Thank you, labor unions ......

[Ben Kenobi]

In situations in the US where teens can't find menial jobs, it's not minimum wage that's the limiting factor.

Absolutely it is. You see this whole, 'living wage' bull**** is responsible for it. If you have to pay them a living wage, are you going to hire an adult who needs to work to feed his family, or are you going to hire a teen who needs the work to make some extra cash?

If the minimum wage were to be abolished, two things would happen. One, these jobs would see their wages drop and the teens would get hired to do these jobs. Two, the inflation rate would drop as well - to reflect the lower cost of wages. Three - the economy would actually start to recover, once the jobs were priced according to what the market will bear, and not the artificial wage inflation. Four - the labour unions would see a massive drop in their wages (tied to the minimum and multiples). This will mean enormous savings to the government, and enormous benefits to anyone trying to get things done.

Sucks for the unions though - which is why it will never happen. It's a pity. Solid economics suggests otherwise.

[Aeson]

Absolutely it is. You see this whole, 'living wage' bull**** is responsible for it. If you have to pay them a living wage, are you going to hire an adult who needs to work to feed his family, or are you going to hire a teen who needs the work to make some extra cash?

This dichotomy doesn't show itself in practice across the economy. There are always menial jobs waiting to be filled, even when the economy is bad. In cases where teens can't get a job it's due to local issue like crime that drive business away, lack of transportation to where the jobs are, and/or just the complete lack of local economic potential (very small towns out in the middle of nowhere where not even farming is possible ... because if farming is possible then there's usually plenty of menial jobs).

If the minimum wage were to be abolished, two things would happen.

It's good at least you can admit two of your four aren't going to happen. You're half of the way there!

One, these jobs would see their wages drop and the teens would get hired to do these jobs.

No. If we assume an adult is going to be a better employee (as you already have in your opening paragraph ... though I don't necessarily agree) the business would still choose the better employee (in your estimation, the adult).

Two, the inflation rate would drop as well - to reflect the lower cost of wages.

We really don't need to deflate the economy any more than it already is, thanks. (But no, unless we open the borders or something like that, wages wouldn't drop much at all from where they are without minimum wage.)

Three - the economy would actually start to recover, once the jobs were priced according to what the market will bear, and not the artificial wage inflation.

The simple fact is that almost all menial jobs already pay more than minimum wage (either to start, or shortly after if you aren't a complete waste of an employee). Those that don't are exploiting illegal immigrants who have dramatically reduced choices in where they can work.

Minimum wage in the US is largely irrelevant at it's current levels. The current economic downturn was sparked by wages not keeping up with personal debt and/or prices, not the other way around. Our economy is very dependent on having a large consumer base willing to buy lots of non-essential goods and services. This makes cost per unit of production drop and thus profits increase and prices drop for manufactured goods, and for service jobs it creates demand keeping them employed and enjoying their (generally) higher wages.

Minimum wage was a good method (perhaps not the best possible one, but certainly better than the other alternatives we've actually been politically able to implement) of ensuring that the working class would rise to the level of being able to participate in the economy as consumers of non-essential goods and services. In economies where the working class can barely subsist it becomes abundantly clear why it's important to get over that hump. How much, and how fast, to increase consumption potential for the working class (again, it could be through other methods than a minimum wage) are the only real questions.

Four - the labour unions would see a massive drop in their wages (tied to the minimum and multiples). This will mean enormous savings to the government, and enormous benefits to anyone trying to get things done.

This is perhaps the most obvious one that wouldn't happen. Unions with compensation tied to minimum wage some way would simply use the power they have to renegotiate a method of determining payment. They get paid as much as they do (in an absolute sense) because they have the power and solidarity as a group to demand it. They would still have a very similar amount of power and probably increased solidarity as a group.

[Uncle Sparky]

Here's a nostalgia piece for those of you Canadians and Americans who once bought clothing made in the US (or Canada).

Circa 1978. At that point most clothing bought in the US was made in the US. For that to happen now, you'd have to pay almost double the price in many cases. Could you imagine? Paying a couple of bucks per pair of socks? And having a bunch of Americans earn living wages from manufacturing them?

I bet HC doen't own a single 'made in the USA' piece of clothing.

[Aeson]

Globalization hasn't reduced employment in the US either. If anything, it's been a positive influence on employment and wages.

