Milton Friedman on Minimum Wage 

nooo... really

I can already hear Piers Morgan interrupting. "Wait wait wait! You can't just say that!"

value of the minimum wage has always roughly been around 7-10 dollars. Inflation didn't affect that.

Patrick McCarron When the federal minimum wage first became law in 1938, it was 25 cents. Adjusted for inflation, that would be worth $4.13 (2015 dollars). money.cnn.com/interactive/economy/minimum-wage-since-1938/

Although there is no date for this interview I would take it as around 1973 when the minimum wage increased over 25% from $1.60 in 1973 to $2.00 in 1974 and $2.30 in 1976. Inflation back then [between 1973 and 1982] was averaging 9% and in those 10 years it more than doubled prices.

If you think about it, minimum wage plays a part in inflation.

I've spotted the Burger King assistant manager

tru

+Marco Better being fired than so clueless as to believe there is such a thing as "slavewages".

Friedman advocated for a UBI - if your needs are covered, you could chose to work for a job that pays you a "slavewage" you'd still earn more than just UBI. Also there wouldn't be inflation for goods with an inelastic demand - unlike minimum wages that would increase the price an inelastic demand would mean the demand won't decrease and you need now an even higher minimum wage.

@Marco No, it's actually not dumbass. Because if you think they're so bad you can just leave. But at least you have the option to. What you call "slave wages" is often all someone can afford to pay someone for the work without their own business going down. They barely make ends meet and the sum of their profits is exactly what you'd call "slave wages." Many business owners don't even make money in the beginning, while still paying those "slave wages." Learn how the economy works before making posts in Milton Friedman videos.

@@minyaw1234 No he didn't. He only advocated for replacing all welfare programs with a universal welfare, which you could technically call UBI, and made a point that it's better with no welfare at all and that all welfare is suppressive but at least with UBI it's singular and much more manageable in what harm it does. It's about it being less harmful, not in him "advocating" for it, which implies something like he likes it in a vacuum.

Which would you rather have, low technology and a slave labor class or high technology and a high unemployed class?

I want people to have the freedom to make their own choices.

Whether automation is positive is debatable. If automation gets to the point where UBI is necessary a lot of people become deadweight. That's a scary scenario to consider, and a lot of people might not take it so lightly

@@spacedickcoochtocooch4144 low wages ≠ slavery

@@simontist No wage = slavery. So we have to draw a line called minimum wage which must at least be the bare minimum cost of running a human body

That's a stretch

Lmao

This is how it used to be all the time in our country. People talking not yelling and all facts were welcome. People listened and made their own decisions.

oh dont be so ridiculous... one has tangible skills and one is unskilled? What to do a minimum wage job? these jobs we are speaking of are pizza parlour jobs, supermarket jobs its not rocket science even if somebody is unskilled they can be skilled in about 2 weeks doing these jobs any human with a basic level of intelligence can say hello and goodbye to a customer or set a timer on an oven you cant pay somebody 5 dollars less because the other person has done a similar job in the past and you will save 2 weeks teaching them the skills you have to teach the inexperienced worker. if the minimum wage didnt exist employers would pay their workers nothing as capitalism is driven towards maximum profit and greed. to your second point wal mart is a stock exchange giant to suggest it couldnt pay the minimum wage is ludicrous and almost comical. In the UK aldi a german supermarket which has a turnover of 56 billion a year and 9000 stores in over 40 countries pays its workers on the floor nearly twice the minimum wage so to suggest wal mart couldnt pay it makes you look a fool, are you a shareholder by any chance?... individualist greedy moron

In over 18 countries not 40 and also lidl the 6th largest supermarket in the UK with 9800 stores in 28 countries pay their workers 9 to 10 pounds an hour they also have a turnover of over 50 million a year... can you really say with a straight face you agree that companies with billion dollar turnovers should be able to pay 4 dollars an hour to their workers that make them the money they have every day? Idiot

Darryl Scott Yeah, because we all know that "capitalism" would force people to literally be slaves and work for nothing. Nice logic there.

