7 Dollar minimum wage

[aeroegnr]

I'm just curious what you all seem to think of Kerry's 7 dollar minimum wage that he promised during the debate.

I'm also curious about how he is going to make this economy "exactly like the nineties" where everything seemed to be going well until someone flushed the floater that was the dot com boom.

If 7 dollars is great for minimum wage, why not 10, or 20, or 50 dollars? Hell, that means those poor mcDonalds workers will get 50dollars/hourx40hours/weekx50weeks/year = 100 grand a year!

Isn't it painfully obvious that minimum wage just causes inflation? Isn't it also painfully obvious when states/cities decide to jack up the minimum wage that small companies immediately fire the workers that aren't worth it and cling to the few that are?

[Locrian]

/agree

Its stupid.

[gravenewworld]

I don't believe there should be a minimum wage at all. The free market should decide "minimum wage." The minimum wage is $5.15/hr, but honestly who really gets paid this much? Hardly anyone. Even teenagers who work at McDonald's get paid higher than that because the labor markets have decided a wage that is higher than 5.15/hr. Raising minimum wages wouldn't cause inflation, however, unemployment may increase.

[wasteofo2]

The minimum wage is $5.15/hr, but honestly who really gets paid this much? Hardly anyone.
According to the Bureau of Labor Statistics, in 2003, 2.1 million people were working for the federal minimum wage or less. Then there are the millions of people who would be working for State minimum wages of something like $5.35 or $5.80 etc.

[Gza]

The free market should decide "minimum wage."


The minimum wage is a way of protecting lower income individuals from the free market. If the free market had it's way, the workers at McDonalds would be making one cent an hour.

[aeroegnr]

The minimum wage is a way of protecting lower income individuals from the free market. If the free market had it's way, the workers at McDonalds would be making one cent an hour.

They would?

[aeroegnr]

According to the Bureau of Labor Statistics, in 2003, 2.1 million people were working for the federal minimum wage or less. Then there are the millions of people who would be working for State minimum wages of something like $5.35 or $5.80 etc.


That's what, less than 1% of the population, or less than 2% of the working population.

I wonder what percentage of those working minimum wage are teenagers.

[phatmonky]

According to the Bureau of Labor Statistics, in 2003, 2.1 million people were working for the federal minimum wage or less. Then there are the millions of people who would be working for State minimum wages of something like $5.35 or $5.80 etc.

Show me a source for your second claim.

[phatmonky]

I wonder what percentage of those working minimum wage are teenagers.


I guess Kerry really is looking out for the little guy - Kerry/Edwards, fighting to make sure our products cost more to increase the standard of living for highschool students!!

[Moonbear]

I'm just curious what you all seem to think of Kerry's 7 dollar minimum wage that he promised during the debate.

I don't think it will make a difference one way or another. But, before I decide, how many employers really pay minimum wage? I worked minimum wage jobs when I was a student, but then I wasn't trying to support a family, just earn enough to help pay tuition (my parents didn't require me to pay for tuition, but I did my best to help as much as I could) and buy pizza when the dining hall food was inedible. I think it's sad if employers try to get away with paying full-time employees minimum wage, but then, when you have adults doing a job any 16-yr old could do, is that the employers' fault?

Isn't it also painfully obvious when states/cities decide to jack up the minimum wage that small companies immediately fire the workers that aren't worth it and cling to the few that are?

Is that necessarily a bad thing? There are too many people who expect a paycheck for doing nothing all day. Why are they tolerating incompetent employees in the first place if the job can be done with fewer competent employees? This does happen, but it doesn't last long. Those few left will threaten to leave when they find themselves doing the job of two or three people for very little additional take-home pay, so the employers will have to hire back more workers. Of course, they may be more careful to hire more competent people the second time around, which will benefit productivity. And, sometimes, if you have enough incompetent people on the payroll, being forced to weed them out improves productivity by letting the competent ones work unhindered.

Edit: the stats in the above posts were posted while I was still typing.

[aeroegnr]

Is that necessarily a bad thing? There are too many people who expect a paycheck for doing nothing all day. Why are they tolerating incompetent employees in the first place if the job can be done with fewer competent employees? This does happen, but it doesn't last long. Those few left will threaten to leave when they find themselves doing the job of two or three people for very little additional take-home pay, so the employers will have to hire back more workers. Of course, they may be more careful to hire more competent people the second time around, which will benefit productivity. And, sometimes, if you have enough incompetent people on the payroll, being forced to weed them out improves productivity by letting the competent ones work unhindered.


I agree, but that wasn't really what I was going for.
Some jobs simply aren't worth 7 dollars, and these are the jobs that are introductory or for younger people, and aren't really meant to be stayed in for 20-30 years.

[wasteofo2]

Show me a source for your second claim.
I didn't use a source, but it's common sense. Are you saying without a source, you won't believe that there are people working for state-wide minimum wages in states which have minimum wages higher than the Federal minimum wage?

[tumor]

The minimum wage is a way of protecting lower income individuals from the free market. If the free market had it's way, the workers at McDonalds would be making one cent an hour.

Exactly,you took words out off my mouth.
Free market wants you and me to work for free.

[Locrian]

No, the employer wants you to work for free. The employee wants to be paid a million dollars for the job.

The free market wants to arbitrate a solution based on supply and demand.

[phatmonky]

I didn't use a source, but it's common sense. Are you saying without a source, you won't believe that there are people working for state-wide minimum wages in states which have minimum wages higher than the Federal minimum wage?

You said millions. I want to not only see that number validated, but also the actual number itself.
It's not common sense.

[phatmonky]

Exactly,you took words out off my mouth.
Free market wants you and me to work for free.
With misconceptions like this, no wonder so many people think capitalism is eveil and wealth must be stolen :uhh:

[Aquamarine]

The minimum wage is a way of protecting lower income individuals from the free market. If the free market had it's way, the workers at McDonalds would be making one cent an hour.
The labor market works like any other market. Pay is decided by demand (employers) and supply (employees). Competition stops employers from giving too low a pay. On the other hand, employers will not pay so much that they make a loss.

What happens if there is a regulation that forces the lowest pay higher than in a free market? It means that there must be unemployment, employers will not voluntarily pay to make a loss. It also means that the unemployed must be supported by the rest of the population and that the unemployed will produce nothing, lowering the standard of living for the rest of the population.

Regulation like this only creates unemployment and decreased standards of living.

[check]

The labor market works like any other market. Pay is decided by demand (employers) and supply (employees). Competition stops employers from giving too low a pay. On the other hand, employers will not pay so much that they make a loss.