It is however a bad thing that there still exist places where workers do not have enough protections or economic clout yet to actually participate meaningfully on the consumption/investment side of the economy. Not only are we wasting a huge opportunity to reduce cost per unit of production and increase demand for high value service jobs, throwing away ~half of humanity's potential for innovation (probably much more when taken with the first clause), but we are burning through our most important limited resources shipping things back and forth from our caged labor sources. Also we are over-consuming limited resources in a manner which increases the loss of value from them due to artificially lower prices.

[Aeson]

I could also add that it leads to low value products which are produced to market in these poor markets. These products often require just as much in the way of labor, energy, and materials as higher value products that would better serve the role. The difference is the low value products are made with much less regard to quality, and thus we're pouring limited resources into creating **** that would never be made if the working class (worldwide) was more affluent.

For instance, the can-openers and pruning shears they sell here. I've yet to find one that isn't utter crap. (I'm not talking about K-Mart "fall apart" style crap ... I mean stuff that makes those blue light specials look like NASA engineered them.) They use just as much metal/plastic as ones found in the US (often more), take up just as much shelf space, cost just as much to transport to market ... all of those energy/resource inputs are lowered in their value because there is no care taken in quality control or design of the product, or because shortcuts are taken to keep prices low enough that the local market can better afford them. So they cost $3 instead of a $5 one you'd buy in the US, and they last about 1/10th as long if they ever even worked. The shears always fail because of the pivot bolt for instance. Something that would have cost at most a few cents to get right. The can openers often never work at all because of poor alignment of the blade (or various other issues). These failures happen within hours of being brand new if they weren't already present. We use tie wire as a replacement, but that negatively affects their ability to cut quick and cleanly. I could go on and on about products like these in these markets. To save a few pennies we throw dollars worth of resources into the "extremely cheap item" hole, diminishing the actual value of all the resources that went into the product so we can market it to our caged workers who can't afford better.

[Zevico]

This dichotomy doesn't show itself in practice across the economy. There are always menial jobs waiting to be filled, even when the economy is bad.

There always jobs to be filled in any sector even when the economy is bad. Like in any other sector, people in menial jobs find other work, die, move, or quit for any number of reasons. While there may always be some openings, the scarcity of these jobs increases when an effective minimum wage is implemented. Again, I refer you to Mr Sowell's article.

In cases where teens can't get a job it's due to local issue like crime that drive business away, lack of transportation to where the jobs are, and/or just the complete lack of local economic potential (very small towns out in the middle of nowhere where not even farming is possible ... because if farming is possible then there's usually plenty of menial jobs).

Those are also explanations, yes.

No. If we assume an adult is going to be a better employee (as you already have in your opening paragraph ... though I don't necessarily agree) the business would still choose the better employee (in your estimation, the adult).

Unless it can cut prices enough for it to train, say, two younger employees to work the same jobs, at less pay, and overall produce more value for the company than a single employee could, however competent.

The simple fact is that almost all menial jobs already pay more than minimum wage (either to start, or shortly after if you aren't a complete waste of an employee). Those that don't are exploiting illegal immigrants who have dramatically reduced choices in where they can work.

Illegal immigration is simply another reason why minimum wage laws make no sense. Illegal immigrants choose to come to the US, taking incredible risks, not least of which is a risk to their lives, to be "exploited." They do this so they can send the money they earn here back to their relatives, who can actually make pretty good use of it because prices (in USD terms) are much cheaper in those countries. Illegal immigration is a result of minimum wage laws for the jobs Americans supposedly "don't want" but were happy to work in, in times past when it was perfectly legal to offer cheap wages for those jobs.

Or as Even and McPherson point out:

Minimum-wage proponents argue that a higher wage floor will improve the standard of living for poor families. The reality is that higher labor costs reduce employment, especially for younger workers, and the greatest amount of pain is felt by black men. The Even and Macpherson study finds that among whites males ages 16-24, each 10% increase in a federal or state minimum wage has decreased employment by 2.5%. For Hispanic males, the figure is 1.2%. "But among black males in this group, each 10% increase in the minimum wage has decreased employment by 6.5%."

The effect on the black community is so pronounced, write the authors, that "employment losses for 16-to-24 year-old black males between 2007 and 2010 could have been nearly 50% lower had the federal and state minimum wages remained at the January 2007 level."

