Minimum Wage for Dummies (ie fascists)Submitted by Faithkills on Wed, 02/05/2014 - 13:22
There are only two possible cases if you raise the minimum wage.
1) You disemploy people. (what the 'right' typically thinks)
2) You don't disemploy people. (what the 'left' typically thinks)
As with any price floor if you raise the price (hourly wage) floor above the expected benefit to the consumer (profit per hour for the employer) they will not buy the service. (you're fired!)
This is true, unless the employers as a group are reaping monopsonistic rent. A monopsony is when you raise barriers to entry of the demand side of the market. A monopoly in reverse, so to speak.
In a monopoly you make it difficult for others to sell the product you sell, thus causing prices to be bid up.
In a monopsony you make it hard for others to buy products you want, thus causing prices to be bid down, in this case wages.
If the labor market is monopsonistic it is possible that you could put a floor on wages and it will still be below the 'profit' the employer makes from employing the worker.
So how do we know what is the case?
And if it turns out the labor market is monopsonistic (and I think it largely is) does it mean we should raise the minimum wage?
Because if you just end the monopsony you can drive up wages and increase employment.
If the labor market is monopsonistic the excess 'profits' (rent) gained from depressed labor wages will attract employers who see the profit potential from underpriced labor, if the market is freed.
If McDonalds really is making, who knows, say $5/hour, from employing minimum wages, and I have some cash, and a project that can use low skill labor, and am not prevented from doing so I'm going to hire them at $1 more, and 'exploit' the wage slaves and make $4/hour off of him.
In turn someone else will be happy to make $3/hour of exploiting the proletariat.
In turn someone else will be happy to make $2/hour sticking it to the working man.
If there are 'excess' profits and this is not happening it's not for lack of greedy 'capitalists'.
It's because other greedy capitalists (and their progressive dupes) got the government to enact all sorts of laws, regulations, codes, statutes, zones, and taxes that have the net effect of barring anyone who would otherwise want in on profiting on the tears of the oppressed masses.
"No one hates capitalism more than capitalists." - Steven
Capitalism isn't about capitalists. When capitalism is about capitalists it's progressivism, ie fascism.
Capitalism is about ensuring there is no government power to purchase.
Because if it exists, no matter how you intended that power to be used, it will be used for capitalists.
That is the iron rule of statism.
It never has been, and never will be, otherwise. The rich get richer and the poor get poorer, and it is because of the structural violence of the state. The rich decide how the poor are educated and indoctrinate them to believe that the state is there for the benefit of the poor.
It is not for the poor. It never will be. It never has been.
Capitalism is about making sure capitalists have no power to do anything but compete to offer you things you want.
If they trick you to believe just a little more state power will protect you, ever, you are walking into the wolf's jaws.
The game is rigged, and they want you to believe that rigging it some more is going to help you.