Living Wages and Wage Slavery

[WinePusher]

I read a post on this forum that referenced the concept of living wages and it got me thinking. So, here's a thread about it:

1) Should the government impose a living wage standard? In other words, should the government impose a minimum wage? Are minimum wages and living wages the same thing?

2) Is the concept of wage slavery correct and legitimate?

3) If someone does not make enough money to take care of themselves and their family, what should be done?

[Furrowed Brow]

1) Should the government impose a living wage standard? In other words, should the government impose a minimum wage?

Where there is a government to impose a living wage then yes it is better to impose it.

Are minimum wages and living wages the same thing?

I don't think so. In the UK the minimum wage for over 21s is £6.31 as I write. It is very difficult to live on that level of wage in the UK. I have been on low wages - but more than the minimum wage - and it diminishes you as a human being. It effects confidence, self esteem, and is an utterly drab way of life even if managing one's money efficiently and is basically depressing. I would not wish £6.31 on anyone. I would say a living wage does not diminish a person. The Centre for Research in Social Policy calculate the living wage for London should $8.55 and a little lower for the rest of the country at £7.45. I'm not sure what metric they are using but I'd put the figure at closer to £20 per hour.

2) Is the concept of wage slavery correct and legitimate?

As I understand it very much yes. It is when if a person works hard and obeys the rules, keeps their job, the poverty of the wage materially restricts the choices they can make and forces them into continuing to accept a low paying role which they have to keep to pay the rent. I was in this position sometime ago and it lasted about five years. I'd ask for a pay rise and be told no, I'd apply for other jobs but because I was being paid so badly I was not even getting interviews because prospective employers I guess dismissed me as a candidate because what was a guy my age doing earning so little. It signalled there was something wrong with me. My boss at the time said I could always leave knowing that I was getting no where applying for other jobs, and that they could always replace me. So I was trapped in a vicious circle where my low pay and low grade job counted against me getting a better job. Five years it took to break out and find another job....and guess what it paid only a little bit more and was actually a worse job. I'd say this experience is wage slavery light compared to many third world countries.

Just to be clear I am now in the top 10% of UK earners, so I am not talking from a position of jealousy, life is comfortable these day, but I do know what it is like to be trapped on a low income and trapped is the right word.

3) If someone does not make enough money to take care of themselves and their family, what should be done?

Until we get a revolution that changes the banking system and really allows us to do something radical I'd say raise the minimum wage. Seriously we have very few jobs left to export we are a nation of waiters and warehouse workers. The threat of jobs leaving for other countries is drying up. Put the minimum wage up, and close the tax loopholes that are allowing so many corporations to avoid tax, give tax huge breaks to cooperatives.

[Darias]

I read a post on this forum that referenced the concept of living wages and it got me thinking. So, here's a thread about it:

1) Should the government impose a living wage standard? In other words, should the government impose a minimum wage? Are minimum wages and living wages the same thing?

2) Is the concept of wage slavery correct and legitimate?

3) If someone does not make enough money to take care of themselves and their family, what should be done?

1. No it should not. Minimum wage creates unemployment and inhibits competition; the same is true for price floors. When the state gets in the business of meddling in businesses, it can protect industries from more innovative small businesses -- whether it's subsidizing big oil at the expense of innovative green technology companies, or if it's forcing transportation companies to charge more so that taxis can compete:

[center][youtube][/youtube][/center]

But there's no real difference between a minimum wage and a living wage. It's just an arbitrary distinction, much like private property and personal property; you own what you own, end of story. To claim that I can have exclusive rights to a toothbrush but not land is hypocrisy. Either nothing is property, not even rights to one's own life, or property rights are valid. And if you engage in a debate you are taking ownership of your argument... so you can't really disagree without making a major contradiction in logic.



