Sun 6 Nov, 2005 10:21 pm
I'm a student in highschool and my assignment was to write a term paper discussing the minimum wage of California whether it should be raised or not. Could any give me some tips on where to start and what arguments I could use? Thank you.
Basically, raising the min wage increases unemployment.
When the cost of goods is increased with wages, there need not follow a fall in employment.
That is the old, discredited argument the English bruited about in the 19th century. They didn't seem to understand that in order for a consumer economy to function properly, consumers need to be able to afford the goods being produced. With an empire into which to dump their products, Parliament (representing the monied interests) resented labor agitation, and fought a long, "last-ditch" fight against organized labor (outlawing such "combinations" at one time) and was still fighting that battle after the Great War, in the 1920s.
The Roman empire in the west collapsed as much for economic reasons as any other. Great, slave-driven enterprises known as latifundia produced agricultural goods--grain, olive oil and wine--as well as simple consumer goods--textiles and pottery/crockery. Often given exclusive contracts to sell to the legions, these enterprises were the culmination of the great struggle between the Patrician order and the Plebeian order which lasted for centuries and was accompanied by several agrarian and "social" wars, which were basically civil wars within the republic.
These wars had not resolved the issues when Sulla made himself dictator, at about the time Iulius Caesar was born. He conducted a bloody proscription against families of the Patrician order who had opposed him, or who potentially threatened his power. When Caesar opposed Pompey, these issues had not been resolved, but Caesar had effectively co-opted the political resentments of the Plebeians by his popular measures such as gladitorial contests, and providing free public entertainment and bread (panem et circenses--bread and circuses). Rome swelled with an indolent and unproductive population, and the Patrician order continued to engross public lands (those gained through conquest) and to set up their slave-driven enterprises.
So long as the empire continued to expand, the Patricians continued to have a market for their production. They were much aided by the Equestrian order, the order of "knights," created in the middle period of the republican empire as a vent for Plebeian ambitions. The empire, however, shrank a little in the Antonine era, but no one, apparently saw the hand writing on the wall. Septimius Severus expanded the empire to its greatest extent, and concentrated on military security and appeasing the legions--but he accomplished it by debasing the currency (adding lead to the gold and silver coins). This created an artificial inflation, another economic concept not to be articulated for almost two thousand years. Thereafter, the empire shrunk and commerce in the west slowly collapsed.
The latifundia primarily thrived in conquered territory, in North Africa and the Iberian penninsula. Rome had filled with literally tens of thousands of small farmers and craftsmen driven out of business by these huge industrial farms and factories, and imperial policy undertook to feed and house them, because they were Roman citizens. The great strength of the Roman empire was an effective routine--that was also its great weakness, because it had no response to the deteriorating situation, not understanding the economic dynamics of having destroyed the very consumer class that had once made the economy vigorous.
The same thing happened in the British empire--labor conditions and the living conditions of the laboring class in England improved very little in the century from the Peterloo massacre to the end of the Great War. When the Indians at the urging of Gandhi stopped buying English cotton goods, and made their own, the Raj responded with armed violence against demonstrators, but the English working class understood what he was about, and he was mobbed by admirers when he visited England between the wars. Just as the English millworkers supported Lincoln and social justice when the American civil war put them out of work, so they supported Gandhi and social justice when the boycott of English textiles put them out of work.
It is only in the twentieth century that economists seem to have noticed and understood consumer economies. The modern equivalent of the latifundia is the shipping overseas of industries which hope to exploit cheap and unprotected labor (unprotected by vigorous enforcement of rational labor laws). I guess the capitalist crowd don't care if all of America is turned into service workers earning minimum wage and shopping at Walmart because they can't afford anything more.
In a consumer economy, high wages work to the benefit of capitalists and investors, because it means that workers, who are the legions of consumers, can afford the goods on offer in the stores. The greedy and not very bright among capitalists seem never to understand this equation.
Business groups and the right wing have opposed every wage rise ever given in Australia. You may be interested to know how many times that wages rises have resulted in higher unemployment. .NEVER