Charles Koch wants to eliminate minimum wage

[trish]

Who expended more labor: the guy scratching the soil who produced 1 brick in 12 hours, or the guy who pushed a button and produced 1,000 bricks in one hour?

How about the laborers who built the machine that outputs those bricks at a rate of one thousand per hour? How about the laborers who built the factory? The electrician who wired the factory for power and the plumbers who hooked it to the municipal water supply? The laborers who built the damn that powers the factory? Those who drilled for the oil and natural gas that heat the factory? How about the architects and engineers who drafted the blueprints? One can go on. There's a lot more energy being consumed and a lot more labor involved in producing one brick than you might imagine. So which brick, the one made in America, or the one made in a single oven by a single worker, took more effort and energy to produce? And who gets the credit for those bricks? Well in your eyes it's the CEO who told his executive committee on the phone between hole 8 and hole 9 that he wants to build a brick factory outside Phoenix. Capitalism is wonderful, I agree. It has made it possible for humankind to grow its populations and live a high quality life. But powerful tools are dangerous, including capitalism. In your little parable capitalism shifted the ownership of the brick from the craftsmen to the corporation. Indeed it eliminated craftsmen and craftsmanship entirely. Brickyards that were once proudly producing high quality clay products now lie dormant all through the American Midwest. Profits are now collected by the corporation and distributed to the CEOs and stockholders. It's a very nice arrangement for CEOs and stockholders. Not so nice for the thousands of workers it took to actually produce a brick. Yes, if it weren't for minimum wage laws it could be even more wonderful for the CEOs and the stockholders.

BTW the Koch brothers are now making billions of dollars by creating an artificial aluminum scarcity, buying it up and warehousing it. Very productive, don't you think? Isn't capitalism operating with very little restraint wonderful? Wouldn't it be more wonderful if there were no restraints?

If you're holding down two or three crummy jobs and still can make a living wage (have you seen McDonald's insulting budget advice?), that's no better than no wage. It's still not living. One's time might be better put to use raising your kids, selling your own "wares", running drugs, or protesting for a higher minimum wage. Capitalism is a big idea. Big ideas solve big problems. They cause big problems too. That's why it needs to be regulated.

[paulclifford]

>>>How about the laborers who built the machine that outputs those bricks at a rate of one thousand per hour?

Well how about them. Their labor would be useless unless directed by the engineer who designed the machine and told them what to do. Same for the rest of the examples you cited.

And what if the same laborers expended the same amount of labor-hours, or burned the same number of calories, or whatever unit you want to measure labor in, but misplaced all of the machine parts, using the wrong wiring, the wrong connectors, etc.? They have expended exactly the SAME labor, the SAME hours, the SAME calories, as workers who followed the engineer's plans and blueprints, but the first group of workers produced nothing of value: a useless machine is a pile of junk regardless of how many hours of labor went into producing it.

What makes something valuable is not something inherent in the thing; it's whether or not it satisfies some sort of want or need in the subjective opinion of someone else.

Economic value is subjective, not objective.

>>>If you're holding down two or three crummy jobs and still can make a living wage . . . , that's no better than no wage.

Obviously untrue. If "no wage" were just as good as "a low wage," then no one would accept a job for a "low wage". The reason they do so, is that from their point of view — theirs, not yours — a low wage is preferable to no wage.

Perhaps your efforts would be more productively spent if you demonstrated outside of a local McDonald's to convince the employees to quit their jobs and accept a wage of $0.00/hour instead of a low wage of whatever it is they're making. I'd like to see how many employees throw down their french-fries and follow you.

In any case, it would be an interesting empirical test of your statement.

>>>Koch brothers are now making billions of dollars by creating an artificial aluminum scarcity, buying it up and warehousing it.

I've heard that Goldman Sachs (not the Koch Brothers) is warehousing aluminum, and that some unions are complaining that it makes the price of a can of beer "artificially" high (that's actually a riot! Unionized labor bears more blame than anything else for making their products artificially high, yet here they are blaming the commodities markets).