2. No. The state of being alive requires that one obtain resources to live. Voluntarily entering into a contract with an employer, in which you will exchange your labor for a portion of the employer's profits, is a choice. If you don't like one employer, you can either get a different job, become your own boss, or go live in the woods. The idea that one is entitled to 100% of the profits from their labor would mean the employer would have no incentive to have a factory and employ workers. The employer would not simply be breaking even, he would be in debt by having to pay every employee, from the assemblyman to the delivery driver, the full price of the final product. This is economically unfeasible, and there can be no moral argument against voluntary labor.

Communists and socialists who advocate this view don't apply it to their own communal framework. If one is in a commune he is forced to work in a factory or on a farm that is communally owned. If he refuses to work, then he will be abandoned by the commune and left to his own devices. He is a slave to the community and he would not have the free choice to establish a for profit business within the commune if he wanted to.

If anarcho-capitalism was prevalent in the world today, it would allow for anarcho-communists to experiment with their little communes, but an anarcho-communist world would not allow for businesses or voluntary labor to exist.



3. They should get a different job or rely on a charity until they can. The burden of taking care of those who need help should fall on those who want to take care of them. Charity works; the voluntary and non profit sectors are enormous. To deny this is to deny reality. Plus the fact is that most of the tax revenue that goes into the system ends up in creating government jobs rather than helping the poor. If I were a rich guy on my deathbed, and I wanted to help the poor, I would write a check to a charity, rather than the IRS, as most people would. But you don't have to be a millionaire to help out your neighbor. I think that taxation really does take a toll on generosity. If people didn't have to pay taxes, they'd have much more of their income to give away. They could use it to pay for all types of insurance, including security, road construction, local homeless shelters, or space companies. Now however the poorest generation has to pay for things they don't want to, like pointless wars and healthcare and retirement for rich baby boomers.

Of course there are many ways that society could take care of the less fortunate and I am certainly no czar of the downtrodden, but I can tell you how it shouldn't be done.

Take Switzerland's new policy for example:

[center][youtube][/youtube][/center]

So they have universal income, where everyone gets a salary that they can get by on, whether they need it or not. Of course this wealth comes from the taxpayer, and only exists in the first place because of freer markets in times past. Greece, on the other hand, could not do this.

I think the progressives in this video prove my point. When an income is guaranteed, the drive to look for work just isn't as pressing. It's probably not there at all for parents who would rather stay home with their kids. Why work when you can leech 5,600 a month? People aren't necessarily lazy or bad for doing this, but who doesn't like a free hand out? This is just basic incentives. When the US was bailing out everyone, all the companies and towns and peeps wanted their share of the spoils too.

Of course the problem is, when you give everyone a diamond what happens to the value of diamonds? Ultimately gas and food prices will go up to reflect the devalued currency. This pretty much makes the whole process pointless, and no one the more richer. But you see, this is what happens when economically illiterate persons are elected into office, by economically illiterate voters, to rule and manage and delegate and play around with everyone's lives, for the greater good and with the noblest of intentions at heart of course. There's no body in office ringing their hands and cackling, so I can't say that's what's happening is evil; but it certainly is stupid and it hurts economies and future generations in the long run.



-

[Goat]

[help3434]

[Replying to post 1 by WinePusher]

Interesting topic. I don't know how this could even be attempted on a national level considering that the cost of living differs so much from place to place. I also don't see how the minimum wage could be raised significantly without causing inflation and/or increasing unemployment. High minimum wage makes it hard to enter the job market.

[Furrowed Brow]

I also don't see how the minimum wage could be raised significantly without causing inflation and/or increasing unemployment. High minimum wage makes it hard to enter the job market.

If this view is true we need to think about how the lower paid worker might ever achieve a non crappy standard of living which did does not leave them trapped within their circumstances. Yuh know back in the day when a worker had a real hope of seeing their kids reach a better life and standard of living than they did. If there are hard mathematical reasons that mean the system is bound to trap people at the bottom then the systems deserves to be burnt down and we should figure out a new way.