What happens if there is a regulation that forces the lowest pay higher than in a free market? It means that there must be unemployment, employers will not voluntarily pay to make a loss. It also means that the unemployed must be supported by the rest of the population and that the unemployed will produce nothing, lowering the standard of living for the rest of the population.

Regulation like this only creates unemployment and decreased standards of living.


It's true. Without a minimum wage the supply and demand would eventually reach an equilibrium point where there would be little or no unemployment and everyone is getting paid fairly. Well, in theory, anyway.

[selfAdjoint]

It's true. Without a minimum wage the supply and demand would eventually reach an equilibrium point where there would be little or no unemployment and everyone is getting paid fairly. Well, in theory, anyway.

I'm with you up to "fairly well'. The market never of itself guarantees a living wage. A dollar a day would be a competitve equilibrium with third world labor.

[Aquamarine]

It's true. Without a minimum wage the supply and demand would eventually reach an equilibrium point where there would be little or no unemployment and everyone is getting paid fairly. Well, in theory, anyway.
There are of course people with limited ability who can only produce enough to get a very small pay. But it is better to help those people by, for example, no taxes on the first x dollars earned in a year. Or a more direct help.

Those who don't have the ability to produce enough to make a living working must be helped by others.

[tumor]

How about not letting to many new immigrants into the USA or Canada.
That might fix in some way problem with min.wage.Why we need anyway so many immigrants here.In Canada, we let I believe 200.000 a year, for a country of 30 millions that is just absurd.
I like "multiculturalism" stuff, but we have to be prudent.

[Aquamarine]

I'm with you up to "fairly well'. The market never of itself guarantees a living wage. A dollar a day would be a competitve equilibrium with third world labor.

Cost like training and transports must be included. And the existence of rule of law, property rights and the rest of capitalism in the country in question.

But this has nothing to do with the minimum wage. A minimum wage cannot force the pay to be higher than in a free market, competing third world countres or not. It can only force unemployment.

[Aquamarine]

How about not letting to many new immigrants into the USA or Canada.
That might fix in some way problem with min.wage.Why we need anyway so many immigrants here.In Canada, we let I believe 200.000 a year, for a country of 30 millions that is just absurd.
I like "multiculturalism" stuff, but we have to be prudent.

This will lead to other problems like the jobs moving to other countries, more expensive goods and reduced exports. Trying to force American companies to remain in the US will mean that they will be replaced by more competitive foreign companies in foreign markets, meaning less income from exports.

The only way to increase wealth/capita is to make the best environment for the production of wealth. It cannot be raised be decree and force.

Arguably, today the Chinese is the world's best capitalists. It will mean that they tomorrow will be the richest.

[gravenewworld]

The free market doesn't want you to work for next to nothing. If employers paid their workers below equilibrium wages, then they would not be producing at their full potential and hence not maximizing their profits. More people would work if they would raise their wages to the equilibrium wage and the company would make more in profit. So it is beneficial for firms to raise wages to what the free market dictates. For example in the 90s, firms were killing each other for workers, offering huge bonuses and enormous hourly wage rates for new college graduates all because the free labor market had decided what the proper wage was. Employers simply can't pay people 2 cents an hour and except to make profits, simply because no one will produce their product/service for that amount.

[russ_watters]

I'm also curious about how he is going to make this economy "exactly like the nineties" where everything seemed to be going well until someone flushed the floater that was the dot com boom. That part in quotes is actually a quote? I mean, Kerry actually said that? Ya know what - I think we should shoot for an economy like the one we had in the 20s! :uhh:

And then people wonder why the guy doesn't impress me.According to the Bureau of Labor Statistics, in 2003, 2.1 million people were working for the federal minimum wage or less. I'd really like to know the demographics of those people and their jobs. Yes, it matters.The minimum wage is a way of protecting lower income individuals from the free market. If the free market had it's way, the workers at McDonalds would be making one cent an hour. Since workers at most McDonalds' don't make minimum wage now (they make significantly more), that doesn't seem to be a reasonable argument. Further, how many responsible adults are trying to make a living flipping burgers? Doesn't the minimum wage mostly help teenagers (who don't need it) and people who screwed-up so bad they can't do anything else? Should we really be carrying these people on our backs?

Republicans and Democrats have two fundamentally different ideas about the purpose (or the very need) of a minimum wage. Democrats seem to think that the minimum wage should provide a "living wage" for any job. That sounds nice, but in real life, why should it be that way? (and can that actually work?) Republicans think the market should determine the wage for each job and the employees should decide which jobs they do and make a living based on working a "good" job.

I think the Democratic position is wrong for two reasons:
1. This country is supposed to value freedom above all else. Regulations such as the minimum wage restrict economic freedom without a real, positive result.
2. As wasteofo2's and Gza's, and especially tumor's posts show, the democratic position is based on what sounds nice in your head, without any real regard for what actually works in practice or the reality of the situation. Data? Doesn't matter! It works in my head, so it must work in reality, right...? Right???!!

As the others show (Aquamarine's clear and concise post, especially), the republican position is based on real facts and real economic theory.

#2 is an important reason why I am not a democrat.

[aeroegnr]

That part in quotes is actually a quote? I mean, Kerry actually said that?


It's a paraphrase. He was saying that or the equivalent during the debate last night. He was speaking of returning to the budget surplus days.

[russ_watters]

A quick case-study to demonstrate the superiority of my (the Republican) philosophy on economics, re: the minimum wage. The philosophy is (as I said before) Republicans think the market should determine the wage for each job and the employees should decide which jobs they do and make a living based on working a "good" job. Lets test this on school janitors.

Lets assume that the minimum wage is $6 an hour and that starting janitors make this wage and it also just so happens that this is the wage the market equilibrium would specify anyway. Lets also assume that the wage is not a huge concern to schools - they need a specific number of man-hours to keep their schools clean.

Lets say that this year, a significant number of recent high-school grads that had planned to be school janitors take on my philosophy and decide that they should choose to find better jobs to make a better living. $6 an hour isn't their idea of a "living wage." They choose nursing and their parents, proud but not wealthy, lend them the money to go to nursing school (I chose nursing because its a field where right now there are not enough workers for the number of available jobs). Now, quite obviously, this works out great for these guys in that they end up, in short order, earning double or triple what they would have as janitors. That's freedom, that's opportunity, that's the American dream. Bask in the glow. But what about the guys who stayed as janitors?

