From: jmorriso@ee.ubc.ca (John Paul Morrison)
Subject: Re: On minimum wages
Organization: University of BC, Electrical Engineering
Date: Thu, 28 Jan 1993 07:19:09 GMT

In article <C1Jt20.39o@ecf.toronto.edu> pelton@ecf.toronto.edu (PELTON MATTHEW ALAN) writes:
>In article <1993Jan28.032621.28150@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>>In article <C1IuzG.7xv@ecf.toronto.edu> pelton@ecf.toronto.edu (PELTON MATTHEW ALAN) writes:
>>>In article <1993Jan27.034716.12266@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:

[ gratuitous quoting of text deleted ]
>
>  I didn't realize I was so unclear that you could miss my point totally.
>Let me try again. 

well, read my response again.

>  When we talk about the kind of jobs to whichminimum wage will be applied,
>we're talking about zero-skill, routine jobs that demand next to no training
>or experience. 

> The ideas of skilled and unskilled labour for such jobs is
>meaningless.  Anybody with minimal capacities, meaning everybody considered
>for the job, is equally competant to pull levers in a factory or put fries
>in bags at McDonald's.  

There is a difference in skills, or value to the employer. You might
have quick witted, faster working burger flippers at the restaurant,
or you could have slower, or perhaps hardworking people, yet they might 
need more supervision.
You can add a lot more to 'skill' than just knowledge: speed, accuracy,
manners etc. even for the simlilar jobs. It's VALUE. Even with totally unskilled
workers, and highly skilled workers, there can be competition:
for example: someone trained to operate a sophisticated tool that can
finish a job in minutes, compared to an army of workers who can accomplish
the same job, but by using manual labor. Compare hiring a gardner, with
his own power lawnmower (so you wouldn't have to invest in buying
the mower) with a strong and fit person who will use your own rusty and
dull hand pushed mower; who do you suppose will work for less?
Won't the guy with only his muscle power to offer, undercut the other
guy, when he sees some uniformed guy with a big fast machine to do the job?

Everybody is not equally competent for the job. Some may do it faster.
Some may plod along. now the better skilled worker may accomplish
the same task quicker. There is no reason to believe that a skilled
worker, who can finish the same job in significantly less time; is going
to charge the same rate, as someone less qualified, less experienced.
So there IS competition, even in the same job, because of the outcome
and the time it takes.

>The employer does not consider the relative abilities
>of the employees, because such skills make no difference.  Price competition
>is inapplicable in such a situation.  You can't compete in terms of cost
>when all available commodities -- in this case, workers -- are of equal
>worth.  A Ph.D. in nuclear physics won't make you more qualified for these

but they aren't of equal worth, that's the point. It is possible to have
a job that a highly trained graduate can do quickly, or without re-doing
improper bits. In this case, a totally unskilled person, might also
be able to do the job, but would take longer, or might need closer
supervision, or redoing work etc. This is the basis for price competition.
Why would someone who can do the job faster, work for the same rate as
someone slower? Either he'll slow down to the speed of the slower person,
or perhaps the employer will pay a premium for speedy work.

>jobs, won't make you work faster or better, and won't make you worth any
>more money.  Skilled and unskilled labour -- it's not a factor.

You have also set yourself up for a fall: why would well trained people,
who can earn $10, or $20 an hour, be competing for $5 an hour jobs?
Other employers will be competing to get those skilled workers doing
OTHER jobs. That leaves room for unskilled people to be employed in
the $4 and $5 an hour jobs.

But  this is where the minimum wage harms: if minimum wage is hiked to
$10 an hour, suddenly skilled workers will be interested in performing
that $5/h work. It makes sense: the work is only woth $5/h but the law
says you have to pay $10/h; there's a $5/h marginal incentive to the
skilled worker, to compete for that job (so he can work at half capacity,
and still make $10/h).
Now the LAW has moved the more skilled workers into 
competition with the unskilled workers. But the law doesn't let the
unskilled workers undercut, in order to gain an advantage over the
skilled workers. Since the employer is legally prevented from paying
less, he'll opt to hire the more skilled workers, since he's getting
a bonus; and maybe he doesn't want to bother with the same supervision
needed for the other, lowe skilled workers.  

This results in two BAD things (which the well meaning but uninformed
socialists never intended): the unskilled workers have been made uncompetitive;
the costs of employing people to do the SAME unskilled work, which used
to be $5/h, and is now $10/h has been inflated, and the employer has
to make more job cutbacks, to maintain the same level of expenses; or
he can pass the costs on to consumers. Inflation and unemployment. Wonderful.

Now my numbers are arbitrary, for example only. But unless the government
knows by some magic crystal ball, what the optimum salary is for a given
no-skill/ low skill job is, the government will probably over exaggerate
the minimum wage, and the more the government exagerates the value of
minimum skill labor, the more harm they will do. The only fair minimum
wage is what the individual worker decides what is acceptable.


>  If you want to continue debating, please debate about what I say.  It 
>doesn't do anything to hear the first argument repeated.
>e

did this get to the point?
>-- 
>					-- Matt
>


-- 
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 John Paul Morrison                     |  
 University of British Columbia, Canada |  
 Electrical Engineering                 |   .sig file without a cause
 jmorriso@ee.ubc.ca              VE7JPM |  
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