But...regarding inflation. Inflation occurs when too much money chases too few goods. This is dependent on how much money is in circulation, and how fast people go spend money. We don't increase the money supply if the increase in workers wages is taken from the profits of the company, shareholder dividends and the pay of the top earners in a company. So we redistribute wealth not print more money. Part of the problem of inflation in the past has been governments creating inflation by money printing blaming the inflation on wage rises and not the true source of the problem which was their money printing. I believe the US dollar has lost over 90% of its value since 1913. This has hardly been due to increases in real wages for workers, and much more to do with money printing.

However to be true the velocity of money as I have heard it called is the rate we rush down the shops and spend the cash we have. People with less and get a pay rise tend to spend more of their income immediately because....they have less. Whilst the affluent are able to save more of their income. We influence the velocity of money with things like higher interest rates that put off folk taking out loans, and encourage them to save. But sure folk who have not been turning on the heating to pay other bills will start to use more electricity to keep warm. This will be a new habit for them and so a pent up demand for some things will be unleashed. We would need some legislation in place to stop the utilities from profiteering. Likewise the there will be issues with the cost of housing as the poorer classes try to upgrade. We keep interest high to discourage them taken on loans and build more homes. Yes and maybe the government has to get involved in ensuring new homes are built if private industry don't like the profits from building affordable housing that does not put folk in debt. As for increased unemployment, not true for some kind of jobs. Garbage still needs to be collected, supermarket trolleys still need to be rounded up, shelves still need to be stacked, buses still need to be on time, goods still need to be delivered, fences still need painting. This work does not go away. We just need to make sure employers can't change terms and conditions to find ways to get employees to work harder and take up the slack of anyone laid off. That takes unions. Jobs that depend on exports are in danger because their is always some bunch of worker around the world that is cheaper and can be locked in factories for 24hrs shifts and so forth. So we need to undo GATT and similar tools of globalisation which allows corporations to easily move capital offshore. There's other stuff we could do like give major tax breaks to cooperatives.

For more radical solutions we phase out the stock market and the idea of shares, and move to a cooperative based economy. Basically we find ways to throttle capitalism until it is vastly reduced.

[Furrowed Brow]

To claim that I can have exclusive rights to a toothbrush but not land is hypocrisy. Either nothing is property, not even rights to one's own life, or property rights are valid. And if you engage in a debate you are taking ownership of your argument... so you can't really disagree without making a major contradiction in logic.

Some equivocation over the meaning of the word "property" going on here I feel. If I think up an argument I don't own it in the sense that you can use it too and at the same time. If you mean we own the copyright of our argument, then that would be the exact text of something we have written. But ownership in this sense is not the same thing as accepting the implications of an argument and taken ownership of its consequences. So introducing the idea of owning an argument is playing with words and relies on a degree of equivocation.

Also you make an invalid argument. You say "nothing is property....or property rights are valid". In predicate logic "nothing is F or something is F" is a theorem. This makes sense. Nothing is blue or something is blue is clearly a tautology. "Nothing is F or everything is F" is not a theorem. Again nothing is blue or everything is blue is clearly not a tautology. By itself your starting proposition is not a valid point. Either nothing is property or something is property is the valid disjunction and avoids any impulse to generalise that property rights are always valid and apply to everything otherwise they never apply.

True you do avoid writing nothing is property...or all property rights are valid but given the content of the rest of the argument this seems to be the basic implication of what you were saying. To create the contradiction you suggest requires you proving something is property and the example you used was someone's own argument. If we ignore the equivocation and grant this as true then the only way a contradiction is formed is if one thing being property implies everything is property. Even without noticing the equivocation the point is just not valid.

It is also true that your phrasing of the disjunction slides from "nothing is property" to a question of "property rights are valid". But I take "nothing is property" to mean "there are no property rights". Maybe I misunderstand you and you are welcome to try and redefine your way out of this problem.

But if I understand you correctly then you make a formally invalid argument and are guilty of equivocation when trying to make your point. Some might found this is pretty much fatal to this particular point you were making.

