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B452 - National Minimum Wage (Repeal) Bill 2012 (Second Reading)

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    (Original post by stanlas)
    Still think some people may be forced into to wage slavery.
    And yes, before a Libertarian points out, I am aware of the resident's income changes. A lot of the Libertarians arguments seem based on the assumption that the residents income is enough to guarantee a good standard of living. But consider these two scenarios:

    1) The Libertarians are right and the residents income guarantees a good standard of living. In that case, unemployment soars as there is no real point in working any more (after all, we are all guaranteed the residents income- why would we want more?)

    2) The Libertarians are wrong and the residents income is not sufficient per se to guarantee a good standard of living. In that case, people must find work to support their families; but without a minimum wage, so called 'wage slavery' will become widespread as employers have too much power in negotiations with employees
    1) What? So people who are at the minimum standard of living never wish to earn a bit more? Desire some luxury? A person earning £40K on a 35-hour week will never trade it for £400K on a 50 hour week? Some people will choose not to work - fine. It doesn't mean that everyone won't. Oh, and it wouldn't be unemployment, but a reduction in the labour force - since unemployment is those who are both willing and able to work, but don't have a job. People will get jobs because they want the challenge, want to push their standard of living higher and so forth - but it'll be a real choice, since it's not about working to survive.

    2) Well, you tell me, we have figures there which are based on the best research into the topic by an institution which is pushing for increases in the minimum wage to meet this - they aren't likely to want to underestimate this figure - it's not in their interests. So if you wish to disagree with the figures (which are clear and in the Welfare Act) then by all means amend them. A minimum wage isn't the answer, changing those figures is.
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    (Original post by jesusandtequila)


    With a lower cost input - firms are more willing to supply a given amount at a certain price (in order to profit maximise). Then you get lower prices and more stuff.
    The equilibrium will have already been met. In the real world it doesn't work. People won't buy more just because they can
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    Aye
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    (Original post by WhatTheFunk)
    The equilibrium will have already been met. In the real world it doesn't work. People won't buy more just because they can
    So you're saying that if something becomes cheaper, more people won't buy it? Consider that you're saying here that the price elasticity of demand for everything is 0. Everything is perfectly inelastic. Everything. Some claim! No evidence?

    Hell if you want to know why you're wrong - then google it. I'm not going to bother linking you to numerous studies, but pretty much nothing has 0 price elasticity.

    The equilibrium will have been met for a certain set of conditions (in this case, a certain price of labour). If the conditions change, the equilibrium changes, which is exactly what I was trying to point out in the diagram above.
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    (Original post by jesusandtequila)
    So you're saying that if something becomes cheaper, more people won't buy it? Consider that you're saying here that the price elasticity of demand for everything is 0. Everything is perfectly inelastic. Everything. Some claim! No evidence?

    Hell if you want to know why you're wrong - then google it. I'm not going to bother linking you to numerous studies, but pretty much nothing has 0 price elasticity.

    The equilibrium will have been met for a certain set of conditions (in this case, a certain price of labour). If the conditions change, the equilibrium changes, which is exactly what I was trying to point out in the diagram above.
    And I could link to a ton of studies and reports that say removing the minimum wage will do nothing apart from make people poor, google is a wonderful tool to find papers to show why everyone right and no one is wrong. The labour need won't increase, unemployment will remain high and the gap gets better

    Removing the minimum wage in an economy is akin to cutting wages all across the economy as Capitalist firms will scramble over each other in their rush to reduce costs. This will take the form of forcing employee wages to their cost (ie their subsistence) while simultaneously increasing the work hours that are allowed per day.

    However to assume that reducing wages to their cost will reduce unemployment is to assume that the labour market can clear, like any other commodity. That is, the market will reach an equilibrium where supply of labour equals demand.

    Just because things being more cheaper doesn't mean people will buy, once you have that 1 tv, 1 oven, 1 hoover they can last 10+ years no need to replace them

    Myth and Measurement:
    The New Economics of the Minimum Wage is meant to be good read
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    (Original post by WhatTheFunk)
    And I could link to a ton of studies and reports that say removing the minimum wage will do nothing apart from make people poor, google is a wonderful tool to find papers to show why everyone right and no one is wrong. The labour need won't increase, unemployment will remain high and the gap gets better
    And how many of those studies incorporate our previous welfare bill on which this bill stands?


