Effects of an Entirely Labor Australia? (1 Viewer)

[volition]

<-- erm what?

My point is, that employers have a rate at which they are willing to employ people. If you raise the rate at which they are able to employ, this action will price people out of a job.

eg. My labour might have only been worth $5/hr, and if the minimum wage is raised to $6/hr, then I may no longer have a job.

So while it's possible that the people who weren't priced out of a job benefit, this only comes at the cost of the people who now no longer have a job!

There are also other issues involved like the idea that employees don't necessarily benefit anyway, because employers sometimes respond to minimum wage rises by just taking out other benefits or reducing the quality of on the job training.

Then there's also the issue of where you would otherwise have two willing parties who aren't allowed to go through with a transaction because of government regulation. This goes against economic freedoms and so it's wrong.

Merit pay wouldnt work with teaching and thats common sense, i can go into more details if you want.

I think merit pay could be workable, so let's see what you've got against it then.

more wages in terms of wage growth? -> Wages Increase -> Business Costs go up -> Cost passed onto end consumer with rise in prices -> General Inflation increase -> Offsets the original wage increase -> Wage Increase Demanded.. Economics is a circle btw.

I said the employers would otherwise have this money, and there's no reason to say they wouldn't be spending it too!

So I don't think it's relevant to say that "it's better for the economy that the workers have the money that would otherwise be owned by the employers".

Yeh, this argument is in one of my economics textbooks. The guys are called David Card and Alan Krueger and they're from California.

They've been quite criticised for supporting the living wage because it causes inflation (due to increased demand).

Not only that, but their methodology has also been questioned.

Check out: "A Reexamination of Card and Krueger’s State-Level Study of the Minimum Wage" by Walter J. Wessels JOURNAL OF LABOR RESEARCH
Volume XXVIII, Number 1 Winter 2007. Basically, this guy uses a similar look at minimum wages, but this time he did it on USA 95-96 min wage hike (as opposed to the earlier one studied by Card and Krueger) and this time around, he found a significant negative effect on employment.

It comes as no surprise really, I think the explanation for the 'switch' in findings is that later on the actual change in employment was more discernible.

 

[kokodamonkey]

My point is, that employers have a rate at which they are willing to employ people. If you raise the rate at which they are able to employ, this action will price people out of a job.

eg. My labour might have only been worth $5/hr, and if the minimum wage is raised to $6/hr, then I may no longer have a job.

So while it's possible that the people who weren't priced out of a job benefit, this only comes at the cost of the people who now no longer have a job!

That wouldnt happen because the minimum wage rises tend to be in line for inflation there for the $6 you get now is the same value as the $5 you might have got 2years back.

There are also other issues involved like the idea that employees don't necessarily benefit anyway, because employers sometimes respond to minimum wage rises by just taking out other benefits or reducing the quality of on the job training.

Where minimum wages apply, this doesnt happen because it happens in line with inflation therefore the prices tend to go up aswell everything is relative.

Then there's also the issue of where you would otherwise have two willing parties who aren't allowed to go through with a transaction because of government regulation. This goes against economic freedoms and so it's wrong.
I think merit pay could be workable, so let's see what you've got against it then.

How do yo umeasure it for teaches it wouldnt work. one. a teacher might be given a class full of reatrds or the bottom class, so how is that fair compared to the one thats teaching the top class... Same goes for a teacher working at say. Think about it. Teachers would also stop doin extra stuff like coaching teams after school. you want that? your going to have to pay for it. You want to ask a question in class? thats an extra $5. YOu want the teacher to stay back after class with you? thats gonna cost you.

So I don't think it's relevant to say that "it's better for the economy that the workers have the money that would otherwise be owned by the employers".

ITs better for the Economy in terms of the business is more like to save that money for things where as the employees would need the money to spend on goods thus its injecting more money into the economy, and into government revenue from income tax.

 

[volition]

That wouldnt happen because the minimum wage rises tend to be in line for inflation there for the $6 you get now is the same value as the $5 you might have got 2years back.

Where minimum wages apply, this doesnt happen because it happens in line with inflation therefore the prices tend to go up aswell everything is relative.

