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

[jkarolyi]

So what's the first order of business for our newly elected socialist nee democrat congress? Raising the minimum wage by almost 50%. How is this supposed to help anyone? Do democrats honestly think that McDonalds and Tyson foods will say "Oh, jeez, out of the goodness of our hearts, lets give up our profits and fat executive pay so we can pay these increased wages"?

Firstly, corporations will have increased incentives to replace people with computers or automation. Why do you need someone taking your order at Mickey Ds? Introduce touch screen ordering systems. Already done for airport check-in! High wages encourage investment in labor saving devices...history has proven this. More factories will close shop and move overseas. Prices of goods and services will rise, further feeding inflation.

Labor should be priced at its true market value...trying to regulate this just causes problems.

Can anyone think of any advantages of increasing the minimum wage other than fulfilling some feel-good campaign promises? Should we require all congress members to take a class in economics?

[legion]

But the goodwill will buy votes.

[Rick Lee]

The advantage is to make other people feel better that a tiny fraction of 1% of the lowest rank of unskilled workers will get a pay raise, most of which will be eaten by payroll taxes right away and maybe inflation a little later.

When I was 16, I made $3.35 an hour flipping burgers at Wendy's in 1987. They forgot to hire more people before all the kids went back to school in late August. So as soon as all the kids left, they offered $7.00 an hour. So, since I went to a private school that started in Sept., I got that pay raise. BUT, that Wendy's was by far the most expensive fast food place in our town and even with my 50% employee discount, it was cheaper for me to pay full price atthe BK across the street, which many of us did on our breaks.

[Dottore]

Originally posted by jkarolyi

Labor should be priced at its true market value...trying to regulate this just causes problems.

Ironically, if you did away with illegal immigration the market would price unskilled labour much higher.

[legion]

Originally posted by Dottore
Ironically, if you did away with illegal immigration the market would price unskilled labour much higher.

True.

The Democratic approach is to flood the market with black market labor while enforcing price controls on white market labor.

The Republican approach apparently is to limit illegal access to the labor market, and let the market set prices (presumably higher).

[widebody911]

Originally posted by legion
The Democratic approach is to flood the market with black market labor while enforcing price controls on white market labor.

The Republican approach apparently is to limit illegal access to the labor market, and let the market set prices (presumably higher).

I'm not so sure that these are so neatly divided along party lines. I'm sure there are a lot of Republican benefactors of illegal labor.

[legion]

Thom, you are absolutely correct. I'm speaking in broad generalities.

[Superman]

I'm not going to go into the economic stuff. If you guys don't get that part, then the light is not going to "come on" just because you read a post by Superman. Suffice it to say that all this "the sky will fall because of price inflation" crap is just that. Crap. In my industry, construction, direct labor costs account for about 20% of the cost of a project. If you could save 10% on labor costs, it would reduce the cost of the project by 2%. And that assumes that you will get just as much talent at a 10% discount as you can paying full price. Yeah, right. So, go ahead and discuss all this runaway inflation you expect. It helps us evaluate your understanding of economics.

What I will point out is that I find it curious that the same folks who say they are concerned about costs to the taxpayer.....are the same ones who think a $5.25 minimum wage is good public policy. For your consideration, a full time minimum wage worker earns about nine hundred dollars a month. Also, as we have discussed her ad nauseum, the typical minimum wage worker is not a high school kid. It is an adult, many of whom are heads of households. So what do you think the cost to the taxpayer is when a working mom makes $900 per month, with no health insurance. She's also getting food stamps and very likely housing assistance. Or she's working three of these jobs to make ends meet, and nobody is at home to raise her kids. Sound good?

But......that's all pretty complicated. Perhaps you guys should just return to your mantra. "Free market." "Free market." "free market."

Funny thing, though. Even you guys agree with regulations. Regulating industries. If you need to be reminded of examples, just let me know. So....."free market" is not really honest, now is it? The Greeks had Mount Olympus and the Gods. The Middle Ages had the Earth as the center of the Universe. Today we have the "self-regulating markets."

