From: pelton@ecf.toronto.edu (PELTON MATTHEW ALAN)
Subject: Re: On minimum wages
Organization: University of Toronto, Engineering Computing Facility
Date: Thu, 28 Jan 1993 05:10:46 GMT

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:
>>>
>>>581 words                  The Freeman
>>>page 1 of 3                Foundation for Economic Education
>>>                           Irvington-on-Hudson, New York 10533
>>>                           (914) 591-7230
>>>
>>>      The Minimum Wage: An Unfair Advantage for Employers
>>>
>>>                    by Donald J. Boudreaux
>>>
>>
>>  Unfortunately, minimum-wage jobs aren't usually of this type.  We
>>live in a post-Industrial-Revolution society.  The type of jobs you'll
>>do for minimum wage are equivalent to flipping hamburgers at McDonald's
>>or hunching over in a factory.  A skilled factory worker does not exist;
>
>It doesn't matter the type of the job or the skills, whatever. "unskilled"
>or "low skilled" is a relative term. It is relative to the skills that
>everyone else has in the job market. Everybody in the job market just might 
>be a doctor or computer scientist, but there will still be ones who are better,
>and ones who are worse. Unless everyone is equally skilled, there will
>be people who are "unskilled" if you compare them to people who
>are better trained. Without losing any generality, the example is still
>valid.
>
>>no matter how much experience you have, or how brilliant you are, you'll
>>work at the same rate as anybody else.  And then your only bargaining tool
>
>If you are a brilliant person, yet you take a low paying factory job, that
>is your problem; if he capitalized on his talents, he could earn more
>(and put a few people out of work by doing their jobs better)
>
>>is willingness to work for a low wage.  Nobody will get hired if they ask
>>for a livable salary, and all employees will end up miserably underpaid. 
>>If a miniumum wage is instituted, the same people will be considered for
>>hiring, since skill is not a factor.  And the same people will do the same
>>work, only this time for wages that they can live off of.
>
>You just aren't getting it. "livable salary" isn't a judgement the market
>makes; the individual can decide whether a job is worth the money it pays.
>But upping the minimum wage, to say $10 per hour, and preventing anyone
>from discounting that rate, will cause more unemployment. Why?
>Because you will have people in the job market who are worth $10/hour,
>and you will have less qualified people, who are only worth $5/hour.
>Now the employer won't hire the less qualified employee, when he can pay
>$10 per hour, and get someone who is WORTH $10 an hour. This makes
>the unskilled worker earn $0
>per hour, ie unemployment. Since the unskilled worker can't work
>for $5 and hour, which is what he is worth, he can't meet the $10/hour
>demands.  The well meant 'solution' to the working poor, actually made
>things worse. Without some drastic training, or a brain overhaul, the
>person isn't CAPABLE of producing work worth $10 per hour. Since the
>law won't let him work for $5/hour, he can't compete with the people
>worth $10/hour. That's what puts him on the dole.
>
>>>     Consider another effect of the minimum wage.  Because
>>>there are more people who want jobs at the minimum wage rate
>>>than there are jobs to go around, employers have little
>>>incentive to treat unskilled workers with respect or dignity.
>>>If an employer is abusive toward an unskilled worker, the
>>>employer need not be concerned if the worker quits.  After
>>>all, there are plenty of unemployed unskilled workers who can
>>>be hired to fill positions vacated by workers who quit.
>>
>>  This only makes sense if you accept the previous point.
>
>you have to accept it. It's a demonstrated economic fact. IT's been 
>researched to death. The free-market economists predicted the increase in 
>unemployement, caused by upping minimum wages, and the socialist Keynesian
>types, with their socialist engineering experiments proved it for us.
>A "fair" minimum wage can't be set by comittee; only the market can determine
>what a fair wage is; because no-one would work for an unfair wage if
>they can find better work. The employer will only pay as much to the
>employee, as the job is worth doing; if the minimum wage is arbitrarily
>forced up; the employer may react by firing a few employees, and dumping
>the work onto the remaining employees (and they should be able to do
>it, after all they are being paid more). And with all the marginal jobs
>suddenly made more expensive, there will be a glut a poorly skilled
>workers all too willing to replace others.
>
>
>>>
>>>     Minimum-wage legislation creates an excess supply of
>>>unskilled labor.  This gives the buyers of unskilled labor an
>>>unfair bargaining advantage over the sellers of unskilled
>>>labor.  It is thus pure fantasy to believe that the welfare of
>>>unskilled workers can be improved by such legislation.
>>>Unskilled workers shouldn't be restricted to a permanent
>>>buyers' market.
>>>
>>>____________________________________________________________
>>>Professor Boudreaux teaches economics at George Mason
>>>University in Fairfax, Virginia.  A longer version of this
>>>article will appear in The Freeman, published by The
>>>Foundation for Economic Education, Irvington-on-Hudson, New
>>>York.
>>>-- 
>
>-- 
>__________________________________________________________________________
> John Paul Morrison                     |  
> University of British Columbia, Canada |  
> Electrical Engineering                 |   .sig file without a cause
> jmorriso@ee.ubc.ca              VE7JPM |  
>________________________________________|_________________________________

  I didn't realize I was so unclear that you could miss my point totally.
Let me try 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.  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
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.
  If you want to continue debating, please debate about what I say.  It 
doesn't do anything to hear the first argument repeated.
e
-- 
					-- Matt

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