MURDR63 your logic is the one thats ridiculous, it already happens

Darryl Scott Where?

xxCCBBxx I thought minimum wage was put in place by government legislations In order to guarantee citizens of lower or no skill levels to obtain a minimum standard of living To correlate with inflation If there was no minimum wage Citizens could be theoretically paid even less than the current standard, by the employer as there would be no law to insure, what is deemed a fair wage. Or have I got this completely wrong???

@@stickykitty The wage of a worker is determined by 2 things in a market economy -Supply and demand -Marginal productivity Supply and demand is pretty obvious, but marginal productivity is not. It determines whether the employer hires a worker or not. The employer looks at the cost of the extra worker and the gains. Only if the gains exceed or are at least equal to the cost the employer will hire. The minimum wage makes unskilled workers ,with low marginal productivity, too expensive and too risky to hire. As a result those workers can't gain experience to raise their productivity and thus their wage. If the wage is low enough employers are willing to take a risk with inexpirienced workers. The minimum wage damages the overall economy as it reduces the overall labor utilization. It costs the state to pay welfare for the unemployed. The worker is stuck in a welfare dependency trap where working would actually net him less benefit and it makes impossible to get a job to gain experience and increase income. Welfare is essentialy unemployment subsidy and if you subsidize something you will get more of it. The minimum wage is based on the completely wrong assumption that the employers don't pay the worker as much as they can, which is impossible in a market economy as the supply of labor is limited, but the supply of jobs is infinite (provided there is no interference in job creation) If the government wants to help the low income workers without bad side effects the only way is by subsidizing their wage. Every unemployed worker gets say 500 dollars. For every say 3 dollars of extra income the worker earns the subsidy is reduced by 1 dollar. So if the worker gets 600 dollars from a job plus (500 - 600/3)=300 subsidy. He gets a total of 900 dollars. The important thing is the income is increased but the worker always gets more money by working than by not working.

you cannot lawfully tax labor. Labor is a natural right. Try again.

Wouldn't the government be subsidizing a good portion of people's wages then?

@@petarmiletic997 I couldn't even read your moronic rantings past the first paragraph. As a business owner I would NEVER hire an employee if I only break even with his wages 🤣🤣🤣 what a joke. I need to make at least 10x what I pay a man in wages off of his productivity in order to skim my own profits off the top and afford overhead. Try again with your idealistic, utopian analysis.

@Awawawa CM wrong. You're hired based on needs. If you're paid to do a certain job, that pays below minimum wage, then that's the only type of work that the business needs. You'd only get promoted or increase in salary, if the business sees economic value in it. Also there IS such thing as minimum wage being above the worth of the work. Not all jobs are high level. Not all jobs have high degree of responsibility, low replacability, and requirement for high intellect. Wages/salary are decided by how much the economic value that the business gets from the work being done, aside from market value as well. It's too complicated to be regulated.

@Awawawa CM Then you don’t know how to do math. If the value of the job is less than the minimum wage, the job will go away. It’s no different than a business selling a product for less than cost. It would be bad for business to sell a product at a loss. Employment is the same thing. There has to be a value. The employees must produce more (value or product) than he/she costs. The point is minimum wage may be more than the value of the employee. In which case the job is eliminated.

@Awawawa CM tldr-increasing minimum wage in a monopsony market increases employment.

". . .the minimum wage made us stop that." When were you doing all this 'hiring' of high school kids? The minimum wage was established over 80-years ago. Also, if there was honest intent at helping the kids find a career/job trajectory, I supposed there's ways to help them on site while still paying them minimum wage.

What are you a maniac, government should tax more than 2 kids. Just contributing to World population and nothing else

Depends on your employer. I paid my people enough to live comfortably at the expense of my profit line. It’s a 4 lane road not a two way street like the socialist insist. If you a consumer want the cheapest price and are willing to pay the biggest box store for essentially zero service and expertise you get companies hiring as you mentioned. We the consumer have also sacrificed they system for that of saving a dollar. It’s not convenient to blame the employer and take responsibility as a consumer, but that doesn’t remove the variable.

