HOW are rich people exploiting less-rich people? (me)
The people in power do everything they can to keep wages down. Minimum wage doesn't keep up with inflation. Pensions went away in favor of the 401(k). Unions are losing their power. A manufacturing job used to buy you a house, car, and help you raise your 2.5 children. Now, it barely gets you an apartment and a bus pass.
But the real exploitation is how the rich have convinced the poor that it's not their fault. "It's those damn, dirty Mexicans stealing jobs!" Or telling them "Hey, we'll give you a pay raise if you give us some tax relief!" or that if they want the house, they need to get a real job or something like that. Manufacturing jobs are non-skilled and don't deserve anything over minimum wage!
Of course, it's all lies, but some people eat that shit up like candy. That's the exploitation. They're fucking the poor and successfully directing the blame somewhere else.
Wages are set by the market through supply and demand
But the low-skill, minimum wage jobs? No. Those wages are effectively set by the government. Every time an employer hires someone at minimum wage, they're really saying "I would pay you less if I legally could." And that's where the rich are making sure minimum wage stays low.
In any case, without a minimum wage, low-skill wages become a race to the bottom as people become more and more desperate for work. Someone might be willing to work for $1/hour because they're fine living in a cardboard box behind their workplace and eating scraps from the garbage.
But that only allows income inequality to worsen. The rich get even richer as they sit back and laugh as the employees essentially auction themselves to lower and lower wages. Upward mobility dies as the ability to seek extra education and training disappears because you gotta work 100 hours/week just to survive.
So yeah, I suppose minimum wage breaks supply and demand for wages, but I'd argue that's a damn good thing.
I agree the person who would work for less might even be the person taking the minimum wage job.
I disagree that this decreases class mobility though. Lowered labor costs mean lower barrier of entry to starting your own business. There’s a floor to how much it costs to start a labor dependent business and it’s based on minimum wage. That means you need substantial capital to get started. Also, lower wages means lower prices which disproportionately benefits poor people.
Hogwash. Are you sincerely arguing that an hour of work doesn't produce $9-15 (or whatever the minimum wage is, plus other overhead) of revenue for the company they work for?
The only time the market will consume more labor because its cheaper is if the amount of labor they already had was already insufficient, in which case if they really needed more people, they would have already hired them.
If labor were much cheaper, I personally might be willing to hire a maid, a gardener, a masseuse, a cook, etc. Similarly a retail business might hire more cashiers, or have more staff on the floor to answer customers questions and help them find things. A gas station might provide a full service experience for their customers. You could do this analysis for virtually any type of business and given cheaper labor they would hire more people.
Why is this so? Because the demand for labor, like goods, is infinite.
Why is that a lie? If literally anyone can do the job and the potential supply for that job includes nearly everyone in the labor market, why would we expect that role to pay more than the bare minimum? At the end of the day people get paid as much as it would cost to replace them.
> A manufacturing job used to buy you a house, car, and help you raise your 2.5 children. Now, it barely gets you an apartment and a bus pass.
The message was more about the lower buying power of a manufacturing job and minimum wage of today versus a few decades ago.
There was maybe a very brief historical moment when that was true, but I don't think it was ever the case; industrial capitalism has always been strongly grounded in the economic insecurity of the working class.
By getting monopsonies (or oligopsonies) and making you receive less from the things you sell. (Like in combining labor prices, and non-poaching agreements.)
By taking public property or outright coercing you into a less desirable outcome. (Like taking the tax you pay, or buying laws.)
Way too many (too many to ignore) rich people got rich by doing one of the above. And even some that did get rich honestly end-up doing that once they have the power.
>Business owners exploit the basic human need for food and shelter to underpay low-skill workers.
You could equally (and wrongly) say that workers exploit businesses basic need for labor. It's economic nonsense.
https://en.wikipedia.org/wiki/Wilbur_Ross#Investments https://www.forbes.com/sites/michelatindera/2017/01/18/how-w...
https://www.cnbc.com/2018/03/02/wilbur-ross-tariffs-are-nbd-...
If you are a holder of a Consumer Staples ETF (which holds Campbell Soup stock) in a retirement fund, is Wilbur Ross taking out of your pocket and putting it in his by using his personal connections with Trump and position as Commerce Secretary?
Is it truly for American competitiveness or is it going to benefit ArcelorMittal and Wilbur Ross's connection with them?