So this fall, high schools suddenly and unexpectedly find that they are short of new janitors. What do they do? Well, for the short term, they make their existing janitors work overtime to make sure the school gets clean. This works out great for most janitors as they make time-and-a-half for overtime work: $9 an hour. The school, however, quickly decides thats not a good idea. What what do they do? They offer $7 an hour to new janitors in an effort to convince the lazier of those janitors in nursing school that it'd be easier to just take their inevitable janatorial job. Now, of course, some will bite and some won't. The ones who don't bite end up sitting pretty, the ones who do bite still end up better off for the trouble, making $7 instead of $6 an hour.

Thats economic theory (supply and demand 101) combined with the American ideal of freedom: you makes your choices and accepts your consequences. In this case, just the fact that some people bought into the American Dream improves the situation for everyone in their group.

But what if we just make it easy and offer $7 an hour right off the bat by raising the minimum wage? Well, since that's the "living wage" most janitors were looking for, it convinces them not to go to nursing school. It convinces them that they don't need to better themselves because the government will take care of them if they don't. As a result, very few of those janitors leave for nursing school, all janitors make $7 an hour, and most stay janitors rather than becoming nurses. We've convinced them not to improve themselves. Overall, their situation is worse than if the government not upped the minimum wage.

[Zantra]

So let me get this strainght- your idea is instead of helping minimum wage earners, we should punish them until they (hopefully) get desperate enough to pull themselves up by thier bootstraps, or give up and turn to crime or drugs to survive? Good strategy! How about HELPING them get better jobs with better educational funding and transitional career change programs? You have to deal with the issue, not push it under the carpet.

If you give a man a fish....

The reason there is a minimum wage is because if restaurants could pay mcdonalds workers 1 buck an hour, they would, and probably sell 50 cent big macs every day. But eventually people would strike, and no one would work there because it would be considered a "substandard" wage. People banded together and and said "I"m not willing to work for $2/hour, so pay us more, and so the companies had to. Competition was a factor also. Could you find illegal immigrants to do the jobs? most likely, but not US citizens.

[phatmonky]

The reason there is a minimum wage is because if restaurants could pay mcdonalds workers 1 buck an hour, they would, and probably sell 50 cent big macs every day. But eventually people would strike, and no one would work there because it would be considered a "substandard" wage. People banded together and and said "I"m not willing to work for $2/hour, so pay us more, and so the companies had to. Competition was a factor also. Could you find illegal immigrants to do the jobs? most likely, but not US citizens.

If that were true, and it isn't, then mcdonald's employees would make only minimum wage. They don't.

[gravenewworld]

The reason there is a minimum wage is because if restaurants could pay mcdonalds workers 1 buck an hour, they would, and probably sell 50 cent big macs every day. But eventually people would strike, and no one would work there because it would be considered a "substandard" wage. People banded together and and said "I"m not willing to work for $2/hour, so pay us more, and so the companies had to. Competition was a factor also. Could you find illegal immigrants to do the jobs? most likely, but not US citizens.

No, McDonald's would not pay their workers 1 dollar/hr. People would simply not work for that wage. Really its not that hard to understand. COMPANIES CAN MAKE MORE PROFIT BY INCREASING THE WAGES THEY PAY IN CERTAIN CIRCUMSTANCES. A company's output and productivity depends on labor, if the company refuses to pay the fair market price for wage, they will not produce at a maximized output since they could be highering more workers at a higher wage.

[Locrian]

The reason there is a minimum wage is because if restaurants could pay mcdonalds workers 1 buck an hour, they would,

It has already been pointed out that this is an obviously false statement. McDonalds pays over minimum wage now. Lowering the minimum wage would not chnage those jobs pay at all.

[selfAdjoint]

The statement that if McDonalds could pay a dollar an hour, they would, is true. Corporations are bound to offer the lowest achievable wage that is compatible with their business plan. In fact McDonalds would always pay a little more than the cheapest rate in order to be more picky about whom they hire. The minimum wage just sets that cheapest wage a little higher.

[Aquamarine]

There seems to be a belief that McDonalds could pay much higher wages. Looking the key statistics at Yahoo, McDonalds have a return on assets of 6.98%. That means that the return on money invested is about 7%. The return on the 10-year bond is about 4%. Is is certainly fair that those investing in a stock should earn at least 3% more than on a risk-free investment. Why otherwise do it?

Looking at the only burger competitor I quickly could find listed, Wendy's ROA is 8.47%. So McDonalds are limited by that, they cannot long-term earn much less money than a competitor.

So it is not really possible for McDonalds to pay much more.

It not the evil companies depriving the workers. They are paying what they can. If they payed more, they would lose to competitors due lack of earnings and investments. If they payed less, people would take other jobs.

[check]

How about not letting to many new immigrants into the USA or Canada.
That might fix in some way problem with min.wage.Why we need anyway so many immigrants here.In Canada, we let I believe 200.000 a year, for a country of 30 millions that is just absurd.
I like "multiculturalism" stuff, but we have to be prudent.

Canada needs immigrants to maintain a growing population. Canada’s total fertility rate is 1.61 children born/woman. (2004 est.) A country needs at least a net gain of 2.1 people per woman/couple to maintain its current population. That’s where immigration comes in.

Oh, and how would limiting immigration fix the minimum wage 'problem'?

[russ_watters]

The statement that if McDonalds could pay a dollar an hour, they would, is true. Corporations are bound to offer the lowest achievable wage that is compatible with their business plan. In fact McDonalds would always pay a little more than the cheapest rate in order to be more picky about whom they hire. The minimum wage just sets that cheapest wage a little higher. McDonalds is picky about who they want flipping burgers? Are you serious? Is that why they "pick" high school kids and dropouts? I can't believe you would say such a thing. So let me get this strainght- your idea is instead of helping minimum wage earners, we should punish them until they... Wait, stop there: how is paying someone what they are worth a punishment? That's what's wrong with America today - people view not getting a handout as a punishment!How about HELPING them get better jobs with better educational funding and transitional career change programs? Good idea - just one little thing: first tell me how to keep them from dropping out of high school. You have to deal with the issue, not push it under the carpet. Well, how about this: I'll deal with my issues, they can deal with their issues? If you don't like that, please explain to me why in a free society, I should be responsible for the failures of people who I have never met.The reason there is a minimum wage is because if restaurants could pay mcdonalds workers 1 buck an hour, they would And you base that on what? They pay $7 an hour and hang big signs out that they are hiring because they're picky like SA was saying, but if the minimum wage didn't exist, they wouldn't have to? In what economics book can I read that theory?