I'm arguing against the minimum wage full stop, rather than just increases in the minimum wage. I'm talking 'ceteris paribus' here, holding everything else constant. Unemployment is increased with or without inflation, so your point isn't really relevant here.

How do yo umeasure it for teaches it wouldnt work. one. a teacher might be given a class full of reatrds or the bottom class, so how is that fair compared to the one thats teaching the top class... Same goes for a teacher working at say. Think about it. Teachers would also stop doin extra stuff like coaching teams after school. you want that? your going to have to pay for it. You want to ask a question in class? thats an extra $5. YOu want the teacher to stay back after class with you? thats gonna cost you.

I think you'll find that there are many ways to try to measure the value of teachers, and the schools that are able to discriminate rationally(pay better teachers more) will prosper. Some places will just pay based on the principal's assessment of the teacher, some will go by marks etc. I don't really see this as much of a problem, society just has to get used to the idea that teachers will be paid based on how good they are, not how long they've been a teacher. Many other professions pay in a similar fashion, there's no good reason to suggest that teachers couldn't be paid the same way.

As for teachers doing extra stuff after school, they would generally be paid more for doing that (more work, more pay). The school would just figure that into their sale price of education, it's not like the kid would be asked to fork out more money for asking individual questions (generally speaking). In any case, it's these things that can help make it cheaper, such as those budget air flights being cheaper because they don't have to give you in flight food (which you agree to as a condition of buying the ticket). This clearly benefits people who didn't need the food but just wanted a cheaper flight. Similarly, if you don't want to send your kid to a school that does sport after hours, you might be able to save that money and spend it elsewhere if you needed it.

ITs better for the Economy in terms of the business is more like to save that money for things where as the employees would need the money to spend on goods thus its injecting more money into the economy, and into government revenue from income tax.

The businesses should have the right to do with their money as they please, it's their money after all.

It goes against private property rights to not let people have exclusive control over what they own (in the case of the labourer, their own body). I'd like to see you justify this incursion on private property rights.

 

[kokodamonkey]

I'm arguing against the minimum wage full stop, rather than just increases in the minimum wage. I'm talking 'ceteris paribus' here, holding everything else constant. Unemployment is increased with or without inflation, so your point isn't really relevant here.

ACtually technically inflation influences unemployment. Think about it.. High inflation -> rba raises cash rate -> interest rate rise -> unemployment up

I think you'll find that there are many ways to try to measure the value of teachers, and the schools that are able to discriminate rationally(pay better teachers more) will prosper. Some places will just pay based on the principal's assessment of the teacher, some will go by marks etc. I don't really see this as much of a problem, society just has to get used to the idea that teachers will be paid based on how good they are, not how long they've been a teacher. Many other professions pay in a similar fashion, there's no good reason to suggest that teachers couldn't be paid the same way.

As for teachers doing extra stuff after school, they would generally be paid more for doing that (more work, more pay). The school would just figure that into their sale price of education, it's not like the kid would be asked to fork out more money for asking individual questions (generally speaking). In any case, it's these things that can help make it cheaper, such as those budget air flights being cheaper because they don't have to give you in flight food (which you agree to as a condition of buying the ticket). This clearly benefits people who didn't need the food but just wanted a cheaper flight. Similarly, if you don't want to send your kid to a school that does sport after hours, you might be able to save that money and spend it elsewhere if you needed it.

Your missing the point. It becomes too expensive. Teachers dont become teachers for the money. The issue is that a teacher thats been teaching for 8years gets the same pay as someone thats been teaching for 20years. thats the real issue.

The businesses should have the right to do with their money as they please, it's their money after all.

Workchoices 2006 gives you that. you dont want an employee, you can fire them.

It goes against private property rights to not let people have exclusive control over what they own (in the case of the labourer, their own body). I'd like to see you justify this incursion on private property rights.

employees are not owned by their employer. they arnt assets in that sense.

 

[volition]

ACtually technically inflation influences unemployment. Think about it.. High inflation -> rba raises cash rate -> interest rate rise -> unemployment up

In EITHER case (inflation or not), unemployment is higher where a minimum wage is present. In EITHER case, private property rights are being impinged upon.

