Is It Time To Restructure Our Minimum Wage Laws?

Personally, I believe it's high time that we, as Americans consider totally rethinking the way that we structure minimum wage laws for the working class.

The current system seems to perpetuate a "Race To The Bottom" for most american wage earners. With massive unemployment, there is a lot of pressure to work "cheaper" than the next guy in order to obtain or keep a job.

For the employer, the incentive seems to be for him/her to keep wages low in order to maximize profits. Everything in this picture seems to work against the best interest of the wage earner.

It seems reasonable to me that we should adopt minimum wage laws that somehow mandate that the lowest paid individual in a given company be paid a wage or salary directly tied to the wage or salary of the highest paid individual in the company via percentages. For example, It could be mandated that no individual in a company can earn more that 40 times the pay of the lowest individual, no dollar amounts needed.

If this were the case, as companies and their CEOs become more successful, the workers are allowed to experience some of that success along with the owners. In this fashion, everyone gets lifted up together instead of record corporate profits year after year accompanied by record levels of poverty year after year with the gap in between growing wider and wider.

Also, I don't believe or at least I would hope, that a mandated dollar amount would not be needed because employers would be driven by their own self interest to pay a decent living wage.

Anyway, just wondering what the rest of you ATSers thought about this idea.

It is DEFINATELY time to do so. TIme the super rich start sharing their wealth or there's gonna be trouble ahead, and would make world war 2 looks like child's play when the masses start fondling their pitchforks as a solution to their woes.

BUT it must begin with the lowest wage earners in the world - China and India. As long as they do not have a minimum and sustainable wage equal to all, EVERY technology, investments and job developed will go to those slaves living on $100 a month, as the super rich becomes mega rich and uses such funds to further decide how mankind should be further enslaved.

The clock..... is ticking........

reply to post by SeekerofTruth101


I accidentally posted my thread before I had written the contents and I had to do an edit to attach some meat to the subject.

Thanks for the response and I agree with you completely.

I have always said that a global economy will not work without global rules. Rules that not only protect workers rights but also rules that protect our environment. Without some kind of global framework, industry will always seek out the lowest common denominator.

Problem with this approach is that the fear mongering right has already labeled any type of global cooperation as a "New World Order."

Global cooperation may not neccessarily mean a path leading towards the much highly reviled 'New World Order'.

The issue is - who's the one who's doing the cooperation? Corporations of the likes such as globalization enslavement of mankind or Humanity's such as democracy and universal human rights?

As long as the masses are educated and taught to differentiate between Corporations' and Humanity's aims, they will be better informed to make the right choices for a common unity seeking common human aspirations that will be fair and equal to all, just as USA had been in the 18th century right up till the first depression when the spectre of coporate shadow govts took over and got us into this mess we are in today.

Forget all the other stuff. We simply need to make employers pay a "living wage". A living wage is a wage that is sufficient to cover - decent housing, decent food, decent medical care, some retirement savings and some budget for leisure. I figure this will come to the equivelant of about $15-17 / hr after benefits. If you can't afford to pay this, then you shouldn't be in business.

reply to post by sligtlyskeptical


I agree with the living wage concept but wouldn't the "living wage standard" vary from state to state. I mean, Iknow it cost more to live in New York than it does to live in Mississippi.

I'm not saying that I disagree with you, I was just trying to think of a more universal method of establishing a baseline minimum wage standard. One where the employer would not be usurping all of the company profits while leaving the employees in a perpetual race to the bottom in order to keep from being replaced by cheaper labor.

There are a handful of reasons that this is not a good idea. Here are 3 of them in order from the most economic to most ethical in nature:

1.) It's economically untenable to base someone compensation on someone else's compensation, instead of on the market value of that person's goods/services. If boss Bob could hire someone to empty the garbage at his company for $5/hr, but is legally mandated to hire the same person to perform the same service for $8/hr, Bob is incurring an economic loss. Now Bob has to pay more to get the same thing, and there is no reason for it other than the law. Do you think Bob will pass his expenses onto you in the form of higher prices? Of course he will. Now you will pay more to get the same product, and no one is any better off except the guy who is taking out Bob's trash, and that guy would have done it for $5/hr because he needed a job.

