Minimum wage, where did the Government mess it up?

[Pastore]

At its creation, the point of making a minimum wage was for a person working full time, could support his entire family, which at the time was considered to be 2 children and a wife. And this worked! A middle aged man making minimum wage working full time could do it!

So what has happened? Because you definetely can't live on one minimum wage worker in a household, and I doubt anyone could do it with both the wife and husband working a minimum wage job.

My only idea was that they have not raised minimum wage with inflation, but instead whenever they feel like it.

Think that is an accurate depiction of what is happening?

 

[Zebo]

property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years.

 

[gopunk]

hehe, another min. wage debate!

i dunno, i guess it's inflation too. wha carbonyl said also makes sense, though i really wouldn't know.

 

[Viper GTS]

<< property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years. >>



Real wages account for changes in price level (ie buying power).

Look at nominal wages if you want to compare prices to pay levels.

Viper GTS

 

[TomC25]

<< property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years. >>





Maybe I don't understand what you are saying, but my parents house is only worth a little over 2 times what they paid for it 23 years ago.

That is not a 10 fold increase.

If they paid $4000 for a car in 1970 that same style car would not be $40,000 today.

Did I not follow what you meant?

 

[shiner]

When they let the Democrats win the propaganda war on minimum wage. The damn Democratic party is one giant Maude Flanders running around screaming "Won't someone think of the children, the blacks, the tree frogs, the homosexuals, the insert name here" just so they can look like champions of the "poor and oppressed" in this country. Fact is their economic policies are what help keep people down in this country. Create a culture of government dependence and what do you get? A bunch of people that think the govt. should take care of them cradle to grave.

I don't buy the argument that a large percentage of the population is working in minimum wage jobs to support a family. I may be wrong but last time I was in Taco Bell it seemed to me that everyone in there except the manager was a pimply faced kid.

 

[Amused]

<< property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years. >>



Hmmm, more questionable claims, huh Carbony?

Please, provide us with national average numbers for income, housing and cars. The LA area and a few select urban areas are NOT representative of the entire nation.

 

[Zebo]

<<

<< property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years. >>



Real wages account for changes in price level (ie buying power).

Look at nominal wages if you want to compare prices to pay levels.

Viper GTS >>



OK lets see if I can make this a little clearer.

My dad made $13 an hour in 1969 driving a Pesi delivery truck and a new Camero was $2800
A Pepsi driver today makes $18 and a Camero is $22,000

Is that real wage deprecition or nominal wage depreciation?

 

[Amused]

<<

<<

<< property values

property values have increased ten fold over the last 20 years while real wages have remained stagnent. Also cars have increased ten fold over the last 30 years. >>



Real wages account for changes in price level (ie buying power).

Look at nominal wages if you want to compare prices to pay levels.

Viper GTS >>



OK lets see if I can make this a little clearer.

My dad made $13 an hour in 1969 driving a Pesi delivery truck and a new Camero was $2800
A Pepsi driver today makes $18 and a Camero is $22,000

Is that real wage deprecition or nominal wage depreciation? >>



One job is not representative either, Carbony. We need:

*The average US income in 1970 and 2000.

*The average price of a new car in 1970 and 2000

*The average price of a house in 1970 and 2000

Without those, all you have is anecdotal sob stories.

 

[Zebo]

Without those, all you have is anecdotal sob stories.

Welcome to the ATOT party.

I am only refering to California and not the midwest since that's what I familiar with. I think even you'd agree homes have increased by 1000% over the last 20 yrs. in much of CA. remember your parents house?

Nationwide I would say you would see a similar trend just not as pronounced.

 

[Amused]

<< Without those, all you have is anecdotal sob stories.

Welcome to the ATOT party.

I am only refering to California and not the midwest since that's what I familiar with. I think even you'd agree homes have increased by 1000% over the last 20 yrs. in much of CA. remember your parents house?

Nationwide I would say you would see a similar trend just not as pronounced. >>



Well, yes. Inflation happens. The value of an object is directly related to how much the stupidest person is willing to pay for it. Just look at E-bay.

And let us not forget the double digit inflation of the 70s here.

Also, remember that as housing becomes more scarce, it becomes more valuable. LA has grown so large, there are few places left to build. Homes in convenient locations are going to skyrocket. NYC is a good example of this.

Now, employers are NOT, and shouldn't be liable to take up the slack for this. Because urban dwellers have run out of room is no reason for companies to shoot themselves in the foot.

Ever since I left the LA area, I cannot honestly understand why someone would want to live there, or in any large city. Hell, I can make more money in a medium/small sized city than I can in a large one. And get a house that is MUCH nicer... not to mention raise my kids in a much more desirable atmosphere.