[Moonbear]

But what if we just make it easy and offer $7 an hour right off the bat by raising the minimum wage? Well, since that's the "living wage" most janitors were looking for, it convinces them not to go to nursing school. It convinces them that they don't need to better themselves because the government will take care of them if they don't. As a result, very few of those janitors leave for nursing school, all janitors make $7 an hour, and most stay janitors rather than becoming nurses. We've convinced them not to improve themselves. Overall, their situation is worse than if the government not upped the minimum wage.

I was following along for the first part, but I think there are some flaws in this last part. If we need both janitors and nurses, and there are people content to be janitors, what is wrong with their decision to do that job? There will always be others motivated to have more than just a living wage, and they will be the ones who choose to be nurses.

In addition, if we assumed your scenario was true, that not raising minimum wage would lead a lot of potential janitors to go to school to be nurses instead, what happens in 4 years when they all graduate from nursing school and realize that after spending all that money on an education, everyone else had the same idea and there is no longer a nursing shortage and instead they wind up having to take that janitor job for $6/h minus the cost of nursing school because they can't get that nursing job they aspired to?

I think raising minimum wage might have a different effect. There are people out there with $7/h jobs who are happy with them because they are a bit above minimum wage. When the minimum wage increases to $7/h, those employees will become discontented that they are ONLY making minimum wage, even though their wages haven't changed, which will force employers to raise wages even further to retain their employees. This is what I noticed the last time the minimum wage was increased. It won't just increase those at minimum wage by $2/h, because then those who had a little more responsibility and earned $7/h will now want $9/h, and those who earned $9/h will want $11/h, and it increases right up to the top. It's only a temporary solution. Though, it doesn't really matter whether the minimum wage gets raised due to federal regulation or pressure from the workforce/labor unions. You can put more dollars in someone's pocket, but it won't increase their buying power if everything increases in cost with it.

[Moonbear]

McDonalds is picky about who they want flipping burgers? Are you serious?

I have to wonder about that claim too. I'd hate to think of what sort of person gets rejected for a job at McDonalds. :eek:

[Ivan Seeking]

I'm just curious what you all seem to think of Kerry's 7 dollar minimum wage that he promised during the debate.

I'm also curious about how he is going to make this economy "exactly like the nineties" where everything seemed to be going well until someone flushed the floater that was the dot com boom.

If 7 dollars is great for minimum wage, why not 10, or 20, or 50 dollars? Hell, that means those poor mcDonalds workers will get 50dollars/hourx40hours/weekx50weeks/year = 100 grand a year!

Isn't it painfully obvious that minimum wage just causes inflation? Isn't it also painfully obvious when states/cities decide to jack up the minimum wage that small companies immediately fire the workers that aren't worth it and cling to the few that are?

I support the $7 wage. This addresses the issue of how low is low - how poor are the working poor?

First and in general, allowing the market to seek its own price clearly doesn't work. We know this since so many companies pay minimum wage. Heck, probably 20% of all jobs in Oregon are minimum wage. If the market really drove the prices up to a reasonable limit, the wage increase wouldn't affect many people. So much for the Republican double-talk.

As for upper limits, I don't see your point. Obviously we want to keep the minimum wage as low as possible but people must be able to survive on a full time job. the fact is, there is a certain percentage of the population that will have to survive on this amount. Seven dollars per hour is $14,560 per year.

Here are some estimated minimums to survive
Housing: minimum $500 per month - 6000 per year [assumes furnished]
Food and personal items - 300 per month - 3600 per year
Transportation [assume city bus] - maybe $60 per month or 720 per year.
I just ran Turbo Tax and calculated the Fed tax at $600 for a single person
Est State - $280, FICA, 250, So maybe 1230 per year in total.

Utilities: est 100 per month - 1200 per year.
Clothing: 500 per year [laundry fees alone, no new clothes. This assumes $5 per load, at two loads a week]
Medical and Dental [assuming no illness] $500 per year [usually the deductable].

So, in order to exist with a roof over one's head, food and basic necessities, I come up with about $13,650 per year. This leaves our fully employed single person, who is just barely existing [God forbid that they might get sick or injured, need a few days off, or have a death in the family] a grand total of an extra $2.50 per day; after the increase.

I guess that big $2.50 per day will go towards clothes, dating, vacations, movies, computers, etc...

Since so many companies now employ minimum wage workers part time, many people must work two or three minimum or low wage jobs with no benefits at all.

What is the impact on inflation? Not much.

Edit: I originally popped off 2020 hours per year for some reason. :yuck: 52 weeks X 40 hours X $7 = $14,560

[aeroegnr]

First and in general, allowing the market to seek its own price clearly doesn't work. We know this since so many companies pay minimum wage. Heck, probably 20% of all jobs in Oregon are minimum wage. If the market really drove the prices up to a reasonable limit, the wage increase wouldn't affect many people.

So many companies, like the ones we have already mentioned in this thread?

My first real job, that I got at 16 (grocery store clerk), paid more than minimum wage over four years ago. I stayed at the job, and by the time I left almost two years later I was making 7 an hour.

Before that, I temporarily worked as a glass cleaner in a building under construction, and that wasn't even minimum wage, and you can't get more unskilled labor than that.



So much for the Republican double-talk.



Who said anything about Republicans?


As for upper limits, I don't see your point. Obviously we want to keep the minimum wage as low as possible but people must be able to survive on a full time job. the fact is, there is a certain percentage of the population that will have to survive on this amount. Seven dollars per hour is $14,560 per year.

Yeah, and the ones who do survive on this amount probably won't be working at that same job a year from now. If the minimum wage goes up, they'll just be fired or stick in the same crappy job.



So, in order to exist with a roof over one's head, food and basic necessities, I come up with about $13,650 per year. This leaves our fully employed single person, who is just barely existing [God forbid that they might get sick or injured, need a few days off, or have a death in the family] a grand total of an extra $2.50 per day; after the increase.



All the motivation to get a better job, and improve oneself.



Since so many companies now employ minimum wage workers part time, many people must work two or three minimum or low wage jobs with no benefits at all.



Desperate times call for desperate measures. Some companies just can't hire full timers because there is nothing for them to do for a good portion of the day.


What is the impact on inflation? Not much.


I disagree. The cost of basic products will go up, which will cause increased loans, and then more money printing.

[Locrian]

The statement that if McDonalds could pay a dollar an hour, they would, is true.

Right, and no one has argued otherwise; I know I posted almost that exact statement on the last page. The issue being discussed is whether McD's would be paying less without minimum wage, and I think it would be most useful to the discussion if both sides made that clear.