    Just because things being more cheaper doesn't mean people will buy, once you have that 1 tv, 1 oven, 1 hoover they can last 10+ years no need to replace them

    Myth and Measurement:
    The New Economics of the Minimum Wage is meant to be good read
    Poor examples.

    I may not buy a 2nd TV, but i may replace my TV with a TV twice the size.

    I may not buy a 2nd Hoover, but i may replace my Hoover with the Dyson Hurricane Force 9001 1/2 with new added robotic flight paths.

    I really find it rather confusing that you genuinely seem to think that the amount of goods sold isn't linked in any way to the price of goods or the income of the populace.
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    (Original post by cambo211)
    And how many of those studies incorporate our previous welfare bill on which this bill stands?
    Exactly. Why should we vote on something that there's been no studies into the effect?
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    (Original post by davidmarsh01)
    Exactly. Why should we vote on something that there's been no studies into the effect?
    Well because the Welfare Act directly affects labour supply, and also (more to the point) guarantees an income such that people won't be poor. It doesn't particularly change the fact that the price elasticity of demand isn't zero for anything.
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    (Original post by WhatTheFunk)
    And I could link to a ton of studies and reports that say removing the minimum wage will do nothing apart from make people poor, google is a wonderful tool to find papers to show why everyone right and no one is wrong. The labour need won't increase, unemployment will remain high and the gap gets better


    Just because things being more cheaper doesn't mean people will buy, once you have that 1 tv, 1 oven, 1 hoover they can last 10+ years no need to replace them

    Myth and Measurement:
    The New Economics of the Minimum Wage is meant to be good read
    Consider what you're saying. If something becoming cheaper means they sell no more. This also means that if you make things more expensive, no less will buy it. With that, why do companies ever compete on price?
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    (Original post by stanlas)
    Still think some people may be forced into to wage slavery.
    And yes, before a Libertarian points out, I am aware of the resident's income changes. A lot of the Libertarians arguments seem based on the assumption that the residents income is enough to guarantee a good standard of living. But consider these two scenarios:

    1) The Libertarians are right and the residents income guarantees a good standard of living. In that case, unemployment soars as there is no real point in working any more (after all, we are all guaranteed the residents income- why would we want more?)
    Unemployment is those who are willing and able to work, but are not in employment. If you decide not to work, you're not actually unemployed, as you weren't willing to begin with. Mind you, that's just a quibble. My main problem with this point is that, up to a point, increases in income cause increases in happiness. As you earn more money, you can afford more luxuries, and you can enjoy life more. There is a cut-off point. After a certain point, more money doesn't actually do anything, I think paperclip pointed out in the last thread it was something like a yearly salary of $78,000 in America (directly speaking, that's £50,600 a year, but given we have higher taxes and higher prices, it'd probably float at around £60,000 a year). If the Resident's Income was £60,000 a year, you'd be right. People would withdraw from the labour market in droves and the economy would collapse. But that's not the case. As it stands, the Resident's Income is rather spartan. I mean, the key word is "adequate", really. You're not going to be affording a video games console and multiple video games, or bookshelves full of books, or a room full of scantily clad women, or whatever else floats your boat. You have enough for a few weekly drinks and a bus ticket to see a film every month (you can see the Rowntree Report for the exact statistics of what it would buy). So, there's still a large amount of incentive to work - it's just not compulsory, and you are perfectly within your rights and capabilities not to. However, I still think most people would want to work, it's just not really the end of the world if they don't.

    Also, even beyond the whole "more income to get luxuries" thing, I'd reckon people would want to work for reasons of self-worth and self-fulfilment. I'm looking forward to getting a decent job. It'd be nice to use my skillset, and feel like I'm doing something. It'd be a bit boring to just drift by on the minimum level, doing nothing and creating nothing. Where's the satisfaction in that? In fact, now people do have the Resident's Income, I think you'd see more people aiming for jobs they enjoy, rather than jobs they have to have as there is no other alternative.