 

[dullard]

<< My only idea was that they have not raised minimum wage with inflation, but instead whenever they feel like it. >>


Bingo. You were correct. Minimum wage has not kept up with inflation. There are a lot of people/groups fighting hard to keep the minimum wage low and they have really succeeded.

For example, from the start of my first job to today, the minimum wage has increased 36%. If we assume a low inflation rate of 3% per year (I don't have the numbers easilly available) then in the same 14 years the cost of living has increased 1.03^14 - 1 = 51%. To get the minimum wage back were it was in the late 80's we need a minimum wage of about $5.80 per hour. To get the minimum wage to where it was in the 60's we need a minimum wage in the upper $6s.

Another troubling thing is that the average number of hours worked has decreased pretty steadilly. Where a worker used to work 40 hours per week, they now average about 35 hours per week. So you are getting paid less per hour (inflation adjusted) AND working fewer hours.

In the midwest you need to earn $18,000/year to be comfortable in a family of 2-3 people (comfortable defined by me as not worring about paying the utilities and getting food on the table). Working 50 weeks per year and 40 hours per week, you need to earn $9 per hour. The midwest is one of the cheapest places to live. Thus elsewhere you need more than $9 per hour to feel comfortable. The current minimum wage is almost half of that!

 

[Zebo]

The average US income in 1970 and 2000.

*The average price of a new car in 1970 and 2000

*The average price of a house in 1970 and 2000

Without those, all you have is anecdotal sob stories. {/


Actually I would love to be able to find these numbers. If you ever see them lemme know.

As for Just "urban la" area increasing that's just not true. San Luis Obispo county has aroung 250,000 people which is very rural and I remember reading in the new times the average home price is now 325K!!! Now I don't have any idea what it was in the 70's . But i would venture to say it was much less.

I would move to MN if the CFO allowed but I can't

 

[Zenmervolt]

Very few people with a family to support actually work for minimum wage. Even the kids at McDonalds are making $1-$3 more than minimum wage. Fast food places in my area start people out at over $6.00 per hour and every friend I had who worked in fast food was making $8.00 per hour or more after 6 months. I'm not saying that it's possible to raise a family on that amount of money, because I honestly have no idea if it is (though I would guess that it's possible with a lot of tight budgeting). Rather, I wanted to point out that the vast majority of minimum wage earners are kids in HS and college who are working for extra spending money and who don't have anyone else to support. All minimum wage does is look nice as a campaign issue while in reality creating an atmosphere in which people think that they are not responsible for themselves because the government will look out for them.

ZV

EDIT: 250,000 people in a county and it's "very rural"? LMFAO! That's about the funniest thing I've heard in a long time. A barely rural county has less than HALF of that population (ex, Wood County Ohio, 121,065 people). A "very rural" county would have between 25,000 and 30,000 people (ex, Adams County Ohio, 27,330 people). I think that you are confusing a commuter county with an actual rural county.

 

[dullard]

Here is my time for anecdotal evidence.

My in-laws own a music store - most of their sales are CDs and car stereos. They pay minimum wage and they are strong democrats who are AGAINST raising the minimum wage. (No one fits their party exactly).

One day they needed help moving their records to a new computer. As I was doing that, they wanted me to help set up new forms and such. While doing this, I happened to see their profits each year. Their profits are the highest the year or two after each increase in minimum wage - their profits were the worst the year before the minimum wage hikes. It made me wonder why. The conclusion: people earning minimum wage are most likey teenagers - teenagers are their biggest customer - when teenagers have more money from a minimum wage hike they have lots more sales. The cost from paying 10% more to their employees was far outweighed by having customers with lots more spending money.

I cannot understand why they are against the minimum wage increases.

 

[dullard]

<< Rather, I wanted to point out that the vast majority of minimum wage earners are kids in HS and college who are working for extra spending money and who don't have anyone else to support. >>


I agree with this.



<< Very few people with a family to support actually work for minimum wage. Even the kids at McDonalds are making $1-$3 more than minimum wage. >>


Now if you earn $1 more over minimum wage, and they raise minimum wage, then in most cases your employer must also raise your salary to keep you at this elevated spot (otherwise you will leave as you see everyone else getting a raise but you). This simple relationship that most places pay higher than minimum wage still holds after every increase in the minimum wage. So yes a hike will affect you (although I often see them increase by only 50% of the minimum wage increase).

 

[StageLeft]

<< hehe, another min. wage debate!

i dunno, i guess it's inflation too. wha carbonyl said also makes sense, though i really wouldn't know. >>

 

[gopunk]

<< minimum wage is evil >>



yup!

 

[Arschloch]

It's good to see that there are some people out there with a good, basic grasp of economics.

