Talks on Minimum Wage

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People tend to believe that government must fix the minimum wage level for any task, and they should increase the amount timely. We used to have various discussions when I was in college. We do study for years with a large amount of economic investment? And what we get? A job of 12 thousands salary per month? (around 15 thousands in discussion nowadays). It will take 3-4 yrs only to earn the spent money and do not know when to save the amount that was invested. Then whats the use of studying years spending hundred thousands of sum? Therefore the government must make the minimum wage/salary laws: this was what used to be the conclusions of most of the discussions.

But after my college, there have been more discussions about the minimum wage laws and increasing the amount. Unions organize various strikes for the issue, political parties supported the strike. Surya Nepal Private Limited had  to shut down the company permanently because of the strike organized by the unions. There are many other examples shut down of industries because of the disharmony between the employee and employer in Nepal.

I was just going through an article: Minimum Wage Laws: Sabotaging the Ladder of Economic Opportunity . I thought this is just the issue we go through many of the times, motivating me to write this content.

Anybody establishes a firm with the purpose of making profit and runs the firm to make better profit. The firm may be different, service may be different, strategy may be different, but the final motive is always making better and better profit may be in terms of money, share, goodwill or any other they believe to be profit. Every will be doing it, including me. And this particularly in not an offense. Every body have the right to make his living without coercing the right of other.

How does an employer hire employee? How does he pays?

The factor that matters to any businessman is profit. He does not bother to hire more and more workers until and unless he thinks he can make better profit from the hiring. Better profit may include the better working efficiency or the better efficiency to salary ratio. I believe nobody bothers to pay more if he can make more from him. The employer never hires men for $10 to have the output of $9.99 (just for an example), he would rather not perform the task. But I believe he would be pleased to pay $15 for the output of lets say $16, that makes him profit.

What’s bad in Minimum Wage and what’s good?

What’s good? Employee gets better salary for their job.

What’s bad? Employers get less attracted in hiring the manpower. Cut offs of job. Increase in work pressure. Unemployment increase. Unexperienced get lesser chances to get the first job. Production cost increase. Cost of the product increase.

What in my view :

Many high school students come to me and ask a question: Which subject has a better scope? Which subject shall I study and/or try to study? I generally answer: “There’s no relation in the subject you study and the altitude you reach after the study. The same study has made people earn 4 digit salary and the same study has made people earn 6 digit earning and this occurs regardless of the subject you study. What height you receive in your career depends on our own ability regardless of the study or profession you choose. Therefore, its better you choose your field of interest”. This however is not the answer I made myself. I know this because I had once the same question and had got similar answer.

Regarding the minimum wage: Its only the job of union leaders, so that they get an issue to get support of the existing labors and bargain management. Political parties favor them to get the votes. Of course increment of earning of workers in itself is good but what comes up along with it should never be blinded. While completing a cycle, I see no profit to the low income people themselves. Its just the numeric value increase not the living standard while completing a cycle. (Cycle: Minimum wage increase — cost of production increase —- cost of product increase — consume the product in increase price). Only the thing that happens in between is the Government collects higher tax and this is fruitful only for a corrupt leaders and government. I would better prefer in increasing the skills of an individual so as to be able to increase the earning.

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Understanding Rights

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I have found no person uninterested about “Rights”. When I was a kid, I was taught in the school about the three fundamental rights : Food, Clothing and Shelter. Neither my teachers felt necessary to let me know about how they get fulfilled nor had I any interest in knowing. I had just considered those 3 aspects of life as fundamental rights. Nowadays, people have added many things in the list like: Water, electricity, education, health, speech, information, employment, recreation, reservation etc according to the society they are inhabiting and according to their convenience. Many of the times we have answers rumbling around us, but we remain unanswered. On going through “Man’s Right” by Ayn Rand, it was the first time I get a clear picture.

“At whose expense?”, the question by her, struck in my head deep. At whose expense should one be provided with food, clothing, shelter or any other so called rights. Who is responsible for “Right to life” of a man?, he himself, the government or other third party? In the article, Rand clearly illustrates: “the right to life means that a man has the right to support his life by his own work (on any economic level, as high as his ability will carry him); it does not mean that others must provide him with the necessities of life.”

Similar for the case of property and speech respectively as: the right to property means that a man has the right to take the economic actions necessary to earn property, to use it and to dispose of it; it does not mean that others must provide him with property. The right of free speech means that a man has the right to express his ideas without danger of suppression, interference or punitive action by the government. It does not mean that others must provide him with a lecture hall, a radio station or a printing press through which to express his ideas.

This helped me to understand the right of an individual more clearly. I am completely convinced with Rand about the only one fundamental right i.e. man’s right to his life (this entails his freedom to act on his own judgement, for his own goals, by his own voluntary, un-coerced choice) and all other entities to be the consequences and corollaries of his action. One has the right to education, it does not mean he should be given it freely. Every goods and services should be produced and if some man are entitled to by right to the product of others, it means the producers are deprived of their right. Taking the goods of others in free is stealing and make others provide service in free is enslavement. And nobody has the right of stealing or enslaving others. The conclusion is rights does not mean getting goods and services in free, right refers to get those through voluntary exchange in between.

