On Balance Minimum Wage Should be Raised to at least 15$/Hour in US
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Warning to new users: My argument is as well researched as my strongest articles.
1) Not enough money.
The subsidies granted for low wage workers are atrocious, and the 15$/ hour calculation is the minimal necessary for even survival. The fact that minimum wage workers want to earn their worth, proves that the wage should be raised. As an expert notes, "It is a fact that our economic system continues to have big gaps. The web of subsidies can create realdisincentives for those at the bottom of the scale who want to work but would actually lose morebenefits than their minimum-wage income would bring in. The effective marginal tax rate for a coupleboth making low wages if the second person works can be more than 100 percent because of benefitformulas. A couple of weeks ago, when I wrote about the war on food stamps, I mentioned a D.C.woman who is struggling to feed herself and her daughter, but calculated that she would need a jobpaying $15 an hour to do better. That is an artifact of poorly constructed, patchwork policies. Liberalcant notwithstanding, there is a culture of dependency that can discourage work among many. But thefact is most people out of work want to work—it defines their self-worth."
There is much evidence among studies that even if the release from poverty was temporary, the effects would be profound. More than 41 Million workers would be lifted out of poverty. From Figure A in that website, it's obvious from inflation that we have not kept up to market price demands. Because the workers provide a negotiable service, it seems logical that the minimal wage's existence asserts their basic rights to earn a living (otherwise, they could be demanded to work for even one dollar per hour, if no one else hired them). The same article notes in Figure B that the proportion also doesn't work in contrary to the rich who keep getting richer (even in comparison to other rich people), while poor people remain poor, ending up with bigger wage gaps. Instead of trying to work longer hours, the productivity could be asserted with higher wage. It is much more incentivizing to gain bonuses and raises easily if you can take care of your family, rather than procrastinating so that you can count our hours (as the end result matters less as long as they are doing some kind of work). The logic works out pretty well.
2) Mental Health
This is the strongest argument for raising wage. Regardless of actual economic impacts, even a placebo-like effect would still be beneficial for the US. NewRepublic has reported about a study, where "The researchers found that workers who got higher wages because of the minimum wage law also experienced an improvement in their mental health, both in absolute terms and relative to the comparison groups. Importantly, the effect of the wage increase was about as large as taking an anti-depressant medication." Depression is a severe problem and delivering medicare to everyone is not as easy as implementing the wage raise. If the greater happiness would be gained, then I don't see problem here. Nobody is getting harmed, and the potential self inflicted along with suicide rates would go down. The human life is invaluable and so this point comes together total for infinite value, with incredible impacts among low wage workers, should we raise the minimum wage.
3) Market benefits
The more money people have, the more they can spend. This is logical. As a result, the potential negatives are slim to none. Various studies conducted by Berkley conclude that " a $15 minimum wage will generate a substantial economic stimulus because of the increased purchasing power for consumption. These effects, which will be greatest in the lowest-wage states, will offset employment loss among low-wage manufacturing industries. The lowest-wage states will also experience lower outmigration and hence become more attractive locations for investment. Workers in these states will also be healthier, more able to enter the workforce and to be more productive workers." Now granted, it's probable that unreasonably high minimum wage might drive out workers with not enough skill (for example, 30$/hour is likely asking for too much), however, we have found that we have gained enough finances to pay $15/hour even for workers with little to no skill. So the immigrants won't be out of work, and those in our own country are also able to compete better, since higher minimum wage makes it a little more stricter to find jobs, both for those that need it, and the competing foreign people. It's a bit of give-and-take that balances out for the most part.
Thank you to Pro for opening the debate. I look forward to the exchange of ideas.
I will not be biasing my response by referencing “cherry picked” articles against the minimum wage. One google search enables you to find all the ammunition you need to make an argument either way. As Pro has kindly reminded us “on balance” arguments are important here. On balance meaning good or bad from a 1) Political 2) Economic 3) Employees perspective. I will thus contend 3 main points in my opening statement to align with topic: 1) the minimum wage is an attack on peoples liberty and is thus objectively Politically bad (irrelevant of its claimed positive effects); 2) it is Economic poison (it is only the amount that determines whether it kills you or not), and 3) the minimum wage has negative effects on employees and fails to achieve the claimed benefits.
