Minimum Wage 

“ For many years it has been a matter of conventional wisdom among economists that the minimum wage causes fewer jobs to exist than would be the case without it. This is simply a matter of price theory, taught in every economics textbook, requiring no elaborate analysis to justify. Were this not the case, there would be no logical reason why the minimum wage could not be set at $10, $100, or $1 million per hour.      Historically, defenders of the minimum wage have not disputed the disemployment effects of the minimum wage, but argued that on balance the working poor were better off. In other words, the higher incomes of those with jobs offset the lower incomes of those without jobs, as a result of the minimum wage.”

http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm

Corporate Taxes -

“In fact, the strongest arguments against corporate tax come from the left. They were most eloquently expressed by Robert Reich, the economist who was considered on the far left of Bill Clinton’s cabinet during his tenure as labour secretary. Corporate tax, he noted, is fundamentally regressive: It shifts wealth to the rich. And not just because General Electric avoids it and corner shops don’t. Since corporations do not physically exist, corporate tax is ultimately paid by individuals – and, as many studies have shown, those individuals tend to be the company’s workers more often than its shareholders or executives.

There is another strong argument against corporate tax: It gives businesses far too much power in politics, law and society. As “taxpayers,” corporations are given citizen-like rights in court and legislatures; as financiers of the state, they are given far too much lobbying power and influence over legislation – almost obligatory given their large taxpaying role.” Doug Saunders, Globe/Mail, April 2011

Perhaps you misunderstood my question.  I didn’t ask for theories.  I asked for real life information about how working for less money and having poorer social programs makes life better for the average person.  Because regardless of Reich things (working for Clinton hardly makes you left), I don’t see much evidence of it when I tried to get government services these days.

oh dear… I see our comments get thinner and thinner off to the right here :|

I blame the neo-libertarians.

Guaranteed income supplement as opposed to minimum wage I could certainly get behind. 

  Canucklehead, your position seems rather contradictory.  You say you support a minimum wage people can get by on.  Just out of curiosity, have you seriously tried living on $10 an hour lately?  I agree with you that income subsidies are also a good means of ensuring people have enough to live on, but that, my friend, is a social program.  And the problem with those deep corporate tax cuts I was decrying earlier, is that they leave us unable to properly fund the social programs we have, never mind create new ones.  There is simply no way to keep up the current level of corporate welfare and ensure that working people get their needs met.   

Creating zillions of $10 an hour McJobs does not make the economy look good on paper.  However, it is preferable to eliminating zillions (or so) $10 an hour McJobs, which is exactly what a raised minimum wage would do.

 The average working person is earning more than minimum wage.  The average unworking person is earning nothing.  Keeping minimum wages low (or abolishing them) means that more unemployed people have the opportunity to metamorphose into working people.

Corporate taxes are taxes on production.  Making production less remunerative will mean that less of it will be done.  For working people, less production means lower wages because of lower demand for labour, as well as increased prices due to shortened supply.

Any idiot cannot create a “McJob”.  Creating jobs, Mc or otherwise, requires capital, a business plan, and entrepreneurial acumen.  Obviously businesses do not exist for the purpose of creating jobs, but for making profits.  Jobs are a result of profit-seeking.  Where profits do not exist, neither do jobs.

Innumerable businesses fail all the time despite having “low” costs of labour.  Everyday another idiot discovers that jobs are not as easy to create as he thought.

I, too, will be impressed with a government that can create jobs by brining in companies.  Usually, governments do not create jobs by brining in companies, but by pushing them out.  By monopolising industries and banishing private actors, governments are able to create a small number of highly-paid public-sector jobs, this, as Bastiat would have said, is what is seen.  What is unseen is the larger number of private sector jobs that had to be either destroyed or reduced in pay in order to finance a privileged minority receiving more than it earns.  

It most certainly is a loss to us when government policy forces an otherwise profitable business to pack its belongings and leave.  Not only do those companies employ Canadians, they also produce the goods that Canadians want to buy with their wages.

Any idiot cannot create a job. What he can do is ignore reality and the laws of supply and demand, causing him to make silly statements and to support destructive policies.

Profit-seeking does not lead to meaningful job-creation.  It leads a company to hire the least number of people at the lowest possible wage it can get away with to get the job done…and to provide as little service as it can get away with. When you remove the profit motive from job creation – as in the public sector – you employ more people at higher wages with better service with no higher costs…because you’re not pissing away Canadian dollars lining the pockets of foreign corporate shareholders.  Moreover, you can obtain supplies cheaper through economies of scale. The profits from crown corporations go straight into funding programs like health care and education. Having a large civil service and a 26.3% corporate tax rate sure hasn’t hurt the standard of living in countries like Sweden.  They still have lots of companies employing their citizens, and they can afford to support the unemployed (6.4% at the height of the recession) with generous social programs that get them back on their feet.   

[Profit-seeking] leads a company to hire the least number of people at the lowest possible wage it can get away with to get the job done…

This is called efficiency.  It is the same principle you apply when you decide to eat your soup with a spoon rather than with a fork; or when you decide to hold your spoon with your hand rather than with your foot; or when you decide to cook your soup on the stove rather than under the sun with a magnifying glass.

What you are espousing is what I like to call the Work Equals Wealth Fallacy–that it should be an economic objective to maximise the number of labour hours required to produce anything.  The problem with this idea is that it views work, and not consumption, as the goal of economic activity.

We in the developed world are rich, not because we have more work to do, but because we get a higher return on the work we do because of lavour-saving efficiencies due to the use of capital equipment.  It is the glory of Capitalism that even a miserable McJobber needs work less than a single week to afford a seemingly magical, hand-held computer that telephones, takes pictures, plays movies, and surfs the web.

