What is the minimum wage hourly pay?
It is a legally mandated minimum rate of pay for one hour of work. The amount varies from time to time and place to place.The U.S. federal minimum is, in general, $7.25 an hour as of March 2018, but it may be higher in some places by state and/or local law. In the United Kingdom it is £7.83 (roughly US$11.06 as of late March 2018) as of 2018 for workers 25 years old and older. In Australia it is $18.29 (Australian dollars, or roughly US$14.07).
Why could a rational firm decide to pay above-market wages?
Because hiring and retaining employees drives many costs, often in unusual places, and paying above market may reduce the total cost, both direct dollars and opportunity costs.Some one will do some of the obvious reasons, like getting the first choice of better people. I will propose some less obvious examples.Two examples:If you have to use very senior people to put in a number of hours for hiring (This follows some suggestions by Yishan Wong and others) - you really want to minimize this time, so pay above market to get a high yield on your offers - maybe 90% of the people take your offer, instead of 60% when you are at market rate. That can save the time of your key people, and that is likely to be critical to your success.So the opportunity cost of hiring may be much greater than any wage difference.Once you become known for relatively above market salaries, you recruiting advertising expense can be reduced. Recruiting ads are cheap today, but when newspapers ruled the world, the San Jose Mercury News was one of the most profitable newspapers in the U.S. and almost all of that because of employment advertising. Each 1/8 of a page ad would cost a couple of thousand dollars, and that bought you one Sunday.You may not need to pay thousands to newspapers today, but headhunters and executive recruiters can cost enormous amounts of money. So maybe with a reputation for paying a little and cheap ad on Craigslist or Linked-In works out better than paying a recruiter.
Who is supposed to live off of minimum wage?
It really doesn't matter who does minimum wage jobs. It doesn't matter whether they can live on it or not. It doesn't even matter that the real force behind minimum wage are Union workers whose contracts are expressed in terms of a multiple of the minimum wage. What matters is basic economic analysis, which proves that even having a minimum wage, let alone increasing it, has zero potential for positive effects to either an individual nor the economy as a whole, and a great deal of potential to do harm to individuals and the economy as a whole. If you know enough about basic Econ, draw a Supply and Demand Curve for Labor, and identify the Equilibrium point. If you don't understand Econ enough to do that, refrain from having an opinion about minimum wages until you do. If the minimum wage is below or at Equilibrium, it has no effect at all, other than to be a total waste of time to legislate. If it is above Equilibrium, the curves will demonstrate that people lose jobs and the economy loses power. It's debateable how much, but it's absolutely clear that there is no positive effect, other than to make Limousine Liberals feel good about improving the lives of hypothetical peasants without the requirement that they actually meet any.
What does minimum wage legislation do?
Minimum wage legislation: a. sets a price ceiling above the market-clearing price. b. has no impact if the minimum wage is above the market-clearing price. c. has the same impact in all labor markets. d. creates unemployment when the minimum wage is above the equilibrium wage. e. is opposed by organized labor.
How will people survive on libertarian wages?
Wage earners will do continually quite well provided all aspects of the economic system are also libertarian – meaning prices are set and controlled by market forces for everything – especially the cost of capital (interest rates) and the medium of exchange (money).In our current non-libertarian system, a cabal (aka the Federal Reserve) manipulates the value and cost of both capital and money.The result is a continual expansion of the fiat money supply – which devalues money, pushing the overall costs of goods and services ever higher – all other things equal. The Fed also enables massive federal debt through government bonds purchased using money it creates out of thin air. This combination of money devaluation and debt creation is a hidden tax on wages of workers, continually decreasing the value of a particular wage.Without these manipulations, the prices of goods and services continually decrease. Every unit of money therefore becomes more valuable - which means the same wage has more purchasing power over time.Therefore, wage earners would enjoy a continually improving standard of living with no need for any increase in their wages, were we to go to a free(d) market.The reason that our wage rates have stagnated relative to productivity gains and actual purchasing power is precisely because of these hidden taxes imposed by the Fed. These hidden taxes allow politicians to steal significant portions of the productivity increases of the private sector. Otherwise, the productivity increases would increase the purchasing power of wages of both blue and white collar workers.Without removing these hidden taxes, ‘libertarian wages’ is meaningless.
Do conservatives understand that without a minimum wage the price of unskilled labor would reach equilibrium at a subsistence wage?
Do you understand that all prices reach equilibrium according to supply and demand, which in the case of wages has little or nothing to do with subsistence?What affects a person’s wage are primarily things like their productivity, what other options they have, how many available workers there are, how useful or desired that kind of work currently is and so on. If my “needs” increase, that has no effect on my income. It MIGHT have an indirect effect, by motivating me to work more hours or in a higher-paying job but that’s quite different.The minimum wage (MW) law does nothing to address the above factors. It’s a simple but stupid and fallacious idea which has miraculously survived to this day. Making certain voluntary transactions illegal does nothing to help those people involved. Whether someone is willing to work for $8/h or not is their choice, not the government’s. The MW can take away that option, but not provide an alternative. And it’s quite ridiculous to assume that a higher rate of pay can simply be enforced with no effect on unemployment rates. As long as there are unemployed people, the real MW is zero and mandated price controls make it harder for those people to get a job.The policy does indirectly help people who already have well-paying jobs by reducing their competition. That’s why it’s popular among unions and in South Africa during Apartheid as a method of holding blacks back. Milton Friedman called it the most anti-negro law on the books. I think he knew a thing or two about economics…
How would an increase in minimum wage involve a conflict of goals?
The conflict here is that many employers cannot afford to pay their employees higher rates or they risk going out of business. Many businesses around me are giving salary cuts and laying off to keep their heads above the water. Taxes, my dear, would be thr problem. lowering taxes for employers would help them give more to their workers...and lowering taxes to the working man would put more in everyone's pockets. There are so many in the population that are disabled, elderly, and charity cases that busnesses and the working man are taxed to death. Politicians are some of the highest paid jobs in america. The problem is when politicians write thier own paychecks through our taxes.