Do you think Bob is going to be motivated to hire a new employee at a wage that is legally(artificially) inflated? Or do you think Bob is more likely to demand more work out of his bottom guys, and if they won't put out then he will find someone who will?

Certainly, increasing minimum wages is bad for employement. Companies have limited resources are not going to buy as much of the things that cost more. If employees cost more, they will not hire as many of them.

2) We live in a global economy. When it comes to less skilled jobs, America does not have any advantages. The higher our minimum wage, the more likely Bob's company is to outsource. If he can get people to make widgets for 10 cents an hour in another country, he has no reason to play along with America minimum wage laws. If there is a job that a lot of people can do or can easily be trained to do, that job will go to the people who will do it for the least amount money. If the least amount of money in America is set by law, then any company that wants to make money will go someone that they can pay people less to do the same thing.

The higher our minimum wage, the less jobs will be in America.

3) Do you think that what Bill Gates has done is only woth 40 times more than what the janitor at Microsoft did in the same time period? Sometimes, people produce things which are worth a lot more than what other people produce. Isn't it right to compensate them accordingly? After all, they're the ones who did it, and people willingly paid for it. Who is anyone else to step in and say it was undeserved?

How do you come up with 40 as the number? I ask because arbitrary limits don't work very well economically. If there's no reason to set something at 40, then it probably shouldn't be set at 40. What's not arbitrary is market value. For example, Bill made his money from the value of Microsoft stock. That value is set by a free market. It's worth exactly as much as someone is willing to pay for it, of their own free will. Bill owns the stock, and the market(the people) are willing to pay billions for it. According to the OP, should we tell Bill and the market that his stock can't be worth that much because we say so? Or should we tell Bill that he has to give the janitor a billion, just to make it fair?

Ultimately, I do think that minimum wage in the US is a good thing. However, it is a matter of fact that it is bad for jobs here. We have to balance the benefits and the costs, and if we get carried away on a crusade to pay the lowest earners more money in order to do the exact same job, we're going to find ourselves in trouble.

reply to post by SeekerofTruth101


before it gets close to having pitchforks in their face, the wealthy will be out of the country, along with their bank account holdings...these people pay alot of money to be protected in every way. you might get some managers of their wealth, but the wealthy will be long gone.

reply to post by OnceReturned


Your thinking is exactly why we need a minimum wage, I agree it should be regional. Without a minimum wage we all end up working for a cot and a few meals daily (about what you get at current min wage). If natural supply and demand were allowed to control all wages then it would simply be a race to the bottom. This is why unions came into existence. If our government did the right thing then we would need no unions.

As far as job overseas it would be logical to prohibit goods coming into the country at a lower price than they could be made here, based on the new minimum wage. This means tariffs. If people were smart enough to add 2+2 they would realize allowing free trade is akin to giving our treasury to private business. With the right policies, we could have full employment, lower taxes, and a wage and price scale that is balanced to provide anyone who works a decent way of life.

reply to post by Flatfish


Yes it is!

I was talking about this with my dad the other day.. He was rather surprised at how low min. wage is here.. 8.40 an hour. He's been working the same job for the past 20 something years, so he hasn't really been where he had to work min. wage.

8.40 IMO is not enough to support ones self.. and I realize that minimum wage is actually a bit lower in some states.

Wages need to be provided so people can support themselves.. maybe it would reduce dependency on the government.

Well since we are talking about the minimum, why not just raise it to say, $10,000/hr.

That way we can all be rich, wait a minute, will that work?

And your idea, what are we going to do, create a whole new bureaucracy? Call it the SOFT?

You know, Screw Over Free Trade. Tell me, when you get your mandatory pay raises and your company closes and moves over to China, you going to whine about that too?

I wish people that do not understand the difference between free markets and tyranny, would just keep their BMC.

Definitely sending mnemoth to this thread, he can school you on what the problems are with state ran markets.

A clue, USSR, Cuba, Venezuela etc etc etc.

Actually, a better idea would be to just pass a law and take all the businesses and divide them up amongst the workers, you know, true communism. That way NO ONE has to work, we can just print monopoly money to buy things from China. Oh wait, that is where we are heading now, not such a good plan.

reply to post by OnceReturned


Regarding the three reasons why you think it wouldn't work, I would like to say that;

First; Bob the garbage co. owner wouldn't be forced to pay a higher wage unless he refused to take a smaller portion of the profit for himself. And we all know that corporate profits are down these days, so that's out of the question, right. NOT! Or, Bob could go out and pick up the trash himself and eliminate the need for employees and then ole Bob could keep all the profits for himself. Point is, the trash won't pick itself up and the workers, which are the backbone of the company, should be rewarded accordingly. I don't think that any of them took their jobs just to help make Bob rich.