There's another interesting facet of minimum wage that nobody discusses: increasing the minimum wage decreases the number of people employed (or at least, makes it lower than what it would have been had there been no increase).

A company has, let's say, $X to spend on labor costs. Labor costs are defined by the number of people employed (N), multiplied by the average wage (W). So, X = NW. If this company has any employees that currently work for minimum wage, then an increase in minimum wage that causes W to increase. If the company wants to keep its labor costs (X) constant, then the company MUST decrease N.

Realize that this only matters at a company where there are people working for minimum wage.

Anyway, my point is that people who are economically liberal always claim to be looking out for people who aren't well off. That being the case, don't they realize that by trying to increase minimum wage, they're putting some of these same people out of work?

This is a similar argument to what I use when I talk about sweatshops. If the government forces, say, Nike to increase their wage for sweatshop laborers, what will end up happening is they'll cut some jobs. Or, they will close down the plant entirely and locate to another country that allows them to pay what they want.

 

[dullard]

<< A company has, let's say, $X to spend on labor costs. Labor costs are defined by the number of people employed (N), multiplied by the average wage (W). So, X = NW. If this company has any employees that currently work for minimum wage, then an increase in minimum wage that causes W to increase. If the company wants to keep its labor costs (X) constant, then the company MUST decrease N. >>



You are right, but the effect is minor. After every minimum wage increase, opponents screamed that this will occur. However studies after the minimum wage increase show that the increase in the number of unemployed minimum wage earners is about 1/10th the amount that your arguement would predict. So yes it occurs, but the overall effect is minor. Here are some reasons why:

1) To keep labor costs low, most companies that pay minimum wage already have the minimum number of employees possible. A bank cannot fire its last teller if the minimum wage goes up; McDonalds cannot fire its frier; 7-11 cannot fire its only clerk. In cases like this N cannot decrease so instead X increases.
2) Like I pointed out a minimum wage increase means more money for the customers, so sales rise so employeers can afford to increase X and when sales rise firing employees is often the opposite of what you need to do.
3) A better labor cost model will include management/owners. Thus X=NW+M where M is the management/owner salary or profit. To keep X constant N doesn't have to decrease since M can decrease. A decrease in M is why owners fight hard against minimum wage increases (if M didn't decrease, then they wouldn't care as they still earn the same).

On average let the total income from minimum wage earners be: Y=NW. After every increase in W, N does decrease slightly but overall Y increases. Thus the poor overall have more money. Sure some people are harmed (like workers who are unproductive/redundant) - but overall they are better off.

 

[Zenmervolt]

<<<< Very few people with a family to support actually work for minimum wage. Even the kids at McDonalds are making $1-$3 more than minimum wage. >>


Now if you earn $1 more over minimum wage, and they raise minimum wage, then in most cases your employer must also raise your salary to keep you at this elevated spot (otherwise you will leave as you see everyone else getting a raise but you). This simple relationship that most places pay higher than minimum wage still holds after every increase in the minimum wage. So yes a hike will affect you (although I often see them increase by only 50% of the minimum wage increase).>>

I have either mis-spoken, or you have missed my point. Teenagers don't need an increased minimum wage. They aren't supporting anyone, and they aren't paying their own way. (This is a generalised case and there are exceptions, but by and large the teenagers earning low wages are earning money that they don't really need.) Raising minimum wage, while it does increase wages for people who earn above minimum wage, is not something that can truly be said to help the poorer classes. The bulk of the benefit of an increased minumum wage goes to kids whose biggest financial burden is paying for the limo at their school's Prom.

ZV

 

[dleiss]

There are about 40,000,000 people making minimum wage. Only in metro areas do the McDonald's employees make over min wage, and they compete for the jobs with Social Security recipients that are tired of eating dog food.

Ronald Reagan stopped the minimum wage from matching inflation, the first of his steps towards destroying the middle class.

 

[gopunk]

Ronald Reagan stopped the minimum wage from matching inflation, the first of his steps towards destroying the middle class.

not quite sure where you're going with this.... the middle class makes more than minimum wage.

 

[Zenmervolt]

<<Only in metro areas do the McDonald's employees make over min wage, and they compete for the jobs with Social Security recipients that are tired of eating dog food.>>

Gee, that's funny. Then Waterville Ohio (all of 7,000 people) must be a metro area because the people at the local McDonalds make $1-$3 over minimum wage. And I guess that the old guy there (maybe 25) is that social security recipient you're talking about.

Get a clue. Also, read a book that's not been pre-approved by Mao. Commie. :|

ZV

 

[drewshin]

dullard,

you win a nobel prize in my eyes

they've instituted a living wage for city employees in san francisco, about ~$9-$10 an hour? and it's worked well so far, it's too early to tell though.