    2) The Libertarians are wrong and the residents income is not sufficient per se to guarantee a good standard of living. In that case, people must find work to support their families; but without a minimum wage, so called 'wage slavery' will become widespread as employers have too much power in negotiations with employees
    Well, they didn't come up with the figures, they're taken from the Rowntree report (as a Liberal Democrat, you should be familiar with Rowntree). In all honesty, though, given this bill doesn't actually affect anyone we have no way of knowing what would happen. From my personal viewpoint, I'd campaign passionately to raise the Resident's Income if it were ever too low, and I agree that if the Resident's Income is too low, this bill would not achieve its aims. But unless you have alternative figures, there's nothing really to go on.
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    (Original post by Mr Dangermouse)
    Lol no.

    The last thing I want is Asian style sweatshops.
    Oh, that's a shame, that's exactly what we were going for.

    Do you know why "Asians" work incredibly long hours for incredibly low pay?
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    (Original post by TopHat)
    Unemployment is those who are willing and able to work, but are not in employment. If you decide not to work, you're not actually unemployed, as you weren't willing to begin with. Mind you, that's just a quibble.
    Indeed, because you're more or less making up that definition, right? I mean, I'm not missing an actual definition of 'unemployed', am I? (That's a genuine question, I'm not being snarky). Surely to be "unemployed" one simply needs to... not be employed. The will or desire of the person in question is irrelevant (as opposed to, say, a 'jobseeker'). In the same way that I'm 'unmarried' whilst simultaneously not seeking to get married in any way.
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    (Original post by CyclopsRock)
    Indeed, because you're more or less making up that definition, right? I mean, I'm not missing an actual definition of 'unemployed', am I? (That's a genuine question, I'm not being snarky). Surely to be "unemployed" one simply needs to... not be employed. The will or desire of the person in question is irrelevant (as opposed to, say, a 'jobseeker'). In the same way that I'm 'unmarried' whilst simultaneously not seeking to get married in any way.
    The definition he's on about is, I believe, the one picked up by certain governments to massage the measurement of joblessness figures. I think Thatcher started the practice by discounting students and unemployed married women when things began to get bad in '81/2. Might be wrong, it could just be complete bs on his part.
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    (Original post by CyclopsRock)
    Indeed, because you're more or less making up that definition, right? I mean, I'm not missing an actual definition of 'unemployed', am I? (That's a genuine question, I'm not being snarky).
    You are missing the definition. To be unemployed you need to actually be willing to work at the market wage but you do not have a job. This is a widely accepted definition.

    For example a housewife who does not want to work, is not unemployed.
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    (Original post by Classical Liberal)
    You are missing the definition. To be unemployed you need to actually be willing to work at the market wage but you do not have a job. This is a widely accepted definition.

    For example a housewife who does not want to work, is not unemployed.
    (Original post by JPKC)
    The definition he's on about is, I believe, the one picked up by certain governments to massage the measurement of joblessness figures. I think Thatcher started the practice by discounting students and unemployed married women when things began to get bad in '81/2. Might be wrong, it could just be complete bs on his part.
    Fair enough!
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    Discounting students is not really massaging the statistics. If another 500,000 people go to university each year, has this dramatically increased unemployment? Not really. Though it does open the way for other abuses, like paying people to do useless education rather than claiming unemployment benefits. EMA is probably a candidate for this.

    Now shifting people onto disability benefits has massaged the figures, unless you believe disabilities are about 3x (iirc) more common than they were 30 years ago.

    (Original post by stanlas)
    Still think some people may be forced into to wage slavery.
    It's rather a broken phrase, like "married one-night-stand". At least that's possible in Vegas.

