- Jul 16, 2012
I never really understood the concept of minimum wage and what is the point of increasing it. I am currently in the USA (since about a year) but I come from a country that has no minimum wage concept. I just looking up some stats online and I see it is about $2-$3 PER DAY(yes you read it right). Needless to say you can imagine the economy and with the level of corruption there are people who are getting way less than that. It all comes down to the level of competition and how much others with equal skill level as yours are willing to work for.
So say you are willing to do work X for $10 but someone says he will do it for $9, everything else being equal the second guy gets the job. The whole point of this is that the value of something is determined by everyone else other than you.
If tomorrow everyone gets a minimum wage of $15, the people who are currently making $15 will start earning $25 and those who are earning $25 will start earning $35. It is all relative.
Another example would be say everyone has a $1 million. What would the price of a gallon of milk then be? Would it still be $4? It would be say around $1000.
All I am trying to say is that wages and net worth everything is relative. $1 million is a lot if only 5% of the population has >1 million. It is pocket change if >95% has it.
Note that I have no background in economics. All I understand in economics is demand and supply. So if I am wrong please educate me
Some people think that they deserve handouts, but don't realize that there are enough hand-up opportunities if they are motivated and eager enough to improve their market value. This makes the rich and wanna-be-rich angry or at least rather disinterested in the struggle for social justice
The problem is that the real wages (adjusted for inflation) didn't rise since the 70s despite huge increases in productivity. I think we have 1.5%-increases each year nowadays but don't pin me down on it. Why, one could ask? Well, because the government spends mindlessly on stupid things instead of colonizing Mars and increasing our lifespans to 250 years xD
So the minimum wage constitutes only one aspect of a wellfare state and won't work if other aspects are lacking. For instance, one can have a very well functioning and fully developed welfare state. And one can have open borders (finanially speaking, i.e. globalism and of course in terms of people, i.e. look at Sweden). But one can't have both at the same time.
Even Adam Smith wrote about such things. He not only wrote "The Wealth of Nations," the bible of all die-hard capitalists (even if some supply-demand guys don't know about it yet). He also wrote "The Theory of Moral Sentiments." Reading it first would prevent people from misunderstanding TWoN and twisting its meaning. It would provide you a more well-balanced outlook on life compared to, say, Ayn Rand worshipping.
This being said, I am not arguing for or against a welfare state. I think that this is a thing that every country ought to be able to decide for itself, minding its unique history and thus its peoples' inclinations.
What I have found out for myself is that countries who where largely under Anglo-influence (mindset) are more prone to capitalism and Northern European countries (and Germany) are more inclined to choose a welfare state. Which worked great until the EU was created, which is now entering into its terminal stage; Brexit as the starting shot. Even Soros didn't make money on it, though other investments made him a net profit.
I don't know the inclinations of the US people because the biggest chunks of the state founding elements were largely of German, Irish and English ancestry. But as we all know they are bound to become a minority in a couple of decades. So more study is needed
In my opinion, capitalism and social elements are not mutually exclusive but can rather develop into more than the sum of its part. But injecting social elements into our system NOW and as the ONLY things added, will surely end in a disaster.
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