In the rest of your post you bring up an interesting point, that although they are paying over the minimum, they could just be doing that to increase the group of people they are able to hire, and that if the minimum wage was less, they'd be paying less.

Unfortunately this assertion is extremely difficult to back up - and rather hard to tear down too. We have rather few instances of minimum wage being lowered to look to for evidence. However, I see a major flaw; McD's isn't paying just 10 cents, or a quarter more than minimum. Starting pay here can sometimes be 20% over minimum wage. I have a hard time believing that market forces are not responsible for that. To be convincing, you'd need to show that there is a reason they are paying more than $1 over minimum, instead of 50 cents.

Overall, as a supporter of minimum wage, I find this excessive use of McD's as an example to be a mistake if a case for the minimum wage is to be made. I would think a broader argument would be more effective.

[Locrian]

The biggest problem I see with this discussion is that it has become an argument between those who prefer a minimum wage against those who prefer a free market. The problem is that a free market does not necessarily equate to a capitalistic system, and I believe that those suggesting a free market choice think it will be.

Even without any government intervention, we wouldn't have a true capitalistic system. First, barriers to entry create oligopolies that do not function as a free market. These are common in the US now, and would exist without govt interference. What's more, it is plainly obvious (and historically true) that without govt intervention, many times monopolies form. These are the very definition of a non-capitalistic system and reek havoc on both prices and incomes.

Secondly, corruption and inefficiency prevent a capitalistic market. Examples of these are rampant recently and also prevent prices and incomes from being what they should be.

I would rather have a true capitalist system and no goverment protections. However, a true capitalistic system isn't possible. There will be deviations, and when they occure they can be detrimental to society. I believe the government has an obligation to protect people from these deviateions, and the minimum wage is one of those protections.

This argument should not be between those who think govt intervention is necessary and those who want a capitalistic market, because that second group cannot deliver such a thing. It should be between those who think there should be protection from a un-capitalistic market versus those who think there should not be protections from an uncapitalistic market.

[Aquamarine]

The biggest problem I see with this discussion is that it has become an argument between those who prefer a minimum wage against those who prefer a free market. The problem is that a free market does not necessarily equate to a capitalistic system, and I believe that those suggesting a free market choice think it will be.

Even without any government intervention, we wouldn't have a true capitalistic system. First, barriers to entry create oligopolies that do not function as a free market. These are common in the US now, and would exist without govt interference. What's more, it is plainly obvious (and historically true) that without govt intervention, many times monopolies form. These are the very definition of a non-capitalistic system and reek havoc on both prices and incomes.

Secondly, corruption and inefficiency prevent a capitalistic market. Examples of these are rampant recently and also prevent prices and incomes from being what they should be.

I would rather have a true capitalist system and no goverment protections. However, a true capitalistic system isn't possible. There will be deviations, and when they occure they can be detrimental to society. I believe the government has an obligation to protect people from these deviateions, and the minimum wage is one of those protections.

This argument should not be between those who think govt intervention is necessary and those who want a capitalistic market, because that second group cannot deliver such a thing. It should be between those who think there should be protection from a un-capitalistic market versus those who think there should not be protections from an uncapitalistic market.
Why bring monopoly into a discussion about minimum wage? Even if regulations of monopolies are necessary, what is the connection to minimum wage? Except for guilt by association.

In economic research it is hard to find support for the dangers of monopoly.
competition is a tough weed, not a delicate flower
http://www.econlib.org/library/Enc/Monopoly.html

[russ_watters]

I was following along for the first part, but I think there are some flaws in this last part. If we need both janitors and nurses, and there are people content to be janitors, what is wrong with their decision to do that job? There will always be others motivated to have more than just a living wage, and they will be the ones who choose to be nurses. I don't see that as inconsistent with what I said. In fact, if people are content to be janitors at janitor pay, that means we shouldn't be artificially increasing their wages. In addition, if we assumed your scenario was true, that not raising minimum wage would lead a lot of potential janitors to go to school to be nurses instead, what happens in 4 years when they all graduate from nursing school and realize that after spending all that money on an education, everyone else had the same idea and there is no longer a nursing shortage and instead they wind up having to take that janitor job for $6/h minus the cost of nursing school because they can't get that nursing job they aspired to? Like I said, I picked nursing because there is an actual shortage right now. Obviously this is a made-up scenario so you can certainly make-up your own, but my point was that if they went into something like business, any influx of new workers would immediately cause significant damage to the market. Certainly, too many new nurses would cause damage, but it would take a significant influx to do that. I think raising minimum wage might have a different effect.... Well, I would say that's an additional effect - and it is. Its true. But its a secondary effect and not as big as the primary effect of increasing unemployment. The main reason for this is that the majority of people earning minimum wage are temporary summer-job-teenager types (SOURCE (http://www.thedartmouth.com/article.php?aid=2004072702010)...expansion to follow). This labor pool doesn't have ambitions regarding those jobs because of the nature of those jobs and in general, accepts what the market pays them.
Though, it doesn't really matter whether the minimum wage gets raised due to federal regulation or pressure from the workforce/labor unions. You can put more dollars in someone's pocket, but it won't increase their buying power if everything increases in cost with it. That is another consequence, yes.

The source I listed above needs a disclaimer: Its an anti-Kerry college newspaper Op-ed piece. But where this one differs from the typical op-ed piece, is it is heavy on facts, data, and economic theory (this kid'll never find a job as a reporter... :wink: ). Several of us asked who these people are that make minimum wage. Here's the answer: About 3 percent of all workers are paid the minimum wage or less. Of them, 53 percent are younger than 25 and 63 percent are enrolled in school. Fifty-four percent of minimum wage employees live in households with incomes at least twice the poverty level. The true average minimum wage earner is a teenager with an after-school job in a lower-middle class family. This set of facts makes the "living wage" argument for minimum wage utterly moot. First and in general, allowing the market to seek its own price clearly doesn't work. We know this since so many companies pay minimum wage. Wait, why does the fact that some companies pay minimum wage mean the market doesn't work? I think you may have an idea of how the market 'should work' that conflicts with how the market does work - ie, economic theory.

