Legally Raising The Minimum Wage In The US Is Pointless
Debate Rounds (5)
We must correctly identify the cause of low wages before aiming to raise them.
The first issue I'd like to bring into this discussion is the job losses for manufacturing of material goods.
"Made in the USA" products were once quite prevalent. Jobs related to these products were the backbone of our middle class. These jobs were generally quite plentiful and could be performed with minimal education.
Today, these jobs are rare. Profiting from something of actual material worth in America is incredibly difficult. The reasons for this effect most jobs in America, but the manufacturing sector has been hit hardest and is the best example.
Some reasons for this are as follows:
Good or bad, this is expensive. The businesses that profiteer from the legal requirements of this are often more profitable than the businesses they are pro-actively investigating (or regulating, if you want to call it that.) Fines against businesses for breaching these regulations are very hefty and often fail to scale to the size of the business. Legal fees and lobbying for certain exemptions are also things that influence the survivability of fresh competition. Less competition means higher profitability for larger corporations but less job-market competition in related or similar fields.
Human resources, safety inspections, disability taxes, safety meetings and regulation requirements, hazard analysis, swaths of legal documentation and court-preparedness, worker training, supervision, mandatory safety equipment from companies with patents or licensing fees, massive insurance payments and bigger penalties. I could go on for hours.
90,000 pages of tax code. IRS penalties. Legal costs. Cost of hiring tax experts. Special taxes that apply to your sector. Volatility due to political climate.
Resources and waste management:
Manufacturers often need to pay extra to use energy, water, attain resources, negotiate trade deals, manage waste on their own, provide their own infrastructure instead of utilizing services provided by the tax pool they pay into, and more.
Shareholders, banks, and stock market management:
This is crucial and at the heart of most successful business. Don't spend money developing good practice in these places, and you will be out-played by the companies who excel in these fruitless games. Yet another thing that produces zero material use for society.
I mean, I could probably go on for days, but I'm not quite an expert. I'd hire an expert if I had the kind of money required to start a business that has any hope of succeeding.
Now as I said, much of these things are actually good. Many are horrible, but well-intended. All of these things cost a lot of money on the government level and the corporate level. Tax payers (workers) pay for the government side of things, corporations pay for both.
Let's even go ahead and say we keep all of this and don't even analyze the actual cost of all the governmental de-stabilization of the free market (can we still call it free?)
What happens when we start freeing up trade with China, or India, or Taiwan. Japan, Africa, Korea.
What do you think should happen, when we trade with almost anyway and we can't make their markets adhere to the same standards that ours do?
Well, we'll probably get the cheapest goods from the countries who can trade with us as efficiently as possible. I'll tell you, it won't only have to do with the skill and efficiency of their work force.
It'll probably have more to do with their total lack of caution for the well-being of their workers, the environment, common-wealth, and anything you can consider good business practice other than what's good for profitability.
So after we've done all this to improve our business ethic by governing the market, we go and open up that market to the entire world and let our businesses try to compete. When they fail, we blame it on mysterious "economic crises."
Now, after decades of building on all of this, the job market is extremely competitive. Not for the people hiring, but for the people looking to be hired. People are seeking higher education to evade the growing number of jobs for our "working poor" class. They're gambling on their ability to be better than the next person, hoping for better schools, grades, or trades. All of which require more investment at the younger ages, and a great deal more stress. Meanwhile, the jobs available for these educated people are showing no sign of increasing. This means more people with more debt, still finding themselves in the "working poor" class. These people actually generate less tangible earnings than those who give up entirely on education. Wealth that builds over generations, such as that earned by property (or at least not lost to loan penalties) is diminishing as well; and we know that poverty transcends generations.
These are big problems. Of course, the root issue is the lack of jobs. The lack of jobs appears to be due to the volatility of our government impacting our free market in-proportionately to the markets we trade with.
