Are minimum wage laws working?

[fintstone]

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.

[jyl]

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.

Originally Posted by fintstone

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.

[jcommin]

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.

[72doug2,2S]

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?

[Rick Lee]

Originally Posted by jcommin

I couldn't buy a head of lettuce if that farm worker was paid a living wage.

Neither could the farm worker. "Living wage" is a red herring. Pay a burger flipper $30k per yr. and pretty soon no one will be able to afford burgers and he'll be out of work. Furthermore, you shouldn't be able to support a family on a menial job. If you're not a teeanger working a summer job and you're making min. wage, your top priority in life should be finding a better job or getting promoted, not getting married and having kids.

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.

[jcommin]

Originally Posted by Rick Lee

Neither could the farm worker. "Living wage" is a red herring. Pay a burger flipper $30k per yr. and pretty soon no one will be able to afford burgers and he'll be out of work. Furthermore, you shouldn't be able to support a family on a menial job. If you're not a teeanger working a summer job and you're making min. wage, your top priority in life should be finding a better job or getting promoted, not getting married and having kids.

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.

Rick,

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.

[island911]

Originally Posted by jyl

...

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.

You are clearly pushing an opinion there. What you are doing is tossing out the need for a wage continuum which helps people learn on the job in exchange for lower wages.

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.

[kaisen]

Originally Posted by Cannonball996

when you factor in all the government money, the minimum wage goes a lot farther then you think. I look at my own employees who I pay a little more minimum wage, and everyone of them gets food stamps (in texas its the lone star card) I know a few of them get some sort of housing allowance because they call me to verify their employment.

I think the real question should be, why does someone with a job still need government money?

If people making minimum wage are also receiving money from the government, isn't that an indirect subsidy to those businesses? In other words, if there were no welfare then workers simply could not accept that lower wage and still live. They'd have to work a less desireable job for higher pay, pursue education/training to qualify for a better job, etc. But since they are subsidized to accept a lower wage (they'd lose their benefits if they made more) then businesses can pay less.

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?

[island911]

Originally Posted by kaisen

If people making minimum wage are also receiving money from the government, isn't that an indirect subsidy to those businesses? .

No. It is a direct subsidy to those people. --many of whom LIVE off of welfare.

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.

[Rick Lee]

Originally Posted by kaisen

If people making minimum wage are also receiving money from the government, isn't that an indirect subsidy to those businesses?

No, because the gov't. assistance a worker gets has nothing to do with their place of work. If they lose that job, they still get that gov't. assistance. If they moonlight for under the table cash, they still get gov't. assistance. If they have kids, they get more gov't. assistance. If anything, gov't. assistance encourages them to stay on the lower rungs of the economic ladder. And that gov't. assistance has to come from somewhere, likely the taxes paid by the business.

[kaisen]

Originally Posted by island911

No. It is a direct subsidy to those people. --many of whom LIVE off of welfare.

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.

Originally Posted by Rick Lee

No, because the gov't. assistance a worker gets has nothing to do with their place of work. If they lose that job, they still get that gov't. assistance. If they moonlight for under the table cash, they still get gov't. assistance. If they have kids, they get more gov't. assistance. If anything, gov't. assistance encourages them to stay on the lower rungs of the economic ladder. And that gov't. assistance has to come from somewhere, likely the taxes paid by the business.

So why not lower minimum wage so more small businesses can thrive? The government will pick up the difference anyway.

[Jim Richards]

Yay, more subsidies!

[island911]

Originally Posted by kaisen

So why not lower minimum wage so more small businesses can thrive?...

Just get rid of it. ...it's more bureaucracy, which only helps the bureaucrats.

Originally Posted by kaisen

...The government will pick up the difference anyway.

Seriously? ...you are going to stick to that 'logic'?

[Rick Lee]

Originally Posted by kaisen

So why not lower minimum wage so more small businesses can thrive? The government will pick up the difference anyway.

Again, the two are unrelated. And politicians will never try to alienate constituencies by lowering the min. wage. Will never happen in my lifetime.

[kaisen]

Originally Posted by island911

Just get rid of it.

Seriously? ...you are going to stick to that 'logic'?

It was your logic.

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.

[onewhippedpuppy]

Originally Posted by Rick Lee

No, because the gov't. assistance a worker gets has nothing to do with their place of work. If they lose that job, they still get that gov't. assistance. If they moonlight for under the table cash, they still get gov't. assistance. If they have kids, they get more gov't. assistance. If anything, gov't. assistance encourages them to stay on the lower rungs of the economic ladder. And that gov't. assistance has to come from somewhere, likely the taxes paid by the business.

This. The government subsidizes the lazy and unmotivated, which serves to reinforce their lifestyle. If your low wage plus welfare provides you with a "good enough" living, where is the motivation to better your life? I went back to college because I was tired of being poor, it was great motivation.

[kaisen]

Originally Posted by Rick Lee

Again, the two are unrelated. And politicians will never try to alienate constituencies by lowering the min. wage. Will never happen in my lifetime.

Then let's raise minimum wage, lessen dollars paid directly to welfare and take those dollars and pay them to businesses who are effected by the higher minimum wage. Zero sum change. Everyone wins, and politicians look good.

[onewhippedpuppy]

Originally Posted by kaisen

Then let's raise minimum wage, lessen dollars paid directly to welfare and take those dollars and pay them to businesses who are effected by the higher minimum wage. Zero sum change.

Why not lessen money given to welfare and cut taxes? You just moved the handout from the poor to businesses. There is no better way to promote people to spend money (therefore helping businesses and the economy) than by cutting their taxes.

[Rick Lee]

Originally Posted by kaisen

Then let's raise minimum wage, lessen dollars paid directly to welfare and take those dollars and pay them to businesses who are effected by the higher minimum wage. Zero sum change. Everyone wins, and politicians look good.

Write your Congressman.

Cutting welfare to individuals and subsidizing evil, low-wage employers will go over like a turd in the punchbowl.

[kaisen]

Originally Posted by Rick Lee

Write your Congressman.

Cutting welfare to individuals and subsidizing evil, low-wage employers will go over like a turd in the punchbowl.

Then what is the answer?