1) POLICTICAL. Minimum wage as an attack on liberty. Whether or not any single individual (or group) thinks that others should be paid more, is an irrelevant arbitrary and subjective opinion. Free autonomous voluntary action in the case of employment requires 2 private parties to enter freely into a contract, and agree what goods are services are going to be exchanged at what price. Individuals or pressure groups using the government to interfere in this process by use of force (however simplistically well meaning), fundamentally stops both employers and employees from entering into mutually beneficial arrangements. If I am unemployed and am willing to sell my labour at a price below the minimum wage to gain a foothold and improve my life, it is NOBODY else's business to interfere. If an employer wants to offer low skilled, inexperienced staff the opportunity of employment and training below the minimum wage, it is NOBODY else's business. The imposition of a minimum wage is an attack on this free voluntary process and institutes a system of force and control. It is not the role of Government to force its citizens (the very people that give it its authority) into doing what others want, rather than what the people themselves want.
If one balances the liberty of individuals against the force applied by the Government to maintain the rule of law, there is a clear government over-reach by applying minimum wage laws.
2) ECONOMIC. If (in a functioning economy) employment opportunities are high, wages will drift up through market forces, if they are poor wages will face downward pressure. This is precisely why we have labour markets, whose clearing prices determine the optimal price point of labour. If a minimum wage floor is set above the clearing price we achieve an unsteady equilibrium and concomitant economic damage (see below). If it is set below that point, it is useless as a policy instrument. Moreover the clearing price is dynamically moving and set in individual labour markets (not a single market). No single price can account for all labour markets. An economy is not a machine where we can alter one input and yield predictable outputs. An economy has more in common with a living organism, where (if we stretch the analogy) each cell is an autonomous actor (in the economic sense) and needs flexibility to adjust. The Capital Structure of the economy, education, skills and experience will all account for which labour markets you find yourself competing in. The market for experienced IT software engineers, is not the market for trainee telephone engineers etc.
What is the empirical evidence? It was Winston Churchill that quipped “you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.” This does not apply to the minimum wage. Roughly 75% of economists agree that such laws are counter productive. To be fair the empirical evidence is numerous, extremely mixed and can be cherry picked (as Pro has done) to support any political view. The essential problem with the studies is that there are no “laboratory conditions”, and the variables at play are under constant flux. And if we are brutally honest the research can be a little “advocacy” based, meaning the researchers are only looking for what they want to find. If one surveys all the literature (Minimum Wages By David Neumark and William L. Wascher), the following patterns emerge:
- There is no dramatic increase in short term unemployment (although 80% of studies highlight long term reduced employment)
- There is a long term reduction in hiring (limiting prospects for poorer people)
- There is reduction in working hours (eroding any benefits of the new minimum wage, as firms compensate for increased labour costs)
- There is an increased tendency for Capital to replace Labour (at faster rates)
- There is increased pressure on inflation eroding the increase in take home pay through minimum wage laws
So if one balances short medium and long terms economic results, the evidence is that the minimum wage damages economic prospects for individuals. Imposing a high minimum wage will especially reduce opportunities, meaning individuals cannot gain the experience they need to compete in the future for better wages in labour markets requiring more experience.
3) EMPLOYEES. Who bears the cost? The simplistic temptation here is to think that “greedy” corporate profits are reduced and the benefit goes to poor or low income families. Whilst the Finance Director writes the cheques and calculates the effects on profits, he does not and the company does not bear the cost. It is either 1) the employee (through reduced hours), 2) the Customer through higher prices (employees themselves), 3) the investor (through reduced profit, dividend and/or capital growth), or 4) obviously any combination. It is they that must ultimately bear the cost. Ah-hah well at least greedy investors get hit, you may think. But who are the investors? Most company investment is made by fund managers, managing trillions of private pension funds (of employees). In other words the cost of a minimum wage is borne by employees and is merely transferring wealth from one set of employees to another. In short it is pointless social engineering and an intellectual conceit.