Needless to say I pretty much disagree with the rest of your post.

[help3434]

I also don't see how the minimum wage could be raised significantly without causing inflation and/or increasing unemployment. High minimum wage makes it hard to enter the job market.

If this view is true we need to think about how the lower paid worker might ever achieve a non crappy standard of living which did does not leave them trapped within their circumstances. Yuh know back in the day when a worker had a real hope of seeing their kids reach a better life and standard of living than they did. If there are hard mathematical reasons that mean the system is bound to trap people at the bottom then the systems deserves to be burnt down and we should figure out a new way.

I think that history has shown that this approach tends to lead to a lot of misery and death. I hope at least you plan on waiting until the new way is figured out before you start burning things down.

But...regarding inflation. Inflation occurs when too much money chases too few goods. This is dependent on how much money is in circulation, and how fast people go spend money. We don't increase the money supply if the increase in workers wages is taken from the profits of the company, shareholder dividends and the pay of the top earners in a company. <snip>

This seems to assume that all companies operate on a high margin of profit and won't seriously be affected by a dramatic increase in minimum wage.

However to be true the velocity of money as I have heard it called is the rate we rush down the shops and spend the cash we have. People with less and get a pay rise tend to spend more of their income immediately because....they have less. Whilst the affluent are able to save more of their income. We influence the velocity of money with things like higher interest rates that put off folk taking out loans, and encourage them to save. But sure folk who have not been turning on the heating to pay other bills will start to use more electricity to keep warm. This will be a new habit for them and so a pent up demand for some things will be unleashed. We would need some legislation in place to stop the utilities from profiteering. Likewise the there will be issues with the cost of housing as the poorer classes try to upgrade. We keep interest high to discourage them taken on loans and build more homes. Yes and maybe the government has to get involved in ensuring new homes are built if private industry don't like the profits from building affordable housing that does not put folk in debt. As for increased unemployment, not true for some kind of jobs. Garbage still needs to be collected, supermarket trolleys still need to be rounded up, shelves still need to be stacked, buses still need to be on time, goods still need to be delivered, fences still need painting. This work does not go away.

Some of it will go away if there are less businesses that can afford to operate. I agree that there is elasticity of demand to buy labor, and so an increase in minimum wage could possibly result in a net good, but this "living wage" idea seems to go far beyond that.

We just need to make sure employers can't change terms and conditions to find ways to get employees to work harder and take up the slack of anyone laid off. That takes unions.

So basically you want the government to micromanage employment, and you want policies that will destroy low margin of profit businesses and discourage new businesses from entering the market. People won't be earning a "living wage" if you have destroyed the economy.

Jobs that depend on exports are in danger because their is always some bunch of worker around the world that is cheaper and can be locked in factories for 24hrs shifts and so forth. So we need to undo GATT and similar tools of globalisation which allows corporations to easily move capital offshore. There's other stuff we could do like give major tax breaks to cooperatives.

So now with all these trade barriers prices are higher. What good is the higher minimum wage?

For more radical solutions we phase out the stock market and the idea of shares, and move to a cooperative based economy. Basically we find ways to throttle capitalism until it is vastly reduced.

How do you throttle capitalism without both throttling freedom and the economy?

[Goat]

As for the claim that the miniumn wage increase causes unemployment

http://servaasschrama.com/2013/09/01/th ... mployment/

Nor, during that time frame, did we have an upset in inflation either.

[Furrowed Brow]

I think that history has shown that this approach tends to lead to a lot of misery and death. I hope at least you plan on waiting until the new way is figured out before you start burning things down.

Yes it has but there is blood on the hands of the US and the West all over the world too. As I have pointed out in other threads there is a hidden history here most folk are hardly aware of. The West has been very good at pointing out the failing of the old Soviet and Chinese regimes and equally good at passing quietly over their own horrors.

