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A labourer is human. He and his family must be kept alive. They have a finite minimum level of basic needs which must be supplied to keep them alive and sane. To buy these needs, the labourer must receive a definite minimum wage. His cost per hour or per piece cannot be less than that which, when multiplied by the maximum number of hours the labourer can work or by the number of pieces he can make per week, equals this minimum wage.
If his hourly or piece rate falls below this level, the number of hours per week he must work must go up. Else he and his family will starve.
The minimum wage is therefore a natural socio-economic quantum whose existence does not depend on whether or not it is recognised by the political régime which holds power within a given socio-economy at any given time.
This economic quantum is not a single, sharply defined amount of money which supports a single, sharply defined standard of living. Its level depends on exactly what is meant by the very subjective word 'need'. Being subjective, the word 'need' must be qualified in order to be meaningful. It demands that we ask the question 'need to live on in order to support what quality of life or level of well-being?' Being a minimum wage, it must be supposed that its size is the minimum necessary to achieve the minimum acceptable quality of life. So what is the minimum acceptable quality of life? On this matter, as far as I am able to see, officialdom is silent. I shall therefore suppose, reasonably I think, that it falls somewhere between the following limits.
But how much a labourer is actually paid is decided entirely by his employer (and the legislation of his capitalist employer's puppet government). The labourer himself has no say in the matter. His employer, whose mind is steered by the self-seeking tenets of capitalism, naturally pays the labourer as little as he can get away with. Recently and fortunately, the depth to which this can sink has been limited by a legal Minimum Wage.
I am led to believe that the Minimum Wage is set by a team of government economists. They try to think of all the things a low paid labourer 'needs' to live on to give him what they see as an acceptable quality of life. But highly-paid government economists have no personal experience of long-term existence on a low wage. They have no mental frame of reference against which to measure the fundamental needs of human life. In trying to do so, they are no more than blind speculators, amateur theorists. Their arithmetic cannot take account of what it is like to lack things which they take for granted to the extent of never consciously having had to consider what it would be like to lack them.
Presumably, these economists start from nothing and proceed to make a list of all the things they think a low paid labourer 'needs', just as they do when working out what 'the law says' the unemployed 'need to live on'. If they happen to forget - or they neglect to consider - anything at all, the Minimum Wage is bound to be set lower than it should be. It could never be set higher. Consequently, what the labourer actually receives as the minimum sustainable wage is unlikely to be anything like the amount necessary to support the quality of life the economists had in mind for him. It can only ever be less.
A minimum wage is paid to an individual. He receives the same amount irrespective of the number of dependants he has. At the time of writing, the Minimum Wage is £3.60 an hour. This is £135 for a normal 37½ hour week. Despite my high-demand leading-edge skills in information technology, having been unemployed for 10 years, I could never hope to 'earn' more than the Minimum Wage.
At the time of writing (June 1999), my state welfare is £157.25 per week for me, my wife who can't work and our two teenage sons who are both still at school.
I thus get 16½% more on state welfare than I would by working a full week. If I still had a mortgage, this percentage difference would be even greater.
It is my State welfare level which is the amount 'the law says I need to live on', not the Minimum Wage. Consequently, if I were working, the DSS would have to 'top up' my minimum wage by an extra 16½%. This 16½% is ultimately provided by the generic taxpayer. It is not difficult to see that consequently, the generic taxpayer is subsidising the wage bill of my employer, and thus, in effect providing him with an element of profit which is not being 'earned' by his enterprise. The capitalist's business is being propped up by the taxpayer. Thus it is, as always, the capitalist who is really free-loading on society.