It's also immoral to not pay people properly.

Wages have not kept up with inflation

​​@@jeffreyd700 Wages haven't, but incomes have. You are probably confused by the difference between 'income' and 'wage', but it is no subtle difference.

​@@lzeb4730 It is immoral to deny people with low skills the opportunity to acquire new ones.

@@lzeb4730 if you agree upon an amount and show up to work and they pay you the agreed amount, that is proper pay. Ideally the pay wouldn’t be intruded on by a third party looking to make money off of your labor.

Bro he was a neo-liberal

I built you a cake.

wait. if you are a business owner but don't pay people anything, does that mean you do all the work yourself?

+Mr Sir pretty much if I don't I outsource it typically.

We call it minimum wage when factually it is just a fixed wage. It is not the responsibility of the government to intervene in the regulation of wages, there is no basis in the constitution for this purpose. Let's run with what you said of large corporations being greedy. We have seen everytime we raise the minimum wage that prices subsequently follow the same trajectory. If business are forced to pay more, they will remain greedy and just raise prices more. Without a fixed wage, the economy will regulate itself, and be free to set a value for work output as it relates to GDP. Whenever the government steps in to help, shit goes wrong. Let's not forget, the constant inflation during the 20's and 30's wasn't a result of the stock market crash. A month after, inflation dropped from 9.2% I think to 6.2%. Only AFTER the federal government stepped in to "fix" it did inflation jump to 25%. The government is always responsible for persistent issues, never the free market. The markets may take a hit, but left to their own devices they recover.

And yet there's another person in this thread who says the minimum wage in the UK keeps him/her out of work. I guess your statement that "the minimum wage has been a huge success in the UK" doesn't really paint an accurate picture either.

@@uberboiz Disabled people can get extra benefits/social security in the U.K. which equals the same pay as a full time job on minimum wage. If they want to contribute to society then they can take up volunteer work.

@@firehot006 Taking government benefits/social security (even if the amount is the same as the minimum wage) is not the same as earning your own salary though. People (disabled or not) have aspirations, and they take on a job not just purely for the monetary rewards.

@@uberboiz 'they take on a job not just purely for the monetary rewards....exactly, such as volunteering.

@@firehot006 well the problem with that is you are assuming volunteer work is in line with their interest / aspiration, which is not necessarily true (just like your initial claim that minimum wage is a 'huge success' in the UK).

What's interesting is that an OECD report showed that a minimum wage worker (who also receives welfare benefits) in Aus with two kids could work just six hours per week to lift themselves above the poverty line. Put this against the same worker in the US who would have to work 50 hours per week to achieve the same outcome. Let's not also forget that the US also allocates a smaller proportion of its GDP to social welfare programs than pretty much any other industrialized country, pitting against those on the lower end of the socio-economic scale. Yes, there's the potential of inflation and loss of jobs, but 'pulling yourself up by the bootstraps' isn't going to change the result for every single person that works for a promotion. It took me years of hard work (without knowing anyone) to get into a mid-paying salary position in Aus. I realized very quickly that hard work will get you far but who you know is even more important. I met countless people in high paying positions who got to where they were because of heavy networking (through social ties or LinkedIn) or just plain nepotism.

@@mattw2792 It is a very normal behaviour to think that other people who are successful have just got lucky with who they know etc. It is also a very normal behaviour to assume anything that holds you back is mostly bad luck. Don't get me wrong people do advance because of who they know but most companies do promote mostly on how hard you work and the quality of your work. The managers who just promote their friends end up with a useless team around them and they get found out eventually. Trust me, hard work always gets recognised at some point and you will progress above those people who rely on schmoozing their way to promotion. Progress and promotion isn't a smooth curve, it comes in fits and starts. If you work hard it is generally recognised and you will get on, you might even find you get two or three promotions back to back once your hard work has been spotted. I have seen loads of people leapfrog colleagues in this way after lagging behind in the promotion game. In my experience how hard you work is as important as how good you work. Often it is better to have a hardworker around who just gets through loads of 'normal' work than a genius who doesn't try hard and only does one good piece of work a year.

