U.S. minimum wage increase?

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194 Replies - 5705 Views - Last Post: 19 February 2013 - 06:49 PM

#1 farrell2k  Icon User is offline

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U.S. minimum wage increase?

Posted 13 February 2013 - 04:50 PM

The current U.S. minimum wage rate is $7.25/hr for most workers. President Barak Obama has suggested raising that to $9.00/hr, a move he claims would strenghten the U.S. economy. I have to agree. I know people with college degrees who because of unfortunate circumstances are forced to work for minimum wage. I get the U.S. Republicans will be against the idea, because they'll have an even harder time blaming poverty on the government, but that extra $70/week for the average minimum wage worker can sometimes mean the difference between paying the water or electricity bill, or not paying it. Yes employers would have to pay out more to workers, and would likely see larger payroll tax bills, but ultimately I believe that the extra spending that will come in the form of consumer purchasing will benefit most of those companies in the long run.

Is the current minimum wage good enough, or do you support a raise to $9?

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#2 modi123_1  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 04:54 PM

How does being able to pay for both electric and water translate into extra consumer spending? I mean if I make just enough to keep the lights on and water in my sink does that really mean I am buying an iphone5 and new plan?
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#3 lordofduct  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 05:01 PM

well no... but saying you can finally afford to pay the electric and water implies there's a chance you have a surplus, and if you have a surplus you can spend money on other stuff.

If you can't afford water and electric in the first place... you certainly aren't affording a surplus. (assuming you aren't living completely off the grid, which just throws a wrench into it)

Though personally I don't think having a surplus, and then spending it on iphones, is something I would condone if you're down in the 15K to 18K a year range (15k is 7.25 min wage at full time, 18k is 9 min wage at full time). You should probably be saving that money and putting it toward getting yourself out of the minimum wage market.
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#4 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 05:06 PM

I've worked for minimum wage before - it sucks, and yeah, we should raise the minimum wage.

But maybe... (as Louis C. K. says) ... maybe this turns out to be an inflationary move, and simply sets a new equilibrium at a higher nominal value, which would amount to a kick in the knees for anyone who's got any savings.

Don't get me wrong, I'm not saying this would be the case or the minimum wage is a bad idea or anything, but the first thing that comes to mind when I hear "raise in minimum wage" is "corresponding rise in prices at Seven-Eleven and Sav-Mor Grocery."

Huzzah for the minimum wage, but can't we come up with something a little more serious?
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#5 farrell2k  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 05:24 PM

View Postmodi123_1, on 13 February 2013 - 11:54 PM, said:

How does being able to pay for both electric and water translate into extra consumer spending?


The most obvious reply is that the electricity or water company gets the $70 that may not have otherwise, which when multiplied by x amount of people means revenues and profits ultimately go up, which ultimately translates to workers keeping their jobs, jobs that allow them to have disposable income with which to purchase the Iphone...or pay their water bill.
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#6 macosxnerd101  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 07:20 PM

Quote

Yes employers would have to pay out more to workers, and would likely see larger payroll tax bills, but ultimately I believe that the extra spending that will come in the form of consumer purchasing will benefit most of those companies in the long run.

When there is an adjustment in the economy, there are winners and losers. An increase in minimum wage hurts some small businesses, like the seasonal ice cream shop. It means fewer jobs on that end. Who it really helps are teenagers, college students that remain employed by the university, and people in poverty.

The government (hopefully) won't pass a bill that just ups minimum wage $1.75. That's a lot of money. The way they did it last time was a $0.70 increase each summer for three years. I directly benefited from it each year. I also fell into the first category of a teenager working a summer job. If the government goes for this, the bill probably won't go into effect for another 2-3 years, and then it will (hopefully) be a gradual increase if it is passed.

I know many of the jobs at my school are less than $9/hour. Personally, I would rather the school be able to employ more people in the hopes that the job helps enable them pay for school (granted obviously not everyone working needs the money). I'm sure the number of job openings would drop if minimum wage went up.

Overall, I'm not sure how I feel about an increase in minimum wage. I'd really have to do more research on the labor statistics and labor market. For what it's worth, according to the 2010 census though, all states have a per capita income above minimum wage.
http://en.wikipedia....tates_by_income
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#7 no2pencil  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 07:39 PM

View Postfarrell2k, on 13 February 2013 - 06:50 PM, said:

Is the current minimum wage good enough, or do you support a raise to $9?

The more minimum wadge is raised, the closer we come to removing middle class.

Inflation.
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#8 farrell2k  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:08 PM

View Postno2pencil, on 14 February 2013 - 02:39 AM, said:

View Postfarrell2k, on 13 February 2013 - 06:50 PM, said:

Is the current minimum wage good enough, or do you support a raise to $9?