The best solution is to allow an economy to react dynamically to ever changing economic circumstances, and for the Government to get out of peoples economic lives. In short free-markets. They do not know what is in the mind of every person, every second of the day.
Imposing price controls whether on wages, car parts, milk or any other factor of production merely distorts and tilts the economy in one direction potentially benefiting person “A” at the expense of persons “B to Z”. But we live in a world where short term political rhetoric is used to create an appearance of benevolence. But if the politicians were serious and if the minimum wage is on balance a “good thing” and has no negative effects, why not set it at 1000$ per hour. If imposing price controls is on balance a good thing, why not set a minimum price for a car, lap-tops, mobile phone, house or whatever. The answers are obvious and present all those who argue in favour of minimum price laws with a reductio ad absurdum. In other words their arguments are absurd. Could it be that politicians want to “appear” benevolent, but actually do not want people to be as well off as them? Could it be that politicians know this is a damaging policy but only want to inject a small amount of poison into the economy so as not to kill it?
On balance the minimum wage hurts ALL employees (especially in the long run).
In the next round I will rebut arguments presented by Pro and detail the common logical fallacy he (and others make) in the political and economic sciences.
Thanks Surgeon. I will gladly drop argument two as I have done my personal research and I admit the pros and cons seem to balance out especially with experts vs experts. It is difficult to say for sure if the culmination of twenty years versus uncertain other factors may have combined together to cause difficult results in most studies. For example, a peer reviewed journal from John Schmitt says the negligible effects of min wage raise can be explained with other variables: “most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases.“ so it can’t be said for certain that it will have negative impact especially with other regulations and ideas set in place to tweak the flaws of the raise.
Secondly, the liberty point is slightly strange, as it seems to advocate for a pure capitalist society. Any regulation infringes on liberty in exchange for security. There must be some standards and some basic ideals. In the past, factories have had horrible conditions and even child labor was sponsored. With Zero government control, and purest liberty possible we would have riots on our hand, strikes that force the government to take action either way. Therefore it is perfectly reasonable to take away a little liberty if companies are able to enforce it and save lives. Con must prove this infringement of liberty outweighs its benefits.
Finally the third point is interesting but slightly contradictory. The first “negative” of reduced hours is a double edged sword on cons side. If you work 3 hours here for 15$/hour and three hours in another location for 15$/hour then you still get net benefit compared to 7.5$/hour for nine hours. And with the customer, the price hike will not necessarily occur for all companies or all products. Some companies only hire very skilled workers and so would not be affected. Others might benefit so much from revenue already that a 15$ raise wouldn’t drop prices. Next, con says it’s bad to funnel resources from employee to employee, but doesn’t tell us why. If we had to reduce someone’s wage from $35 to $28 per hour in order to raise the wage, the $7 per hour would make a small difference for the it already succeeding, vs the guy who is struggling to make a living. So the negatives here are not too bad.
I await cons argument.
Thank you for your points Pro I will deal with them later. Firstly as promised I wish to point to the common logical fallacy made in the field of political and economic sciences.
Frederic Bastiat writing in the 19th century introduced the “broken window fallacy”.
In Bastiat's tale, a boy breaks a window. The townspeople looking on decide that the boy has actually done the community a service because his father will have to pay the town's glazier to replace the broken pane. The glazier will then spend the extra money on something else, jump-starting the local economy. The onlookers come to believe that breaking windows stimulates the economy.
Bastiat points out that further analysis exposes the fallacy. By forcing his father to pay for a window, the boy has reduced his father's disposable income. His father will not be able to purchase new shoes or some other luxury goods. Thus, the broken window might help the glazier, but at the same time, it robs other industries and reduces the amount spent on other goods. Bastiat also noted that the townspeople should have regarded the broken window as a loss of some of the town's real value. Moreover, replacing something that has already been purchased represents a maintenance cost, not a purchase of new goods, and maintenance doesn't stimulate production.