If eliminating the minimum wage means that some burger-flipping teenagers make $7 an hour in areas where the market supports it and $4 an hour where it doesn't, there is nothing wrong with that. Heck, probably 20% of all jobs in Oregon are minimum wage. Well, at least you're giving data now - you're making it up, but at least its data. I'd suspect you're way off (unless Oregon is far below average, since the national average is 3%) - but you posted it so if you want to make anyone buy your argument, you need to verify that number. As for upper limits, I don't see your point. Obviously we want to keep the minimum wage as low as possible but people must be able to survive on a full time job. the fact is, there is a certain percentage of the population that will have to survive on this amount. Seven dollars per hour is $14,560 per year. As the stats show, most people making minimum wage do not "have to survive on this amount." I don't see screwing with economics for a large number of people to benefit a small number as a good thing. In fact, there are other ways to protect those people who do have to get by on minimum wage already in place.My first real job, that I got at 16 (grocery store clerk), paid more than minimum wage over four years ago. I stayed at the job, and by the time I left almost two years later I was making 7 an hour. Heck, I can top that: during the summer before my senior year in high school, I did data entry as a temp and my lowest job paid something like $8 an hour while my highest paid $12.25.

Prior to that, I worked food service in a nursing home and also got more than the burger-fippers because the job sucked so bad. Supply and demand, baby.

Locrian - I see the discussion slightly differently. I know a completely free market is a bad thing, so my position is that we should have the minimum amount of regulation possible while maintaining the integrity and stability of the economy. That means having a minimum wage but not making it a "living wage." The counter-argument is based on social welfare and, in my opinion, social welfare, while it feels good to do, makes for bad economic policy.

[Locrian]

Why bring monopoly into a discussion about minimum wage? Even if regulations of monopolies are necessary, what is the connection to minimum wage? Except for guilt by association.


My primary point concerned oligolopoies; monopolies are a extension of that problem. I could have made my case without mentioning monopolies, but it seemed prudent to introduce possible further deteriorations of the capital system. As to what the connection is, I'll quote from your link:

In short, monopoly reduces society's income.

Not that the link is particularly good. His idea of prices "close to the competitive level" is 20% higher - something not that close at all. His idea of an expensive govt program is 50 million dollars. So he thinks a hundredth of a percent of GDP is a lot, and a 20% price hike is a little. Mediocre rationale.

In any case, since neither you nor your link make a case that our economy would be a true capitalist free market system without govt intervention, I don't see why my point doesen't stand.

Pardon the bad typing, one hand bound up. Also, I appreciate your reply.

[selfAdjoint]

I have to wonder about that claim too. I'd hate to think of what sort of person gets rejected for a job at McDonalds. :eek:

Just go to that greasy spoon down the street from the McDonalds. I've eaten at McDonalds and I've eaten at the greasy spoons, and I say McDonalds is picky.

[Aquamarine]

Not that the link is particularly good.
That's pretty tough on a Nobel Laureate. :biggrin:


His idea of prices "close to the competitive level" is 20% higher - something not that close at all.
Where did he state that? This is more correct
Several kinds of evidence suggest that monopolies and small-number oligopolies have limited power to earn much more than competitive rates of return on capital. A large number of studies have compared the rate of return on investment with the degree to which industries are concentrated (measured by share of the industry sales made by, say, the four largest firms). The relationship between profitability and concentration is almost invariably loose: less than 25 percent of the variation in profit rates across industries can be attributed to concentration.

His idea of an expensive govt program is 50 million dollars.
Actually, he said:
Antitrust policy is expensive to enforce: the Antitrust Division of the Department of Justice had a budget of $54 million in 1991, and the Federal Trade Commission budget was $74 million. The defendants (who also face hundreds of private antitrust cases each year) probably spend ten or twenty times as much.


In any case, since neither you nor your link make a case that our economy would be a true capitalist free market system without govt intervention, I don't see why my point doesen't stand.
Of course there must be a government, who has claimed otherwise? Well, some anarcho-capitalists do, but with no evidence and little theory. I still don't see what monopolies or oligopolies have to do with the minimum wage? You have presented no argument that the minimum wage is beneficial.

The Truth About Sherman
http://www.mises.org/fullstory.aspx?control=331&fs=+the+truth+about+sherman

Microsoft
http://www.mises.org/fullstory.aspx?control=328&fs=mises.org+on+microsoft+

[Locrian]

Quick post during lunch,

Where did he state that?

Thus, even a small number of rivals may bring prices down close to the competitive level.

Look at the chart above that quote (the Kessel bond bidder chart). Three bidders was still a 20% increase. He was proud of the improvement with two bidders. Even six suggests a 7% increase, which is wholy unacceptable. It requires ten to reach a stable market price. We don't even have ten soup makers, much less can it be said every market has ten suppliers. The idea that america would have a capitalistic system without govt intervention is flawed.

The statistics he's shown only further to convince me that oligolpolies are bad for the economy. Economists would have a fit if inflation reached 7%, and yet this nobel laureate doesen't seem perplexed by the damage even a large oligopoly can do. On top of that, keep in mind you are only responding to half of that post I made on the last page.

No, I have yet to try to make a case for minimum wage. In fact, I think I'm the first post on the thread, saying I'm against the increase. Trying to make a case for minimum wage seems silly, since there is NO chance of it being removed - where's the threat?

However, I just couldn't sit by while people made silly free market arguments that they could never hope to deliver on.

[Aquamarine]

Quick post during lunch,

Look at the chart above that quote (the Kessel bond bidder chart). Three bidders was still a 20% increase. He was proud of the improvement with two bidders. Even six suggests a 7% increase, which is wholy unacceptable. It requires ten to reach a stable market price. We don't even have ten soup makers, much less can it be said every market has ten suppliers. The idea that america would have a capitalistic system without govt intervention is flawed.

The statistics he's shown only further to convince me that oligolpolies are bad for the economy. Economists would have a fit if inflation reached 7%, and yet this nobel laureate doesen't seem perplexed by the damage even a large oligopoly can do. On top of that, keep in mind you are only responding to half of that post I made on the last page.

No, I have yet to try to make a case for minimum wage. In fact, I think I'm the first post on the thread, saying I'm against the increase. Trying to make a case for minimum wage seems silly, since there is NO chance of it being removed - where's the threat?

However, I just couldn't sit by while people made silly free market arguments that they could never hope to deliver on.

It is not possible to draw any conclusion about the level of inflation and prices in the economy from this study on bond market spreads. But it should noted that the total effect on price of the bonds, was a change of 0.574% when changing the number of bidders from 1 to 20, which is small effect if it could be translated to other areas. But the author's only point was that a few potential competitors have large effect, nothing about the exact effect in other areas.

Look instead of what the real-world studies shows, as cited above.

Read the link above on the Sherman Act. It is illuminating.

Regarding the minimum wage, when has popular opinion decided truth in science?

[Locrian]

It is not possible to draw any conclusion about the level of inflation and prices in the economy from this study on bond market spreads.