Sorry, but if something is deemed "artificially too high" by manufactures, they would switch to some other material — e.g., glass or plastic in the case of beer and other beverages. The reason they don't switch at present is that consumers of beer and other beverages are perfectly willing to pay the current price for their beverages in aluminum cans.

This is simply another example of "commodities speculation" and "arbitrage", and is not only perfectly legitimate legally, but it performs a very important function economically: allocating a scarce resource (aluminum) efficiently — meaning, directing it to those producers and, ultimately, consumers, who value the resource the most — over different geographical areas, and over different time periods.

The socialist/Marxian notion that resources are "fixed" and need to be owned by a panel of "resource experts" in the government is a sure way of guaranteeing that there really will be a shortage of that resource; "shortage" meaning: no matter how much a consumer is willing to pay for it, he simply cannot buy it because it's just unavailable.

That was the common, everyday buying experience of consumers in the socialist Soviet Union, the socialist Maoist China, the socialist Communist Cuba, the socialist Marxist North Korea, the national socialist economy of Hitler Germany, etc.

Constant shortages of many goods, and all for the same reason: the resources were socialized, nationalized, and owned by the government.

>>>Very productive, don't you think? Isn't capitalism operating with very little restraint wonderful? Wouldn't it be more wonderful if there were no restraints?

But there are always restraints. The choice is between what kinds of restraints: natural economic restraints (competition), or artificial political ones (regulation). The second usually undercuts the first, and is far less effective at doing what it is intended to do.

[trish]

Well how about them. Their labor would be useless unless directed by the engineer who designed the machine and told them what to do. Same for the rest of the examples you cited.

Actually I included the engineer as one of those examples. So according to you the engineer's work would be useless if not for the engineer! Look do you want the brick or not? If you do somebody will have to make it, 'cause they don't make themselves.

[broncofan]

The example you gave with the brick workers is probably a better counterexample. A company with a method of producing one thousand bricks per hour may be able to pay a worker more than the company whose workers can only make one. That does not mean they necessarily will. The workers do not receive the profits, but are paid based on the supply and demand of labor.

Therefore, if it is easy to push a button and produce a thousand bricks, then there will be many workers who can do this job and the wage will be low. As a result, the company will make larger profits. We can see that at some level, since workers have a great deal of trouble systematically withholding their labor to drive up wages, that higher wages should be mandated. These workers have a collective action problem and are in a specific position of vulnerability that is not faced by those owning the means of production.

The point I was making is not that workers who use violence are justified in doing so. It is that if you exploit people without limit then you end up with people who will refuse to cooperate. You may protect yourself from them by hiring police officers and security guards at the same dollar an hour wage but they might not be too eager to protect you. Eventually you have shortages in demand because you've starved your own customer base.

As I said, workers tend not to be able to aggregate their interests effectively. So they have very little opportunity to bargain for wages, and employers have great opportunity to play their interests against one another. When you have such abuses, it calls for government regulation through a body of laws that prevents that kind of exploitation. You don't like it but it has won out through the democratic process.

[broncofan]

Trish brings up an interesting point about the intellectual property that is used to make a thousand bricks. Many companies force their engineers to sign agreements that assign any invention they create to the company. As a result, the company has provided nothing but a breeding ground where smart people with no capital can create things for them but retain no property right in their own creations. This is another example of people who own property having a disproportionate amount of bargaining power. Do you really think that someone who was not facing a relatively higher degree of duress would bargain away the entire product of their own ingenuity?

The company who buys the machine then does not have to share even the smallest proportion of the profits with the employees because these people need money now. So they cannot effectively withhold labor in order to barter for a fair share of the profits that their work enables. That is where the government comes in. They do not mandate equity sharing or anything close to that, but they don't permit you to systematically take advantage of a broad class of people. We should have a system that allows for upward mobility and does not fix people into a state where they are constantly having to choose between starvation and near starvation.