This is more commonly expressed today as the law of unintended consequences, or perhaps more colloquially as ”the road to hell is paved with good intentions”. But the song remains the same. Too much economic thinking is one dimensional. Just do this and there will be no detrimental effects, but person “A” will benefit. But every time we make “engineering like” adjustments to the economy, we end up impacting the structure of production and capital in unseen ways, distorting it and tilting it away from its optimal point (expressed through supply and demand and the clearing price). The minimum wage and the arguments used to support it fall directly into this trap. In my view Pro has an impossible task. For his argument to work “on balance”, he must prove that there will be less “bad” unintended consequences from such a measure, compared to “good” intended consequences. But we will only see measures on how it effects person “A”, never on “B to Z”. To date both logic and empirical evidence are that such measures are counter productive.
On to Pros comments.
Am I advocating for a pure Capitalist economy. In short yes. The minimum wage is one thing I would strip away. Along with central banks, Government control of money, countless amounts of red tape and regulation, price support and control mechanisms, anti-trust legislation...the list goes on. However there are points of agreement and disagreement. I am not arguing for an anarchy (anarcho-capitalism). As I stated in my opening, Government plays an essential role in maintaining the rule of law. With respect to a capitalist economy this is expressed through laws pertaining to international trade, property rights, contract law, and non-aggression principles (physical and financial). Anyone committing fraud (for example) is guilty of a crime. Thus a legal system, police, military and diplomatic service are required. And in Pros example I would expect riots to be put down through policing and upholding property rights.
As for child labour etc., are we serious? In what way was capitalism and free markets responsible for child labour? Was child labour absent, in the absence of free markets in the former socialist countries? Which countries abandoned child labour first? Which countries still have child labour? There is not even a correlation between child labour and capitalism. What we are talking about here is the social evolution of a society away from distasteful practices. The plain fact of the matter is that 300 years ago most of our ancestors (including the children if they survived) died in poverty, working in the fields at very young ages. The industrial revolution changed that, and people lived longer in better housing (albeit squalid by our standards). But the social practice of using children in the workforce was common and a hangover from times before the industrial revolution. But to be clear, it is NOT acceptable in a capitalist or any other system to use child labour. Children lack the basic ability to consent, thus in the case of employment, they are not able to contract (this is a basic concept in contract law - principle of “mens rea”). The opposite is true than what is suggested. Capitalism and its incredible wealth generation, actually accelerates such social evolution (see the Kuznets curve), away from things like child labour.
I do not have the burden of proof that the loss of liberty is worse than enacting such laws. It is axiomatic that we want to live in economic freedom, it is illogical to claim that minimum wage laws do not impinge on that freedom. The question you are perhaps getting at: "OK where is the balance?". Well the answer to that is we only find that through trial and error, but Robert Nozick in his famous book "Anarchy, State and Utopia", was able to bootstrap and intellectually sound starting point.
As for the double edged sword you see with reduced hours. 2 points. Firstly the minimum wage is likely to reduce dynamism and new opportunities, making it less likely that anyone will be able to find a second job (as those jobs are less available, and the first job is also more likely under threat). Secondly the effect is more likely to be marginal than it is multiplicative. Someone working 40 hrs / week may have their time cut to 30 or 32 (not to 20). Meaning they have much less available time to re-invest in other opportunities, even if they could find those opportunities. In other words they are more likely to be idling, and we lose productive capacity from the economy (which is the engine of growth in the economy). As I said we could point to any number of articles that demonstrate this, but then we run into the problems of selective research.
Sorry if I was unclear which argument two I was dropping, I meant your argument two, not my argument two. I still don’t feel like you’ve pierced at the heart of my argument. Regardless of small economic and liberty problems, even if we forced companies to save lives indirectly, this would still be a net benefit. While liberty is important, if companies still held onto vast amounts of money for personal profits, and hold on very long hours then people would be depressed. The effects on mental health still are not refuted. You must prove that the economic effects are so toppling that even saving hundreds of potential lives and suffering will not be worth it.