Your missing the point. It becomes too expensive. Teachers dont become teachers for the money. The issue is that a teacher thats been teaching for 8years gets the same pay as someone thats been teaching for 20years. thats the real issue.

Even if they don't become teachers for the money, it still makes sense to use merit pay so that their pay more accurately reflects the value of their labour. It is economically important that prices are held at their 'true' value.

employees are not owned by their employer. they arnt assets in that sense.

I didn't say that employees are owned by their employer. I'm referring to the sale of the persons labour, not sale of the person.

Employees and employers should have the freedom to decide between themselves what the conditions are, without outside interference. So the employee has the property rights to their own body and labour, the employer has the right to their own money. Either party should be able to walk away from the transaction for whatever reason they want to.

 

[kokodamonkey]

In EITHER case (inflation or not), unemployment is higher where a minimum wage is present. In EITHER case, private property rights are being impinged upon.

you cant prove that.

Even if they don't become teachers for the money, it still makes sense to use merit pay so that their pay more accurately reflects the value of their labour. It is economically important that prices are held at their 'true' value.

no because it would be impossible to agree on a system that would works. ALl they have to do is just pay more for each year you been teaching, plus increased pay or tax deductions for putting time into getting masters etc in stuff.

I didn't say that employees are owned by their employer. I'm referring to the sale of the persons labour, not sale of the person.

Employees and employers should have the freedom to decide between themselves what the conditions are, without outside interference. So the employee has the property rights to their own body and labour, the employer has the right to their own money. Either party should be able to walk away from the transaction for whatever reason they want to.

True. i would love to get rid of the minimum wage because labour is too overpriced in this country we are uncompetitive.

 

[volition]

you cant prove that.

I have pointed to that study done that showed that unemployment was experienced, and I've given you the reasoning for it. Something that costs more (labour), is less likely to be bought (employment). Employers will be more inclined to try and use machinery or find some other substitute for labour, or might find that they can't run their business at all, once again reducing possible avenues for employment.

I actually think the onus should be on you to prove why minimum wages don't increase unemployment, rather than on me to prove that they raise unemployment, given that it's an imposition on private property rights.

no because it would be impossible to agree on a system that would works. ALl they have to do is just pay more for each year you been teaching, plus increased pay or tax deductions for putting time into getting masters etc in stuff.

Impossible to agree on a system that works? Maybe in a public sector type system, but surely a private system would find a way soon enough. As I said, the market rewards efficient discrimination (paying better teachers more money).

 

[jb_nc]

you cant prove that.

that's pretty basic economics. If people are paid $2 a company can afford to higher twice as many people than at $4.

 

[Sparcod]

I said before that I always thought that if the minimum wage rose, the firms are more likely to switch to technology.

Of course, companies can AFFORD to hire more workers but do they need more?

Is the minimum wage closely similar to the living wage? If yes then there is a point in working otherwise unemployment benefits are better and that'll make everybody lazy. So that's a good thing with the min. wage.

If wages were $0.20 an hour, nobody will be interested. I'm sure the companies are smarter and more generous than that.

 

[HotShot]

I said before that I always thought that if the minimum wage rose, the firms are more likely to switch to technology.

Of course, companies can AFFORD to hire more workers but do they need more?

Is the minimum wage closely similar to the living wage? If yes then there is a point in working otherwise unemployment benefits are better and that'll make everybody lazy. So that's a good thing with the min. wage.

If wages were $0.20 an hour, nobody will be interested. I'm sure the companies are smarter and more generous than that.

Yeah - its basically like pricing with a twist.

If you keep to low - then you wont have enough supply of labour. If you keep it to high you will way too much demand of labour. From firms perspective.

Thus if you skilled you get a decent wage and if your not FUCK off BOgans.

so yah.

 

[Aryanbeauty]

I would n't mind a Labor rule now if Kevin Rudd is gonna be tough like this http://www.news.com.au/story/0,10117,21518879-29277,00.html?from=public_rss