Raise the Minimum Wage

[Gaspar]

Sorry, the message I intend to send is that many people cannot or will not (despite significant effort) change their position in life. Many people can, although fewer here manage it here than in France, Spain, and Canada, among other places. More than places like Mexico and Brazil, though. Those people are still people. You can't make policy based on the exceptions. What do we do about the people who do indeed attempt to improve their circumstances but find it impossible for them?

Part of the problem is that getting an associate's degree typically does not increase earning power as much as the student loan debt costs, and dropout rates are very high among nontraditional students in four year programs (but are quite respectable in two year programs). Clearly, figuring out what it is that keeps people from finishing their education and helping them with that is an important component of any solution. Otherwise they just get themselves a bunch of debt they can't get rid of with nothing to show for it except more people calling about unpaid bills.

The job of a free society is to protect the opportunity, not to guarantee success.  Humans innovate and elevate themselves through example.  When free people see others doing the necessary work and enjoying the rewards, they are driven to do the same.  When people see reward without sacrifice they are reluctant to exert any unnecessary effort.

Use of the term "position in life" is debilitating and destructive.  If you do not like your "position in life" then commit to move! 

I am confident that your answer will be "Well it's not that easy!" 

If it were easy, it would not be worth it.  Success without sacrifice is typically squandered.  That's why lottery winners don't last very long.

[nathanm]

Thank you for your post, "Standard Libertarian forum post #22". It was quite informative.

Edited to add: Feeling slightly less glib, I'd like to point out that you simply can't seem to comprehend the concept that millions of your fellow countrymen are in fact putting forth lots of effort and still find themselves stuck in minimum wage jobs. When you just ignore anything that doesn't fit in your worldview, it's hard to have a rational one.

[Conan71]

Thank you for your post, "Standard Libertarian forum post #22". It was quite informative.

Edited to add: Feeling slightly less glib, I'd like to point out that you simply can't seem to comprehend the concept that millions of your fellow countrymen are in fact putting forth lots of effort and still find themselves stuck in minimum wage jobs. When you just ignore anything that doesn't fit in your worldview, it's hard to have a rational one.

And when the minimum wage is raised, they are still stuck in a minimum wage job.  Funny how that works! 

[nathanm]

And when the minimum wage is raised, they are still stuck in a minimum wage job.  Funny how that works! 

Nobody said they wouldn't be. Seems to me that one ought to be able to feed and house oneself on full time work, though.

[heironymouspasparagus]

And when the minimum wage is raised, they are still stuck in a minimum wage job.  Funny how that works! 

Funny, huh?  Well, ok, I guess from a certain perspective it would be funny.


And then the reality - the NEW minimum wage now provides that much incremental more economic activity and opportunity.  Which is what really happens in an economy...they have more, spend more, money moves more, etc, etc.  Only this actually works as opposed to the whole Reaganomics (Voodoo Economics) fantasy espoused lo, these many years....

Or do you subscribe to the standard Republican school of thought that says "Low wages are the solution....?"

As opposed to the opposite that says "Low wages are the problem."

[Red Arrow]

Nobody said they wouldn't be. Seems to me that one ought to be able to feed and house oneself on full time work, though.

http://aspe.hhs.gov/poverty/12poverty.shtml

What do you think the minimum wage should be?  For a family of 4, $11/hr would still have them at the poverty level. 

I used 2080 hrs/yr, 52 weeks at 40 hr/wk.

[heironymouspasparagus]

http://aspe.hhs.gov/poverty/12poverty.shtml

What do you think the minimum wage should be?  For a family of 4, $11/hr would still have them at the poverty level. 

I used 2080 hrs/yr, 52 weeks at 40 hr/wk.

No less than the 1968 inflation adjusted equivalent.

Even though that was really warped by Reagan the week after the inauguration...going from 15% to 6% in a matter of "days"....

[Conan71]

Funny, huh?  Well, ok, I guess from a certain perspective it would be funny.


And then the reality - the NEW minimum wage now provides that much incremental more economic activity and opportunity.  Which is what really happens in an economy...they have more, spend more, money moves more, etc, etc.  Only this actually works as opposed to the whole Reaganomics (Voodoo Economics) fantasy espoused lo, these many years....

Or do you subscribe to the standard Republican school of thought that says "Low wages are the solution....?"

As opposed to the opposite that says "Low wages are the problem."

You forget, cost of living for everyone else tracks with minimum wage.  Everything you purchase from bacon to gasoline has had someone making minimum wage in the development or raising of the natural resource, manufacture or processing, delivery, or retail end of it.  

Let's say Congress says minimum wage must go up 25%.  If a person gets a 25% pay increase like every other minimum wage job holder, the company he works for must necessarily raise their prices by a commensurate amount to remain profitable.  Granted, not every job in the company is a minimum wage job, so the increase may not be a full 25% but it will go up.  Retail, grocery, food processing, and menial manufacturing are filled with minimum wage jobs.  But every place that person does business with must raise their costs as well because they had a sudden increase in payroll costs, not to mention increased payroll costs related to the clusterfark of Obamacare.