Yes that was a little unclear and I thought it was a bit strange given that you thought your argument 2 was the most persuasive.
Perhaps I am not making myself clear. But let me take you up directly on the mental health point. You are persuaded by one article examining ONLY the positive effects of implementing such a policy. The article isn’t impressive to me. It is already pre-loaded with assumptions and is advocating for a “side”, rather than being sober research. For example the quote “everyone deserves basic healthcare”. Who said they did? It may sound harsh but why do I or you have the obligation to care for someone who I or you do not know? I might choose to voluntarily of course, but this cannot be an axiomatic presupposition. You may claim its the government who are responsible. But who are the government? who funds them? A philosophical argument needs to be constructed for such a claim (and there simply is not a convincing one). Even the philosophical attempt by Marx: “to everyone according to need, from everyone according to ability”, has no grounding in natural law or rights, it is just grounded in rhetoric.
EVEN, if it were true and this was not advocacy research (it clearly is), we should not ignore the simple fact that mental health is impacted by many factors which were not controlled for in the survey. In addition the survey did not include the mental health of workers who lost their jobs as a result of the minimum wage, nor those who faced reduced hours, nor is it longitudinal (as the results of such a policy work through the economy, pushing up prices and reducing returns on capital for everyone). There is an admission of this in the article: “There are reasons to worry about Reeves’s data. The most important concern is that it was not a true experiment, because workers could not be randomly selected to either get a wage increase or not. So it’s possible that the improvement in the mental health of workers who got a raise had some other cause.” It goes on to quote another randomised study, but that only falls foul of the points I raised above.
You are simply not addressing the points. Why should we believe this “on balance”. 1) In short this is Bastiat's broken window fallacy writ large, what about all the other impacted people who are unseen? 2) I raised the point about “who bears the cost?” I contend that it is only people (not companies) that can bear the cost of such measures, ie employees themselves and as we are distorting the efficiency of market processes the net effect is damaging not positive.
Sorry to quote mine you. I generally do not like that style. But just some points to add clarity.
“While liberty is important, if companies still held onto vast amounts of money for personal profits, and hold on very long hours then people would be depressed”.
Again this is fallacious reasoning. If this argument were true then it should be demonstrable that working for companies making strong profits is correlated (and casually so), with poor mental health. Do you want to work for a company making losses but pay say 11$ hr, compared to a company that makes strong profits and pay say 10$ hr. Maybe you do?, but not everyone would choose that option. It isn't rational nor good for mental health to be constantly worrying that the company will go bust and that you will lose your job.
But on a deeper point I have to ask if you understand what profits are why they are important and what happens to them? Your point rather assumes that some top-hated victorian capitalist has a secret company mattress where he sticks surplus cash at night, whilst the 11 year old he employs sleeps in a cardboard box, and that profits are some evil mal-intent by greedy companies. This is NOT how it works!
Firstly profits are a good thing for society. They are a signal to Entrepreneurs of where to invest, in order that society is served the best mix of products and services from available capital stock. If the population at large demand something in high enough value/quantity, profits can be achieved by efficient deployment of resource. The people get what they want and jobs! No societal need, no profits! Profits are either 1) retained by the company for investment in new productive capacity to expand business and eventually employ more people (although this can take time as capital is re-structured), 2) retained to strengthen the capital position and debt ratios thus increasing the share price benefitting the investors, 3) paid to investors in the form of dividends. The vast majority of “investors” in sheer weight of cash are NOT Warren Buffet types, but are you and me and billions of employees worldwide through our pension funds. If you see profits as some rich seam to be mined for whatever “social justice” policy you want to deploy, you end up hurting the very people you want to help. In a free market capitalist system profits and clearing prices are the main signalling system and driver of production and growth. Taking a share of them merely distorts this and worse still promotes cronyism between governments and corporations, leaving the common man worse off.
