I think the point of “every job worker deserves a living wage” is that every person deserves to exist and survive at a reasonable level in their society. In American society we use “the labor market” to provide this. The interpretation being that if someone does any type of labor for 40 hours a week they should be able to reasonably survive without having to work in excess of 40 hours a week, residing with roommates as an adult over a certain age, etc. I understand the argument being made here is that the labor market does not exist to and has no responsibility to maintain individuals at a certain level- and that may be correct- but in a modern society it is inexcusable to not have SOMETHING to insure the well being of each and every person who exists.
I would like to modify slightly "everyone deserves a living wage" to "everyone deserves a living *income".* The truth of the matter is that some jobs simply don't create much additional economic value, and no employer should be obligated to pay a worker more than their job's value, indeed if they did then such jobs would simply not exist at all.
But obviously as well as being fair to the employer, it is important to be fair on the worker. It's not fair for employers to be forced into awarding loss-making jobs, but it's *really* not fair for individuals to not have enough money to live on. This is where the state can intervene; the state can tax the highly productive jobs that make their practitioners far in excess of what they strictly need (as well as, of course, unearned wealth accumulated merely through the appreciation of assets) and redistribute that money to cleaners and other unskilled labour.
The mistake the author makes here is he assumes that the economy is an external factor to our civilization. It's not. The economy is just part of a larger political economy, which is itself embedded within a larger culture. Thus the "market" which does operate according to supply and demand, operates within a political and cultural framework. For example, today the companies making up the S&P500 choose to deploy more than 98% of their retained earnings for stock buybacks. Half a century ago these funds would be invested into the real economy, creating more demand for labor than happens today.
Why is this so? Well stock buybacks juice higher share prices, and higher share prices mean higher executive compensation from their stock options. The purpose of stock option compensation is to incent executives to focus on creating shareholder value, and it works. This focus on shareholder value as the objective of business is what I call shareholder primacy economic culture. It means less demand for workers for a given economic environment.
50 years ago, stock buybacks were not permitted, executive compensation was effectively capped by higher marginal rates at the top, and financial returns were lower than returns on equity, even though ROE was lower than now. As a result of executives invested in real capital rather than financial capital (shares), demand for labor was higher for a given economic environment, and wages were higher as well. The same laws of supply and demand applied then as now, but the politically and culturally set parameters were different, yielding a living wage more often.
Some people would be willing to sell their organs but we don’t allow them to. Many people are willing to sell sex but we have complicated and varied feelings about that and make it mostly illegal. Children and their families were willing to have kids work for money but we’ve made it illegal. We already have a minimum wage… setting it at a living wage amount is a policy choice that should be debated on its merits - it’s not a new or original type of meddling in the market. And that doesn’t get into the distortions that powerful organizations introduce into the market the tragedies of the commons etc. which distort the market and require counteracting to make the market more efficient. Your more specific argument about your friend is easily addressed - majority of activists are talking about “a living wage for a full time job” defining it as somewhere over 30 or 35 or at 40 hours per week. No one that I’ve seen is really arguing that 15 hours a week needs to be able to support a family.
I would object to many of those polices, rent seeking, and regulatory capture -- among many other distortions -- for similar reasons laid out in the article, so I'm not sure what your point is. Pointing to the status quo doesn't justify it.
There are compelling arguments for such a position, especially one that can be roughly conveyed by a moral slogan (my body, my choice). Why not organ sales?
One of the chief objections to this view is that the poor and marginalized will be exploited for their organs because they are desperate.
There are two problems with this objection though. First, many poor and marginalized people often have terrible options, and banning organ markets only makes that worse. Making it wise counts for something morally. Second, poor and marginalized women would be easier to pressure to abort a baby they want to keep. Yet we do not think this is reason to ban abortions, do we? There are moral and efficiency tradeoffs galore in policy.
For an excellent book on the topic by two moral philosophers, I would recommend: *Markets without Limits*
To answer what my point is, it was partly to argue with you and partly to attempt to clarify what exactly you’re saying/arguing in your post. I grant you that being in favor of organ markets makes you more consistent as a market absolutist - I’m familiar with the arguments people can and do make, it just wasn’t clear to me from your essay that those were your views. I myself don’t think banning organ sales makes poor people worse off. Though I suppose there are some very limited carve outs I could be convinced are okay - but a free for all results in horrifying things in my view. What is your stance on negative externalities and how unregulated markets fault to account for them?