You still have the false, zero sum, disproven logic that tells you that raising the minimum wage, raising taxes and increasing regulations will hurt multi-millionaires and billionaires who can just buy their way out of the law via loopholes and outsourcing. Minimum wage and other increased regulations will only hurt small business owners and make it more difficult for them to participate in competitive markets. You have these beliefs because you have never owned a business or held a hiring position in your lifetime.

yeah that's not what I think at all. But thanks for telling me what your preconceived notions of my view are. If any business cannot afford to pay their employees a decent wage, then they cannot afford to be in business. The status quo you seem to be advocating is for bushiness big and small to pay their employees as little as they possibly can and have the government support them through food stamps because they cannot afford to put a meal on the table even though they have been working full time. Their are plenty of small business models that do very well paying their employees $10.10 per hour or more. I don;t believe in loopholes or outsourcing. Obama has advocated cutting taxes for business owner who hire in the US and closing loopholes. It is the GOP who want's tax cuts for outsourcers and amnesty for those who evade taxes in the caymans. I don;t what more regulations I want nonsensical regulations like food and safety inspectors and safe guards against poisoning water supplies and fertilizer plant explosions and oil spills. I'm sorry to hear that you are for all those things. If you cannot do business without poisoning people or the environment, then you probably shouldn't be in business.

Matt Hoyte I have years of experience debating people just like you, and thus, like any chess player, I can think a few moves ahead... Predicting your opponent's next move is a natural part of debate. I don't think the welfare state should exist at all, I think we should repeal all of the laws and systems except for the laws against violent crime, and everything should be entirely privatized and deregulated, which creates a laissez-faire system where more jobs are available due to the lack of government-issued licenses required to participate in those job functions. For example, the road to becoming a lawyer, a doctor, or any other high-pay field would be much shorter without the government-issued requirements. If you want to save the environment or anything else, save it on your own dime. Meritocracy allows you to attain money and then you can save anything or anything you want - on your own dime, not on mine. I support individualist anarchy, because it allows me to do this. I can get as many resources as I want, by any means necessary, and then I can decide where, who, what, etc. to spend them on. You should evade taxes. You should fight against the government, the unnaturally constructed corporation which wastes money and turns a net loss while the private sector turns net profits. The federal government is a failed corporation that the taxpayers continually bail out, year after year, and it should be abolished completely.

Laissez-faire capitalism is not a meritocracy....you are conflating money with merit. A worldview where universal access to education and healthcare are bad things and dumping toxic chemicals into the water supply, fraud and theft are good....sounds like an anarchist utopia.

Matt Hoyte Money, by itself, isn't merit. But WEALTH is. The average person who wins the lottery is bankrupt within one year. The regulation of education and health care has actually made those things inaccessible because of the costs of the associated bureaucracy. Private education and health care are more effective and less expensive than the amounts currently assessed as taxation to the average taxpayer, meaning that all we would have to do is simply eliminate the middle man. Likewise, the police and military would also be privatized. What I'm suggesting is not an 'anarchist utopia' at all, it's called 'pure democracy' and it has plenty of successful examples around the world, in comparison to the numerous failures of socialism and communism.

Pretty much

You're a really stupid person.

Janet Burke The policies slurred as "trickle down" were in the real world (as opposed to the liberal ignorance echo chamber) phenomenally successful, characterized by strong economic growth, the greatest period of job creation in US history and a massive improvement in worker compensation (the "stagnation" myth having been long debunked). Would that we had an economically competent president again!

