|Mr Khan said:
|Mr Khan said:
Workers quit and go where? Labor is a buyer's market, inherently, and all companies would push wages down as low as they felt they could for the job to still be "worth it" (and not in terms of what the job is fairly worth, but that you can hit a point where the pay is so low that people would just rather go on welfare)
If that were actually true, then why are only 6% of employees paid minimum wage? Oh, because labor competition is what actually sets wages.
Some interesting stats on this...
- Only about 6% of the workforce actually makes at or below minimum wage at any given time
- The vast majority of these are young people and/or people with very little education or in part time positions
- The industry with the highest number of people making these low hourly wages is the foodservice industry, where tips make up the difference, leading to actual incomes generally above minimum wage. If you take these out (since they make more than minimum wage when you include tips), the above figure would drop much lower.
- Almost nobody STAYS at minimum wage, unless in a tip-based position, but they make more than the statistic suggests anyway
The fact is, as long as you get a halfway decent education, there's absolutely no way you should be stuck in a minimum wage position. Hell, I worked at a fast food restaurant while in high school and was only at minimum wage for 3 months there! If companies could really 'push down' wages without a minimum wage as you (wrongly) suggest, they should be able to 'push down' wages to the minimum wage with one in place, but that's not the case. Why do the vast, overwhelming majority of workers (in both union and non-union positions) make above the minimum wage? There's no law stating they have to pay their employees what they do.. It's because the market has set reasonable value on those jobs, not a government regulation.
That's a fact, Jack!
EDIT: If employers really had the power to just go as low as they wanted, why is the average hourly earnings in the US about $24? http://www.bls.gov/eag/eag.us.htm . The current minimum wage has almost zero impact on real hourly rates.
Does that "average" earning take into account the people who make $1000 in the time it takes to sneeze?
As far as we can tell in the meanwhile, most people on the minimum wage are NOT teenagers, but are "full" adults, and 40% of them are classed as breadwinners (pulled from... somewhere in the Department of Labor).
As for the questions of why companies would try to push down? Even for professional positions, companies are trying to find ways to get away with paying people little to nothing, but they call them internships. Fortunately unpaid, work-producing internships for for-profit companies are in the process of being outlawed. Next they just need to crack the non-profit sector.
You do make a valid point that a company's desire for long-term worker retention usually leads to seniority-based pay raises even for low-end positions, but the entry level wage would certainly sink across the board (until it hits that dirt-poverty threshold. But then again, internships dodge the dirt-poverty threshold and still people compete for them) if the laws mandating it vanished.
This takes into account those who make an hourly wage, the 'rich' are generally salaried.
You miss the point that only 6% of all workers make minimum wage (about 4% if you factor out tip-based positions, which you should) or lower at a given time, 50% of those are young people, 30(ish)% in the service industry (so most likely make more), that leaves the rest who are generally TEMPORARILY at that low a wage, are part time (not the breadwinner), are just starting in a position, and/or are extremely low skilled. Even so, the extremely low skilled worker will generally not be at minimum wage permanently. Again, if your hypothesis were true, there should be a far larger, and more statistically significant portion of the population making the minimum.
It is a near statistical impossibility for anybody with half a bran, a high school diploma, and a decent work ethic to be in a minimum wage position long-term. This is undeniable.
Even though most of the poplulation will literally NEVER make minimum wage, those that do DO NOT stay there, period. Your hypothesis just doesn't match up with the reality of how the market works.
Hell, even the average cashier at WalMart makes about $10/hr!
EDIT: In a good economy (more robust job market), the percentage at minimum wage is about half, so again, market sets wages...