What about the government? We pay the tax and in return the government should provide them in free.

Is it? I am not convinced.

What is the source of income of the government?

Tax.

Who Pays?

Economically active citizen.

Who receives?

Shared Amongst all for common good.

Then theres some questions. Are not economically passive getting the output of the toil of others? Isn’t it an enslavement?

Who gives the government authority to collect tax? They take them from coerced policy and law. Isn’t it stealing to take the outcome of others by force wherever they use? Isn’t stealing a stealing if its for noble purpose?

Then how can a government run to provide the facilities to people? I now say, why should the government provide the goods and services produced by others? The producers shall manage them. We all know how better we care and manage our property comparative to others.

Then whats the role of government? The answer is simple “Protect the rights of its citizen” through rational rule of law and voluntary exchange of the service.

In general, we have always been expecting the government to take better care of us and provide us the every goods and services. But being rational, we must think “How it comes?” I say – I no longer need the care of the government if it comes from theft. Being a man, I believe in myself that I have the ability to have my living on my own strength. I can support myself from voluntary exchange of my skills, knowledge and toil. In fact, each of us can, and most of us are doing so. Understanding rights helps to change our attitude regarding how we live our life. I just want to leave a question at last: “Do we want to enslave others and/or steal?

What is liberty and why all laborers should demand it over socialism or communism

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I find it really convincing…

Brian By Experience

The core pretense to liberty is that you own yourself.

That is you own your body and the fruits of its work.

  • If those fruits are sweet, then you enjoy the sweet fruit of your labor.
  • If those fruits are bitter or rotten, then you wallow in the fruit of your labor.

Understanding that, you will understand that it isn’t just buyer beware, it is seller beware. That is, you could, without knowing any better, undersell yourself. Oops. So as the seller, you got both the bitter and sweet fruits. Learn from it, and do better next time. However the buyer also has the same risk. He could accidentally over pay for the goods or services, then oops.

If I am paid to make a painting, should I get paid every time that it resells?

(legalese calls that royalties. I call it sponsored thuggery.) If I had in my contract that…

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The Government needs to stop acting like God.

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No matter how noble purpose it is… a theft is a theft… either be it the person or the government….

Brian By Experience

When God does something for you, it is from the riches of his realm, but when man does something for you, find out if it is from his wealth, a wealth given to him, or stolen wealth.

Many times the services that you receive from your fellow man, is actually ill gotten goods or services. War on hunger creates hunger because the money that would be spent on my family is now taken in taxes and given to another. The war on poverty creates poverty because the money which I would have used to create jobs, or created wealth, is taken and given to those who create neither. The war on drugs creates life time drug addicts, because they now have a criminal record, they are less employable, and more susceptible to doing worst drugs as a result.

We are talking about here is Man trying to be a sufficiency…

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Culture of blames

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Blaming others has always been easy excuse from the personal weakness. I remember my leadership training, where “Sen. Raj Bimal Shrestha”, focused on one sentence “Every Excuse Are Lies“. This has always been my motivating factor to seek better opportunities, to compete and to lead, wherever I have been afterwards.

The “Culture of Blames” has become a great disease in context to Nepal. I even think I would have been victim of it, if only had I not attained that training. I consider myself lucky enough in this regard.

Every day, I meet the victim of this disease in my surrounding and most prominently in the “Facebook”. Being surrounded by the diseased ones of-course is an unpleasant feelings, but it’s a truth.

Our bureaucrats and politicians have become corrupt and they no more care about the nation and public. The political transition and government inconsistency has led the investors fear to invest. Educated unemployed population is increasing. Cost of goods and services has increased. Poverty increasing. Loadshedding increasing. Scarcity of water increasing. Inappropriate Labor Cost. Etcetera.

I consider these are all the blames. The blames to hide ones weakness and failure. May be true, but they are not the excuse that you are unemployed or your business is getting down, or you are paid low. I believe “The day You Stop Blaming Others Is The Day, You Begin To Discover, Who You Truly Are“. I do not find it convincing that you do not have the skills to get employed and you blame others or you lack the skills to paid enough and you blame others. Complete a degree has never been the completion of the criteria to get employed in the job you want. You must look at yourself, why you are unemployed even after completing your education in spite of blaming others.

It was your fear, that you could not start you business or your inability to convince the investors to invest in your business. You did not had the courage to start risk your capital or you lacked the confidence for it. Its your fault that you fail. You cannot blame others not even the government for you not being able to earn.

It was your fault that you only saw an opportunity in the water scarce area. It was your fault you depended on “Nepal Electricity Corporation” solely for electricity. It was your fault to be not able to penetrate the corrupt system to do what you wanted.

I simply believe “If we realize what we are capable to do in the given environment, and be responsible of the good and bad of own inspire of blaming others, then we will never fail“. We need to kick off the Culture of Blames, if we want to succeed. Blaming others never gonna change any thing.