Perhaps this is what the sudden push is all about: try to dilute the real cost of Obamacare on employees by suddenly mandating a pay increase which, when government does it, is absolutely indistinguishable from a new tax in the eyes of the employee.  It's yet one more government-mandated cost.  Whether the employer must pay it as a tax or additional payroll cost or extortion fee to the Teamsters, it's got the same net affect on the bottom line and on the cost to the end user.

The purpose of increasing minimum wage in the minds of people who think they benefit from it is increased purchasing power.  Now they can have an occasional ribeye instead of sirloin seeming like a luxury. Maybe they can finally afford a newer more fuel efficient car, maybe they can occasionally splurge on name brand goods instead of generic (which is an overblown concept for the most part) or perhaps they can afford locally grown foods- oh wait, that local producer had to raise their prices to cover their sudden labor cost increases!!!  Wait, what?!

Imagine the chagrin of the person who thought Congress stepped in on their behalf and increased their spending power only to realize the cost of everything they use from de-oderant to a Big Mac has just gone up roughly the same rate as their pay went up.

Raise minimum wage all you want.  It never takes into account the other side of the equation: spending power.  A minimum wage does NOT better the lifestyle of people working 40 hours in bottom rung jobs.  The only thing which is guaranteed to better their lifestyle is getting out of the range of work which is only worth a minimum wage.  You can make minimum wage $25 per hour and the people making $25 per hour will still live in squalor, eat pure crap for a diet, and can only still afford to shop at Goodwill and buy generic cigarettes instead of Marlboros.

Simple economics, something you've apparently learned to grasp because you have some potty training issue related to Ronald Reagan and Rupert Murdoch.  That's why things like "1968 inflation adjusted equivalent" you read somewhere never jibes when minimum wage is raised.

[Gaspar]

You forget, cost of living for everyone else tracks with minimum wage.  Everything you purchase from bacon to gasoline has had someone making minimum wage in the development or raising of the natural resource, manufacture or processing, delivery, or retail end of it.  

Let's say Congress says minimum wage must go up 25%.  If a person gets a 25% pay increase like every other minimum wage job holder, the company he works for must necessarily raise their prices by a commensurate amount to remain profitable.  Granted, not every job in the company is a minimum wage job, so the increase may not be a full 25% but it will go up.  Retail, grocery, food processing, and menial manufacturing are filled with minimum wage jobs.  But every place that person does business with must raise their costs as well because they had a sudden increase in payroll costs, not to mention increased payroll costs related to the clusterfark of Obamacare.

Perhaps this is what the sudden push is all about: try to dilute the real cost of Obamacare on employees by suddenly mandating a pay increase which, when government does it, is absolutely indistinguishable from a new tax in the eyes of the employee.  It's yet one more government-mandated cost.  Whether the employer must pay it as a tax or additional payroll cost or extortion fee to the Teamsters, it's got the same net affect on the bottom line and on the cost to the end user.

The purpose of increasing minimum wage in the minds of people who think they benefit from it is increased purchasing power.  Now they can have an occasional ribeye instead of sirloin seeming like a luxury. Maybe they can finally afford a newer more fuel efficient car, maybe they can occasionally splurge on name brand goods instead of generic (which is an overblown concept for the most part) or perhaps they can afford locally grown foods- oh wait, that local producer had to raise their prices to cover their sudden labor cost increases!!!  Wait, what?!

Imagine the chagrin of the person who thought Congress stepped in on their behalf and increased their spending power only to realize the cost of everything they use from de-oderant to a Big Mac has just gone up roughly the same rate as their pay went up.

Raise minimum wage all you want.  It never takes into account the other side of the equation: spending power.  A minimum wage does NOT better the lifestyle of people working 40 hours in bottom rung jobs.  The only thing which is guaranteed to better their lifestyle is getting out of the range of work which is only worth a minimum wage.  You can make minimum wage $25 per hour and the people making $25 per hour will still live in squalor, eat pure crap for a diet, and can only still afford to shop at Goodwill and buy generic cigarettes instead of Marlboros.

Simple economics, something you've apparently learned to grasp because you have some potty training issue related to Ronald Reagan and Rupert Murdoch.  That's why things like "1968 inflation adjusted equivalent" you read somewhere never jibes when minimum wage is raised.

Your analogy is correct, except that the market consequence is actually more profound.  You cannot simply raise minimum wage.  Doing so causes an increase in total wage structure to preserve advancement incentive.  For instance.  If you raise minimum wage to $9.00 an hour for the entry level worker, the shift manager who was making $8.75 will need to be bumped up closer to the $10/hr level, and the assistant manager who was making $10/hr will need to be shifted to $13.  In compact labor division environments this may continue all the way to upper management.