“You must prove that the economic effects are so toppling that even saving hundreds of potential lives and suffering will not be worth it.”
You seem to want to continually shift the burden of proof, when neither you nor these articles have remotely come close to prove the positive for the case. I do not have the burden, I can simply point to the fallacies you are making and ask you to address those to make your points less contestable. As Ludwig von Mises pointed out economics is a branch of logic (the logic of human action), not an empirical science. It is as easy for you (as it is for me), to cherry pick articles demonstrating our respective cases, but I am trying to get underneath the “noise” and rhetoric and ask the obvious questions that follows from such disastrous policy instruments.
Your argument structure is:
P1 - Paul will be better off (insert claim here... purchasing power, mental health etc), if I take something away from all the Peters
P2 - All the Peters will be not worse off
C - Taking from all the Peters is a good idea
I challenge P2 flat out and P1 is at best conflicted by other evidence and especially longitudinally. You are sacrificing liberty in order to rob Peter to pay Paul, and make Paul happy for a brief moment until his hours get cut back, he loses his job and/or his new spending potentially induces a dose of inflation wiping out his new gains through the minimum wage. On balance and in the long run nobody is better off. That is a worse result for everyone.
Now I understand where Con is coming from, but the equivalent of "communism" (funneling from rich to poor) is not necessarily the worst idea. Numerous studies have found that the 7.5$/hour is not nearly enough to survive nor support a family of three/four. This is common sense. The minority rights and problems are putting them in the drain at the benefit of the majority who live relatively well. Con has tried to say that it is bad to take away from someone merely because you can (they have no need for it), but then encouraging Charity would also seem to be pointless, which is illogical. Just like the job itself is a market demand, workers on higher level can still yet negotiate and try to settle some kind of deal so that they wouldn't have to contribute too much money to raise the minimum wage. The fact that more than half a million are paid minimum wage, despite the disparity between inflation rates, goes to show that the companies' greed encourage them to put the wage as low as possible, despite earning more than enough to pay for $15/hour. Already, low-wage workers are going on strikes in the tens of thousands, which is far more harm with potential earning/productivity lost than Con's lack of real numbers or figures given. He thinks that merely reducing one aspect of depression isn't going to do much, despite my claim that it is as effective as giving everyone anti-depression medicine. Reeves on his own may be questionable, but add upon another expert's opinion and the idea is solidified: "Increasing wages can improve psychological well-being and job satisfaction, increase the opportunity cost of engaging in unhealthy habits, and expand the ability to delay gratification.1 Increasing low wages can also reduce income inequality."
Conclusion: Con says liberty is important, but I say equality is also a form of liberty in itself. Without the opportunity to break out of the minimum wage shell, low wage workers continue to suffer, and speak out against the lowly 7.5$/hour idea. Con has listed many potential flaws, but the fact that the suffering is much lesser with minimum wage raise means that pro still wins out in the end. Because Con has failed to note how a middle-class with slightly lower wage, will outweigh the very lower class with much better wage (proportionally, it's 200% increase, compared to say, 7/35 which is only 20% decrease). Vote pro.
Firstly I would like to thank Pro for an entertaining and lively discussion, conducted in a polite manner.
In this part I will try and summarise the debate:
- We have seen fallacious reasoning to justify the introduction of a minimum wage
- Referencing of a narrow range of studies to support 1)
- Rhetorical canards aimed at rubbishing the ability of free markets and capitalism to solve these problems to support 1) and 2)
False reasoning, selective studies and rhetoric do not construct an argument, they are merely gloss. An argument needs to be grounded in solid thinking, logic and bedrock reality. The bedrock reality is, what it is. Free markets inevitably lead to the best possible outcome for everyone. The freer the market the more wealth is created for everyone, and interestingly the poorer in Society have higher absolute levels of wealth. What is the evidence?
We need only plot GDP per capita against the the International Economic Freedom Index (a proxy measure for how capitalist a country is). There is a direct linear relationship between a countries wealth and this index. The average person is better off, not worse off under free markets. This is why the ordinary person votes with their feet and wants to migrate to countries with more economic freedom, rather than less!