Trading with foreign countries is a privilege that is generally reserved for the richest corporations. Corporations that have copyrights, patents, and other mechanisms to restrict the free market through law. They even have funds to lobby for politicians, and pay for campaigns necessary to run elections.
In the end, none of it seems to serve the common American worker. Our politicians are asking for our vote with the promise of a minimum wage increase; is this the solution?
I don't think so. I think a minimum wage increase is a bandaid that will actually harm the worker more over time. We haven't even covered inflation. Inflation of our currency, cost of goods, the every-increasing cost of borrowing on a national level..
Does it make sense to simply force businesses to pay more to employees, when the climate that resulted in this abuse has yet to be reformed?
A say minimum wage increases are just political tools. They serve to do nothing to fix the root issues, and may actually harm us more in the long run. Minimum wage increases have only served to buy temporary calm from the people of this nation. It's being touted around as something to save single moms, college students, and struggling low-economic areas. It's none of these things.
Minimum wage is just a fresh carrot for a very tired horse. I think it's about time people realized that.
1) It creates a stronger middle class. More people will have greater disposable income which they will spend, thus stimulating the economy. This is good for businesses and society overall.
2) It creates a sense of 'worth' for people. If a person is paid a decent wage, knowing that they can meet their daily needs, they'll feel better about themselves. This leads to greater productivity in the workplace and creates a more harmonious society and an environment that is conducive to positive psychological and emotional well-being.
3) It prevents a situation of a 'race to the bottom.' Competition is sometimes bad. In the case of wages, competition will always result in the driving down of wages, because there will always be someone who is willing to work for less, particularly in unskilled jobs. Proponents of the free market claim that people who are more productive will be paid more, but then by that logic, employers will fire more productive staff and hire trainees in order to keep wages low, since the cost of keeping a productive worker is higher than the productivity gained.
Here are two common arguments against the minimum wage that I would like to debunk:
1) Businesses will move offshore because they will no longer be competitive due to the increasing cost burden of the minimum wage. This argument is flippant, at best. The fact is that developing nations like China will always have lower labour costs than the US. Let's say it costs 50c per hour to hire a person in China; in the US the minimum wage is around $7 (federal). Even if the minimum wage were lowered to $4 per hour, that's still eight times higher than the minimum wage in China. Therefore, $4 is technically still too much in labour costs, even though it's lower than $7. Now, one may argue that American businesses would be willing to absorb a little bit more labour costs if it means keeping jobs onshore. So, at what figure is that? Is it $4, $3 or $2 per hour? Even at $2, that's still four times the cost of the Chinese worker, not to mention other potential savings made in China, etc. You see what's happening? It's beginning to be a 'race to the bottom' and that's assuming that businesses are willing to absorb that little bit extra in order to stay in America, which is contrary to the logic of capitalism and the free market, since the purpose of a business is to maximise profit for its shareholders. Also, even if you argued that $2 per hour is okay because that's what the market pays, then the other question has to be: is this going to be enough for a person to live? The answer is likely to be no, since no person could live off $16 per day (assuming that he/she works 8 hrs per day) in the US.
2) People choose to work in unskilled jobs and therefore it's their fault if they earn low wages: should I even dignify this ridiculous statement with an answer?
Finally, the no-brainer. All major developed nations in the world have a minimum wage; some might have collective bargaining, but the result is essentially the same. If you look at the countries with the highest standards of living according to human development indicators, all of them have a reasonable minimum wage. Why is that? It can just be a coincidence? The minimum wage has been proven, tried and it works.
Yes, it is flippant, because business has already moved offshore gradually over the last several decades for a multitude of reasons. You may have noticed that I established that already, if you'd read my opening argument.
"2) People choose to work in unskilled jobs and therefore it's their fault if they earn low wages: should I even dignify this ridiculous statement with an answer?"
It's your ridiculous statement. I didn't inject any of these ideas into this debate so you're not going to earn any points by colorfully dismantling them. No one's asking you to dignify your made up question with an answer.