But you're right. We should learn the lessons of history and keep fixed on that, not think we are ushering in a utopia or put life before ideology. But we do need to have a very clear view of how the world is working and how it presently extracts wealth from the poorer classes and the poorer nations and funnels this wealth to the richest in society. This in itself would not be so bad if this same process did not squeeze the poor out of the profits of society and reduce their life chances. It is not that the rich get rich that is the problem, but the rich get rich on the backs of the poor. 25 years ago I probably sounded like Darias, and even only a couple of years ago I probably would have sounded more like you. More cautious and even handed would have been my approach. Today yes I am angry, but with good cause. Too be honest I'm ashamed It has take me so long to work it out I've always kind of prided myself on being bright. So I have no excuses.

This seems to assume that all companies operate on a high margin of profit and won't seriously be affected by a dramatic increase in minimum wage.

Well profits will be affected because they would be redistributed on a new model. where a business works on low profits such that it just does not have the means to meet minimum wage then the business can be turned into a cooperative. Let the workforce take responsibility, and remove the minimum wage restriction on cooperatives. Why should we tolerate any organisation whose low profit business model pushes folk into poverty. How is that ever acceptable. Therefore allow the workers to take over and see if they can do better is a better option than leaving than business as it is.

So now with all these trade barriers prices are higher. What good is the higher minimum wage?

When you are poor the important costs are the roof over your head, utilities, food, healthcare and transport. Of these food is the most susceptible to global markets, so have no tariffs on food. We do import stuff like gas and oil, but where these are imported it is not a question of protecting jobs at home. The rest on this list are questions of the home market. We don't import houses. Healthcare would be nationalised following best practices of the European models and other examples found around the world. Other stuff like TVs, laptops, iphones, washing machines, a pair of shoes etc. could well see some inflation, and we may just have to get use to this. Recently I stopped buying cheap clothes from Primark because of the Bangladesh factory disaster and changed to an old fashioned mid range brand Marks & Spencer which is like five times more expensive. Ouch! It hurts buying clothes there compared to Primark but this kind of additional cost does not put pressure on a weekly budget like the other items I mention. But frankly there are workers in 3rd world factories that also deserve the same consideration. We need to pay more to raise their standard of living. Ironically it is our demand for cheaper product that undermines our own wages by holding down the wages of foreign workers which means they are more attractive to capital, the movement of capital to poorer nations is a downward pressure on our wages that means we need cheaper goods.... It is a vicious downward spiral.

I have posted this link before I think but I encourage you to watch all of this 1994 Charlie Rose interview with Sir James Goldsmith. This interview is just one small example of what I have learnt that has radically changed my outlook from where I was when I first joined this forum. The value of this video is the clarity of hindsight and seeing how Goldsmith's understanding and warnings were spot on. 4.5 billion people were about to be made available to world markets for the first time and Goldsmith could clearly see that capital was going to fully exploit this opportunity at the cost of society in the West. the same interview contains a segment in which Laura Tyson makes a contribution. Unlike Goldsmith history has shown she was either lying or did not know what she was talking about. (Goldsmith was himself a capitalist red in tooth and claw so there is much else I would disagree with him on but he was an interesting character).

[youtube][/youtube]

The present global trade agreements are not written for our benefit, they are written for the benefit of major capital owners. Basically we go back to the drawing board on GATT and found ways to reach an agreement that benefits people and society and not capital.

How do you throttle capitalism without both throttling freedom and the economy?

Which begs the question how does an autocratic corporation in which folk have to do as they are told and basically works as mini totalitarian state promote freedom and democracy? Corporations are not democratic.

We ramp up democracy to a degree we've not seen before. Government by referendum and the phasing in of the cooperative business model. We move away from the idea of leaders, Prime Ministers, Presidents, Chairmen, Politburos, Kings and Queens and we aim at something far more egalitarian. Which of course will throttle the ability of one person or group to exploit and extract profit from the labour of others. We build constitutions which explicitly state people are not units of production they are human beings.