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27-11-2013, 05:50 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
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We often hear people championing the implementation of minimum wage in Singapore. There are some however, who feel that it is not beneficial to low wage earners.
Why the minimum wage hurts the poor and lower skilled
Reading through some of the articles here in The Real Singapore (TRS), I occasionally come across people calling for a Minimum Wage Law. This stems from ignorance in Economics. So I would like to explain why the Minimum Wage law is a bad idea because it causes unemployment. Also, far from helping people with low skills, it actually harms them. Thus, a minimum wage law will cause the poor remain poor because they won't be able to find a job. This means that there will not be a chance for them to gain working skills and a promotion after they have gained working experience.
It is not possible to improve the people's standard of living by forcing employers to pay a higher salary. At the end of the day, you get paid for what your work is worth. This can only be determined on a voluntary basis between employer and employee.
If your labor is worth $1,500 per month, and there is a minimum wage of $1,600 per month, it means you will be fired. If you are already paid $1,600 or more per month, the minimum wage is not going to help you. So if you are unskilled, you cannot get a job. If you are allowed to work at below the minimum wage, you will gain working experience, making you more valuable as an employee. In the end, your wage will rise. But with the minimum wage, you won't get a chance to put on foot on the bottom rung of the ladder.
If it makes sense to have a minimum wage, why not set it at a very high wage so that all of us will be rich. Set it at say $10,000 per month. No country in the world has done that.
You cannot break the iron law of economics by using force. You cannot raise standard of living by forcing employers to hire you at a higher wage than what your work is worth.
Here is a few youtube links explaining why the Minimum Wage law does not work:
How the Minimum Wage Creates Unemployment - YouTube (http://www.youtube.com/watch?v=AbuJYhX3prc&list=PL07E05914BDBE4F64)
Milton Friedman - A Conversation On Minimum Wage - YouTube (http://www.youtube.com/watch?v=x-BGi4NIFww)
Please go through the two links. They can explain it better than I can. The second link is a short talk by Economics Nobel Prize winner Milton Friedman on why the Minimum Wage law is stupid. He mentioned that it would cause the lower skilled workers to get fired. After all, if your work is worth less than the minimum wage, you will lose your job.
Friedman explained that it especially hurt the blacks in America since they generally have lower educational attainments than the whites or Asians. In Singapore, the ethnic group that will suffer most from a Minimum Wage law is the Malay since their educational level is on average lower than the Chinese and Indians.
Despite the fact that the minimum wage law is stupid, most countries have it which goes to show how lousy so many governments are. Those countries without a Minimum Wage law are as follows:
Austria, Brunei, Denmark, Finland, Germany, Hong Kong, Iceland, Italy, Norway, Singapore and Sweden. See link:
Countries without Minimum Wage Law | small-m (http://micpohling.wordpress.com/2007/04/14/countries-without-minimum-wage-law/)
Cassidy Owary
Source: https://www.facebook.com/photo.php?f...size=781%2C445 (https://www.facebook.com/photo.php?fbid=625370244172814&set=a.620154084694430.1073741829.606753656034473&type=3&src=https%3A%2F%2Ffbcdn-sphotos-f-a.akamaihd.net%2Fhphotos-ak-frc3%2F1455883_625370244172814_69530408_n.png&size=781%2C445)
Click here to view the whole thread at www.sammyboy.com (http://sammyboy.com/showthread.php?169167-why-minimum-wage-law-is-stupid&goto=newpost).
https://fbcdn-sphotos-f-a.akamaihd.net/hphotos-ak-frc3/s720x720/1455883_625370244172814_69530408_n.png
We often hear people championing the implementation of minimum wage in Singapore. There are some however, who feel that it is not beneficial to low wage earners.
Why the minimum wage hurts the poor and lower skilled
Reading through some of the articles here in The Real Singapore (TRS), I occasionally come across people calling for a Minimum Wage Law. This stems from ignorance in Economics. So I would like to explain why the Minimum Wage law is a bad idea because it causes unemployment. Also, far from helping people with low skills, it actually harms them. Thus, a minimum wage law will cause the poor remain poor because they won't be able to find a job. This means that there will not be a chance for them to gain working skills and a promotion after they have gained working experience.
It is not possible to improve the people's standard of living by forcing employers to pay a higher salary. At the end of the day, you get paid for what your work is worth. This can only be determined on a voluntary basis between employer and employee.
If your labor is worth $1,500 per month, and there is a minimum wage of $1,600 per month, it means you will be fired. If you are already paid $1,600 or more per month, the minimum wage is not going to help you. So if you are unskilled, you cannot get a job. If you are allowed to work at below the minimum wage, you will gain working experience, making you more valuable as an employee. In the end, your wage will rise. But with the minimum wage, you won't get a chance to put on foot on the bottom rung of the ladder.
If it makes sense to have a minimum wage, why not set it at a very high wage so that all of us will be rich. Set it at say $10,000 per month. No country in the world has done that.
You cannot break the iron law of economics by using force. You cannot raise standard of living by forcing employers to hire you at a higher wage than what your work is worth.
Here is a few youtube links explaining why the Minimum Wage law does not work:
How the Minimum Wage Creates Unemployment - YouTube (http://www.youtube.com/watch?v=AbuJYhX3prc&list=PL07E05914BDBE4F64)
Milton Friedman - A Conversation On Minimum Wage - YouTube (http://www.youtube.com/watch?v=x-BGi4NIFww)
Please go through the two links. They can explain it better than I can. The second link is a short talk by Economics Nobel Prize winner Milton Friedman on why the Minimum Wage law is stupid. He mentioned that it would cause the lower skilled workers to get fired. After all, if your work is worth less than the minimum wage, you will lose your job.
Friedman explained that it especially hurt the blacks in America since they generally have lower educational attainments than the whites or Asians. In Singapore, the ethnic group that will suffer most from a Minimum Wage law is the Malay since their educational level is on average lower than the Chinese and Indians.
Despite the fact that the minimum wage law is stupid, most countries have it which goes to show how lousy so many governments are. Those countries without a Minimum Wage law are as follows:
Austria, Brunei, Denmark, Finland, Germany, Hong Kong, Iceland, Italy, Norway, Singapore and Sweden. See link:
Countries without Minimum Wage Law | small-m (http://micpohling.wordpress.com/2007/04/14/countries-without-minimum-wage-law/)
Cassidy Owary
Source: https://www.facebook.com/photo.php?f...size=781%2C445 (https://www.facebook.com/photo.php?fbid=625370244172814&set=a.620154084694430.1073741829.606753656034473&type=3&src=https%3A%2F%2Ffbcdn-sphotos-f-a.akamaihd.net%2Fhphotos-ak-frc3%2F1455883_625370244172814_69530408_n.png&size=781%2C445)
Click here to view the whole thread at www.sammyboy.com (http://sammyboy.com/showthread.php?169167-why-minimum-wage-law-is-stupid&goto=newpost).