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HISTORYTEACHER: Minimum Wage Raise? historyteacher

Monday, March 07, 2005

Minimum Wage Raise?

I was rather disappointed in this article. Not because of the news. Instead I do not like the analogy they try to draw.

"Fact One: For the last nine years, the minimum wage has been set at $5.15 an hour."

"Fact Two: During those same nine years, members of Congress have seen their wages grow by $28,500. House and Senate members are now paid $162,000 annually for their public service jobs."

The free market is supposed to set wages - not the government. By contrast congress can only receive pay raises from congress as the constitution clearly states. I do not want to start a discussion on whether or not congress is overpaid. However, I do want to point out that no where in the constitution does it give congress the right to set wages between an employee and employer.

Minimum wage only leads employers to seek ways to lower there number of employees. If someone is raising a family on minimum wgae than I would argue that the person probably has made more than one poor choice during his or her lifetime.

I was encouraged that the senate killed a minimum wage increase. Maybe now it is time to kill minimum wages period!


At 6:35 AM, Blogger Scriptor said...

The relationship between employers, workers, and consumers can be extremely complex. If employees take fewer workers than unemployment would result and presumably weakened production. If there is no minimum wage, businesses may agree to drastically lower wages. This is a dilemma, should we have a few workeers earning a lot of money, or many earning less money? How would the incomes affect spending habits?

At 8:51 AM, Blogger Scriptor said...

You can study this problem if you do a few calculations. Let's say there are two situations, one in which 3 people each earn $5000 a month, so together they have 15,000. The other is 5 people earning 3000/month, still a total of 15,000. Now let's say the cost for all basic expenses (food, clothes, bills) for each of those persons was $2000. The 3 earning 5000 would after paying the basic expenses each have 3000, so total they now have 9000 left. For the 5 earning 3000/month they would have 1000 each after they pay the basic expenses. That means those five would have a total of $5000 remaining. So in one case the 3 who are earning more money have more money left to spend or save than the 5 earning less money, even though both groups when they started out had a total of 15,000. Now if these situations were different employment options an employer could take, they probably would take the one with 5 people earning less money, since it's a better value. Now this does not take into account a lot of things, but basically a few people earning more money can as a group spend on extra things or save more than more people earning less money.

At 8:51 AM, Blogger The Sovereign Editor said...

This conversation actually comes several weeks late from my point of view. Back in January, Michael Savage voiced his support of a higher minimum wage. I have never supported a minimum wage at all, but hearing Savage speak on the topic made me wonder if I reasonably could support a minimum wage. Using what I learned in my Contracts Law class about bargaining power, I was able to come up with a convincing argument in favor of a minimum wage. The article I wrote can be found here:

Minimum Wage Proposal: How to raise the minimum wage and benefit private enterprise

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