It gets worse. Not all states were fully affected by the federal minimum wage increases because some already mandated a minimum wage above the federal requirement. But in the 21 states that were fully affected, about 13,200 black young adults lost their job as a direct result of the recession, versus 18,500 who lost their job as a result of the minimum-wage mandates. "In other words," write Messrs. Even and Macpherson, "the consequences of the minimum wage for this subgroup were more harmful than the consequences of the recession."

[giblets]

Illegal immigration is simply another reason why minimum wage laws make no sense. Illegal immigrants choose to come to the US, taking incredible risks, not least of which is a risk to their lives, to be "exploited." They do this so they can send the money they earn here back to their relatives, who can actually make pretty good use of it because prices (in USD terms) are much cheaper in those countries. Illegal immigration is a result of minimum wage laws for the jobs Americans supposedly "don't want" but were happy to work in, in times past when it was perfectly legal to offer cheap wages for those jobs.

Immigrants have always been a cheap labor source in the US. In "times past" with no minimum wage there was still a flood of immigrants. Illegal immigration is a result of the ease of smuggling people into a free society using modern transportation technology, in spite of a feeble attempt to stop them because of a mix of xenophobia and a desire by working class people to not compete with immigrants for jobs.

[Zevico]

I'll qualify my remark by saying that illegal immigration will be substantially less without a minimum wage and that it is a key driver for illegal immigration.

[C0ckney]

I'll qualify my remark by saying that illegal immigration will be substantially less without a minimum wage and that it is a key driver for illegal immigration.

why is that?

are the places where those immigrants come from going to suddenly become much better, or is the US going to become worse if minimum wages are abandoned.

[Aeson]

There always jobs to be filled in any sector even when the economy is bad. Like in any other sector, people in menial jobs find other work, die, move, or quit for any number of reasons. While there may always be some openings, the scarcity of these jobs increases when an effective minimum wage is implemented.

The minimum wage in the US hasn't been effective for a long time. It's a number that any employer worthy of being in business can pay more than. Unemployment has been low. The "teen" red herring compared to 1940's is mostly because of other social and economic changes, like 14yos no longer needing to drop out of school to get a job to support their parents and siblings. Nowdays kids can coast into their 20's on Mom and Dad and/or Uncle Sam. (Not necessarily a good thing IMO.)

Unless it can cut prices enough for it to train, say, two younger employees to work the same jobs, at less pay, and overall produce more value for the company than a single employee could, however competent.

Cuts both ways. Whoever would work for less would have an advantage (in regards to the impact of wages, perhaps not overall). It's unknown if the adult or teen would work for less. If we are to assume how it would play out though, most likely the adult with a family to take care of would be willing to work for less because they have to get a job to survive. The teen can mooch or slack for a few more years with much less consequence.

I see this all the time here. Guys with dependents (sometimes their siblings or parents, not always just kids) are much more motivated to get a job, even though the jobs pay next to nothing. Guys who have little to no responsibilities (or are willing to ignore them) generally make the rather sane choice that their free time is worth more than a pittance in cash they could get by working their ass off.

Illegal immigration is simply another reason why minimum wage laws make no sense. Illegal immigrants choose to come to the US, taking incredible risks, not least of which is a risk to their lives, to be "exploited."

Using exploited in quotes shows just what an ******* you are. Employers using threats of turning immigrants in to authorities to get them to do things they wouldn't do otherwise is a horrific thing. The only reason that employers in the US can pay illegals less than minimum wage is because the illegals do not have the ability to go after the vast majority of jobs (who's employers aren't willing to break the law), thus their employers don't have to compete with (the vast majority of) other employers for labor. This is decidedly not a free market solution.

They do this so they can send the money they earn here back to their relatives, who can actually make pretty good use of it because prices (in USD terms) are much cheaper in those countries.

Low prices like that are not the good thing you think they are. It means the economy is depressed or hasn't developed as much. Mainly because the working class doesn't have enough money to actually provide demand for goods and services, and on top of low wages there's usually massive unemployment (even without a minimum wage) because no one wants to build their business model around providing things for people who don't have money. For us to try to return to that type of economy would be extraordinarily stupid.

Illegal immigration is a result of minimum wage laws for the jobs Americans supposedly "don't want" but were happy to work in, in times past when it was perfectly legal to offer cheap wages for those jobs.

