Who should determine what a worker's wages are?

Question

The federal minimum wage puts the feds in control of national wages.

Should the government be in charge of how much money you earn, or should the decision be an agreement made by the employer and the employee?

The first answerer wrote: "The government doesn't set a maximum wage. It just sets a minimum. What's wrong with that?"

1) Once the minimum wage goes up, all wages go up. That's why unions actively push the issue. So the feds in fact do control all wages.

2) What happens when someone's wages go up, but productivity remains the same?

3) People forget, or may not even know, employers tend to cut other costs when the price of labor is artificially increased. This results in layoffs, cuts in employee benefits, or cuts in the quality of goods and/or services.

Answer 1

Obviously the free market should set wages without government interference. That's simply another way of saying that people should have the freedom to accept what they're willing to accept, or pay what they're willing to pay, for work to be done. Freedom's a good thing isn't it? That would make the economy most productive. So long as there is competition among hirers (which there always is in plenty, in a free economy), people cannot be "exploited", whatever that means.

And if you're one of the few unlucky people who actually do receive the minimum wage (whether that's the regulated rate or a natural market clearing rate), the economy is sending you a signal very loudly and clearly that you need to upgrade your skills to make a better contribution. It's one thing to be flipping burgers when you're a kid working after school, but it doesn't much help your fellow man to skip the Med school and make a career out of it.

It is very important for economic productivity that such a signal CAN be sent, and that the government not interfere to encourage people to remain unproductive -- which is what a regulated minimum wage does.

Answer 2

Workers' wages should be determined by a judicious application of labor contract theory. Many factors go into determining what consitutes a fair wage. A minimum wage is an effort by the government to "level the playing field," such that employers with wage-determining power (usually those with the largest number of low-paying jobs) do not get to set workers' wages so low that workers have to depend on the government (quite so much) for support. The government uses minimum-wage laws to promote the stability and susainability of our society.
As an earlier respondent stated, pure capitalism can't work because it leads to the accumulation of most wealth in few hands, such that whatever efficiencies are achieved in making more products or services available while using fewer resources ultimately leave the people in control of all the wealth with no one left to buy what they produce, thus rendering the accumulations of wealth as completely useless.
Pure socialism also can't work, for the reasons the earlier respondent stated, because we naturally tend to seek our own advantage at the expense of others, no matter the economic system at play.
Our economic system employs elements of both capitalism AND socialism, to good effect, promoting the viability of our economy and our society.
Although labor contract theory asserts that wages and other compensations are negotiated between workers and employers, the government is a valid player in that negotiation, and serves as a referee to ensure fair play.

Answer 3

Governments do a poor job when they meddle with economies more than a little. But capitalists (employers) have workers completely outplayed when it comes to negotiating wages.

Employers value "efficiency," and that means they're always looking for ways to sell more goods while hiring fewer workers. Because workers are also consumers, the fewer of them there are and the less they are paid, the less profit the capitalists will make in the long run.

But the time scale for significant amounts of "market spoilage" is longer than the amount of time capitalists have between starting their businesses and retiring from business. So each generation of capitalists spoils the market environment a bit more.

Furthermore, any capitalist who attempts to halt the downward trend will be sued by his shareholders (for lessening their own profits) and the business who shows any moral self-restraint will be driven out of business by his competitors.

Socialism fails because of a social phenomenon called "tragedy in the commons," wherein each person cheats just a little on the commonweal, trying to get more out than he put in.

Capitalism fails because it is a cancer that grows like mad, kills a world, and then dies when the world does.

Nature did not intend for any creature, intelligent or otherwise, to live by any economic system that isn't rooted in the family idea, which sets kinship priorities above all else. Any nation that tries to do so risks its own survival.

Answer 4

I think the decision should be up to the employer. If an employer doesn't provide as much for the same job as another employer, then the other employer will usually get better qualified workers.

Answer 5

The US Department of Labor

http://www.dol.gov/

The government doesn't set a maximum wage. It just sets a minimum. What's wrong with that?

Answer 6

confident, as long as my fellow workers are of intense character, have intense ethical values and countless artwork ethics, the salary ability could be limitless. i does not artwork for a union using low character, low ethical values and unethical habit of a few who can drink and smoke weed in the time of place of work hours and carry mutually the automated pay will improve and bonuses for shoddy production.

Answer 7

So the employer does not have an advantage?

Answer 8

Our Mother's

Answer 9

The workers themselves (but it'll have to be fair)

Answer 10

THE WORKER!!