U.S. minimum wage increase?

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194 Replies - 5185 Views - Last Post: 19 February 2013 - 06:49 PM

#16 farrell2k  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 09:48 PM

There are some industries that will not survive in certain places. U.S. manufacturing has taken a huge hit, but it is still the number 2 manufacturer in the world, after China. It makes more sense to pay a chinese worker $2 USD/hr to make clothes and disposable electronics, thus those jobs won't survive in countries like the US and in regions like the UK. That will never change, but doing away with a minimum wage is a race to the bottom. Why would someone take a job for less than a fair minimum when he or she could simply live off of government benefits instead? For the people who are forced to do so, it amounts to slave labor. I wouldn't want to live in a society like that, but to each his own.
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#17 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 09:53 PM

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to each his own.



Talking about societies, this doesn't really apply as well as it does to something like ice cream flavors, does it?
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#18 AdamSpeight2008  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 10:03 PM

The idea of the minimum wage as a policy is political one up man-ship.

The first party to introduce it wins, since it be political brave or even suicidal for another party to remove it or even reduce it.

Why not go the all hog and pay everyone one the same amount, regardless of the skill, experience, knowledge or scarcity. Fireman paid the same as a Programmer or Nurse or politician.

This post has been edited by AdamSpeight2008: 13 February 2013 - 10:10 PM

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#19 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 10:09 PM

Really, you have to admit that's pretty weak. Sort of like "providing police to protect citizens? why not just give everyone a private bodyguard?" or "taxing income? why not just take all of the money everyone makes and give it to the government?" would be weak.

This post has been edited by jon.kiparsky: 13 February 2013 - 10:09 PM

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#20 KYA  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 10:17 PM

Support for a federal minimum wage is a sure sign of economic illiteracy
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#21 CTphpnwb  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 10:39 PM

Small businesses need customers who can afford to buy from them. Paying only minimum wage benefits the employer in the short term, but hurts other businesses, and that eventually cycles back around to hurt the employer. It's why we have these "jobless" recoveries that are followed by recessions.
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#22 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 10:47 PM

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The case for a national minimum wage set by the federal government is risible. It's obviously ridiculous to suggest that labor conditions are the same everywhere - even if you did have that magic 8-Ball to tell you what is the "just right" level of government-set wages, it would be radically different from urban to rural markets, and among states and localities with drastically different costs of living.



Okay, so perhaps he's right. The federal minimum wage would be improved by raising it in high-wage areas.

Or is he arguing against himself? I think maybe he is. His arguments in this section are in fact arguments for strengthening the federal minimum, not weakening it.

His final paragraph in this section is completely incoherent, mixing up Dunkin' Donuts with small businesses, and completely ignoring the fact that a national donut chain will go anywhere they can make more dollars than none - and there's no way in hell that $80 per worker per week is going to make a difference to that calculation. So far, he's completely misfired.


2.

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If you buy the idea that a single national minimum wage can make economic sense, why on earth would you allow some states to end-run around the federal rule by raising their own state minimum wages above the federal limit?


Okay, so "minimum" went wooshing past him. 0 for two.



3.

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What About Illegal Immigrants?


I knew we were going to get here. Got a problem? Blame it on a brown person. Charming. Of course, the only reason that "illegals" work for cheap is because some rat bastards have declared them "illegal" and made it illegal for them to work in this country. Remove this interference with the market, and his argument evaporates - but of course he'd have a stroke if you suggested anything of the sort.


Sorry, this guy's a complete wash. Where did you dig up this joker, anyway?
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#23 farrell2k  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 13 February 2013 - 11:14 PM

Arguments against minimum wage tend to remind me of the argument for small government. Proponents of both of these don't seem to know that we had both before, small government and no minimum wage. Both didn't work out so well.
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#24 Cheribasa  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 07:55 AM

This crap that Obama is doing will affect me later, but I think we were getting along just fine, and as said above, with more 'money' that the Middle class has, the more inflation could mean. The American dollar means less and less in the global market. Good thing I have plans to move to Estonia. Sooner or later, I will leave all this crap behind.
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#25 macosxnerd101  Icon User is online

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 07:58 AM

I think the Wall Street Journal does a good job explaining the impacts of a minimum wage increase.

Cite: http://online.wsj.co...3328738108.html

Quote

That is because of the Earned Income Tax Credit, which boosts wages for workers at the bottom of the pay scale without putting their jobs or incomes at risk—which is one consequence of hiking the minimum wage. If Mr. Obama is dead set on using the government to boost wages, the EITC is the place to start, as the evidence suggests that minimum wage increases have no appreciable impact on poverty.
...

Republicans have supported this tax credit because eligibility is based on working and earning income. Democrats hail the EITC because it's refundable, meaning that a low-wage family without any tax liability nevertheless can file a tax return and get a check from the government....

Another reason a higher minimum wage doesn't reduce poverty rates is that a hike in hourly pay doesn't necessarily translate to an annual income bump. If employers faced with suddenly higher labor costs reduce hours or employment, take-home pay will decline. Economists writing in the Journal of Human Resources in 2005 found that to be the case, with the "losers" from a higher minimum wage—who moved closer to the poverty line after the policy was passed—outnumbering the winners...

A 2007 study by Mr. Sabia found that a higher Earned Income Tax Credit can boost the wages and employment of single mothers. But the employment of single mothers dropped by 6% for each 10% hike in the minimum wage.

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#26 lordofduct  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 08:08 AM

View PostAdamSpeight2008, on 13 February 2013 - 10:29 PM, 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.



View PostAdamSpeight2008, on 14 February 2013 - 12:03 AM, said:

The idea of the minimum wage as a policy is political one up man-ship.