Illegal immigration has nothing to do with a minimum wage. It's due to stupid immigration laws, and terrible economies in other countries that people are trying to escape. We and they would be much better off if all the illegal immigrants working in the US were legal instead, even though they'd be paid more.

[Aeson]

There always jobs to be filled in any sector even when the economy is bad. Like in any other sector, people in menial jobs find other work, die, move, or quit for any number of reasons. While there may always be some openings, the scarcity of these jobs increases when an effective minimum wage is implemented.

The minimum wage in the US hasn't been effective for a long time. It's a number that any employer worthy of being in business can pay more than. Unemployment has been low. The "teen" red herring compared to 1940's is mostly because of other social and economic changes, like 14yos no longer needing to drop out of school to get a job to support their parents and siblings. Nowdays kids can coast into their 20's on Mom and Dad and/or Uncle Sam. (Not necessarily a good thing IMO.)

Unless it can cut prices enough for it to train, say, two younger employees to work the same jobs, at less pay, and overall produce more value for the company than a single employee could, however competent.

Cuts both ways. Whoever would work for less would have an advantage (in regards to the impact of wages, perhaps not overall). It's unknown if the adult or teen would work for less. If we are to assume how it would play out though, most likely the adult with a family to take care of would be willing to work for less because they have to get a job to survive. The teen can mooch or slack for a few more years with much less consequence.

I see this all the time here. Guys with dependents (sometimes their siblings or parents, not always just kids) are much more motivated to get a job, even though the jobs pay next to nothing. Guys who have little to no responsibilities (or are willing to ignore them) generally make the rather sane choice that their free time is worth more than a pittance in cash they could get by working their ass off.

Illegal immigration is simply another reason why minimum wage laws make no sense. Illegal immigrants choose to come to the US, taking incredible risks, not least of which is a risk to their lives, to be "exploited."

Using exploited in quotes shows just what an ******* you are. Employers using threats of turning immigrants in to authorities to get them to do things they wouldn't do otherwise is a horrific thing. The only reason that employers in the US can pay illegals less than minimum wage is because the illegals do not have the ability to go after the vast majority of jobs (who's employers aren't willing to break the law), thus their employers don't have to compete with (the vast majority of) other employers for labor. This is decidedly not a free market solution.

They do this so they can send the money they earn here back to their relatives, who can actually make pretty good use of it because prices (in USD terms) are much cheaper in those countries.

Low prices like that are not the good thing you think they are. It means the economy is depressed or hasn't developed as much. Mainly because the working class doesn't have enough money to actually provide demand for goods and services, and on top of low wages there's usually massive unemployment (even without a minimum wage) because no one wants to build their business model around providing things for people who don't have money. For us to try to return to that type of economy would be extraordinarily stupid.

Illegal immigration is a result of minimum wage laws for the jobs Americans supposedly "don't want" but were happy to work in, in times past when it was perfectly legal to offer cheap wages for those jobs.

Illegal immigration has nothing to do with a minimum wage. It's due to stupid immigration laws, and terrible economies in other countries that people are trying to escape. We and they would be much better off if all the illegal immigrants working in the US were legal instead, even though they'd be paid more.

[molly bloom]

What MrFun probably doesn't realize is that unions are fundamentally conservative organizations.

That's so quaint.

[C0ckney]

Well, if it was at all unclear to you what I meant, it's simple: look at HC's post.

what you wrote was nothing like that. if that really was what you meant, then you failed to convey your message. don't blame others for your inability to write clearly.

You asked for empirical evidence to demonstrate that youth unemployment is higher in countries where there is an effective minimum wage...

yes i did and what i got in return were two opinion pieces. the fact that you don't understand that opinion pieces aren't emperical evidence is a bit worryiny for someone who wants to be a lawyer.

[MrFun]

Why isn't there any talk of banning corporations since some corporations are corrupt?

[OneFootInTheGrave]

There is talk, just not here, posters here are rotten capitalists who sold their souls to the corporations for not much money, so there is no talk of banning, as if corporations are banned they who sold their souls would have nothing left to sell. Their life would have been lived in vain and as a result they would have no hope of making it in another, more successful system - in Mingapulco

Therefore status quo is supported around here, you can ban labour unions and work harder until you are doing at least 85 hours a week with no overtime to make it in Mc Donalds, but no banning of corporations who steal the food from the mouths of hungry babies, when you invested you are invested - no questions asked.