The bulk of the first half of your post was about why good average wealth is a good thing for the economy. The reason for this is obvious; how you call this proof that a legally imposed minimum wage is the only way to generate wealth in the middle class, though, is beyond me. Raising the minimum wage is raising the quantity of dollars given to people with zero regard for how that will impact the quality of those dollars. Wealth can't be measured by the quantity of dollars a person is legally required to be paid, because the worth of those dollars is relative to what commodity prices are.
Raising minimum wage does nothing to prevent the market from continuing increasing commodity prices, and probably does a lot to cause it. The many factors that made it possible for these companies to produce multi-billion dollar quarterly profits, instead of competing with each other, have been introduced gradually over the nearly a century. It's no wonder people find it so hard to grasp the real issues. I touched on many of them in my first post, but you wouldn't know that.
The imposed rules of this market resulted in the ceaseless raising of commodity prices, increased taxation, trade advantages of foreign industries due to obvious unequal government imposed operating costs, market-dominance strategies including legal force to squelch competition, and the profiteering from ever-growing debt that generates an unending growth of immaterial dollars that can be used to buy material things.
The economy will always seek to take as much from the consumer as possible while keeping operating costs at an absolute minimum. That's actually a legal obligation for corporations. Go ahead and legally impose greater operating costs without legally limiting profit margins, and see what happens. You'll need to do it again shortly, but not until more permanent wealth has been generated at the very top in the form of new equity or profitable debt taken from the people during the period of high earnings imbalance.
Raising the minimum wage under these conditions is not a solution. It's a tried and proven method of winning votes and keeping people's eyes off of the underlying issues. A minimum wage increase will get peoples' heads above water long enough for them to get enough oxygen to live through the next dunking.
I look forward to hearing your response to round one.
You have some catching up to do.
Despite you argument, you have failed to address a simple point: what is the alternative to a minimum wage? I assume, based on your comments in the first part, that you advocate a market-based solution when determining the minimum wage, for the purpose of maintaining the profits of businesses in an ever-increasing competitive global economy.
If your view is of the above, then you need to address the issue (which you didn't address in the first round) about the 'race to the bottom.' If there's no minimum wage, and we wish to have a market solution instead, how do we prevent the foregoing situation?
You mentioned that the biggest issue is the lack of jobs, particularly in manufacturing. The fact is that there will always be unemployment, not to mention under-employment, and not to mention those who have given up looking for jobs. I agree that the more jobs there are, the better; but this isn't so clear-cut. Jobs for whom? University graduates? Construction workers? Waiters? It's not about the job, so much as it about the fact that 'work should pay'.
There's a lack of positions for even the working-poor class; nevermind the fact that these jobs make people want to kill themselves. The jobs provided for this class of people are generally provided by corporations who have massive, multi-billion dollar net profits every quarter. We need to examine the circumstances that have made it possible for these corporations to make such huge profit margins without competition that would lower their commodity prices and keep our dollar's buying power up.
When you look at a corporation in America that posts multi-billion dollar profits and decimates it's competition, you usually see a few common issues. Most of these companies are profiteering from foreign labor. If you look at my original post, I went over why this is possible in detail, but no single person can quantify the actual implications of it all -- that's a job that I'd love to see our government doing. The government, however, isn't expressing much interest in bringing these issues to light. Large corporations fund successful elections. They make sizable donations to tax exempt foundations that are often run by politicians; when they aren't run by politicians, they're run by people who invest large amounts of money in lobbying as well. It's plain to see why the government might turn a blind eye to tackling the underlying issues for falling wages. I've seen some politicians try to run a campaign on this issue; they are often blasted by the media as isolationists if they get any media attention at all. It's hard to succeed without big funding, particularly when your message is directly against whatever these people are trying to buy with their "donations."
You're making big generalizations like "the fact is, there will always be unemployment" and "there will always be a race to the bottom for wages."