Even in companies with broad divisions of labor such as healthcare, if the laundry personell who were making $7.75/hr are suddenly paid the same as the housekeeping staff, the advancement and incentive structure will need to be shifted to preserve hierarchy. Basically, the result is not simply an increase in labor cost for entry level labor, it is an increase in cost throughout all divisions of labor, and results in price adjustments to at least compensate, and in many cases increase overall profit as a hedge. 

That is why government mandated wage laws do not improve poverty, and in most cases increase overall poverty and unemployment among the young, uneducated, and unskilled workers.

Minimum wage debates are wholly political, and designed to appeal to the economically ignorant only.

Past studies by and large confirm the prediction that higher minimum wages reduce employment opportunities and raise unemployment, particularly among teenagers, minorities and other low-skilled workers. – Masanori Hashimoto

[heironymouspasparagus]

You forget, cost of living for everyone else tracks with minimum wage.  Everything you purchase from bacon to gasoline has had someone making minimum wage in the development or raising of the natural resource, manufacture or processing, delivery, or retail end of it.  

And you (and Gaspar) forget...or more likely just ignore the facts of the total economic equation regarding inflation, productivity, and wage gains.  Kind of surprising since you both are "in" business...but maybe not so surprising, since those realities have in very real terms put massive increases in additional profit into the hands of top management in this country over the last 40+ years at the direct expense of working people.

Here's how it really works - inflation runs 2.5% (If you believe the government...).  Productivity increases at 3 - 5% annually for the last 40 years.  Real wage decreases about -2% annually for the last 40 years.  So, the cost of inflation is born almost totally by working people.  Productivity increases drop straight to the bottom line, into the pockets of CEO's.  Net real gain to 1%ers - in excess of 4 to 5% (and more) annually just on the backs of the American workers - those 47% that Romney was so dismissive of...you remember them, don't ya??

And all those so-called "bad" effects of raising a minimum wage, whether here or Japan...just fantasy talk between upper management.

But you guys know this....

[Conan71]

Your analogy is correct, except that the market consequence is actually more profound. 

I didn't even want to go there.  Way too much effort to end up with the expected reply that Heir eventually left. 

Bottom rung jobs will always be bottom rung jobs regardless how much you pay someone to do them.  All other costs escalate and their spending power does not improve.

[heironymouspasparagus]

I didn't even want to go there.  Way too much effort to end up with the expected reply that Heir eventually left. 

Bottom rung jobs will always be bottom rung jobs regardless how much you pay someone to do them.  All other costs escalate and their spending power does not improve.

Literally what you are saying with that is since costs are going to go up, they should just be left alone - just like they have been for decades, comparatively - and it is no big deal that the reality is that the real spending power - meaning the real spending power of all those people - has declined by over 25%!  Just as long as the 1%ers continue to advance at 20% a year, it's not really a problem...

The Republican solution hard at work;  low wages are the solution!

[Gaspar]

Literally what you are saying with that is since costs are going to go up, they should just be left alone - just like they have been for decades, comparatively - and it is no big deal that the reality is that the real spending power - meaning the real spending power of all those people - has declined by over 25%!  Just as long as the 1%ers continue to advance at 20% a year, it's not really a problem...

The Republican solution hard at work;  low wages are the solution!

No one knows where your ambiguous numbers come from, but either way, you purposefully disregard a significant amount of data.  There is no such thing as a Poor Person or a "1%er" over time. Those are static snapshots, that do not reflect the dynamics of income mobility.

I don't expect for you to accept this or even acknowledge it for that matter.

[DolfanBob]

Who needs minimum wage? this girl has it all figured out.

http://www.youtube.com/watch?v=4LWlkXRZ3CA

[Conan71]

Literally what you are saying with that is since costs are going to go up, they should just be left alone - just like they have been for decades, comparatively - and it is no big deal that the reality is that the real spending power - meaning the real spending power of all those people - has declined by over 25%!  Just as long as the 1%ers continue to advance at 20% a year, it's not really a problem...

The Republican solution hard at work;  low wages are the solution!

Bzzzzzt!!! WRONG ANSWER!

Minimum wage jobs pay minimum wage because they are considered to be entry level work suitable for students, a secondary household income, or a training position leading to something better.  They are not typically jobs people keep for a lifetime.  Someone who bounces from one minimum wage job to another for 30 years has done so because they have not sought to better themself or they don't bring a set of skills to the job that makes them worth more in the job market.

What would you be worth in the job market without an engineering degree or prior experience for what you now do?

The best thing you can do to improve someone's overall income and purchasing power is to improve their education level so that they can leave the bottom rung of the job market.  Simply mandating minimally skilled jobs are now worth x-amount more does absolutely no long term favors to those who do nothing to improve their job skills or marketability to employers looking for employees who are worth more money to them.