Does minimum wage work in a capitalist society?

[SubcomandanteJames]

Recently I've been reading up on the idea of "minimum wage" apparently having no true purpose in a capitalist society. Currently I am taking an advanced Macro-economics class, and a theory being proposed is that in capitalism, minimum wage establishes an "invisible line" in the production/consumption graph which doesn't truly (or for any substantial period of time) better a people's living standards because its under-capping of how much one can be paid only raises the price of living in return. I was wondering if anyone could either contrast or qualify this economic theory.

Several issues I have with: If this is true, that minimum truly serves no purpose except to act as a kind gesture with no true results, then this only furthers my opposition of capitalism. There is no question that minimum wage jobs must be held for the society to function, yet they are not able to (nor will they ever be able to apparently) be a livable wage.

However, this minimum wage question also re-proposes the question... how can a capitalist society ever truly improve the standard of living for all members of its society (if this theory on minimum wage is true) without exploiting the poor (often unseen because this takes place in foreign nations often, in the means of production)?

Any arguments for or against minimum wage in capitalism? Is the theory true, or questionable? And for that matter, is minimum wage just a bastard child of reformism? If minimum wage does little to nothing, then does it only postpone a worker's revolution?

:confused: :confused: :confused:

Thanks everyone.
-James

[Psy]

Minimum wages counteracts (to a extent) the devaluation of commodities since lowering the labor value of a commodity leads to its devaluation in the marketplace through competition, for example if capitalists can reduce wages by $100 it would eventually lead to the commodities they produce to devalue by $100.

[Zolken]

Minimum wage is perfect for capitalism, while socialism aims to destroy the wage-scale altogether.

[SubcomandanteJames]

Minimum wage is perfect for capitalism, while socialism aims to destroy the wage-scale altogether.

Perfect for capitalism as in helping workers in the mode of capitalism or helping capitalism, and not the workers?

Again, if you disagree with the theory that was being proposed to me, please counteract it with some economic evidence so I have something to go by.

[mreyda]

There is a false idea that raising wages in turns raises the cost of living by raising the cost of the good produced. This would be true if the price of goods was determined by the wages paid to the workers who produced them. (If this were true the cost of living would have been going down for the last 30 years, as wages and working conditions have been whittled away.)
The price of a consumer product is a function of the amount of labor required to produce it, the demand for the good, the supply of the raw materials and/or the good itself, and the price required for a producer to turn a profit. The last is the least important. If the going price for a good is not enough for a producer to turn a profit, he will simply stop producing it.
If the minimum wage rose enough that an individual capitalist manufacturer was no longer turning a profit, he would either find a way to produce more efficiently or stop producing that good in the quantities he is producing currently.
An increase in the minimum wage is the result of the growing strength of the working class and is a redistribution of surplus value, even if it is a small one, in favor of the working class. And a higher minimum wage does lead to an increased standard of living for the working class.

[Zolken]

Perfect for capitalism as in helping workers in the mode of capitalism or helping capitalism, and not the workers?

Again, if you disagree with the theory that was being proposed to me, please counteract it with some economic evidence so I have something to go by. Perfect as in the sense that the wage-scale is a vital part of the machinery which maintains the dominance of the capitalist system. Greed and the spirit of competition are twin pillars of capitalism fueling the incentive of wage-increase by which one strives to surpass co-workers in terms of wealth and status. Give a ditch-digger a 50-cent raise and suddenly he thinks himself a better man than he was the moment before. Thus the importance of a standardized wage in a socialist society.

[New Tet]

Perfect as in the sense that the wage-scale is a vital part of the machinery which maintains the dominance of the capitalist system. Greed and the spirit of competition are twin pillars of capitalism fueling the incentive of wage-increase by which one strives to surpass co-workers in terms of wealth and status. Give a ditch-digger a 50-cent raise and suddenly he thinks himself a better man than he was the moment before. Thus the importance of a standardized wage in a socialist society.

What are "wages"?