I think the point of “every job worker deserves a living wage” is that every person deserves to exist and survive at a reasonable level in their society. In American society we use “the labor market” to provide this. The interpretation being that if someone does any type of labor for 40 hours a week they should be able to reasonably survive without having to work in excess of 40 hours a week, residing with roommates as an adult over a certain age, etc. I understand the argument being made here is that the labor market does not exist to and has no responsibility to maintain individuals at a certain level- and that may be correct- but in a modern society it is inexcusable to not have SOMETHING to insure the well being of each and every person who exists.
I would like to modify slightly "everyone deserves a living wage" to "everyone deserves a living *income".* The truth of the matter is that some jobs simply don't create much additional economic value, and no employer should be obligated to pay a worker more than their job's value, indeed if they did then such jobs would simply not exist at all.
But obviously as well as being fair to the employer, it is important to be fair on the worker. It's not fair for employers to be forced into awarding loss-making jobs, but it's *really* not fair for individuals to not have enough money to live on. This is where the state can intervene; the state can tax the highly productive jobs that make their practitioners far in excess of what they strictly need (as well as, of course, unearned wealth accumulated merely through the appreciation of assets) and redistribute that money to cleaners and other unskilled labour.
The mistake the author makes here is he assumes that the economy is an external factor to our civilization. It's not. The economy is just part of a larger political economy, which is itself embedded within a larger culture. Thus the "market" which does operate according to supply and demand, operates within a political and cultural framework. For example, today the companies making up the S&P500 choose to deploy more than 98% of their retained earnings for stock buybacks. Half a century ago these funds would be invested into the real economy, creating more demand for labor than happens today.
Why is this so? Well stock buybacks juice higher share prices, and higher share prices mean higher executive compensation from their stock options. The purpose of stock option compensation is to incent executives to focus on creating shareholder value, and it works. This focus on shareholder value as the objective of business is what I call shareholder primacy economic culture. It means less demand for workers for a given economic environment.
50 years ago, stock buybacks were not permitted, executive compensation was effectively capped by higher marginal rates at the top, and financial returns were lower than returns on equity, even though ROE was lower than now. As a result of executives invested in real capital rather than financial capital (shares), demand for labor was higher for a given economic environment, and wages were higher as well. The same laws of supply and demand applied then as now, but the politically and culturally set parameters were different, yielding a living wage more often.
Some people would be willing to sell their organs but we don’t allow them to. Many people are willing to sell sex but we have complicated and varied feelings about that and make it mostly illegal. Children and their families were willing to have kids work for money but we’ve made it illegal. We already have a minimum wage… setting it at a living wage amount is a policy choice that should be debated on its merits - it’s not a new or original type of meddling in the market. And that doesn’t get into the distortions that powerful organizations introduce into the market the tragedies of the commons etc. which distort the market and require counteracting to make the market more efficient. Your more specific argument about your friend is easily addressed - majority of activists are talking about “a living wage for a full time job” defining it as somewhere over 30 or 35 or at 40 hours per week. No one that I’ve seen is really arguing that 15 hours a week needs to be able to support a family.
I would object to many of those polices, rent seeking, and regulatory capture -- among many other distortions -- for similar reasons laid out in the article, so I'm not sure what your point is. Pointing to the status quo doesn't justify it.
Thanks for reading!!
You think people should be allowed to sell their organs?
There are compelling arguments for such a position, especially one that can be roughly conveyed by a moral slogan (my body, my choice). Why not organ sales?
One of the chief objections to this view is that the poor and marginalized will be exploited for their organs because they are desperate.
There are two problems with this objection though. First, many poor and marginalized people often have terrible options, and banning organ markets only makes that worse. Making it wise counts for something morally. Second, poor and marginalized women would be easier to pressure to abort a baby they want to keep. Yet we do not think this is reason to ban abortions, do we? There are moral and efficiency tradeoffs galore in policy.
For an excellent book on the topic by two moral philosophers, I would recommend: *Markets without Limits*
To answer what my point is, it was partly to argue with you and partly to attempt to clarify what exactly you’re saying/arguing in your post. I grant you that being in favor of organ markets makes you more consistent as a market absolutist - I’m familiar with the arguments people can and do make, it just wasn’t clear to me from your essay that those were your views. I myself don’t think banning organ sales makes poor people worse off. Though I suppose there are some very limited carve outs I could be convinced are okay - but a free for all results in horrifying things in my view. What is your stance on negative externalities and how unregulated markets fault to account for them?
As the saying goes: the true minimum wage is always zero.