I think, as a lawmaker, I'd err on the side of raising the wage, because inflation doesn't stop and in the long run, it will be better. But I'd feel for the people hurt by it.
I think it's a clumsy solution even in the long run. There are better ways to achieve the same goal of making sure workers have enough to live on, I think, such as the negative income tax.
One of the downsides of the minimum wage law is that many people don't need minimum wage and are willing to work for less; teenage babysitters and busboys, for example, don't need as much to live on as an adult Wal-Mart worker with a wife, kids and elderly parents, but the minimum wage affects the employers of babysitters and busboys too - who can often least afford it. They therefore tend to respond either by breaking the law by hiring on the black market, or they fire their staff. Ever wonder why almost no newspapers hire children to deliver the papers anymore? Why pay a high minimum wage to a ten year old with a bike when you can pay it to an adult with a car who can do a route five times bigger?
One suggestion that has been put forward has been to expand child labour laws. There are already detailed rules for employers around how many hours a minor can work and what kinds of work they can do. This benefits adult workers by making them not have to compete with teenagers; if the jobs had completely separate classifications, you could have a lower minimum wage for the low-commitment, low-hour, highly safe jobs suitable for minors (ideally, large corporations would be prevented from having many jobs in this category), and a higer minimum wage for adults with families whose job absorbs more of their life. This is a flawed solution too, but at least one benefit of it is the reduction in harm to small businesses and households hiring occasional staff, and a clear recognition of which jobs should reasonably be expected to support a family.
Didn't Ontario used to have two separate minimum wages? I have a distinct memory of earning just over $4 per hour, with a cheque from the school board so it wasn't black-market (I shelved books in the school library) while the adult minimum wage was over five dollars.
Many of the jobs that are suitable for children/teens, like my library job, are now instead done with volunteers. While I see the benefits of that, I also had a lot of benefit from working in a library at the age of fourteen, earning enough to take pressure off the family budget by buying my own clothes and incidentals.
Negative income tax: not only do you not pay taxes, but if you earn below a certain threshold, the government will pay you?
I'd like to see more discussion about this in the political sphere. Too often, everyone gets focused on one aspect of the problem - low minimum wage - so that solutions which take that aspect out of the dialogue aren't considered.
Negative income tax: not only do you not pay taxes, but if you earn below a certain threshold, the government will pay you?
It depends on the implementation method, of which many have been proposed, but usually it's the opposite; the government gives everyone X amount, which is enough to live on if you are extremely thrifty and frugal, and then taxes Y% of everything you earn with no regard to tax brackets. The rich end up giving back all of X and more, of course, and the poor keep X but have to give up Y% of their earnings like everyone else.
Libertarians like me bring up the negative income tax all the time in the political sphere, but then liberals yell at us because of the "poor people paying the same Y% as the rich" factor, and conservatives yell at us that no one would bother to work if they could live on X. :) But I do think this is the fairest approach to wealth redistribution anyone has yet come up with.
Hmmm... mostly it's in economic textbooks, I don't really know of a lot of links. You might try this one: Negative Income Tax (http://www.globaljusticemovement.org/subpages_articles/nit.htm)
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(no subject)
Date: 2007-01-05 03:30 pm (UTC)(no subject)
Date: 2007-01-05 04:10 pm (UTC)One of the downsides of the minimum wage law is that many people don't need minimum wage and are willing to work for less; teenage babysitters and busboys, for example, don't need as much to live on as an adult Wal-Mart worker with a wife, kids and elderly parents, but the minimum wage affects the employers of babysitters and busboys too - who can often least afford it. They therefore tend to respond either by breaking the law by hiring on the black market, or they fire their staff. Ever wonder why almost no newspapers hire children to deliver the papers anymore? Why pay a high minimum wage to a ten year old with a bike when you can pay it to an adult with a car who can do a route five times bigger?
One suggestion that has been put forward has been to expand child labour laws. There are already detailed rules for employers around how many hours a minor can work and what kinds of work they can do. This benefits adult workers by making them not have to compete with teenagers; if the jobs had completely separate classifications, you could have a lower minimum wage for the low-commitment, low-hour, highly safe jobs suitable for minors (ideally, large corporations would be prevented from having many jobs in this category), and a higer minimum wage for adults with families whose job absorbs more of their life. This is a flawed solution too, but at least one benefit of it is the reduction in harm to small businesses and households hiring occasional staff, and a clear recognition of which jobs should reasonably be expected to support a family.
(no subject)
Date: 2007-01-05 06:27 pm (UTC)Many of the jobs that are suitable for children/teens, like my library job, are now instead done with volunteers. While I see the benefits of that, I also had a lot of benefit from working in a library at the age of fourteen, earning enough to take pressure off the family budget by buying my own clothes and incidentals.
Negative income tax: not only do you not pay taxes, but if you earn below a certain threshold, the government will pay you?
I'd like to see more discussion about this in the political sphere. Too often, everyone gets focused on one aspect of the problem - low minimum wage - so that solutions which take that aspect out of the dialogue aren't considered.
(no subject)
Date: 2007-01-05 07:24 pm (UTC)It depends on the implementation method, of which many have been proposed, but usually it's the opposite; the government gives everyone X amount, which is enough to live on if you are extremely thrifty and frugal, and then taxes Y% of everything you earn with no regard to tax brackets. The rich end up giving back all of X and more, of course, and the poor keep X but have to give up Y% of their earnings like everyone else.
Libertarians like me bring up the negative income tax all the time in the political sphere, but then liberals yell at us because of the "poor people paying the same Y% as the rich" factor, and conservatives yell at us that no one would bother to work if they could live on X. :) But I do think this is the fairest approach to wealth redistribution anyone has yet come up with.
(no subject)
Date: 2007-01-05 07:47 pm (UTC)(no subject)
Date: 2007-01-05 08:02 pm (UTC)