Second; The elimination of tax breaks to companies who outsource along with some import tariffs, equal to those imposed on american goods going to foreign countries, would go a long way towards eliminating the outsourcing of american jobs. Personally, I believe we need legislation to mandate that products sold in America are built in America with american workers. Much like Toyota builds cars in America for sale here. In return, I believe that if american companies want to sell their products in a foreign country, they too should build those products in that country. That way, workers worldwide are less affected by the differences in the standards of living between countries.

Third; No I do not think that Bill Gates deserves more than 40 times what his workers make. Bill Gates would be nothing without his employees. Again I ask, is he going to pick up all the garbage himself? The only reason Bill Gates is rich is because his ideas have been mass produced by who? Employees that's who.

The reason I chose the number 40 was because I heard Robert Reich state that 20 or 30 years ago, the average CEO took home 40 times the pay of one of his employees, and then he went on to say that today, the average CEO is taking home over 300 time the pay of one of his employees. Seems apparent that greed has stepped in and tipped the scales somewhat. If we don't find ways to limit greed, it will surely destroy middle America.

reply to post by Miraj


Thanks for the reply.

There is a very good article from the site listed below where the blogger makes a strong argument that the republican party should be referred to as "Cheap Labor Conservatives" and I couldn't agree with him more.

The article was written a few years ago but it is as valid today as it was then. It's entitled "Defeat The Right In Three Minutes." Check it out.

www.conceptualguerilla.com/?q=node/55

reply to post by OnceReturned


In example #1 that pretty much sounds like what goes on right now with unions? And that would be why alot of jobs are sent packing overseas, or companies go bankrupt because the people are making more money than they are producing.

reply to post by saltheart foamfollower


"Free Trade," is nothing more than a corporate ploy to utilize the worlds cheapest labor while sustaining the world's largest profit margins. What a Joke. From NAFTA to CAFTA to Most Favored Trading Status, all designed to destroy the american standard of living.

Free Trade should apply to raw materials only. All other refining and manufacturing should be done in house in order to maintain stable job growth as well as a healthy economy.

reply to post by jaynkeel


Unions are not the cause behind outsourcing, Greed is! There wouldn't be a minimum wage today if it were not for unions, mush less worker safety standards.

I worked for a union for 32 years before management forced me into early retirement at age 48. The companies I worked for are not outsourcing and they're not going broke either, as a matter of fact they are some of the largest in the world and they continue to make big profits.

Corporations today would rather spend tens of millions lobbying against things like minimum wage and worker benefits when that same money could just as easily provide those things to the workers thereby creating a much happier, healthier and more productive workforce while at the same time reduce the burden on social programs that corporations also lobby against.

reply to post by Flatfish


I used Free Trade because it fit in my joke I was attempting.

I wanted to use free market. Kind of hard to come up with a joke with FM in a word.

NAFTA GATT. Hmmm, when did those get passed?

Let me think, who is pushing something called the Clinton Globalization Initiative. Hmmm, I think the name kinda throws it out there doesn't it?

Funny how the Dems are SUPPOSEDLY all about the workers, yet they have pretty much helped in the destruction of the US economy.

Government in bed with corporations and the banks is the problem. No amount of regulations is going to stop the government controlled corporations and banks, or if you prefer the corporations and banks that control government, from worrying about themselves.

Legislation and regulations is the way corporation and government make the free market NOT WORK.
It is not supposed to work for the little guy. That is why they pass the legislation, to prevent the free market.

Oh well.

Originally posted by sligtlyskeptical
reply to post by OnceReturned

 

Your thinking is exactly why we need a minimum wage, I agree it should be regional. Without a minimum wage we all end up working for a cot and a few meals daily (about what you get at current min wage). If natural supply and demand were allowed to control all wages then it would simply be a race to the bottom. This is why unions came into existence. If our government did the right thing then we would need no unions.