This is verbatim from the very people who are dodging the underlying issues that actually cause unemployment and a race to the bottom for wages. These are issues that are very much connected to our governance of the market. We inflict expensive regulations upon our domestic labor and do nothing to equalize foreign labor expenses.
You can't hire American labor without providing expensive social programs, minimum living wages, and special accommodations for race, religion, special needs, gender equality, etc. These are good things. And let me emphasize; I'm not saying these things should be given up. However, if we continue to trade freely with foreign countries that do not need to incur these expenses, our domestic companies will undoubtedly fail. Anyone who can't identify this issue is ignorant, and anyone who denies it is delusional. Politicians that don't talk about it aren't stupid; when they're forced to talk about it, the way they deflect and warp the topic is quite intelligent. Albeit, when most topic debates are limited to the attention span of your average American (30 seconds or so,) it's not terribly difficult to get out of it unscathed.
Say, for example, if Apple wants to make an iPhone; why would they buy American metals, plastics, or glass? All those raw materials can be produced more cheaply in foreign countries. Why would they take those materials and mold components from them? It can be done cheaper elsewhere. Why would they use American laborers for assembly? It's cheaper elsewhere. Even the shipment from foreign nations is cheaper when provided by said nations. Even foreign oil is cheaper to provide energy for all levels of industry. If we can't impose our price fixing on oil, our artificially profitable oil companies fail. If we can't buy patents and inventive employees from foreign countries, we lose our price fixing on products like smart phones. Our economy isn't only suffering on the bottom, but at the top there's a lot of speculation about how long we can continue profiting while producing nothing of actual material worth. Half our market is contingent on loans acquired from speculation. How long can it go on?
Brewing a coffee, frying a burger, or ringing through an item does not produce any material wealth. We're outsourcing far too much actual industry, and the world undoubtedly notices that most of us only work to facilitate each others' consumption of foreign goods. Increasing minimum wage under these circumstances is not a solution.
Just think about all the jobs that have been removed from American soil lending to any single product that you might go out and purchase. American corporations profit almost entirely from foreigners. The jobs remaining in America that produce actual material worth are extremely difficult to profit from, and it's not hard to see why.
So is the solution to simply increase minimum wage? I think not. Increasing minimum wage just serves to perpetuate this problem. It does means that corporations will pay a bit more to their working-poor class. Any corporation would be absolutely silly not to recognize that they can increase prices, at that point, and it will not result in new competition.
The corporations are not paying people enough. That's clear, when you see their gigantic profit margins. Take the annual net profit of a large utility, energy, fast-food, or what have you; divide their annual net profit by the number of employees. You'll be shocked at just how much money is produced from each person in comparison to how much is paid out to them. Most of the money goes to already-rich shareholders and lenders. Does it make sense to generate wealth without producing anything of actual substance?
Make the corporations pay more to their employees, and what will happen? They'll charge more. They "compete" with a shared reluctance to dip below multi-billion dollar profit margins. Increase their operating expenses, and they'll increase their prices.
I can't give you a solution. If I had one, I'd be running for office and probably failing because I'd never get the kind of money required to run an election. Who'd pay for it? What party would accept me? Democrats and Republicans both get the funding for their elections and the funding for their tax-exempt foundations from this system. To have your voice heard in America as a political candidate, you need money, charisma and you need to maneuver around political landmines like being touted as "against a minimum wage increase."
What I can illustrate for you, is why minimum wage increases are totally and completely pointless. And that's what this debate is about.
I also recognize that the way to deal with the issue of companies moving off-shore can be quite contentious. Should the Government actually prevent companies from moving off-shore? This would be beneficial in reality, and the most effective means of achieving this would need to be done on a more global scale where the EU likewise prohibits companies from moving off-shore. Competition and the free-market have won out in this instant, and whilst we could hope and pray that Governments would do something like this, it's highly unlikely, and I think you realize this as well.