You are right, it isn't a very good way to determine larger market effects. I thought about saying that but it seemed easier to attack that argument than discredit it. Now not only is it a bad example, but even if we were to accept it it fails to make its point (twenty companies is not an oligarchy, and many markets do not contain twenty suppliers)! He really doesnt provide much else to spport his claim. You need a better nobel laureate! :tongue2:

Look instead of what the real-world studies shows, as cited above.

Is it more convincing than the last link? I promise to read it, but you will have to wait for your reply. I have not said as much about the last link as I wanted, and am begining to fear I do not have enough good fingers left to keep up with you!

Regarding the minimum wage, when has popular opinion decided truth in science?

I dunno, who said it did? You seem bothered by my unwillingness to take up defense of the status quo. Why would I care to do that - it's already the status quo! I'm much more interested in paring down the alternatives. Those arguing to go to remove it because a free market is better are selling snake oil.

[Aquamarine]

You are ignoring those other studies mentioned by Stigler. See also his lists of references.

More:
http://www.cato.org/tech/competitionandantitrust.html

[Zantra]

I think the problem is that too many of you are dealing in theory, and not practical application. People say "well minimum wage is a stepping stone" but If that stepping stone isn't stable (sssssssss) IOW, if you can't provide yourself the basic tools necessary to work AND improve your education or job skills to GET a better job, then it's not a stepping stone, it's a crappy job you're trapped in, for some people. We're talking about the bare minimum, basic living wage necessary to exist in this country. Just because someone has a minimum wage job, doesn't mean that they should have to live subhumanly, which is what some are advocating. I'm not a bleeding heart, but I still think a bottom line is necessary. I worked a minimum wage job when it was 4.25. I was still living at home. But even then if you'd told me I had to exist on that living on my own, I'd have laughed and left. And no matter what people's motivation, if they can't exist on a certain wage, they won't work for it. There's a minimum standard of living beyond which it becomes better to live at a soup kitchen for free than to work a job and not have enough food or money to get to and from work.

And to clarify the immigration comment, I'm talking about all the illegal immigrants that companies get away with paying minimum wage or WORSE because they CAN. If you eliminated all of those illegal immigrants, there would be a huge shortage of lower wage workers, and it would force companies to increase wages to remain competitive. Perhaps this is more true in California than anywhere else, but it's still a valid point.

If you claim that only high school students work these jobs, then there's a simple way to solve that- increase the minimum wage for full time workers only. Let the part timers earn less because of the inference they are students, and let the "breadwinners" or working adults earn enough to eek out an existence.Not to mention- the military has a "COLA" or cost of living allowance which is adjusted to acount for inflation. SO if the Military reconizes it for it's troops, why doesn't it apply to americans as a whole? questions that need answering.

[Gokul43201]

I can only see two consistent long-term stands on this issue :

1) Eliminate a federal/state mandated minimum wage, and let the free market do it's job
2) Raise the minimum wage periodically to roughly track inflation rates

Leaving the minimum wage at $5 doesn't make sense. For how long must it be at $5 ?

[russ_watters]

I think the problem is that too many of you are dealing in theory, and not practical application. And I think the problem is that too many of you are dealing in what sounds good in your head, and not practical application. :biggrin:

Gokul - you forgot the 3rd choice (the democratic position): raise the minimum wage much faster than inflation to make it a "living wage" (because it isn't now).

[Zantra]

I can only see two consistent long-term stands on this issue :

1) Eliminate a federal/state mandated minimum wage, and let the free market do it's job
2) Raise the minimum wage periodically to roughly track inflation rates

Leaving the minimum wage at $5 doesn't make sense. For how long must it be at $5 ?

According to the republicans, it's apparently until no one will do minimum wage jobs anymore because you have to work 4 hours to pay for a gallon of milk. Then they can just hire illegal immigrants to work for free in return for legalization or a driver license.

The main republican stance here, is that "I don't make minimum wage so it's not my problem if people that do these jobs aren't happy with it".

And when that same person mugs you, or gets your kid hooked on the rock because he can't feed himself on that job, would you care then?

[phatmonky]

According to the republicans, it's apparently until no one will do minimum wage jobs anymore because you have to work 4 hours to pay for a gallon of milk. Then they can just hire illegal immigrants to work for free in return for legalization or a driver license.

The main republican stance here, is that "I don't make minimum wage so it's not my problem if people that do these jobs aren't happy with it".

And when that same person mugs you, or gets your kid hooked on the rock because he can't feed himself on that job, would you care then?


I'm so glad to see generalizations are still running rampant in this forum.

[russ_watters]

I'm so glad to see generalizations are still running rampant in this forum. Well, it is much easier and more fun than posting an actual argument...

[HazZy]

clinton on minimum wage increases when he was running for his first term, "[it's] the wrong way to raise the incomes of low-wage earners." and yes, he was absolutely correct.

[Gokul43201]

russ, phat, kat, etc..

I'd really like to know if you disagree with my previous post...in the context of long term treatment of the minimum wage. It's clear what the left wants - they mostly want #2 in the long run. But from those on the right, I hear choice #1 mentioned, but in the context of leaving the minimum wage where it is. That seems inconsistent to me.

So, again, what would be the point of leaving it the way it is ? Eventually that'll turn the minimum wage into a vestigial organ or it will cause widespread outcry demanding a rather sudden increase that may well be undoable (because that would be disastrous).

russ, your comment on the 3rd option is noted, but that would only be a short term effect (until the minimum wage matches a "livable wage").

[Moonbear]

Gokul, reading through your above post made me realize something that I've been forgetting/overlooking throughout this entire discussion. There are also state-mandated minimum wages when states deem the Federal minimum wage is too low. It makes more sense to me for states to determine minimum wages, because cost of living differs quite dramatically from state to state. That Federal minimum wage isn't even going to come close to a living wage in New York City, but would be quite a bit closer in some rural part of the midwest. One nation-wide minimum wage can never be a living wage. The thing is, with the current minimum wage, a single person with no children can survive on it. It would need to be a no-frills lifestyle in a cheap part of middle America, but it can be done. If someone expects to raise children on a minimum wage job, then yes, there is a problem, but then they are the ones who should be seeking a job better than minimum wage if they expect to raise a family. So, as I've been thinking about this more, I think we should kick the minimum wage over to the states to determine, and it would be reasonable to set it such that it is a wage on which a single person with no children can obtain basic needs (a cheap apt, food meeting basic nutritional requirements, transportation to and from work, whether via bike or walking or mass transit or a cheap car depending on distance the cheap apts are from jobs), but they can do without the TV, cable, stereo, CDs, DVDs, brand name clothing, etc. If they want to have children, they need to aspire to something better than minimum wage, otherwise minimum wage is just welfare in disguise. This would have the added benefit that in states with low cost of living, small businesses would have a chance to grow without trying to match a "living" wage for a family of four in New York City.

