Abolish Minimum Wage

Minimum wage first came about in 1938 when congress instituted it as a part of the Fair Labor Standards Act (FLSA) (Sherk, 2013). At the beginning the first minimum wage stood at twenty five cents an hour and the last minimum wage increase has occurred in 2007, when the congress raised it to $5.15 an hour that year to $7.25 an hour in July of 2009 (Sherk, 2013). I have read that the District of Columbia and the 19 states have established local minimum wages that are higher than the federal rate. Over the past 60-70 years the minimum wage has varied tremendously. It has ranged from a low of $3.09 an hour to a high of $8.67 an hour from the years of 1948-1968 (Sherk, 2013). The congress normally raises the minimum wage only during the times of a healthy economic grown and low unemployment and we know exactly why, don’t we? (Sherk, 2013).

In the article, “To Protect The Defenseless, We Must Abolish The Minimum Wage,” by Yaron Brook and Don Watkins, from Forbes Magazine, the authors argue against the minimum wage. Yaron and Don say that “the problem is that minimum wage doesn’t ensure everyone can earn a living- it ensures that many of us can’t earn anything” (Brook & Watkins, 2013). They are simply saying that the minimum wage goes not let anyone to save or earn anything; minimum wage also denies a person the right to decide what pay rate they should offer and what pay rate to accept by their employers. Watkins shares an example with the reader’s right in the beginning of this article where he applied for a few jobs when he was seventeen years old and got a call back from one of them which was a ticket taker at the local mall. He told the manager that “[he] once helped [his] dad wash his car” (Brook & Watkins, 2013) and the manager offered him $5.35 to start with which he thought was not much, but better than what anyone else was offering him.  The only reason Watkins took the job was because no one was offering him anything better and it was better than being out of work. Watkins understood the fact that he was being offered $5.35 because he was not worth more at the moment but he knew he could build his resume with the more work experience he could get which would get him a better job with a better and higher pay. The authors state that “young people regularly work for low and even no pay in order to build their resume, learn useful skills, and make networking connections” (Brook & Watkins, 2013), which is really important in the work field today. They say that just getting your degree won’t make a difference; you may not even be able to get a job with your degree, but if you have work experience, volunteer experience and have had knowledge about the field, then you are more likely to get a job rather than just having your degree. It is about building yourself and climbing the ladder.

As we know now, there are three major schools of thought that have shaped the study of labor law. The first, Unitarianism, is the “Official Version of the Law.” It is a system where the employees and employers share the goal of a common good. It is concerned with “maximizing their individual liberty and gaining from wealth generated by capitalism” (Comack, 2006, pg. 154). The second, Liberal Pluralist, is a method that utilizes state intervention when necessary to sort our conflict between employees and employers. This school views existing labor laws as having performed well throughout time by never unfairly benefiting one sole body. There is also the concern of imbalance of power where vulnerability can lead to exploitation of workers if they are not in a union, employers are able to use police force against their workers, and collective bargaining to fight back against imbalance. The last school of thought is Marxist, exploit their workers to achieve a “surplus value.” It is a way to adapt and provide solutions to the constant conflict crisis created by capitalist society.

Brook and Watkins argument would fall under the Unitarianism school of thought because that is a system where the employers and employees share the goal of a common good and they are concerned with “maximizing their individual liberty and gaining from wealth generated by capitalism” (Comack, 2006, pg. 154). In the author’s argument, this is the school of thought that comes to mind. They argue that their employment shouldn’t be anyone else’s but the employers and the employees and that government shouldn’t be involved.

Brook and Watkins argue that “the problem is that the minimum wage doesn’t ensure everyone can earn a living- it ensures that many of us can’t earn anything” (Brook & Watkins, 2013). In relation to their argument, I believe that liberal pluralist’s would provide a counter argument. It opposes the liberal pluralist’s point of view as they claim the capitalist as a “powerful engine” for producing wealth. They view existing labor laws as having performed well throughout time by never unfairly benefiting one sole body.