Whilst the economy is in this shape, however, there is still the lingering issue of the minimum wage. As you rightly pointed out, business would, in theory, increase their prices to compensate for the increase in labor costs; and this is seen in countries with high minimum wages. I know from experience that prices can only be increased so much. In a competitive market, firms are competing with either other for markets, so there is an incentive for businesses to try and have as competitive a price as possible. Prices don't go up in accordance with wage growth, and neither does wage growth increase with cost of living prices. It's not that simple. What actually ends up happening is that businesses need to take more out of their bottom line in order to meet the increase cost of labor, and of course this affects how business-friendly a jurisdiction is, or why it's harder to succeed in some jurisdictions that others. The biggest blow is on small businesses, I admit. Ultimately, what drives prices down is competition, the effect of which is greater than labor costs. Supermarkets like Aldi, Lidl and Costco have entered high-wage markets and played a role in injecting competition into those markets to the extend that the former oligopolies have had to restructure their prices; and this has taken place despite the fact that the minimum wage is comparatively high.
NuckaBlitz forfeited this round.
augcaesarustus forfeited this round.
The fundamental issue is that the American economy is weighed down by regulation and restrictions that it cannot impose upon the entire world. Without a balancing mechanism that effectively preserves the viability of real industry, our economy will continue to suffer. You cannot fix the underlying issue with a minimum wage increase.
The most secure and viable markets in the US are ones that include serving consumers for a reason.
We are a consumer country. We regulate, by extension of policy and regulation, what markets can compete against foreign competition and what markets can't.
As of right now, we heavily suppress industry that produces actual material goods. Yes, exceptions exist, but we currently take far more than we give. We import more food and resources than we export. We do not import resources and export the fruits of our labor.
The world, primary, trades for our bank notes. They also trade for the rights to use our patents and copyrights, which we enforce through global political agreements that greenlight direct enforcement by agencies or military. We also trade military aid for political compliance, and this supports our immaterial economy.
If tomorrow, the world no longer accepted our bank notes or recognized our patent and copyright law.. we would be left with our material trade and our they would be out of compliance with our military-aid agreements.
Our actual exports could never support the consumerism of America. That's the underlying reason against increasing minimum wage.
You can't simply take more from the corporations. Every dollar spent out of the US economy is only capable of buying greater oppression of foreign laborers.
We buy coffee beans, iPhones, clothes, televisions, raw resources, oil, and obviously much more from these impoverished countries. There are so many things that we cannot make here in America, because our government won't allow us to take the lower standard of living that comes with deregulation. Meanwhile, we do allow ourselves to benefit from the willingness of other governments to do so. The result is fundamentally slave profiteering, but it's far enough away and done so ambiguously that it doesn't bother the common persons' sensibilities.
When we suddenly find our quality of life decreasing, what we're actually seeing is a quiet improvement of living standards abroad. Increasing minimum wage is just a reassertion of our "right" to do nothing, but we need to be able to back it up if we want it to work. We need to take more and give less, and they need to give more and take less. That's the end result.
So if they refuse to give more and take less, like they've been quietly doing, the minimum wage increase will only result in higher commodity prices. Foxcon in China will increase their costs for iPhones, Apple will increase the price, and our dollars will be devalued. The dollar devaluation will impact every unspent dollar; social security, savings, investments.. etc.
The whole thing is a mess, and we are very much threatened by time. Over time, it's inevitable for abrupt changes to occur in this type of economy. China could erupt into civil war, and we could lose a large portion of the goods that create our zero-material-production jobs.
We need to move away from earning off the backs of people who work much harder to receive much less than we do. We need to do it in a way that doesn't devastate our country. Giant corporations like Wal-Mart that employ many, many people will not be viable. We need to phase them out without leaving our people stranded.
We need to be able to sustain ourselves without taking more than we give.
augcaesarustus forfeited this round.
1 votes has been placed for this debate.
Vote Placed by U.n 12 months ago
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