Post by ShivaTD on Dec 29, 2013 12:14:11 GMT
Don't misunderstand me as I'm not an advocate of mandated minimum wages but there is a flaw in so-called "free market capitalism" because the "Law of Supply and Demand" breaks down when it's applied to labor. The statement was made that both the employer and the employee "profit" from the "employment contract" but that is false when it comes to low paying jobs. A person that doesn't receive enough compensation to pay for the "cost of living" is operating at a "loss" financially and there is no profit for them. "Profit" only occurs after the "cost of doing business" are met but the costs for the employee are not being met if they can't afford food, shelter, energy, medical services and other necessities that are included in the "cost of living" for the person.
It is a problem for which I don't have a "magic bullet" to fix it but it is an identifiable problem. Perhaps there is no magic bullet at all and instead we must address the problem in an ad hoc manner.
As all should know I'm a huge advocate of the Inalienable Rights of the Person but not everything revolves exclusively around those rights. We must also be a moral society as well and while a person doesn't have an inalienable right to be fed or to have a roof over their head or a right to be treated for illness or injury as a moral society we must ensure that the poor amoung us do not starve, that they are not forced to live on the streets, and that if they are ill or injured that they will receive medical treatment.
As a nation we produce more than enough wealth to ensure that everyone has a place to live, food on the table, and that they receive medical care.
When I look at the problem of working Americans that can't afford food, shelter, or health care the problem of "underpayment for labor" based upon the "Law of Supply and Demand" for labor is the root of the problem. The claims made by those that believe "paying more will raise prices" are fundamentally false as the cost of labor is only a small component of the costs of goods and services overall when it comes to low income jobs.
I also realize that as a society we don't "save" anything when an enployer underpays for labor as the financial burden to ensure that the employee has enough to eat, has a roof over their head, or receives medical services merely falls upon the taxpayer. The "costs" don't just disappear but instead are just transferred elsewhere.
A worker at Walmart that requires $100/mo in SNAP (food stamp) assistance still requires that additional $100/mo for food regardless of whether it comes from wages paid by Walmart or if it comes from the taxpayers. From my personal perspective I'd rather pay 1% or 2% more for products I purchase from Walmart than to pay more in taxes to fund the needs of the Walmart employee. I'd prefer a "market" solution over a "government" solution to the problem.
The same is true when it comes to meeting the health care needs of the workers in America. They must have those health care services and we, as a society, have a moral obligation to ensure they receive them. The question just comes down to either a "market" solution or a "government" solution to the problem.
As an "ad hoc" solution related to health insurance I've proposed that the employer should carry the cost of funding the health insurance needs of the employee. The employer is "profiting" from the employment contract while, for low paying jobs, the employee is operating at a loss. It is a minimal cost (I put a number of $1.50/hr on it as that would suffice) that doesn't significantly affect the costs of goods and services. This doesn't affect higher paying jobs as it just becomes a component of overall "compensation" that doesn't affect the enterprise at all. It is a "market" solution that addresses the problem of the "underpayments for labor" which occur based upon the "Law of Supply and Demand for Labor" where coercion exists in a free market that forces some individuals to work "at a loss" as they don't earn enough to pay for the necessary costs of living.
Of note this isn't the only possible solution but it is a pragmatic solution. A more preferable solution for me is to increase the disposable income of the person by changing our taxation at both the state and federal levels of government. The lowest paid workers in American currently have the highest tax burden relative to income in the nation when total taxation of the person is addressed and that tax burden adversely affects their ability to pay for the their necessary costs of living. That is a much more complex issue to address although the solution of that problem is actually quite simple.