, versus what the USA does. If what the UK does works for them, good for them. I'm spouting things that I think are good for the USA, which is a different culture, and has different issues, than the UK.]

I'm sorry that you've found yourself in your situation. I hope that in time you will be where you wish to be. At the same time, publicly funded coverage for privately taken risks strikes me as no consequence at all.

[Philosophickle]

I could stomach the wage cuts for the poorest people if the same percentage cut was reflected across the board. In wartime Britain, everyone pulled together to do their bit, and there was a spirit of unity, which sadly has failed to resurface in these crappy times. Is it unfair for me to think this way, do you think?

I dunno, here in my part of America I've noticed two things: 1) People are getting frustrated, violent and suicidal and 2) In my area, at least, people are losing their jobs and giving up hope finding one (I don't know where you live, CC, but I live smack dab in St. Louis, which has become hell for African-American women in situations similar to yours but with significant drug/prostitution history). Most of them are jobless, and the traditional backbone of the American economy--the private sector--has to let a huge fraction of the workforce go because of the minimum wage. The govt. certainly feels that it can violate these wage laws--just ask someone like me who teaches multiple classes while attending grad school for absolute peanuts--but businesses are forced to fire employees.

Now, it'd be nice for everyone in the world to be rich and comfortable, but there are better ways of doing it than a min. wage. Taking off my libertarian cap for a moment, well-funded social programs that take their funds from some source other than the bottom line of business is just smarter. [I think you'd be interested to know that after I put that period, I embarked on a 30 minute spree of watching farting pastor videos. It has nothing to do with the topic, but just know that happened right here.] What happens when min. wage laws are set is that prices are artificially inflated. The second thing to happen is that unemployment rises; not everyone and every job is worth 8 bucks an hour, so businesses don't hire people for 5 dollar an hour jobs. The next thing to happen is that businesses equate min. wage with the minimum to live on, which reduces incentive to pay more than the min. wage. It's a handy excuse for payroll to give12 dollar an hour workers only 8 dollars an hour. Another side affect is that those businesses become unprofitable and those industries shift to other places where consumers can pay less for those services. I'm sure you are aware of outsourcing and the problems that causes for Western, developed countries, but just so we're clear, it just means you won't be working for 5 dollars an hour, not that someone else won't be. It just shifts the geographical location of those low-paying jobs.

What's kinda ironic about this situation (and has been pointed out by anti-min. wage activists that include leftists as much as libertarians) is that while the govt. forbids employment at under 8 dollars an hour and this inevitably increases unemployment, is that the unemployment relief programs pay worse than min. wage. So rather than working for 5 dollars an hour, a person becomes unemployed and takes money from govt. programs which equals, say, 3 dollars an hour.

The best way to make living standards more affordable is to increase supply, not demand. The more food we have, the cheaper homes can be built, the less we need to make to survive. The govt. fidgets with the wrong side of the equation, and creates an employment wasteland in the process.