But what a wonderful world it would be if the key to our well-beings was simply to erect as many barriers to efficiency as possible, ensuring that every consumable goody would enrich us with innumerable, pain-staking hours of labour in exchange for its manufacture.  We then could pass laws requiring all work to be done with one hand and while blindfolded, making our punch-cards runneth over with huge multiples of labour hours just to execute the simplest of tasks!  

Alas, we’d be work rich and product poor.

But hey, let’s not let the facts stand in the way of a convenient theory.

What, exactly, about my theory makes it “convenient”?

I know nothing about Sweden–I’ve never lived there and never studied it.  For every Sweden (“and other such countries”) you can play, I can counter with a Greece, or a Spain, or any other of the little piggies who get no roast beef.  Or how about the I.O.U.S.A.?

But let’s assume that Sweden’s economy is “booming”.  Evidently, you’d prefer it were busting.

I thought we were having a debate about how to improve an economy.  But you don’t want our standard of living raised; you want our standard of living razed:

Wealth beyond that which is necessary to feed and care for the population and work toward the betterment of society is not a helpful goal.

At this point I must disrespectfully disagree.  I think it is extremely “helpful” for humanity to aspire to be more than a tribe of dirty savages stalking the wilderness for a sluggish raccoon to eat.  And what is one to do with such an empty-bin of a statement as, “work toward the betterment of society”?  The betterment of society according to whom?  I happen to think that society is incalculably bettered by computers, televisions, internets,  miniskirts, automobiles, air conditioning, literature, music, and host of other things that hardly are comfortable under the heading, “that which is necessary to feed and care for the population”.

But hey, let’s not let the facts stand in the way of a convenient theory.

What, exactly, about my theory makes it “convenient”?

I know nothing about Sweden–I’ve never lived there and never studied it.  For every Sweden (“and other such countries”) you can play, I can counter with a Greece, or a Spain, or any other of the little piggies who get no roast beef.  Or how about the I.O.U.S.A.?

But let’s assume that Sweden’s economy is “booming”.  Evidently, you’d prefer it were busting.

I thought we were having a debate about how to improve an economy.  But you don’t want our standard of living raised; you want our standard of living razed:

Wealth beyond that which is necessary to feed and care for the population and work toward the betterment of society is not a helpful goal.

At this point I must disrespectfully disagree.  I think it is extremely “helpful” for humanity to aspire to be more than a tribe of dirty savages stalking the wilderness for a sluggish raccoon to eat.  And what is one to do with such an empty-bin of a statement as, “work toward the betterment of society”?  The betterment of society according to whom?  I happen to think that society is incalculably bettered by computers, televisions, internets,  miniskirts, automobiles, air conditioning, literature, music, and host of other things that hardly are comfortable under the heading, “that which is necessary to feed and care for the population”.

I note that you didn’t actually respond to my example of Sweden and other such countries that manage to keep corporate taxes substantially higher than ours, have an enormous public service and generous social programs and still not only have a high standard of living but a booming economy.  
 But hey, let’s not let the facts stand in the way of a convenient theory. 
 I also never said that work equals wealth.  Wealth beyond that which is necessary to feed and care for the population and work toward the betterment of society is not a helpful goal.  In case you haven’t noticed, the consumer-based economy is destroying our planet. 
If the planet is to survive, it’s about time we were product poor and work rich. …rich with work toward the betterment of the planet. 
 

[Profit-seeking] leads a company to hire the least number of people at the lowest possible wage it can get away with to get the job done…

This is called efficiency.  It is the same principle you apply when you decide to eat your soup with a spoon rather than with a fork; or when you decide to hold your spoon with your hand rather than with your foot; or when you decide to cook your soup on the stove rather than under the sun with a magnifying glass.

What you are espousing is what I like to call the Work Equals Wealth Fallacy–that it should be an economic objective to maximise the number of labour hours required to produce anything.  The problem with this idea is that it views work, and not consumption, as the goal of economic activity.

We in the developed world are rich, not because we have more work to do, but because we get a higher return on the work we do because of lavour-saving efficiencies due to the use of capital equipment.  It is the glory of Capitalism that even a miserable McJobber needs work less than a single week to afford a seemingly magical, hand-held computer that telephones, takes pictures, plays movies, and surfs the web.

But what a wonderful world it would be if the key to our well-beings was simply to erect as many barriers to efficiency as possible, ensuring that every consumable goody would enrich us with innumerable, pain-staking hours of labour in exchange for its manufacture.  We then could pass laws requiring all work to be done with one hand and while blindfolded, making our punch-cards runneth over with huge multiples of labour hours just to execute the simplest of tasks!  

Alas, we’d be work rich and product poor.

Where profits do not exist, neither do jobs.

GM, Chrysler, any random American bank, the entirety of the bloated public sector…

Sadly, Justin, for far too many Canadians & Americans with jobs, the above sentence is no longer true.

The average non-working person is not earning nothing.  The average non working person is receiving social assistance, which – while miserable – at least ensures that their family has dental care, a drug plan, and bus passes (or at least it does in BC).  You, apparently, think that these people should be starved off this plan and forced to work 16 hour days at two crummy jobs for the same privilege.  How fantastic for business!!  Tons of cheap labourers so desperate for work that they’ll put up with anything.  You may support that, Justin, by my Canada does not force people into slave-like conditions no matter how young, inexperience or foreign they are.  If a company can’t abide by that, let them leave.  It’s no loss to us.  I’ll be impressed with a government that can create jobs by bringing in companies that pay a living wage and are respectful of workers.  Any idiot can create a McJob.