Re: [OT] Herding cats

Halla wrote:
On Sun, 9 Apr 2006 20:05:40 +0100, "hotchapoonadapoonakinaha"
<kathSCREWSPAM@xxxxxxxxxxxxxxxxxxxxxxxx> blethered:

<snip large swathes>

and you would prefer your taxes to go to the unemployed?
I know I rather my taxes didn't.



(speaking as a current non(income) taxpayer...)I'd prefer that to
going back to the days of the poorhouse. I don't like the thought that
someone somewhere is living the life of Reilly (or is it Riley?) at my
expense, but then I suspect that for every one of those people there
are a hundred struggling to get by, just like everyone else, and the
fact I grudge supporting those who won't support themself is a flaw in
my character rather than a genuine grievance. It may also be a symptom
of overexposure to the more judgemental category of tabloid. Did I say
tabloid? I meant newspaper. Obviously.


<snip>

http://theconsensus.org/uk/principia/social/index.html

"The fact that in Britain today some forty-percent of the population is reliant to some extent on welfare is an indictment of the entire system. It means that the poorest segment of our people is unable to earn enough to support themselves and their families, despite unemployment being at a low level. Simply stated, too many jobs do not pay a 'living wage' to their employees and the state has to step in to boost their income through taxation of the wealthier proportion of our society.

This has two massively undesirable side effects. The first is the creation of a vast non-productive government bureaucracy. The second effect is even worse - it is the effective taxpayer subsidisation of whole swathes of sweatshop industries, mostly in the service sector. It is our contention that the primary function of the government is to regulate - not to tax one section of the population in order to hand out cash to another. The regulation required to rectify the above situation is the statutory minimum wage.

There is a familiar argument against raising the minimum wage to decent levels. It is that jobs will be lost either through reduced demand or the export of jobs to lower wage areas of the world. A glib reply that contains more than a grain of truth is to say that any job not worth paying for is not worth doing, but let us ignore that and examine the objections just mentioned. The idea of jobs being exported to low wage regions is a very valid objection. However, assuming this is undesirable, which is an arguable in itself, we can get around this by applying minimum wage laws purely to service jobs that cannot be exported at all.

Consider the archetypal low wage job - the worker in the burger bar. Suppose, suddenly, those wage costs double - what happens? It is obvious that the job is not going to be exported to (say) India and your cheeseburger flown in from Delhi so the options are rather limited. The proprietor can employ the same number of people, but increase the cost of the final product. However, one might think that demand is likely to fall and the number of employees reduced.

This is the crux of the argument. It does, though, ignore one crucial element. Namely, that overall tax can be reduced because people no longer have to subsidise a large section of the population. On the other hand, perhaps jobs will still be lost because they will not want to spend that extra money on burgers. That too is fine - it is the 'free market' (or freer market) determining that one sector of the economy (burgers) is not quite so viable now it has no hidden government subsidies.

Yet in general, most service jobs are not dispensable. Hotels still need people to make the beds and wash the linen. Shops still need sales staff. Hospitals still need nurses and cleaners and the rubbish still has to be collected. The effect of drastically increasing the minimum wage in the service sectors would be to make those sectors more attractive. The manufacturing industries, and the industries with 'exportable' low wage jobs can compete in that new market - or not. Ultimately low wage exportable jobs should be exported to other areas of the world - it is a far better solution than 'foreign aid' from rich First World nations.

In addition we might discover that the claim that we have to import more migrants because the labour force is shrinking due to an ageing population might take something of a dent if we find 'unemployment' rising because we insist on no longer paying slave wages for 'menial' jobs. In fact, we might discover that quite a few of our 'old' people are only too happy to flip burgers and maintain a comfortable standard of living quite beyond anything the state pension is able to provide. And as an aside, 'slave wages' seems to be a generous term. A Canadian economist recently published a study which purported to show that paying a worker the then existing minimum wage was cheaper than keeping a slave under tradional conditions of servitude.

And one final irony for those of you who are old enough to remember – do you recall the prophecies of 'the leisure society'?
Where did that future disappear to?"

FFF
Dirk
.

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