Raising minimum wage...how is this supposed to help?

[Christien]

Originally posted by Racerbvd
"The problem with America is stupidity. I'm not saying there should
be a capital punishment for stupidity, but why don't we just take the
safety labels off of everything and let the problem solve itself"

1 word: lawyers.

[fastpat]

Originally posted by Rick Lee
Why in the world should anyone be guaranteed a min. wage by law? If you can't live on min. wage, then you work harder or smarter to get ahead. If you can't, that's too bad. Life is hard on stupid people. Everyone should have the right to fail.

The first and last time I was paid minimum wage was when I was 13 years old and worked in a Laundry-Dry Cleaning store taking in dirty clothes over the counter. I knew nothing about retail, learned to make change properly (this was long before credit cards and ATM's), and so forth. I didn't deserve the minimum wage either, but they had to pay it.

I've never been paid minimum wage since, and don't know anyone of working age (16+) that has either. The whole sob story of folks trying to raise families on minimum wage are utter garbage.

[Flatbutt1]

We just lost nearly 40 university educated, very high 5 figure salary professionals from our office. Very scary indeed. But I've heard from a lot of them that they've already found new jobs(albeit with a slightly lower salary) . Two younger guys w/out family responsibilities are working at Home Depot because they have that option. But none of them could make it on minimum wage. Further none would choose to do so.

Sorry to say but if you have a family you'd better get your azz in gear 'cause MW isn't gonna git it.

[SlowToady]

Just because minimum wage is raised doesn't automatically mean everything is going to skyrocket in price, ie runaway inflation. Sellers can ONLY charge what the market will bear, if they want to stay in business. So if they have to pay everyone more, and increase consumer prices to help offset that, they can only increase prices so much. Someone mentioned movie tickets. Well, they can only go up so much, and if they do go up, if you still pay it, well then what's the problem; you got at least what you paid for. The marginal benefit was obvioulsy worth the marginal cost. Also, they could try new (or modified) methods of Price Discrimination to offset costs. If increasing consumer costs doesn't completely make up for the increase in wages, then the business also has to learn to be more efficent, which isn't bad. Efficency is key is business.

Wage raises aren't all bad, either, since studies show that those in lower income brackets have a Marginal Propensity to Consume of about .8; that is, they spend 80% of whatever increase in wages they receive. More taxes money, more sales, etc. If the MPC is .8 then the Marginal Propensity to Save is .2, so they are saving 20% of their increase in wages. This increases the available supply of loanable money to lending institutions, and increases the lending institutions ability as an aggragate to create money.

And, let's say some inflation did set in. That's bad for lenders, not borrowers, which most of us in this discussion are. The money you are paying back is worth LESS than the money you borrowed, so you're getting whatever it is you took the note on cheaper. Besides which, wages generally adjust with inflation; not necessarily in lockstep, but usually close.

There are good arguments both for and against Minimum Wage. And if you're against it solely on the grounds of "The man regulating the free-market," there are a LOT of other issues to be discussed on that front.

[fastpat]

Originally posted by SlowToady
Just because minimum wage is raised doesn't automatically mean everything is going to skyrocket in price, ie runaway inflation.

That's true, and of course, that's not the worst problem with minimum wage by any means. It's biggest problem is that it hurts those that it's supposed to help, because it causes some of them to lose their jobs.

[Nathans_Dad]

Originally posted by SlowToady
Just because minimum wage is raised doesn't automatically mean everything is going to skyrocket in price, ie runaway inflation. Sellers can ONLY charge what the market will bear, if they want to stay in business.

Ding ding ding!! Now then...take the next step and say "And if they can't charge enough to pay the worker they have to fire the worker."

See how easy that was?

[SlowToady]

Originally posted by Nathans_Dad
Ding ding ding!! Now then...take the next step and say "And if they can't charge enough to pay the worker they have to fire the worker."

See how easy that was?

Unless, as Wayne says, the push is "merely symbolic" and won't accomplish much, in which case this whole discussion is akin to pissing in the wind.

Does anyone have any data that shows how consumer prices change as minimum wage changes?

Are consumer end costs going to rise so much that people stop buying the goods/services and have to layoff workers?

Also, I think I made a point of saying that about 80-90% of the increase in wages is spent, at various venues, and might even balance things out, as a whole. And that about 10-20% of it will be saved, increasing the amount of money available to lending institutions with which to increase the money supply.

Since I'm obvioulsy a dolt, what's the "ding ding ding next step" program for that?