The first party to introduce it wins, since it be political brave or even suicidal for another party to remove it or even reduce it.

Why not go the all hog and pay everyone one the same amount, regardless of the skill, experience, knowledge or scarcity. Fireman paid the same as a Programmer or Nurse or politician.


You have a very all or nothing mentality on this.

When someone agrees with having a min wage, that doesn't necessarily mean anyone is arguing for equal pay across the entire gambit.

Don't use such a red herring either, it does nothing to actually support your argument of no min wage.


Personally, I'm a man of no extremes. I believe extremes tend to hold the wrong answer.

Lets assume there is a high chance nothing is perfect, or at least that the free-market isn't perfect, it's demonstrably not perfect. Going with only free-market is an extreme, where as using other ideas to fix the imperfect parts is compromise. That's what minimum wage is... with out it the free-market can drive the wages of certain individuals into an un-livable wage. Having a min wage stops that, and if the job can't survive at min wage, then the job leaves the region.

Market forces won't do that exactly. Market forces will consider the cost of leaving the region and first attempt to push wages even lower. Labor forces will accept lower wages for a time before they stop taking the jobs, because certain individuals will take the lower wages over no wages.

Will it spiral? No, it won't spiral, but it'll definitely screw some shit up before finally the labor refuses to do the job at the low wages, and then the job must leave the region.

Min wage just puts a buffer there, to relieve some of that stress in those circumstances.

The thing about min wage is that if it gets too high it can have an effect in the other direction by influencing inflation (of course it's not the only force that influences it). And currently speaking a 9 dollar min wage might do more damage than help... I say might though as I don't know the specifics, I don't know the threshold, I'm not an economist.

This post has been edited by lordofduct: 14 February 2013 - 08:09 AM

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#27 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 08:25 AM

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If employers faced with suddenly higher labor costs reduce hours or employment, take-home pay will decline.


But how likely is this? We know that employers don't spend money they don't have to. In fact, economists tell us they're going to spend money on labor based on a simple question, which is "do I make more money by purchasing this hour of time than it costs me to buy it?"
And since the difference in price between this hour today and this hour tomorrow is about $2, there's a very slim margin where this is going to make a difference. If your coffee shop is so marginal in that last hour that $2 makes a difference to you staying open or not, then you don't make that decision based on the $2, you make that decision based on other factors. (Real-life example: We always kept Mojo's open until 11 PM on weeknights because the customers who found us open late on a Tuesday night would come back in the evening on a Thursday, or on a Saturday afternoon, and they would keep coming back - the last hour never made much till, but it made us a lot of money)

In general, I don't believe the argument that raising the minimum wage will appreciably affect the rate of employment at the bottom, because those employers already hire as few people as they can possibly get away with: if they could hire fewer people, they would hire fewer people, regardless of where you set the minimum wage.

To put it another way, this argument requires that you believe that setting the minimum wage to half its current rate would roughly double employment at minimum-wage establishments. That is clearly ridiculous, and so is the Journal's position. The fact that this happens to be the received orthodoxy of academic economics merely reveals the gaping holes in the dismal science, and its fundamental failure to understand the real world.

They make pretty graphs, though.
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#28 no2pencil  Icon User is offline

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 08:27 AM

*
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View Postfarrell2k, on 13 February 2013 - 10:34 PM, said:

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.

Heh, you know how to run a business?

I pay my employees a mixture of what they are worth & what the business can afford. If I was forced to pay them more, I would have to let one go. I had a technician that I was paying ($12/hr) more because he did a better job, & he was offered more to go elsewhere. I also had a technician whom I was paying less because he was new ($9/hr), & he got fired for yelling at customers, constantly neglecting documentation, just overall poor employe performance. No matter how much I paid that 2nd technician, he wouldn't perform any more favorably. He sucks as a computer repair technician. So now that minimum wadge is going up, he's either going to be someone else's problem (at a new, higher minimum wadge), or he isn't going to find work at all.

& this entire though process of 'potential customers' is ludicrous. I'm not going to see any more business at my shop because people are making $1 something more an hour. They either need our services or they do not. & if they do, they want top notch service. Which my shop can only achieve from hiring skilled workers & paying them what they are worth. Raising minimum wadge does not raise their skill set, & does not raise our production, & does not offer a better product.
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#29 macosxnerd101  Icon User is online

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 08:35 AM

Quote

To put it another way, this argument requires that you believe that setting the minimum wage to half its current rate would roughly double employment at minimum-wage establishments. That is clearly ridiculous, and so is the Journal's position. The fact that this happens to be the received orthodoxy of academic economics merely reveals the gaping holes in the dismal science, and its fundamental failure to understand the real world.

This statement is based off the assumption that economists view things as scaling linearly. Some do- these are called perfect substitutes. Most things aren't perfect substitutes; and as such, aren't modeled linearly.
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#30 jon.kiparsky  Icon User is online

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Re: U.S. minimum wage increase?

Posted 14 February 2013 - 08:46 AM

Even so, it's hard to see how a model would predict a loss in employment from raising the minimum and not a corresponding gain from lowering it. Translating this into the real world, this is an argument that employers view labor as something they want to have, and want as much of as they can buy, which is of course incorrect. If you've ever run a business, you know that this is silly - you hire as many people as you need to get the job done, and not more. If labor suddenly becomes cheaper, you don't hire more of it, you only hire more people if you have more work to be done. Likewise, if labor becomes more expensive, that doesn't change the fact that not having your coffee bar staffed means lost revenue, so you hire the same number of people.

Economists really ought to get jobs, their theories would start to make sense.
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