Debate over: minimum wage must exist

Disputes over the minimum wage are no longer a question of whether it should exist but rather at what level it should be set.

© Ewan-M

© Ewan-M

The Independent, last Tuesday, announced that there is no longer any debate about the need or legitimacy on the minimum wage. Meanwhile, for some, it remains a definitive example of how state intervention damages welfare of the very poorest, and helps to keep them poor. For others still, it is not high enough and deserves to be increased further. The Conservatives have kited a scheme to increase it in line with the profits of the company – as if there was a maximum moral amount of profit that entrepreneurs deserved for world-changing and life enhancing innovations. Finally, Hackney Council have joined in, calling for powers to be delegated to local authorities and information sharing to begin so people’s voluntary financial arrangements can be properly punished.

This debate is going in the wrong direction.

4 Comments

  1. The fact that there is a debate means it is going in the wrong direction, for such a debate tends to a majoritarian view, or a majority of those aware of their vested interests. 1 employer vs n employees cannot be a “democracy”.

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  2. It would be easy to dismiss the source (and I would certainly never click on a link from the “ex” KGB Dependent newspaper).

    However, there is indeed widespread support for this idea that government should set the price of labour. This shows a basic failure to grasp basic reasoning (the real foundation of economics is logical reasoning – not “studies” whether pro or anti minimum wage edict) – the idea that one can raise wages by passing an edict, is as insane the idea that one can reduce the price of bread by passing an edict. Sadly statists (kings as well as mobs) have believed this for thousands of years.

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  3. Because the minimum wage came in only 15 years ago, It
    would be helpful to hear stories of how people coped back then
    without it. What were the reasons for it and who spearheaded the
    debate back then, it might help with opening up the
    debate.

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  4. It must be remembered that the minimum wage law is only one factor among many. It is certainly the case that *all other things being equal* minimum wage laws will cause unemployment to the extent to which they fix wages above the market rate. However, as all other things are not equal in this morass of intervention and corporatist plundering, it may not be worth fighting that hard against something which has such widespread support. This is speaking as someone who has argued the economic case many times in the past.

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