[Stavros]

Almost all blacks knew this, of course, which is why until the mid 1960s, most blacks voted Republican. All blacks knew it was the Democratic Party that had supported the master/slave system in the south; all blacks knew it was the Democratic Party that instituted and supported the racist "Jim Crow" laws; all blacks knew the insurgent group calling itself the "Ku Klux Klan" had been started by Democrats*; all blacks knew it was the Democratic Party that supported "Separate But Equal" in the Plessy case; all blacks were aware it was the Democratic Party which supported school segregation; all blacks knew that the white guys blocking the entranceways to white schools so that black children could not enter when school integration began — those white guys were Democrats and all blacks knew it!

And that's also why Martin Luther King, Jr. voted Republican his entire life.

Factually incorrect:

As the leader of the SCLC, King maintained a policy of not publicly endorsing a U.S. political party or candidate: "I feel someone must remain in the position of non-alignment, so that he can look objectively at both parties and be the conscience of both—not the servant or master of either."In a 1958 interview, he expressed his view that neither party was perfect, saying, "I don't think the Republican party is a party full of the almighty God nor is the Democratic party. They both have weaknesses ... And I'm not inextricably bound to either party."
King critiqued both parties' performance on promoting racial equality:

Actually, the Negro has been betrayed by both the Republican and the Democratic party. The Democrats have betrayed him by capitulating to the whims and caprices of the Southern Dixiecrats. The Republicans have betrayed him by capitulating to the blatant hypocrisy of reactionary right wing northern Republicans. And this coalition of southern Dixiecrats and right wing reactionary northern Republicans defeats every bill and every move towards liberal legislation in the area of civil rights.

Although King never publicly supported a political party or candidate for president, in a letter to a civil rights supporter in October 1956 he said that he was undecided as to whether he would vote for Adlai Stevensn or Dwight Eisenhower, but that "In the past I always voted the Democratic ticket." In his autobiography, King says that in 1960 he privately voted for Democratic candidate John F. Kennedy: "I felt that Kennedy would make the best president. I never came out with an endorsement. My father did, but I never made one." King adds that he likely would have made an exception to his non-endorsement policy for a second Kennedy term, saying "Had President Kennedy lived, I would probably have endorsed him in 1964."
http://en.wikipedia.org/wiki/Martin_...g,_Jr#Politics

[Stavros]

Under British governance until 1997, Hong Kong had no labor legislation at all; none. No minimum wage laws, no laws requiring anyone to join a union or hire union workers. Guess how much unemployment they had? Zero. None. Additionally, wages were not "subsistence", because the way free markets form, there were always slightly more jobs available than there were potential employees to fill them, so employers — if they wanted "quality labor" — had to bid talented people away from competitors. And since there were no prescribed minimums, those who were not "quality labor" from the employers point of view — the least skilled — could still find employment because no laws prevented them from accepting a low, entry-level wage.

Today, under Chinese rule, though Hong Kong is still robust, a lot of new labor laws have been implemented since 1997. Result? Unemployment of the least skilled workers, between 4% and 7%.

Rubbish, as usual from PC.

Labour law in Hong Kong can be dated back to the impact of immigration on a place that was populated by 23,817 people in 1845, growin to 300,000 by 1901, and 878,947 by 1931.

Labour laws were introduced because of the growth in HK of craft guilds which had secret rituals (as did the Guilds in Europe) and the criminal Triad Societies -all were obliged to register under the Triad and Unlawful Societies Ordinance of 1887 until merchant associations were exempted under an update of the Ordinance in 1911.

Following the Versailles Treaty and the May 1919 Movement, the growth of Sun Yat-Sen's Guomingdang Party led to labour unrest culminating in the General Strike-Boycott of 1925 which almost broke Hong Kong's eminence as a trading port of significance for China and the British Empire.
Labour unrest continued after the Japanese Occupation with the Tramway Strike of 1949 which itself followed the 1948 Trades Union and Trades Disputes Ordinance, which restricted the right of Honk Kong residents to form trade unions and banned any affiliation with overseas unions.
After a relatively peaceful decade in the 1950s the 1960s was a decade of unrest, from the Kowloon Riots of 1966 to disturbances related to the Cultural Revolution which in fact reduced labour participation as most HK Chinese were anti-Communist and dropped out of union membership.