Janet Burke townhall.com/columnists/thomassowell/2014/01/07/the-trickledown-lie-n1772687/page/full

+FletchforFreedom Hi, mind sharing a link about how the "wage stagnation" talk is a myth? I agree with you, I'd just like some reading material. ^^

+Pheromone Happy to oblige: research.stlouisfed.org/fred2/series/COMPRNFB Economists don't look at just wages because they can be tremendously misleading. Since about the 1960s, workers have demanded more and more of their compensation in the form of benefits. Equally important is the fact that health care costs, the chief driver of the inflation figures (which are unaffected by which pocket the money comes from to pay the costs), are overwhelmingly paid for by those benefits so just looking at wages is an apples to oranges comparison. Hope that helps. And I hate when RU-vid eliminates all spaces and %^&*^$%*’s up the links! All fixed.

FletchforFreedom The link's giving me an error. Page not Found.

No, actually. The majority of the well designed econometric studies fully support what he is saying for the past 2 decades on a nationwide basis. And bear in mind that the labor market has changed significantly since Friedman talked about this, meaning his logic doesn't necessarily hold when he talks about job skills. Today's minimum wage jobs are very low skilled which was not always the case. And since your understanding of economics seems... rather limited, I can go into the rest of your comment too. Any job that exists, exists because there's a demand and an available supply. What you end up doing by artificially increasing the wage rate (assuming that it is fully determined by the value of the marginal product and the marginal cost of labor), is forcing businesses to try to push that cost onto their consumers so that they do no have to downsize. Unfortunately, the elasticity of demand in the outputs market for every business is not zero. It will affect their profits and force those who cannot compete to exit the market (giving a potential rise to monopolies as well). But there's no logical connection why a job that exists should pay enough to off. It's simply not true and would be far more economically efficient to redistribute income from those workers and employers who have more market power in the labor market. "Do you really think a CEO's skill level is so high that he/she commands millions? If so, how do you explain businesses going bankrupt?" The average and median CEO pay are near $160,000. The skill levels are very high but you also have to think about job turnover for those in businesses that pay millions to their CEO. There is also an incentive bonus from stock options and the like that tie the CEO's performance to the business's. Although there are things completely out of a CEO's hands that can negatively influence their bottom line, such as poor handling of monetary policy.

Actually there is your historical data...web.archive.org/web/20110629183749/www.house.gov/jec/cost-gov/regs/minimum/50years.htm ...id say youre the one who can be called full of shit.

Sorry, but you are wrong. Look at the McDonald's workers. If they do manage to get their $15/hr wage then most of them will be fired because most of them do not have a $15/hr skill set. Employers will look to all the unemployed college graduates if they have to pay them that much and throw applications from unskilled, uneducated workers into the trash. Nobody is going to pay $15/hr to anyone unless they can get $15/hr worth of value from them.

gamewizard how much do you figure you are worth, per hour, and what are YOUR qualifications?

I make a minimal of $35 per hour. No one gets my services for less. If someone doesn't like it, they're free to go elsewhere. Someone always recognizes my value and experience and are willing to pay for it. As for my experience, nearly 25 years in the trade with 15 years field experience as a Journeyman and 5 years as a Foreman. I will get paid accordingly or they can pay someone else. Most companies are more than willing to pay for my knowledge and experience. Those that don't, don't get to benefit from it.

Great idea.

@Sergio Rubio Interns for $0 an hour, a more qualified employee taking on more work, or the manager/boss themselves. You basically remove the ability to work for less in exchange for experience with minimum wage. Meaning, it only hurts the poorest and least qualified. :/

No shit. Thanks... I'm not sure micky dicks was what he ment.... that is a skillless job. Unless your talking actually manager or owner. But if you did work your way up to one of those spots ya I do think that would be a skill. Or you could show another job you do need to lurn a actually skill at. Hey look I showed up for 2 years while in school.. that is actually a skill being on time an showing up... easy skills yes but under sold as important... also dealing with co workers an customers skills... so there are a few. But again you shouldn't be looking to start a family if all you can do is flip a burger or dunk some fresh fries down. You need more experience from sounds of it my dude Keep the good fight mayb3 you'll get his point in a few years