Does Minimum Wage Protect the Defenseless?

[Mike: This post is a response to an earlier food for thought question on Class Interests and the Law]

Minimum wage is the lowest hourly wage that an employer is legally permitted to pay employees, and the main purpose of enacting minimum wage is to protect workers from exploitation and non-unionized workers in unskilled jobs; it also protect those who are facing poverty and guarantee for a living wage to all workers. In Canada, each province and territory has its own minimum wage rules and regulations.

History of Minimum Wage:

In 1894, New-Zealand was the first country where minimum wage was introduced, and in 1896, it was appeared in Victoria, the state of Australia. Later, the minimum wage was introduced in Great Britain and many other European countries. In 1912, the state of Massachusetts was the first jurisdiction, in North America, to institute a minimum wage. However, this legislation was only applied to women and minors working in certain industries and contains numerous exceptions and has ineffective enforcement mechanism (Labour law analysis, 2005).

In Canada, the first attempt of regulating minimum wage was in result of paying fare wages to the public servants, who work for the government. Later Canadian legislators began to enact policies to address issues such as low wages, long working hours and unhealthy conditions that were prevailing at the time. In 1918, British Columbia and Manitoba were the first provinces to enact the minimum wages. Later, other Canadian provinces such as Nova Scotia, Ontario, Quebec, and Saskatchewan followed their example. However, these laws were only applied to female workers in certain industries. North American Unions thought that men are at the better position to ensure adequate wages; indeed, they consider that women are vulnerable to work exploitation, so they need state intervention to protect working women (Labour law analysis, 2005). In 1925, British Columbia became first province by legislating minimum wage for male workers (Lobour law analysis, 2005). Since male were considered the main breadwinners of the household, the minimum wage rates for men were higher than women.

In the article, “To Protect the Defenseless, We Must Abolish the Minimum Wage” Yaron Brook and Don Watkins argue that the minimum wage does not ensure that everyone can earn a living, and it does not guarantee that everyone is paid fairly. In their view, many people are denied work because their employers think that they may not have enough skills, hence not worth it.
By giving an example of his first employment, Watkins makes his point that if government enforces a wage which is higher than an employee’s ability, would not make that employee more productive or skillful; rather, it gives a power to an employer to terminate the employment for such worker. In their view, employers have to compete for workers the same way they have to compete for their customers. They think that there is always a fair wage available for ambitious and skilled workers, but an individual should know that how much he or she is worth of. Watkins and Brook believe that employment is a contract between employers and employees, and their decision should not be influenced by third party. They think working at low wages, sometimes, is better than being out of work. They see working on low wages as a benefit for young people, who may not only gain some experience but also may expand their social network.

I think Unitarianism school of thought is best fit for their argument because Unitarians believe that work is a contract between employers and workers; they (workers) voluntarily accept the job and associate risk to the work place. In Unitarians’ view, the implementation of labour law is misguiding the public that it is applied to protect workers’ rights, but in reality, it is just serving selected group of people in the society and harming the rest of the public (Comack, p.154). Likewise to Brooks and Watkins’ argument, Unitarians think that labour law has distorting effects on both employers and employees because it deprives employers and workers freedom of choice and undermine nation’s economic performance.

In contrary, the liberal pluralists would argue that there is imbalance of power between employers and workers. However, it should be corrected through unionization and collective bargaining. They would dispute that regulating minimum wages for employees may not only protect workers’ rights but also reduce the probability of work related exploitation.

In my perspective, minimum wages do not earn a living or do not guarantee for fare wages because an individual, who is working on minimum wages cannot fulfill his/her basic necessities such as food, cloth, or shelter. Unless, that individual have another source of income; for example, having another part time or full time job. However, minimum wages are good for student or young employees, who want to earn some skills or experience to advance their careers because minimum wage jobs not only give these workers experience but also teach them essential job skills that, are very crucial in order to have advanced work opportunities. Once workers gain these skills they become more productive and earn raises. Further, students and young adults are more likely to attain minimum wage jobs because of their desire to flexibility. I think having minimum wage in the labour market reduce the probability of work exploitation. At the same time, it increases the job competition.

In addition, I think that we should not abolish the minimum wages because there are more negative impacts than positive. It seems that Brook and Watkins are disregarding the struggle that people gone through to bring minimum wages in application, so I think abolishing minimum wages may increase the probability of workers exploitation. For a moment, just assume that we have abolished the minimum wages, and people accepted whatever wages are offered by an employer. Is it possible that an employer will offer higher wages? We all know employer always think about their profits and benefits, so it is definite that they would offer lower wages to their employees. Now my question is that how it is possible for an individual to earn a living on the lower wages than the minimum wages? There is no doubt that abolishing minimum wages or enforcing lower wages for workers would only increase the chaos. Lowering wages mean increasing profit for employers and at the same time disregarding workers right to earn a living to fulfill their basic needs.
References:
Comack, Elizabeth, (2006). Locating law: race/class/gender/sexuality connection (2nd Edition).
Publisher: Fernwood Pub. Halifax
Minimum Wage Data base introduction. Retrieve on November 24, 2013 from http://srv116.services.gc.ca/dimt-wid/sm-mw/intro.aspx?lang=eng

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One response to “Does Minimum Wage Protect the Defenseless?

  1. This is an interesting and well-written post. Recent discussions regarding the minimum wage have provided a further criticism of the unitarian perspective – especially the notion that wages are exclusively a matter of employee – employer negotiations (or that they can be conceptualized this way). Specifically, critics have pointed out that the gap between the lowest wages that are paid and the minimum income necessary to live in contemporary society means that state institutions and the ‘social safety net’ are required to step in and provide supports that will allow people to subsist. Thus, we can speak of the ‘hidden costs’ of low wages. A race to the bottom caused by the elimination of minimum wages (which, as you note, are already insufficient) would increase this burden on government bodies.