The argument of minimum wage is a common issue in the industrial revolution. Every class a person may take in university, this topic is a main topic that is always discussed. In concluding with this argument, I would agree with the article written by Brook and Watkins. A person should be offered the wage according to their experience on their resume but at the same time minimum wage can help the poor which is better than nothing and not having a job at all. It is very important, especially in the world today, that a person work for “low and even no pay in order to build their resume, learn useful skills, and make networking connections” (Brook & Watkins, 2013) for the wellbeing of themselves. I would agree with this article because the state takes away freedom from both the employer and the employees.

Sources:

Brook, Y., & Watkins, D. (2013, March 27). To protect the defenseless, we must abolish the minimum wage. Retrieved from         http://www.forbes.com/sites/objectivist/2013/03/27/to-protect-the-defenseless-we-must-abolish-the-minimum-wage/

Comack, Elizabeth (Ed.) (2006). Locating Law: Race, Class, Gender, Sexuality Connections, 2nd Ed. Halifax: Fernwood.

Sherk, J. (2013, June 26). What is minimum wage: Its history and effects on the economy. Retrieved from    http://www.heritage.org/research/testimony/2013/06/what-is-minimum-wage– its-history-and-effects-on-the-economy

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One response to “Abolish Minimum Wage

  1. This is an interesting post. You are correct in your application of unitarianism to describe the authors’ perspective.

    Be careful when presenting a theoretical analysis to keep the distinction(s) between descriptive and prescriptive statements clear. For example, you write “The last school of thought is Marxist, exploit their workers to achieve a “surplus value.” It is a way to adapt and provide solutions to the constant conflict crisis created by capitalist society.”

    This suggests that Marxists either exploit their workers or are in favor of the exploitation of workers, neither of which is an accurate statement.

    In reality, the unitarians, liberal-pluralists, and Marxists are all regarding the same phenomenon. However, they are describing and explaining it differently, and they favor different interventions. The unitarians see the labour market as something akin to a reality TV competition, where everyone is playing the same game, and everyone is out to ‘win’. The liberal-pluralists perceive the game as being heavily stacked in favor of certain groups. The role of the law, then, is to regulate competition between groups and provide protections that will allow the game (to continue our metaphor) to go on. The Marxists see the game as being fundamentally rigged, skewed in favor of the owners of the means of production, and subject to regulations that are also largely shaped by the capitalist class. They propose that the game is designed to produce a small number of winners, and to allow them to maintain their wealth. At the same time, the game produces a massive underclass of workers who are all striving to survive, and to achieve a prize that is often well beyond their means.

    In terms of Brook and Watkins’ argument, you cite their claim that “It is very important, especially in the world today, that a person work for “low and even no pay in order to build their resume, learn useful skills, and make networking connections”. This is an interesting statement. Tucker would invite us to examine this claim, and to consider whose interests it advances.

    Being able to hire people who work for low or even no pay *definitely* benefits capitalists, individually and as a class. After all, the minimum wage is expensive.

    Being able to work for low or even no pay in order to build a skill set or reputation *could* benefit a given worker, provided that opportunities for advancement are available, and provided that one is able to make a convincing case the he or she is ‘worth more’. This is the promise of upward mobility and advancement.

    Several problems arise here. First, there are always more workers than there are opportunities for upward mobility and better pay. This, to return to our metaphor, puts individual workers in the position of reality TV contestants – owing allegiance ultimately to themselves alone, and seeking advancement at the expense of others. Second, we have to remember that capitalism, as a socio-economic system, produces inequality. It is designed to function in this way. So, if we support the idea that people can, should, and indeed must work “for “low and even no pay in order to build their resume, learn useful skills, and make networking connections””, we have to acknowledge that the system is designed to ensure that the bottom of the economic ladder is always much, much, bigger than the top. Finally, Brook & Watkins’ argument rests on an assumption – that in a market where there are no wage controls, and where workers are required to work for low and even no pay, employers still have some incentive to reward performance and ability in a way that will lift people into the middle class. What guarantee is there that this is the case?