But doesn’t this lead to inequality? Not at all! We can make the same plot for the GINI coefficient (a measure of wealth distribution), which effectively flat lines. There is no obvious relationship. Infact wealth distribution is worst in socialist countries, where a narrow oligarchy sit on top with everything (“on behalf of the people”), and everyone else has literally nothing (private property being outlawed). I admit that is an extreme example, but the rhetoric of a social justice intervention in the economy (such as the minimum wage) is simply not backed by the facts.
“Numerous studies have found that the 7.5$/hour is not nearly enough to survive nor support a family of three/four”
But this is evidence of the failure of government intervention, not of free markets. What would wages be in a dynamic free market economy, where the competition for employees was robust. In a mixed economy we are only slowly poisoning the economic patient, rather than killing it directly through socialism. But we are shackling it with regulation, picking the pockets of wealth creators to give it to our favoured groups (this week and another the next) and creating cronyism. Wages in countries with freer markets have higher wages, and purchasing power (reference the Heritage foundation). Minimum wage policies are effectively saying, now we have poisoned the patient a little bit with some arsenic regulation and that has not worked, lets try strychnine to solve the arsenic problem. The answer to low wages is not more but less poison.
In any society there will be winners and losers. In a society with high degrees of economic liberty, some people are just more talented than others, we would therefore expect there to be in a difference in outcomes. That is a good thing! It promotes innovation and production. Equally some people simply do not have the skills nor ability to compete for higher wages. We want them to have the maximum opportunity not restrict it by minimum wages. We do not solve things by removing everyone's liberty to benefit a group. We have to accept the world as it is, and allow a dynamic market to drive everyone to the highest point they can achieve. For those who fall disastrously back (which is a very small part of the overall population), there has always been support from the community and public at large through charity and voluntarism. But nobody should be forced or compelled to act as someone else wants to see the world, to benefit a third party.
And in any case, as I have demonstrated in previous rounds, the people who bear the cost of such measures are other employees, not employers. We do not have the right to take from all the Peters to give to a single Paul, just because we personally have a beknighted vision of how society should be.
As for the canards we have seen:
- Accusation that Capitalism was responsible for child labour - false
- That Capitalism enriches a small group and keeps others in poverty - false
- That Capitalists keep profits for themselves - false
Pro has introduced yet another canard in the last round, namely. That equality and liberty go hand-in-hand. Equality is NOT compatible with liberty. That has been clear at least since the enlightenment or arguably as far back as Aristotle. To enforce a pattern of equality you have to treat people unequally, meaning laws restricting what some people can do or must do are passed and their liberties are restricted and/or property taken. There is no example in history where this has not been true. Reference here F.A. Hayek on “Social Justice”.
Economics is a dismal “science”. It is (in effect) the study of shortage. Like the weather or indeed evolution, it conforms to models of chaotic complex systems, and is far from perfect. It is sometimes wasteful, sometimes hyper productive, sometimes protracted, sometimes resilient to change, sometimes the tiniest variable can throw it into convulsions. But of course that is the nature of spontaneously ordering systems. And as we have seen, through history, it is capitalism allows us to operate at our best, settle and adjust within that spontaneous order. A set of government bureaucrats, with a list of qualifications as long as your arm, can never plan better than the market, because economic information is widely distributed in the heads of billions of people, making hundreds of decisions daily (and all the time their personal preferences and sentiments are changing hourly). The fatal conceit of socialism, and the fatal conceit of mixed economies are where we think that these same bureaucrats can enact policies such as the minimum wages, price controls, incomes policies and we can achieve a better result. Free markets are always the optimal solution to manage shortages, the main problem with them, is that they have no PR machine, and demagogues with PR machines can always point to problems (as they can in any chaotic complex system) and say they can do better. They cannot.
Once again thanks to Pro for raising this very interesting topic. I enjoyed the exchange.