January 26, 2007

The "What I'm Worth" Debate

The minimum wage debate has struck up again with the newly elected Democratic majority in Congress. And thus, debates among my friends, acquaintances and intellectual inferiors as well. The popular argument amongst my pro-wage increase friends is, "What people don't understand is that increasing wages will increase spending capital and therefore increase revenues...so everybody wins." Me, in my jerk mentality goes, "great, let's raise the minimum wage to $60 an hour." The reply, "Well, obviously there's a limit." "Ok, great. Then, what is it?" my truthfully curious reply. Their retort, "Well, I think the proposed $7.25 is reasonable."

Ok, here's the thing. There shouldn't be a debate about this anymore. If increasing the minimum wage (to an extent) helps everyone, then what is that ideal economic number? This is truly an economic question. What wage helps the most people? What? Economists say that magic number is $0? Those cruel, hateful jerks.

Maybe that's what they are. Maybe they're right, but ignore basic rules of moral decency. But, let's at least look at the cons of raising the minimum wage, and understand that there ARE some before we try to hurry this vote through to "help" everyone.


Jeff said...

Yes, there's a limit, just as there is in all matters of government striving to achieve economic equality/security and fulfilling our proper moral obligations.

Social Security doles out a grand or so a month, just for being over 65. Should we get rid of that too, because the market didn't dictate it?

Medicare serves the elderly with guaranteed insurance who may not otherwise be covered in a market system (and they weren't prior to LBJ's passage of the program) for a cheaper rate. It's the most effective government program to date. Should we revert to heeding market principles again, when 7/8ths of the elderly didn't have health insurance?

My point is to simply say there's a limit doesn't disprove that it's still a good idea to adequately compensate people with a living wage -- particularly to people who work the thankless jobs that make this country run. Certainly we can debate what that limit is, but the lack of a safeguard for the working poor resorts us back to the fine days of Hoovervilles.

Sabai said...

I think you just argued my point over again. The point is, let's determine what the healthiest S.S. amount should be, and what the optimum minimum wage should be for all parties involved. Not just look at the problem of poor people not being able to make ends meet and say, "well, let's boost up their hourly wage a couple bucks." That's like looking at a basement that's having support problems and saying, oh let's just take the beam from this side of the house and put it over here. It helps the problem, but causes a new one.

Anonymous said...

to jeff,
never has our government preached economic equality...we aren't a socialist economy. the idea behind our economy is that some make millions and some don't. By no means am i suggesting that we forget those who don't, but it is important to remember that our goal isn't econmic equality. the goal is to provide a living wage. So, what is a living wage? in third world countries, $75 a year is a livable income. What is ours? it is probably a lot lower than we expect. That doesn't mean that people making a living wage are going to be as comfortable as donald trump or oprah, but that they have their basic needs met.

on another note, i'm not to sure i buy the trickle down effect. I don't have much money, so if i were given more, i wouldn't spend it, i'd save it.

note number three, social security:
"Social Security doles out a grand or so a month, just for being over 65."
i don't know about you, but i dole out a grand or so a month out of my paycheck so that when i'm 65 i can have financial security. unfortunatly this may not be seeing the flaws of the system.

moral of this comment- stay in school kids. your education is what makes your wage increase.

Sabai said...

anonymous comments are tough, because if they're not a friend, i don't want to make fun of them.

But, unfortunately, your rebuttal of supply-side economics based on what you think you would do with more money doesn't disprove the economics behind it.

Secondly, I'm curious to know whether or not a "general education" will truly be the answer to higher wages in a global economy?

Steve said...

You also can't just look at economics in a vacuum. Even if you discount the moral arguments (which you probably shouldn't), the economy has to be examined in the context of our whole social framework. The one that produces the most wealth might not be in the best interests of the country. It's all about finding the right balance, neither pure socialism or pure capitalism.

Now on the topic, I have no idea what that wage might be (probably varies from city to city, actually, depending on cost of living). I just hope if we ever do find the magic number we tie it to inflation so we don't have to go back to the drawing board every five years.

Sabai said...

Steve's comment of "The 'minimum wage amount' that produces the most wealth might not be in the best interests of the country" is very interesting. So, I guess we need to consense on what the best interests of the country are.

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