The more minimum wadge is raised, the closer we come to removing middle class.

Inflation.


I don't know if I buy that. Cost will go up for employer, but so too will potential for more customers. Some businesses will benefit from increased consumer spending(winners) more than others(losers). It's pretty much that way now.
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#9 Lemur  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:24 PM

Setting an artificial price floor like a minimum wage is a bad idea, and always will be. It gives incentive NOT to hire that extra person because it would cost more. Maybe someone is worth ~7/hr, but certainly not 9. That causes a rise in unemployment, and really impoverishes the lower classes more than it benefits them.

Now if all businesses have to raise minimum wage, they want to retain a profit margin. By common sense we can guess what they'll do: increase prices. It's like a game of dominoes, if one price increases then anything dependent on it will rise as well. All you've done is shift the price curve and increase inflation.

Minimum wage is a bad thing. Granted that slave labor is also extremely deplorable and some employers are shallow like that, but would it not be better to have a job for 4/hr and have a job than be unemployed? Some money is better than no money, and anything that gives incentive for layoffs or more stringent hiring is a bad idea.

Basic economics.
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#10 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:27 PM

The concern about inflation here is not a matter of manufacturing costs going up. The concern here is a matter of price equilibrium. Since economics is pretty much voodoo beyond some broad truisms, it's impossible to say with any certainty what will happen, but we can make some guesses about what's likely to happen, and it's certainly not outside of the range of human experience that shopkeepers and manufacturers, knowing their customers have more money in their pockets, would want to get some of it, and raise their prices.

Again, I'm not arguing that there should be no minimum wage, or that I know where the right minimum wage is - very possibly it should be higher than it is now, I don't know - but I don't know how you rule out the likelihood that this will have an inflationary effect, or how you decide what the right set point would be.

I do think it would be wise to decide on a point and set it, index it to inflation, and use it to provide some stability in the economy rather than letting it stick for four or five years at a time and then raising it up when some politician needs a good thing to do for poor people. That would allow us to focus on more meaningful changes, which are urgently needed (for example, a proper nationalized health care system, instead of the insane subsidy for insurance companies that we've got starting up now)

This post has been edited by jon.kiparsky: 13 February 2013 - 08:27 PM

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#11 AdamSpeight2008  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:29 PM

There shouldn't be a minimum wage, you don't want to work for said pay. Don't take the job.
It's an economic disadvantage in a global economy.
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#12 Lemur  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:33 PM

The harsh truth is this: some people aren't even worth minimum wage. The more it rises the more people get added to that list. Works wonders on unemployment.
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#13 farrell2k  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:34 PM

View PostAdamSpeight2008, on 14 February 2013 - 03:29 AM, said:

There shouldn't be a minimum wage, you don't want to work for said pay. Don't take the job.
It's an economic disadvantage in a global economy.


Eck. Terrible idea. Every employer would be paying the least amount the market will bear. Millions of desperate workers would have to accept the low wages, incentivising other employers to do the same. Income would go on a downward spiral.
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#14 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:38 PM

View PostLemur, on 13 February 2013 - 10:24 PM, said:

Minimum wage is a bad thing. Granted that slave labor is also extremely deplorable and some employers are shallow like that, but would it not be better to have a job for 4/hr and have a job than be unemployed?


Often times, actually the answer is no. If a job doesn't cover the expenses of having the job, it's a loss, and the time spent on it is lost time. Especially if that time is not doing something enjoyable and edifying like writing programs, but is something tedious, dangerous, or utimately debilitating, as much low-wage work is.

The classic example is a mother with a child: if she has to pay minimum wage for child care, and she takes a minimum wage job, she ends up losing money in the end (taxes). If the only work she can find pays minimum wage, working is a mistake for her. If she can get work that gives her an effective wage of a dollar or two an hour, then she has to decide whether that is going to make a difference to her life. Suppose she can get $40 a week, all things sorted and settled. Is that worth handing her child over to a stranger for? Possibly not - she might reasonably seek other avenues to meet her survival needs (family, friends, savings, borrowing) and to bring in income (education for future employment, start a small business, or whatever other means her ingenuity or idiocy can devise) or she might simply crumble in the face of a life of seemingly no good choices, and sink, as so many do.

Basic economics.
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#15 AdamSpeight2008  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 08:48 PM

Paraphrasing your comment

Eck. Terrible idea. Which employer would be paying the most amount the market will bear?

A dying one!

Examples
UK Manufacturing Industries we created and supplied the world, and look at it now.
Steel
Ship building Industries in Ireland and Northern England.
British Coal Mining.
Priced themselves out the market.

Where are all the mining, ship building and manufacturing industries? Towards the Chinese side of the globe. Why? Cheap labour.

This post has been edited by AdamSpeight2008: 13 February 2013 - 08:52 PM

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