Michael van der Galien’s opposition to a minimum wage, from what I’ve read here on TMV, appears to be entirely ideological. I’ve never seen him site facts or research to support his position.

For more on the minimum wage, try these sites:

http://econ161.berkeley.edu/movable_type/

http://www.nathannewman.org/log/archives/cat_labor_minimum_wage.shtml

The first references a number of peer reviewed papers that I, unfortunately, can’t afford to read. It sure seems to me, though, that it’s at least possible that labor market monopsony has artificially held wages below the equilibrium wage that would prevail in a perfectly efficient market. If that’s the case, then raising the minimum wage will not decrease employment and may even increase it.

Whatever, it seems to me that when you take a position that is so wildly out of the mainstream not only in the US, but in the entire 1st World, you ought to have to support it with more than mere ideological assertion.

Right. And don’t foerget, the US have already been at that point some time after WW II. Since then, the situation has detoriated again. What’s the reason for the decline? Surely not an overly generous minimum wage law. Why don’t you start looking for the real reasons for a change, Michael?

That kind of debate can continue until the Republicans are so embarrassed in the media, they have to accept an up-or-down vote on minimum wage.

This is not the bill to solve problems of executive compensation or taxation issues. It’s about raising minimum wage, which hasn’t been done in TEN YEARS. … priorities, priorities, priorities!

MvdG, you make the counter argument fairly suscintly with this:

It is not, nor should it be the government’s responsibility to determine how much people make in the private sector, which is called private for quite a good reason.

However, I’d like to argue that such a situation of no-governmental regulation is only benificial in situations where there is something very very close to a purely free market, and I believe that there are many examples of how our employment market is less than free.

As a bit of a tangent (please bear with me), just to get across my ideas of the shortcomings of our market, lets consider text message services. I don’t know if you get these comercials in the Netherlands, but here in the US there are a number of comercials offering text messages of Yo-mama jokes, daily affirmations and other kitch. From a pure, rational market stand point, these things have almost zero value. Most of the “services” could be found for free with a quick google, which would allow any truely open competitive market to quickly brush off such “products” which I would consider closer to scams. However, these companies are able to charge in the range of a few dollars PER MESSAGE. Obviously there is some other force other than laws of the open market propping up the price of these scams. I think that what inflates such scams is basically human psychological shortcomings. I would be willing to bet that people sign up for these scams on impulse and then are stuck in them.

Now, to relate this to the question at hand, minimum wage. I would argue that another time that people are not able to make rational economic decisions is when they are faced with poverty. If you must worry about getting food to your children and paying your water bill this month, you are simply not going to make smart economic decisions. Pure survival instincts start to kick in and you would be willing to take anything rather than hold out for anything better. I think that such a condition, when it is held be a decent portion of the population artifically deflates wages to below what they would be in a truely rational free market. Therefore, I believe it is the duty of government to acknowledge these human frailties and to design systems which compensate for them.

In this situation I believe this means something close to many of the “living wage” movements which dictate that a 40hr/wk job should be sufficient for provideing a decent level of shelter and food for themselves and atleast 1 child. Most of the estimates of what that would take is something quite a bit above the federal minimum wage in the US.

Very good point! Yes, there has been a historical precedent. Only obscenely rich elitists would want to get back to this time.

A single worker has exactly NO bargaining power when dealing with an employer. Unions could change this balance, but the power of uniuns has been systematically undermined, starting with the Reagan administrtion. If workers don’t have the power to achieve a wage that’s sufficient to make a living fo a small family, and if unions aren’t a factor, then lawmakers have to set minimum standards in order to prevent a further erosion of the standard of living for unqualified workers.

Btw, MvdG, have you ever held such a job or is your opinion totally based on theoretical considerations?

The Private Sector left to its self, unregulated, does not create a stable and healthy economic situation. It makes monopolies and as someone mentioned above, rigs the system to ensure that it stays there.

I don’t understand why people need reminding of this simple fact. Unfettered capitalism leads to the conditions like we saw during the time of the Robber Barons, and it’s slowly heading that way again.

The Private Sector left to its self, unregulated, does not create a stable and healthy economic situation. It makes monopolies and as someone mentioned above, rigs the system to ensure that it stays there.

The market is fickle, amoral and easily rigged. Leaving people’s livelihood in the hands of executives whose pay and bonuses would be helped by holding pay artificially low if they could rig it wouldn’t be good for society. Also, you forget that in the U.S. many small businesses can’t provide health care so while you may get a job you won’t have retirement benefits or health insurance from that job. Also many small businesses don’t pay their employees enough to buy insurance or pay for health care on their own. Small business also makes for a shaky backbone given the failure rate they have.

I believe the word for that is “Hyprocricy“.