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The Problems with a Minimum Wage (Economics 101)
Contention: Minimum wage laws, while benevolent to some extent, if altered positively, will only serve to harm the economic improvement of an area and the people living there.
The issue of minimum wage laws came into being in the late 19th century when the common people of the industrialized world were working in atrocious conditions for next to no pay and, due to the fact that unions were illegal, did not have the ability in any way to control the selling cost of their product: labour. Because of these problems, the governments of a number of industrial countries, fearing a marxist revolt, enacted minimum wage laws to guarentee a fair wage for workers.
With the continuation of capitalism, however, and the gradual advancement of even the poor in these nations, not to mention the power of organized labour, minimum wages became less of an issue. Nevertheless, minimum wages rose and rose through the decades.
There are numerous problems with minimum wage laws, however. Ignoring the obvious fact that with their nearly monopolistic power, organized labour usually can sell labour at whatever cost, and that such laws are only more involvement of the gov't in private business, there are other problems caused by rampantly increasing minimum wages.
Chief among them is the deteriation of competitive capitalism. Capitalism requires competition but, in a modern industrialist state, establish big business, with their vast resources and capital, have notable advantages over a fledgling entrepreneur. Rockefeller was known for driving down oil prices to wipe out competition. With his vast resources, he could afford to take a loss that the entrepreneur could not.
Similiarily, big business is far more capable of weathering high minimum wage laws. A small business, with its limited initial resources, would be incapable of paying its workers the mandated wage and still having competitive prices. Small businesses would be forced to raise their prices, making their downfall certain. Established businesses may take losses to stay competitive, eventually destroying the small business, which must either fire its workers (reducing production) or increase prices. Further entrenched, the big business may now raise prices to make up for the increase in wages, resulting in the obvious increase of wages equates to an increase in the cost of living, completely nullifying the entire basis of a minimum wage law.
thanks
(there you go... some old time Albert Speer for yall who thought I was now just rambling about a vengeful God)
The issue of minimum wage laws came into being in the late 19th century when the common people of the industrialized world were working in atrocious conditions for next to no pay and, due to the fact that unions were illegal, did not have the ability in any way to control the selling cost of their product: labour. Because of these problems, the governments of a number of industrial countries, fearing a marxist revolt, enacted minimum wage laws to guarentee a fair wage for workers.
With the continuation of capitalism, however, and the gradual advancement of even the poor in these nations, not to mention the power of organized labour, minimum wages became less of an issue. Nevertheless, minimum wages rose and rose through the decades.
There are numerous problems with minimum wage laws, however. Ignoring the obvious fact that with their nearly monopolistic power, organized labour usually can sell labour at whatever cost, and that such laws are only more involvement of the gov't in private business, there are other problems caused by rampantly increasing minimum wages.
Chief among them is the deteriation of competitive capitalism. Capitalism requires competition but, in a modern industrialist state, establish big business, with their vast resources and capital, have notable advantages over a fledgling entrepreneur. Rockefeller was known for driving down oil prices to wipe out competition. With his vast resources, he could afford to take a loss that the entrepreneur could not.
Similiarily, big business is far more capable of weathering high minimum wage laws. A small business, with its limited initial resources, would be incapable of paying its workers the mandated wage and still having competitive prices. Small businesses would be forced to raise their prices, making their downfall certain. Established businesses may take losses to stay competitive, eventually destroying the small business, which must either fire its workers (reducing production) or increase prices. Further entrenched, the big business may now raise prices to make up for the increase in wages, resulting in the obvious increase of wages equates to an increase in the cost of living, completely nullifying the entire basis of a minimum wage law.
thanks
(there you go... some old time Albert Speer for yall who thought I was now just rambling about a vengeful God)
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