Ukip! Ukip! Ukip!

[SpontaneousOrder]

For many, it's an artificial ceiling.

I understand where you're coming from, but the fact that this could be perceived to be the case only strengthens the argument that those minimum wage earners are overpaid. From an economic perspective that artificial ceiling makes no sense as not paying more than one has to means that workers will attract the wage required in order for the employer to get what he wants.
If an employer won't go above minimum wage then he can't value that employee more than minimum wage - i.e. that worker is worth (in a free market) either the minimum wage, or less.

An employer will naturally employ more people according to their marginal productivity. If a factory makes widgets and at 100 employees it outputs 500 widgets, it may be the case that at 150 employees it can only make 650 widgets. At 200 employees it might only make 700 widgets.

At a certain point there is no profit in employing more workers, and a higher NMW only moves that point closer. Closer means less people employed, and less room for wage growth as increasing wages without extra output means less profit. So you get to choose between more employees at a lower rate, or fewer employees at a higher rate - but only up to the point where either direction results in zero marginal productivity. Beyond that point where input exceeds output, jobs and wages will cease to grow.

If you want to help people have more wealth, minimum wage is not the way to do it. The only way to make the policy work the way you intend it to is to be more and ore controlling of employers so that they can't avoid the inevitable loss in profitability, and the only way to do that is to introduce soviet style communism which, lacking any real price mechanism, is about as inefficient at creating wealth as is possible.

[SpontaneousOrder]

Opinions aren't evidence.

Read the articles/watch the interviews and they'll show you their evidence. If you read Sowell's 'basic economics' you'll get an awful lot of evidence referenced.

[Zero Liability]

Did you miss the memo? Only the OECD can use the word "evidence".

[doodab]

Read the articles/watch the interviews and they'll show you their evidence. If you read Sowell's 'basic economics' you'll get an awful lot of evidence referenced.

You ought to be able to quote some of it then.

[SpontaneousOrder]

You ought to be able to quote some of it then.

Why?

[MicrosoftBob]

I think the minimum wage is a red herring, the real issue is the tax payer subsidy of big business via tax credits that distorts the market more than the minimum wage

[doodab]

An employer will naturally employ more people according to their marginal productivity. If a factory makes widgets and at 100 employees it outputs 500 widgets, it may be the case that at 150 employees it can only make 650 widgets. At 200 employees it might only make 700 widgets.

At a certain point there is no profit in employing more workers, and a higher NMW only moves that point closer. Closer means less people employed, and less room for wage growth as increasing wages without extra output means less profit. So you get to choose between more employees at a lower rate, or fewer employees at a higher rate - but only up to the point where either direction results in zero marginal productivity. Beyond that point where input exceeds output, jobs and wages will cease to grow.

This simplistic model leaves out the possibility of investment in technology and/or training. Something that reduces the marginal productivity of unskilled labour makes both of those more attractive. It's technological progress and not simple population expansion that drives wealth creation, so this has to be a good thing.

The other thing your dogmatic recital fails to take into account is that capitalism as it stands simply doesn't distribute wealth to the poorest. In many cases it doesn't even result in a subsistence wage being paid. Describing the mechanism by which wealth transfer occurs when it doesn't actually happen in practice rather points to a flaw in your reasoning doesn't it?

[doodab]

Why?

To back up your opinions with facts.

[DodgyAgent]

This simplistic model leaves out the possibility of investment in technology and/or training. Something that reduces the marginal productivity of unskilled labour makes both of those more attractive. It's technological progress and not simple population expansion that drives wealth creation, so this has to be a good thing.

The other thing your dogmatic recital fails to take into account is that capitalism as it stands simply doesn't distribute wealth to the poorest. In many cases it doesn't even result in a subsistence wage being paid. Describing the mechanism by which wealth transfer occurs when it doesn't actually happen in practice rather points to a flaw in your reasoning doesn't it?

You don't like capitalism do you? yet you gorge off the proceeds of it.
The way you choose your words as though people are entitled to feed off "capitalism" (the work of others) in the form of redistribution. The problem with capitalism is that too many people are cut off from its world either through poor education, monopolistic private and public institutions and red tape. In other words there is not enough capitalism

[doodab]

You don't like capitalism do you? yet you gorge off the proceeds of it.

For me it's been great, up to a point. I'd like that to continue but to do that it needs to change because it is not sustainable. This is why I'm making my point, not because I "don't like it". I like chocolate, but I know I can't live off chocolate alone.

The way you choose your words as though people are entitled to feed off "capitalism" (the work of others) in the form of redistribution. The problem with capitalism is that too many people are cut off from its world either through poor education, monopolistic private and public institutions and red tape. In other words there is not enough capitalism

Oh shut up with the emotional BS and read what I wrote you dimwit. The capitalist system is inherently redistributive because the distribution of income under a capitalist system is inherently unequal. This is hardwired into the system, regardless of the other factors you mention, so long as those with capital expect a return on their investment that outstrips both economic growth & inflation. The simple act of giving them that return means that the remaining share grows more slowly than the reference rate i.e. those without capital become relatively poorer.

By arguing for the status quo you aren't arguing to do away with redistribution, you are simply arguing in favour of redistribution to the already wealthy. Because that is what capitalism naturally does. And it's got very little to do with education, monopoly and red tape and everything to do with the existing distribution of accumulated wealth. Hence my point that we need to make the distribution of income independent of the preexisting distribution of wealth to make capitalism sustainable.