And, how about a decently reasoned reply, instead of some emotional outburst such as "well I worked so hard.." and this and that. Or how no one ever gave you anything, ever, so no one else should get anything, either.

Have a good day

edit()

I guess what I'm trying to say is that I just don't believe that an increase in the Minimum Wage, which happens every few years I'd guess, is going to bring about mass jobless-ness and runaway inflation. Especially since most states have their minimum wages set above Federal level.

edit2()

Hmm...50% is a pretty large increase...I figured we were talking like 50 cents or something, like usual. That almost a $2.60 raise...hmmm.

[legion]

In 1998-2000, there was a labor shortage around here in minimum-wage-type jobs. Unemployment had dipped below 1% in the county, and there was no one to be had stuffing gorditas at Taco Bell.

Funny thing happened. Signs for $8 an hour appeared on all of the fast-food restaurants, and they were offering BONUSES for each month people stayed on. Prices did rise modestly and staffs were smaller than they had previously been.

Within the next two years, there was an influx of recent Mexican immigrants to the area. (I have no idea their collective legal statuses.) Wages came down, sizes of staffs increased, prices came back down.

[wludavid]

Originally posted by Nathans_Dad
Ding ding ding!! Now then...take the next step and say "And if they can't charge enough to pay the worker they have to fire the worker."

See how easy that was?

Not necessarily. That's one possible outcome among many. If you consider that a business owner wants to do as much business as possible (sell the most widgets, do the most oil changes in an 10 hour day) he will hire the workers necessary to do that. If the labor cost goes up X%, there's no reason to assume the owner will fire people. If he has fewer employees, he can do less work and earn less revenue. Instead, he'll pay the workers more and either take a hit in profits (or CEO compensation), or try to pass increased costs to his customers.

And before anyone ding-ding-dings me, we should remember that there are industries that are HIGHLY competitive even in a market with increasing costs -- airlines are a great example.

[Superman]

Originally posted by Nathans_Dad
Wow, I must be seeing things...

Since 1973 there have been multiple minimum wage increases, the minimum wage in 1973 was $2 an hour. The poverty rate was 11%.
Ten minimum wage increases later the minimum wage is now $5.15 and the poverty rate is.....12%.

Never mind, THIS time it will work...I swear.

Yeah, you are seeing things. You're seeing what you WANT to see. Truth is, $2 in 1973, adjusted for inflation, became $8.83 in 2005.

[Superman]

Originally posted by SlowToady
Supe, do you mind if I PM you?

I tried to PM you. Your box is full.

[Superman]

Originally posted by JSDSKI
Seems like minimum wage earners will just get a little more spending money. Probably a wash in terms of stimulating economy, adding a bit in tax revenue, and increasing business expense.

They don't make enough money to save. So yeah, this is EXACTLY the right group to give money to. They will immediately spend it, which will stimulate the economy. By contrast, and contrary to what you have been led to believe, tax breaks for the wealthy are spent on........Wall Street.

[Superman]

Originally posted by Tim Hancock
So what's next.....raise minimum wage to $20/hr? I bet that would really jump start the economy? Govt mandating pay scales is just wrong period.

Quite frankly, this would be a good idea. Sure, I like freedom as much as anyone else. I also like aspects of capitalism, including and especially its self-leveling of supply and demand. Opportunity. And....I don't support gubmit regulation where it is not appropriate. But.....

Once again, it is widely believed that with every worker who earns less than around $15 per hour, your tax money is making up the difference. Either with health care, or transportation (your taxes pay for public transportation), food stamps, housing assistance, etc. That wage (about $15 per hour) is where a person can reasonably expect to "pay their way." Nearly every job that pays less than this.....is a drain on your tax money.

[Moneyguy1]

Supe..

But will the average reader "get it"?

Wealthy people do spend more money, but not all they save. It goes into the market and not into the mainstream economy.

It is almost like the "privatization" of Social Security. How can a person spending every penny on housing, food, clothing and other necessities be expected to invest? Those of us with excess income (descretionary funding), it is difficult to understand that quandry.

[Superman]

Originally posted by cool_chick
If it's raised, they won't qualify for government handouts. It'll save all of us money.

It'll shift the burden away from gubmit social programs. Either you guys are serious about that goal, or you are not.

On a related note, we are moving toward the day when products' selling prices include the full cost of creating and selling the product. It was sweet when manufacturers could walk away from the land it had polluted. But then the gubmit had to come in and clean it up. All those $1.29 widgets should have cost $1.59.