    If you mean something more like people earning less than you'd prefer, remember there will still be a de-facto minimum wage, which is the point at which claiming welfare pays more than working. Some people may choose to work anyway, which is very laudable. Otherwise, a lot of people already get by on that.
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    (Original post by CyclopsRock)
    Indeed, because you're more or less making up that definition, right? I mean, I'm not missing an actual definition of 'unemployed', am I? (That's a genuine question, I'm not being snarky). Surely to be "unemployed" one simply needs to... not be employed. The will or desire of the person in question is irrelevant (as opposed to, say, a 'jobseeker'). In the same way that I'm 'unmarried' whilst simultaneously not seeking to get married in any way.
    Nah, the real definition of unemployed is able and willing. Otherwise university students would be included, those voluntarily retired before the age of 65 would be included, housewives would be included, and so on, none of whom are really in the same category as those who want a job but can't get one.
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    (Original post by TopHat)
    Nah, the real definition of unemployed is able and willing. Otherwise university students would be included, those voluntarily retired before the age of 65 would be included, housewives would be included, and so on, none of whom are really in the same category as those who want a job but can't get one.
    So people who sit at home and do nothing and eat up the benefits don't count as unemployed? The people who will be even better off if this bill were to pass? That just encourages laziness and unemployment will just increase.


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    (Original post by hines)
    So people who sit at home and do nothing and eat up the benefits don't count as unemployed? The people who will be even better off if this bill were to pass? That just encourages laziness and unemployment will just increase.
    Well, in the real world, people who are on benefits are considered "willing" to work, even if perhaps they aren't, the reason being seeking a job is compulsory whilst on benefits, so they do count as unemployed, even if they're only "technically" willing.

    I personally don't see the problem with people choosing not to work and surviving from the Resident's Income, and I'm surprised anyone on the left would, when thinking about. You have to consider how TSR works. In real life, government revenue is raised by a wide and varied number of sources, but the largest are income tax and VAT. That means most of the money that goes towards benefits in real life is taken from those who have (probably) worked for it. That means, if people try to stay on benefits as long as possible, it is taking money from those who (probably) worked, to give to those who are definitely not and would prefer to avoid working if possible. Now, I agree, that's totally wrong. It's not a fair way of doing things, and in real life, those on benefits really should be forced to get a job where possible. That way, people who are genuinely in need can get provided for, but people who are working don't have to sustain people who just decide they want to contribute.

    But, that's real life. Now consider TSR land. On TSR, the vast, vast majority of government revenue is raised from the LVT - land value tax. Our VAT is something like 5% (and I'd personally like to see it abolished), our income tax bands are some of the lowest in the world. TSR money is not raised from people working hard. It's raised from land. Now, every single person who is on the left should consider land communal property. How can anyone have a right to own land? Think about that. Why does anyone own land? Because a few thousand or hundred years ago, someone with bigger muscles and a bigger sword said "this is mine". How can anyone lay a claim to what exists independent of humans? You simply can't justify it. Land should be the collective, equal property of every man, woman and child. Marx believed that, Proudhon believed that, Hobhouse believed that, Lloyd George believed that. Even modern Labour figures express some interest in a Land Value Tax - it was part of Andy Burnham's leadership campaign. So why do we allow private ownership? It's because of a problem called the "tragedy of the commons", and also because allowing people to own land gives them incentive to improve it. However, on TSR, what we don't do is allow people to make unearned profits from land. So, that's where government revenue on TSR comes from. It doesn't come from taxing the working, it comes from the natural value of land.

    As such, everyone is entitled to land. Every single person in the community is entitled to an equivalent share of the land value tax. Resident's Income is not paid uniquely to the unemployed. Every single person who lives in TSR land is paid the Resident's Income, not just the unemployed. The richest get it, the poorest get it. It is something you, as a member of the community, are entitled to. It is not a benefit. It is your right to share in the collective rewards of land. As such, if you want to do nothing, and simply live from the amount of money that provides, I am fine with that. That money hasn't been taking from the (probably working). It's not money taken from determined and persevering working class men trying to improve their situation. It's money that naturally belongs to the community anyway, and those who decide to live from it and not find employment don't get any more than anyone else does. If they want to do so, it is their choice - it really is their money.