[Superman]

Originally posted by legion
True.

The Democratic approach is to flood the market with black market labor while enforcing price controls on white market labor.

The Republican approach apparently is to limit illegal access to the labor market, and let the market set prices (presumably higher).

This is hilariously funny. Apparently, you don't know what's going on with this issue. You haven't noticed that illegal immigration is a problem the Republicans cannot possibly afford to stop. Fence? Did that look like a solution to you? Wow, we're back in fantasyland where Republicans are about freedom and Democrats are about control. Holy ****!

[legion]

And this was a civil conversation for the first 7 posts. "Milking the man dry" doesn't benefit anyone.

[pwd72s]

Mere gesture on the part of the Dems, buying votes. Many states have laws placing minimum wage above the federal level.
More smoke and mirrors. Common when the Democrat party rules.

[Superman]

I 'm sorry Legion. I really don't mean to insult you. It's just that I've been doing this for so long. By "this," I mean dealing in public policy decision regarding workers and wages. I've made plenty of speeches. Lots and lots of hecklers. For the last few years of that, I really really wanted a heckler at each event. They made it fun. Now, I am a consultant. But I'm still available to discuss these things. Lots of mythology and emotional assumptions. The economics are actually fairly straightforward, but they conflict with the emotional beliefs.

I like free markets as much as anyone else. But the brute fact is that workers do not have the clout. Employers do. And wages can and do get pushed to the lowest possible, even artificial, level. While you and I pick up the tab that the employer is not paying. You pay for the real cost of that hamburger anyway. Either directly to the employer who pays all of the worker's necessary expenses......or to the gubmit for programs that handle that for the employer. You see, I just thought you guys were interested in avoiding the gubmit programs.

[Superman]

Yes, most states have gone past, and sometimes way past, the federal min wage. It's not current grandstanding that is happening. It is past inaction on the part of the feds.

[on2wheels52]

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

Most of my customers would get a raise, sounds like more money for Jim

[m21sniper]

Originally posted by jkarolyi
So what's the first order of business for our newly elected socialist nee democrat congress? Raising the minimum wage by almost 50%. How is this supposed to help anyone? Do democrats honestly think that McDonalds and Tyson foods will say "Oh, jeez, out of the goodness of our hearts, lets give up our profits and fat executive pay so we can pay these increased wages"?

Firstly, corporations will have increased incentives to replace people with computers or automation. Why do you need someone taking your order at Mickey Ds? Introduce touch screen ordering systems. Already done for airport check-in! High wages encourage investment in labor saving devices...history has proven this. More factories will close shop and move overseas. Prices of goods and services will rise, further feeding inflation.

Labor should be priced at its true market value...trying to regulate this just causes problems.

Can anyone think of any advantages of increasing the minimum wage other than fulfilling some feel-good campaign promises? Should we require all congress members to take a class in economics?

My solution is a 50 year moratorium on Congress passing any new law without a 75% majority.

Originally posted by on2wheels52
"Raising minimum wage...how is this supposed to help?"

Most of my customers would get a raise, sounds like more money for Jim

Not exactly, because Jim will pay that much more for every other thing jim buys as business owners everywhere increase prices to compensate for the spike in labor costs.

You know, inflation.

[skipdup]

Seems to me that a head of household earning minimum wage has either recently started a new, very low level job or is being paid what they're worth - based on performance and/or the job they're doing.

[on-ramp]

Min. wage helps the illegal immigrants.

the ones about to cross couldn't be more thrilled.

[Racerbvd]

If you are over 21, raising a family, and still only earning MW, you are an idiot!!

[on-ramp]

MW is sub-poverty wage. you can't live on it. it's more symbolic than anything.

[azasadny]

I love it when people say "You can't raise a family on minimum wage"! Well, no shi_!!! You're not supposed to have a family if you're only earning the minimum wage! Be responsible for providing for your own family and quit looking to the guvment for a handout.... that's what I'd like to say to those idiots...