Same here. The employers paying workers $5 per hour are gubmit-subsidized businesses. Drive down fast-food-row and view those businesses as being seriously subsidized. Free market? Let's try it! Only let's let "market" pay it rather than shift costs to gubmit.

[Superman]

One more thing. Bryan and Len are using the "sky is falling" argument, as are a number of Republican members of Congress. As we all know, the Republican Party is the Party of Industry. And the Democratic Party is the Peoples' Party. Unless you have been fooled by the propaganda.

No, a modest hike in the federal minimum wage is not going to cause the sky to fall. It will not cause the Earth's orbit to decay, dooming us to a fiery death. It will not destroy the economy. It will save taxpayer dollars, and it will stimulate the economy. But unfortuately, if the R's don't play the chicken-little card, then they will blow another opportunity to ask for tax breaks for business.

[Superman]

For your consideration, here is an excerpt from an article today. It discusses Washington State's minumum wage, which is probably still the highest in the nation and may always be, since it is now indexed to inflation:

"Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more."

[Racerbvd]

Originally posted by SlowToady
Unless, as Wayne says, the push is "merely symbolic" and won't accomplish much, in which case this whole discussion is akin to pissing in the wind.

Does anyone have any data that shows how consumer prices change as minimum wage changes?

Are consumer end costs going to rise so much that people stop buying the goods/services and have to layoff workers?

Also, I think I made a point of saying that about 80-90% of the increase in wages is spent, at various venues, and might even balance things out, as a whole. And that about 10-20% of it will be saved, increasing the amount of money available to lending institutions with which to increase the money supply.

Since I'm obvioulsy a dolt, what's the "ding ding ding next step" program for that?

And, how about a decently reasoned reply, instead of some emotional outburst such as "well I worked so hard.." and this and that. Or how no one ever gave you anything, ever, so no one else should get anything, either.

Have a good day

edit()

I guess what I'm trying to say is that I just don't believe that an increase in the Minimum Wage, which happens every few years I'd guess, is going to bring about mass jobless-ness and runaway inflation. Especially since most states have their minimum wages set above Federal level.

edit2()

Hmm...50% is a pretty large increase...I figured we were talking like 50 cents or something, like usual. That almost a $2.60 raise...hmmm.

I have friend who own manufacturing businesses that start people at MW for the piece work have clearly said that it cost them money and they have also stated they will most likely let some people go, I also have clients in the food business, and the last increase cost one of them an extra $60K a year just in the payroll taxes, something you keep forgetting about the fact the the owner is having to pay tax on the extra $$$ the state & gubbmit are forcing them to pay instead of letting the workers earn it. What ever happened to people wanting to earn a living, & prove them selves, and work their way up??

[Superman]

I wonder what the typical receipts are for a typical McDonald's restaurant. I'd bet it's a breathtaking figure. I wonder what would be the result if we divided that McDonalds' labor costs by its business volume. That is, I wonder what percent of its gross income goes to pay for labor.

And the backdrop is this: Since I am fairly squarely in this debate in terms of my profession, I could probably retire if I had a dollar for every time somebody thought prices would double if wages go up ten percent. Think about that. How could that possibly ever be true? If wages were ten times gross business volume then sure. But of course, business volume cannot be less than wage costs. Certainly. In my industry, conservative think tanks have reported that public works cost would fall by 50% or more if "prevailing wage" law were repealed. That would be an amazing feat since, if the same skilled workers could be persuaded to work for free, the savings would be no more than 30%.

Nevertheless, you're hearing it again now. The sky will fall!!!!!!

[Moneyguy1]

My God, Yes!! Consider the plight of the executives of many corporations....Shouldn't they get increases at least percentage wise to match increases in the minimum wage?

(Shouldn't the minimum wage be tied somehow to the rate of inflation., at least?..Just a thought.....)

It is an interesting situation when those in Congress and those in management making high6 and some with 7 figure salaries think that a buck or two an hour paid to their employees at the lowest ranks will somehow ruin the economy.

We are not all gifted with the same talents. Some citizens do not have the ammunition to aspire to high position. This does not take away from their value to society. If they are doing the best they are capable of, this is something we should respect. It is management's job to find other ways to streamline their costs, such as internal economies. Isn't that one of the reasons they are so well compensated?

Many times increases in the cost for products has nothing to do with increased labor costs. Some increases are simply the knowledge that the traffic will still bear paying a little more. Cable TV is an excellent example, with a practicaly "captive" audience.