    But, even if you don't accept that argument, this Bill does not change whether people will choose not to go into employment or not. You've said:

    (Original post by hines)
    So people who sit at home and do nothing and eat up the benefits don't count as unemployed? The people who will be even better off if this bill were to pass?
    How does repealing the minimum wage make people who choose not to go into employment better off? It doesn't. They don't get any more money than they did before. Repealing the minimum wage doesn't even encourage more people to voluntarily remove themselves from the labour market, if you think that is a bad thing (which I don't, and the left shouldn't). Repealing the minimum wage will hopefully actually get more people to work, as there will be more jobs on offer. If you really think that the Resident's Income was a bad idea (and given the idea actually originates with the left, and wasn't really picked up by Libertarians until afterwards, you shouldn't) then repeal the Welfare Bill. This bill is looking at something entirely different.
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    (Original post by TopHat)
    Well, in the real world, people who are on benefits are considered "willing" to work, even if perhaps they aren't, the reason being seeking a job is compulsory whilst on benefits, so they do count as unemployed, even if they're only "technically" willing.

    I personally don't see the problem with people choosing not to work and surviving from the Resident's Income, and I'm surprised anyone on the left would, when thinking about. You have to consider how TSR works. In real life, government revenue is raised by a wide and varied number of sources, but the largest are income tax and VAT. That means most of the money that goes towards benefits in real life is taken from those who have (probably) worked for it. That means, if people try to stay on benefits as long as possible, it is taking money from those who (probably) worked, to give to those who are definitely not and would prefer to avoid working if possible. Now, I agree, that's totally wrong. It's not a fair way of doing things, and in real life, those on benefits really should be forced to get a job where possible. That way, people who are genuinely in need can get provided for, but people who are working don't have to sustain people who just decide they want to contribute.

    But, that's real life. Now consider TSR land. On TSR, the vast, vast majority of government revenue is raised from the LVT - land value tax. Our VAT is something like 5% (and I'd personally like to see it abolished), our income tax bands are some of the lowest in the world. TSR money is not raised from people working hard. It's raised from land. Now, every single person who is on the left should consider land communal property. How can anyone have a right to own land? Think about that. Why does anyone own land? Because a few thousand or hundred years ago, someone with bigger muscles and a bigger sword said "this is mine". How can anyone lay a claim to what exists independent of humans? You simply can't justify it. Land should be the collective, equal property of every man, woman and child. Marx believed that, Proudhon believed that, Hobhouse believed that, Lloyd George believed that. Even modern Labour figures express some interest in a Land Value Tax - it was part of Andy Burnham's leadership campaign. So why do we allow private ownership? It's because of a problem called the "tragedy of the commons", and also because allowing people to own land gives them incentive to improve it. However, on TSR, what we don't do is allow people to make unearned profits from land. So, that's where government revenue on TSR comes from. It doesn't come from taxing the working, it comes from the natural value of land.

    As such, everyone is entitled to land. Every single person in the community is entitled to an equivalent share of the land value tax. Resident's Income is not paid uniquely to the unemployed. Every single person who lives in TSR land is paid the Resident's Income, not just the unemployed. The richest get it, the poorest get it. It is something you, as a member of the community, are entitled to. It is not a benefit. It is your right to share in the collective rewards of land. As such, if you want to do nothing, and simply live from the amount of money that provides, I am fine with that. That money hasn't been taking from the (probably working). It's not money taken from determined and persevering working class men trying to improve their situation. It's money that naturally belongs to the community anyway, and those who decide to live from it and not find employment don't get any more than anyone else does. If they want to do so, it is their choice - it really is their money.

    But, even if you don't accept that argument, this Bill does not change whether people will choose not to go into employment or not. You've said:



    How does repealing the minimum wage make people who choose not to go into employment better off? It doesn't. They don't get any more money than they did before. Repealing the minimum wage doesn't even encourage more people to voluntarily remove themselves from the labour market, if you think that is a bad thing (which I don't, and the left shouldn't). Repealing the minimum wage will hopefully actually get more people to work, as there will be more jobs on offer. If you really think that the Resident's Income was a bad idea (and given the idea actually originates with the left, and wasn't really picked up by Libertarians until afterwards, you shouldn't) then repeal the Welfare Bill. This bill is looking at something entirely different.
    I accept your points, however it's just one side of my argument. I don't agree with people earning almost nothing when sometimes jobs are very skilled and require lots of work. Minimum wage ensures work is well rewarded.


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Updated: June 18, 2012
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