[Zantra]

I'm so glad to see generalizations are still running rampant in this forum.


When in Rome...

It's a 2 way street. I've presented an arugment if you flip back a bit.. I'm getting writers cramp.. click on the back button :tongue2:

The main opposing stance is that "if people don't like minimum wage they should get better jobs"... That's the same as saying "if you don't like paying such high taxes you shouldn't like in america"

Again, not dealing with issue, just pushing it under the carpet.

[russ_watters]

russ, phat, kat, etc..

I'd really like to know if you disagree with my previous post...in the context of long term treatment of the minimum wage. It's clear what the left wants - they mostly want #2 in the long run. But from those on the right, I hear choice #1 mentioned, but in the context of leaving the minimum wage where it is. That seems inconsistent to me.

russ, your comment on the 3rd option is noted, but that would only be a short term effect (until the minimum wage matches a "livable wage"). My point was that I don't think either 1 or 2 accurately reflects the position of either side. For #1, I've never heard of anyone who wants this. #2 better reflects the Republican position than the Democratic one. My #3 is the Democratic position. And it wouldn't be a "short term effect," (sure, it would require passing only one law, but that's missing the point): it would be permanent, and its consequences to the economy would be permanent.

[phatmonky]

russ, phat, kat, etc..

I'd really like to know if you disagree with my previous post...in the context of long term treatment of the minimum wage. It's clear what the left wants - they mostly want #2 in the long run. But from those on the right, I hear choice #1 mentioned, but in the context of leaving the minimum wage where it is. That seems inconsistent to me.

So, again, what would be the point of leaving it the way it is ? Eventually that'll turn the minimum wage into a vestigial organ or it will cause widespread outcry demanding a rather sudden increase that may well be undoable (because that would be disastrous).

russ, your comment on the 3rd option is noted, but that would only be a short term effect (until the minimum wage matches a "livable wage").

Bring it back to a states rights issue, including the ability for each state to choose NOT to have a minimum wage if they wish not to.

[russ_watters]

Bring it back to a states rights issue, including the ability for each state to choose NOT to have a minimum wage if they wish not to. While I don't share this opinion, there is a good logic to it: the cost of living and cost of employing is different everywhere and a national minimum wage doesn't reflect that.

[Locrian]

You are ignoring those other studies mentioned by Stigler. See also his lists of references.

More:
http://www.cato.org/tech/competitionandantitrust.html


What other studies? He mentions a few facts, such as taxi drivers and the problem with anti-trust, but these are not studies. What list of references? He has further reading at the bottom, but he doesn't reference hardly anything, and certainly doesn't have a citations. Some of those are followups (such as the Kessel paper, maybe?) but since they aren't correctly cited it takes reading to be sure.

If this was supposed to convince me that our economy is a pure market system without govt intervention, it is not working. Judging by the front page of the Oct 18 Wall Street Journal, I'm not the only one having serious doubts. I still object to the constant references to "letting free market" do the price setting in this thread, because I don't necessarily believe it will run efficiently (and I am certain they are implying that). How is discussing anti-trust legislation (which does not apply to oligopolies) going to affect my opinion there?

Sorry its taking so long to reply, hopefully my typing be back to normal soon.

[Lawrence Albano]

I don't believe there should be a minimum wage at all. The free market should decide "minimum wage." The minimum wage is $5.15/hr, but honestly who really gets paid this much? Hardly anyone. Even teenagers who work at McDonald's get paid higher than that because the labor markets have decided a wage that is higher than 5.15/hr. Raising minimum wages wouldn't cause inflation, however, unemployment may increase.

I am sure all the illegal mexicans will eat that up! Then the americans unemployment rate will be like 20%

[Aquamarine]

I am sure all the illegal mexicans will eat that up! Then the americans unemployment rate will be like 20%
Maybe since the economy has severe atherosclerosis due to reduced capitalism, for example regulations like minimum wage and benefits like social security.

It sure didn't happen during the more capitalistic nineteenth century when an enormous amount of poor people emigrated to the US.

[Aquamarine]

What other studies? He mentions a few facts, such as taxi drivers and the problem with anti-trust, but these are not studies. What list of references? He has further reading at the bottom, but he doesn't reference hardly anything, and certainly doesn't have a citations. Some of those are followups (such as the Kessel paper, maybe?) but since they aren't correctly cited it takes reading to be sure.

If this was supposed to convince me that our economy is a pure market system without govt intervention, it is not working. Judging by the front page of the Oct 18 Wall Street Journal, I'm not the only one having serious doubts. I still object to the constant references to "letting free market" do the price setting in this thread, because I don't necessarily believe it will run efficiently (and I am certain they are implying that). How is discussing anti-trust legislation (which does not apply to oligopolies) going to affect my opinion there?

Sorry its taking so long to reply, hopefully my typing be back to normal soon.
It was you who introduced oligopolies and monopolies as examples of market failure in this thread about the minimum wage. This had nothing to do with the minimum wage except for guilt by association.

From the article, which since its primary audience is the public has an easy language and less than perfect reference list (But still usable):
Several kinds of evidence suggest that monopolies and small-number oligopolies have limited power to earn much more than competitive rates of return on capital. A large number of studies have compared the rate of return on investment with the degree to which industries are concentrated (measured by share of the industry sales made by, say, the four largest firms). The relationship between profitability and concentration is almost invariably loose: less than 25 percent of the variation in profit rates across industries can be attributed to concentration.

For somewhat more scholarly articles:
http://www.cato.org/pubs/pas/pa021.html
http://www.cato.org/pubs/pas/pa405.pdf
http://www.mises.org/journals/rae/pdf/R3_4.pdf
http://www.cato.org/pubs/journal/cj20n3/cj20n3-3.pdf
http://www.cato.org/pubs/journal/cj6n3/cj6n3-5.pdf

For a more easy read, the history of the Sherman Act:
http://www.mises.org/journals/scholar/DiLorenzo%2EPDF
http://www.cato.org/pubs/journal/cj9n3/cj9n3-13.pdf

More:
http://www.cato.org/tech/competitionandantitrust.html
http://www.mises.org/fullstory.aspx?control=328&fs=mises.org+on+microsoft+