October 15, 2005

Response to Earthenvesselmz on Minimum Wage Laws

In response to Earthenvesselmz reply to my recent discussion of minimum wage laws:

Minimum Wage

1 - Definately not! Which freedom would be limited? Bob and Jack FREELY agree to a contract. Neither is required to do so. Having once made the agreement, both parties are legally required to follow through, but Bob and Jack have already surrended the right not to do what the contract specifies by signing it.

2 - The incentive may not make ALL people care, but it will likely make some people care, depending on the expected outcome. Essentially, all investment is the postponement of present good for expected future greater good, even if that greater good is unsure. If companies (and by application, people) would always choose to take the short term benefits over vague long term benefits, there would be no saving, no entrepaneurs investing in new ideas, no research and development firms, etc. Take the medical industry for example. Within the medical industries are lots of businesses willing to invest in research projects that won't generate profits for years as new drugs and medical tools are developed, which then have to go through a lengthy FDA approval process before they can even be sold and the possibility exists that the FDA could reject the drug making it impossible to profit from the project. I see no justification for your unsupported ascertion that people ignore long term unquantifiable benefits for short term quantifiable benefits.

Furthermore, I see no justification for the idea that given the assumption that people (for that is what businesses and governments are composed of and the ones who make the decisions we are discussing) will suddenly become more concerned with the long term benefits if we relabel their institution as a "social" institution. People still have self-interest and the governments job would still be the same.

3 - Which problem are you refering to? The fact that legislating higher wages can not increase the capital to pay for wages by the same proportion? That actually isn't a capitalist problem, it's a monetary problem (in part). Simply by legislating that 10 employees formerly paid out of $100 now be paid 50% more, the $100 does not become $150. Theoretically, the government could either print more money, raise taxes, or borrow to compensate the $100 with the additionally $50, but that money has to come from some where. In the case of printing money, the currency is devalued, which is essentially a flat tax on everyone. If the government raises taxes, it is effectively decreasing the wages of other workers to increase the wages of other works. Another 10 workers who are paid out of $200 are taxed $50 to pay for the other 10 workers and they now effectively make less. Finally, if the government borrows money, it has to pay it back later with one of the other options, so that is only a short term solution. Therefore, I reject your unsubstantiated assertion that "captialsim" causes "this" problem. Furthermore, if capitalism is the problem, what would your solution be? Clearly, if capitalism is a problem, minimum wage laws are just a symptom solution. Capitalism remains to continue causing problems.

As for the lack of freedom in worker-employer contracts, this is absolutely not the case. My sister and I worked minimum wage jobs at Target one summer (or rather, she did and I opted to work at night for an additional $ an hour) and our alternative certainly was not starvation. We freely chose the jobs valuing the contribution to our college educations and augment our life-styles (I was able to afford the laptop I am typing this on). The pitfall of the "living wage" argument which you seem to be ascribing to here is that it seems to me that most of the people seeking minimum/low income jobs are younger people like me, who are supported to an extent by others but want to get a job to augment our lives or save for the future. We aren't in danger of starving.

As for work vs. starving, there is no right to food. God had the following to say about getting food:

Gen 3:19 In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken: for dust thou art, and unto dust shalt thou return.

The apostle Paul had this to say about the relationship between working and eating:

2 Thes. 3:10 For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

Therefore, I find the starve or work a minimum wage job to be hardly terrifying or some kind of inherent problem that condemns capitalism and necessitates legislation of any kind. In fact, I find the ascertion that the alternative of starvation entitles the poor man to something to be unbiblical.

Furthermore, how does the fact that I wish to employ low cost labor and someone else agrees to work for that price suddenly make me responsible for guaranteeing an arbitrary minimum quality of living or justify forcing me to act as some kind of charity? If I am not mistaken, that is why we have charities and welfare (which is another topic).

Ownership Derived from Investment

I suspect you are referring to Locke's argument that property rights dervice from the infusion of something (say land) with one's own labor (building a house and a fence). However, you omitted a key component of Locke's argument which is that that that which is made personal property by an infusion of labor is necessarily previously unowned. Thus, his argument, while it suggests a reasonable justification for the emergance of private property, does not provide the definitive means of gaining property. We are not in a system of nature or lack of ownership within which Locke applied his argument. Today, nearly all goods and land is owned. Thus, I can not go and build a house in your backyard and claim I therefore own your backyard because that violates your property rights. Today, ownership is achieved through free legal transfers of previously owned property, not the creation of new property through the infusion of labor. Therefore, the short answer to your question is no.

Likewise, the answer to your second question is no. The company is pre-owned. If I go into a factory and work, I do not become an owner of the company. There are two ways to look at this. First, if I am not hired by the company, I am violating their property rights in the first place by breaking into their factory and trying to work for them. Second, if I am legally hired by the company, I have already agreed on a form of compensation, my salary. I do not receive ownership in the company, but I receive ownership in currency. Another way to look at the 2nd case is to observe that my labor for the company is not owned by me, and therefore the infusion of that labor with the companies goods makes the goods the company's and not mine, for I have sold the ownership or property of my labor to the company in exchange for ownership of some other property.

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