Tuesday, November 08, 2005

Minimum Wage is Wage Control

Wages depends upon the contract between employee and business owners, whose interests are not the same. Employee want to be paid more and business owner want to give little.
Supply and Demand dictates wages.
If there's more employees than jobs, wages will be down. Jobs that have limited qualified employee pool pays more. If jobs are plentiful, wages will go up to attract employees.
Morally, wages should not be below the amount sufficient to maintain a family of 4.
The main goal for all Filipinos, employee and business owner is job creation to increase 'revenue and stock which increase national wealth'. More jobs create more wealth, not a set of numbers to pay for those already employed. The number one jobs creators are small businesses. Minimum wage is a small business owner's clutch to pay within the limits of the law, not what the job is worth.
Minimum Wage removes business owner decision - how much to pay and how many to hire - to run his establishment. Owners will employ family members to save on capital or do it himself. Owners will hire 1 instead of 2 to do the work of 2 to save on capital. Adam Smith's Division of Labor theory for prosperity do not apply if one employee is doing 2 skills or Owner does what a hired hand should do.
Division of Labor is specialization for skill improvement to increase productivity.
In the end, all employee potentials and owners do not gain more 'revenue and stock' to increase national wealth.

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