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Clearly minimum wage reduces overall employment as you must make enough additional revenue to cover the increased salary. If your customer base does not change, them you must increase prices. If he market will not allow for a price increase, you are out of business.
The $7.25 example dies not make sense because it us presented backwards. If $7.25 is the natural rate and you increase it to $14.50, can you raise prices enough to cover payroll or will you cut workforce? Would you hire additional employees at that higher rate and uf you did, how many would be entry level at that price? There are lots of things I am willing to pay somone to do for ne if the price is right. If it costs $20 to get my lawn mowed....I am in. If it costs $200 to get my lawn mowed...,I will either mow it myself or I will xeriscape. |
That assumes that minimum wage laws do indeed result in an increased salary. Put another way, that assumes that if there was not a minimum wage of $7.25 (federal; may vary by state) then the salaries for some jobs would be lower than $7.25 (I used $3.62, a -50% cut, as a hypothetical example).
But do minimum wage laws indeed result in an increased salary? If so, in how many cases? In this thread, several people have said that the going rate for low-end jobs in their area is already well above the minimum wage. The minimum wage wouldn't seem to matter in those cases. I guess what I'm getting at it, the minimum wage may have lagged so far behind inflation that it may not really matter anymore, or may matter very little. Quote:
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Maybe the minimum wage is society's way of making us feel good for those who have minimal skills that work in the industry. The reality is we need cheap labor. Flint won't pay $200 to cut his lawn. I couldn't buy a head of lettuce if that farm worker was paid a living wage.
Most of you talk about your experience when you were young working part time. I don't know the statisitics but your part time job is someones full time job. The minimum wage was $1.60 when I was a teenager in 1967. I later found a part time job that paid $30/day. By the time I was 20 -21, I was a member of the Teamster union making $5.41/hr. Those wages allowed me to save money that put me thru school. My parents had no money to send me. That environment doesn't exist today. Factory jobs are gone - what is left is food service and retail - those working in those industries are just threading water, especially if it is your full time job. I work in manufacturing and more than half of the factory labor force works 2 jobs. We also have a temp service that supplies labor to buffer the business cycle of our business. They typically are $9- $10/hr jobs. There is a revolving door every day of hires that come and go. Several years ago, we re-negotiated the contract with this temp service and agreed to a lower starting wage - it was a cost reduction. You also get what you pay for. Some of thse people are just down right scary. History tells me there has and will be a demand for cheap labor - a harsh reality - the minimum wage just makes us feel better. |
Minimum wage removes some of the market forces that would differentiate between work and rates. Some jobs are charging minimum wage that should never go that low, while others are over priced for their respective work.
Not all work is equal. What kind of system requires equal outcomes for unequal efforts? |
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There was an article in the Wash. Post a few yrs. ago about a Safeway worker who had been bagging groceries at that same store for 30+ yrs. and was making $60k. I already knew Safeways in the DC area were grossly overpriced and so I never went there. But that article explained why they were so expensive. |
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Thats why we need cheap labor. I'm not going to judge why someone can't or won't better themselves. We are all different - that's the reality. |
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I get that. Lots of middle aged and older people are fearful of the younger generation displacing their lazy-ass job. So, they want to put up barriers... nip it in the bud. Make those kids live with their parents a while longer. ...Doodle on their faded HOPE poster. ..maybe they can go occupy something. |
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If they are receiving $100 a week in welfare-like benefits, would it make more sense to pay that business $100 a week that gets paid out in higher wages? If that were $7.25 minimum wage, it's effectively $9.75 ($2.50/hr x 40 hrs = $100). It's the same money one way or the other, right? It benefits the employer as much as the welfare recipient, right? Like it has been said, businesses couldn't afford to pay more, they'd have to close their doors. So welfare keeps those businesses profitable and/or viable. Am I thinking wrong here? |
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Many people choose a low paying, but fun, or easy job just to pass the time. ...rather than say, garbage collector. Hello, and welcome to Walmart. |
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Yay, more subsidies!