As far as job overseas it would be logical to prohibit goods coming into the country at a lower price than they could be made here, based on the new minimum wage. This means tariffs. If people were smart enough to add 2+2 they would realize allowing free trade is akin to giving our treasury to private business. With the right policies, we could have full employment, lower taxes, and a wage and price scale that is balanced to provide anyone who works a decent way of life.

Well, my post was more an assessment of the situation than "my thinking." Here you're talking about an economy that is totally regulated and isolated from the world. Pervasive government involvement and isolationtionism have historically given very poor results. There are countries that make these things work, but those countries are not like the US.

Natural supply and demand wouldn't result in a race to the bottom, it only results in getting paid a wage that is based on the value of your services. If you're doing a job that anyone could do, or than almost anyone could easily be trained to do, then it's not a very valuable job; it's easy to find other people to do it. Because there are a lot of people capable of filling those types of positions, wages are low; all the employer needs to do is find one of the many capable people who is willing to do the job for slightly less than the next guy. Doesn't this make sense though? If I have a company, and I need a job done within the company, shouldn't I decide how much it's worth to me to have that job done? I'm not going to force anyone to do the job, I'm going to offer to pay them some amount, and if I can't find anyone to do it for that amount, I will offer more until I can find someone, or I will just do the job myself. Is that so crazy? What you're talking about means that the government comes in and says, "No, if you want that job done, you have to pay X amount of dollars, even if there are people who are willing to do the job for less."

The free market - natural supply and demand - lets people choose to do whatever they want. Any changes to that system are all of the type, "No, you can't do that, we're going to tell you how you have to do it instead." The market is made up of the people who participate in it, and the regulator is the government. I think it's right for the people - the participants in the market - to make the decisions and set the market values. The alternative is to let the government make the decisions, and I hate that. Wages in a free market are exactly equal to the monetary value that society places on a service. Atheletes makes millions because people pay to see them. No one is forced to do anything, they just spend their money how they want and this is how things end up. Regulation means someone is being told how to spend their money, which is inefficient and unfree.

You say, "With the right policies, we could have full employment, lower taxes, and a wage and price scale that is balanced to provide anyone who works a decent way of life." How could we increase employement by increasng minimum wage? You're making employees more expensive for companies. How can you possibly make something more expensive without making it better and expect companies to buy more of it? At the same time, you're suggesting that American companies pay more than the market value for any goods that are produces cheaply overseas. This is another way to drastically increase expenses for a product that is no more valuable. Setting prices lower on the conumer market so that "a decent way of life" is affordable also hurts businesses. Nearly everything that you're describing hurts businesses; they have to pay more to get the same thing. You can't hurt businesses without hurting the job market and the economy as a whole.

What you describe is a kind of economic utopia where everything is better an nothing is worse. It's impossible, and when you consider the realities it turns out that most of what you're suggesting would actually do a lot more harm than good. Somehow in relatively recent history the US turned itself into the most powerful economy in the world. It seems to me that you should look at how that happened, and at the same time look at what happened to the countries who set out to engineer an economic utopia.

I agree the divide between the wealthy and poor is widening, and it's not a good thing. But there are 2 massive issues that prevent a solution ...

1) If you raise the minimum wage you raise the base price of production, creating inflation. The cost of goods and services goes up, and then higher wage brackets go up. Very quickly, minimum wage earners are STILL earning minimum wage - the dollar amounts are different, the purchasing power is not.

2) If you cap maximum wage limits, you create a move to less transparent forms of compensation. Things like independant contractor agreements, etc. A lot of performance bonuses are already used to somewhat mask true compensation over and above the stated salary. There will always be loopholes.

The reality is you have to work hard and work smart. And if you are lucky and talented and come to run your own business ... expect excellence from all your employees. And reward them all accordingly.

reply to post by OnceReturned


Yeah America became the worlds strongest economy alright. That was prior to NAFTA and China being awarded "Most Favored Trading Status," which was nothing more than the assurance that american corporations needed to begin the mass exodus known as outsourcing. With this in place, they now felt is was safe to move their manufacturing overseas because they had a guarantee that their chinese made products would be offered for sale in the U.S..

Let's just see how long our "World's Strongest Economy" status last. I think China just took over Japan for the second place spot and I bet you can guess who their coming after next.

Don't get me wrong, there is nothing wrong with profit but when is enough, enough?