Far from lax labour law and private enterprise making HK a paradise of free market economics, it was the British Empire in its governance of Hong Kong which created the public housing sector, which invested in the physical infrastructure of HK, and which financed most of the education which resulted in the spectacular literacy rates which have been an important feature of HK's economic success; rather in the way that literacy rates soared in the USSR as the state financed education; and indeed, improved noticeably in Afghanistan under the guidance of the USSR in the 1980s.

The problems of the HK economy did not follow the withdrawal of the British in 1997 but have been shaped by the demands of capitalism before and since -the Open Door policy promoted by Deng Xiaoping in 1978 led to the relocation of most of the small textile manufacturing companies from HK to Guandong province, indeed, by 1997 80% of the foreign direct investment in Guandong came from Hong Kong capitalists who abandoned their workers for the cheaper labour market in the PRC -hardly surprising that the 1970s was for a time characterised by sit-ins, occupations, strikes and disputes over redundancy payments.

If it is rubbish to argue there were no labour laws in HK before 1997, it is also rubbish to argue there was no unemployment, as if HK was immune from the Oil Price shocks of the 1970s, and the Asian Economic crisis of 1997.

Unemployment in HK has fluctuated over the decades: 5% in 1983 dropping to barely 1% in 1989, rising to 3.9% in 1997, falling to about 2.1% in 1998; rising to 9% in 2004, falling to 3% in 2008 where it appears to have stabilised.

None of this is solely the consequence of HK being a Special Administrative Region of the People's Republic of China; it has a lot to do with HK reinventing itself as a financial and service economy while losing its manufacturing base, yet retaining its entrepot status; while changing modes of labour that have affected all economies -self-employment increasing, seasonal labour, part-time contracts and so on make up the formula.

In Hong Kong, growth, historically is intricately linked to state investment in the physical and social infrastructure, as well as entrepreneurial capitalism; private enterprise would not have housed the population or educated them en masse, but selected a few for 'the privilege'. Just as large segments of the populations of the British Empire between 1880 and 1960 were educated by Christian Missionaries not by private enterprise.

http://eh.net/encyclopedia/article/schenk.hongkong
http://www.tradingeconomics.com/hong...mployment-rate
http://books.google.co.uk/books?id=O...istory&f=false

[broncofan]

Southern strategy - Wikipedia, the free encyclopedia

PaulClifford, this should explain what happened to the African-American vote and why they have by and large avoided your party like the bubonic plague since LBJ signed the civil rights act into law.

[broncofan]

PaulClifford is so opposed to collective bargaining but it is just one tool workers have to negotiate. You ask whether a worker would prefer to make $1 rather than $0 and I assume you know that the answer is that something is preferred to nothing.

By allowing workers to collectively bargain they are allowed to ask the company an analogous question. If a person produces goods that are worth $20 per hour of work, would the company be willing to pay $15 an hour in order to receive that work? The answer should be that any time the marginal cost of labor is less than the marginal revenue produced by it, an employer should accept the offer.

You also say that goods do not have an objective value. But capital assets can be valued by adding up their cash streams and discounting back to present value. When such assets are sold the difference in valuation between buyer and seller is presumed to be a difference in the discount rate chosen. Labor might be valued in the same way. And if buyers and sellers of labor were on equal footing you would presume that workers would be paid wages that are somewhat commensurate with the value of what they produce.

The only reason they are not paid more is because as I said, their only means of negotiating on an equal footing is to try to minimize collective action problems. They must be in a position to bleed companies in the same way companies bleed them. It turns out that owners of companies are able to hold-out for their profits better than workers can for wages.

[broncofan]

PC,
another thing if you don't mind. I know sometimes it's helpful to break someone's post into sentences and offer rebuttals to each sentence, but I think doing it as often as you do hurts the readability of your posts. You quote one sentence and then offer a three paragraph rebuttal to that one sentence. Everyone does this from time to time by isolating parts of a post but I feel like you splice each post to an extreme degree.