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And I agree. I think minimum wage is a false floor when people who choose to accept minimum wage just supplement it with government assistance. |
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Cutting welfare to individuals and subsidizing evil, low-wage employers will go over like a turd in the punchbowl. |
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By my rough math and Google search, the max EITC for 2011 for family of four is $5112. In looking at the IRS tables, to have that kind of tax liability, your taxable income would have to be $38k. Back out the two personal exemptions of $3700 per adult and child tax credits of $1000 per child and you can gross that income up another $9400. So that means $47,400 in gross income for two earners with two kids before they pay dime one of fed. income taxes. Anything less than that and you're getting more EITC back than you paid in taxes, i.e. welfare. $47,400 divided by two earners is $23,700. Assuming 40 hrs. per week, 2000 hrs. per year, that means you have to earn more than $11.85 per hour before you pay dime one of net fed. income taxes. That's more than any state or fed. min. wage.
I'm pretty sure that kind of income level qualifies for plenty of non-taxable assistance from various fed/state/local agencies too. |
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So even at $11/hr minimum wage we wouldn't be collecting more taxes, just cutting business profits so we'd collect LESS taxes at the same tax rates? |
Sounds logical to me.
When I was in my early 20's I worked at an auto repair shop. The manager paid me minimum wage on paper only. I was getting anoter 10 bucks an hour under the table. I am guessing a lot of that goes on now adays. Quote:
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I'm sticking with an earlier claim in this thread that min. wage hikes are a backdoor way to more FICA $$, which is probably how the feds justify letting state min. wage prevail over federal if it's already higher. |
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How much is an apartment in your area? Let's do the math and see if we think they should be able to live without government money or not. I'm not trying to bait you, I really want to run the numbers and see. |
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I'm not the accountant in my family, but I believe Rick's comment was based upon your tax credits and refund that you receive at the end of the year, and the potential to actually receive more in refund than you paid in. I don't know of any circumstance in which you don't have to pay in to state and federal taxes on each paycheck, you could just potentially get it all back (or more) at the end of each year. I can't speak to this specifically, because I'm more than happy to let my accountant wife take care of this stuff for me. |
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$9/hr x 40 hrs x 4 weeks = $1440/mo $450/mo for a nice apartment in a nice area Groceries $100/mo Gas for car $100/mo Water $20/mo Electricity $40/mo Deducting those necessities leaves you with $730/mo left over. I'm obviously not deducting taxes from the check, and not including perceived "necessities" such as cell phone, cable TV, internet, new car payment, etc. Most of my wife's siblings are living this exact life while going to college. Can you raise a family on this? Hell no. But if you're trying to, shame on you for not taking responsibility and trying to make a better life. Even manual labor around here pays much better than $9/hr. |
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Are minimum wage laws working?
I don't see how anyone can work for minimum wage. The minimum wage is an insult to humanity in this country. It's there I suppose because some would pay even less if they could get away with it.
I think Seahawk put it in perspective. $10/hr cash is like 15 on payroll. One can at least live at a comfortable (relatively speaking), while in modest poverty, making 15. Get a couple wage earners in the household and the comfort factor will reach into having basic financial discretions. YMMV state by state. Even a combined 30/hr cash in metropolitan CA is a stretch if you're going anywhere but broke. |
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A minimum wage can increase overall employment as the additional dollars will be spent by the employee on goods and services.
That's the macro-economic story. Fint's comment above to the contrary is also true but only at the micro-economic level. In contrast, a subsidy to the well-odd, e.g. lower tax rates, tends to be invested so there is a lower effect on jobs. |
Does trickle-up work as well as trickle-down? Or is it all VooDoo?? :D
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Do tell us more macro-economic stories. ...of a confused Parfessor. I mean, you really don't -get- where "additional (macro econ) dollars" come from, do you. |
isly if you cannot act like a grown up then stay in your PARF playpen
and try an introductory econ course sometime |
So then, NO; you really don't -get- where "additional (macro econ) dollars" come from.
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