Raise minimum wage?

[OutHouse]

Throckmorton is a sad little worker bee who has no idea how businesses actually operate.

and he wonders why he is dirt poor and bitching about living in a blue state.

 

[Throckmorton]

It might not be exactly $12.75 depending on other factors, but when you pay more for labor a business is going to have two options 1) pass on the increase to the consumer or 2) cut into your profits. Most profit margins in our economy are already pretty small, especially when you're in a business that involves cheap labor like fast-food restaurants and the like.

I'd be curious what type of small business you were working for.

(Btw microeconomics specifically covers supply and demand along with price ceilings (rent control) and price floors (minimum wage) and is a good subject to learn about. Just sayin'.)

So? Pass the cost on to the consumer. I'll pay an extra 50 cents for a burger. Or $1 for a burger. Or $2 for an oil change.

If I was buying a new car I'd pay the extra few thousand bucks for an American or Japanese car vs a Korean one (the price difference is from the labor costs). So would almost everybody here. So why do we need dirt wages in retail?

Did they stop teaching about Henry Ford in American schools? I learned about his philosophy on wages in elementary school and that was in Trinidad.

 

[Infohawk]

So? Pass the cost on to the consumer. I'll pay an extra 50 cents for a burger. Or $1 for a burger. Or $2 for an oil change.

If I was buying a new car I'd pay the extra few thousand bucks for an American or Japanese car vs a Korean one (the price difference is from the labor costs). So would almost everybody here. So why do we need dirt wages in retail?

Did they stop teaching about Henry Ford in American schools? I learned about his philosophy on wages in elementary school and that was in Trinidad.

Again, supply and demand. When the cost of a product rises, less people will purchase it. So you might decide to keep buying burgers, but other people won't and will stay at home. The business will serve less burgers and in turn hire fewer employees. Hence higher unemployment.

Again, we don't NEED dirt wages in anything, including retail. It just so happens that there is a great enough supply of unskilled labor to warrant low wages. Forcing businesses to pay employees more just reduces sales and leads to more unemployment than would otherwise exist.

 

[HeXen]

No. Not everyone gets a 20% raise. The minimum gets increased to $20.

lmao. what about, no....HAHAHAHAHAH
oh crap thats classic. i gotta sig this. Wow fantasies are fun aren't they? throw in some leprechauns, a princess and suddenly the world is perfect. Copy this man's post to Obama, it's pure geni.....hahhahahahhah

 

[Throckmorton]

Again, supply and demand. When the cost of a product rises, less people will purchase it. So you might decide to keep buying burgers, but other people won't and will stay at home. The business will serve less burgers and in turn hire fewer employees. Hence higher unemployment.

I understand supply and demand, but I think the effect of wages on prices to consumers is drastically overstated. Remember, people said the $5.25 minimum wage would destroy jobs and that didn't happen. They said the world was going to end when minimum wage became $7.25, but fast food restaurants are doing well. Hell, you can buy a burger for $1 off the "dollar menu", served by someone making $7.25.

Again, we don't NEED dirt wages in anything, including retail. It just so happens that there is a great enough supply of unskilled labor to warrant low wages. Forcing businesses to pay employees more just reduces sales and leads to more unemployment than would otherwise exist.

So if there was a labor shortage at the unskilled end of the job market, would that lead to restaurant prices that are out of reach for consumers? Or is it somehow different when the market dictates the wage?

And why ignore the benefit of those people at the bottom being able to consume more with their higher wages?

When the market alone controls wages, of course fast food restaurants will pay as little as they can, for the sake of a few cents profit margin. But if the minimum is higher, all those restaurants compete with each other on a level playing field. Wages are a classic example of the tragedy of the commons.

 

[Infohawk]

I understand supply and demand, but I think the effect of wages on prices to consumers is drastically overstated. Remember, people said the $5.25 minimum wage would destroy jobs and that didn't happen. They said the world was going to end when minimum wage became $7.25, but fast food restaurants are doing well. Hell, you can buy a burger for $1 off the "dollar menu", served by someone making $7.25.


So if there was a labor shortage at the unskilled end of the job market, would that lead to restaurant prices that are out of reach for consumers? Or is it somehow different when the market dictates the wage?

And why ignore the benefit of those people at the bottom being able to consume more with their higher wages?

When the market alone controls wages, of course fast food restaurants will pay as little as they can, for the sake of a few cents profit margin. But if the minimum is higher, all those restaurants compete with each other on a level playing field.

The minimum wage almost certainly did destroy jobs, just not all or even most of them. You're acting like there's a price cliff when it's actually a curve. Nobody credible is saying that raising the price of a burger is going to turn all customers away or destroy all jobs. What they're saying is that some customers will turn away and fewer employees will be hired all things else being equal (as in the economy is not growing to offset those layoffs, etc.) So of course the world will not end, but the economy would be matching supply with demand worse than it otherwise would.

If there were a shortage of unskilled labor, wage prices for unskilled labor would rise. Consumers would have to pay more for a burger. Or businesses might actually be inclined to automate their service. (Its this automation that truly makes us rich as a society. Instead of 90% of people slaving away in fields, we very few people working on farms.)

 

[Throckmorton]

The minimum wage almost certainly did destroy jobs, just not all or even most of them. You're acting like there's a price cliff when it's actually a curve. Nobody credible is saying that raising the price of a burger is going to turn all customers away or destroy all jobs. What they're saying is that some customers will turn away and fewer employees will be hired all things else being equal (as in the economy is not growing to offset those layoffs, etc.) So of course the world will not end, but the economy would be matching supply with demand worse than it otherwise would.

If there were a shortage of unskilled labor, wage prices for unskilled labor would rise. Consumers would have to pay more for a burger. Or businesses might actually be inclined to automate their service. (Its this automation that truly makes us rich as a society. Instead of 90% of people slaving away in fields, we very few people working on farms.)

How do you know the optimal part of the curve, taking into account increased purchasing power of the workers, isn't at $20?

 

[Infohawk]

How do you know the optimal part of the curve, taking into account increased purchasing power of the workers, isn't at $20?

You act like everyone will be making $20. Remember, decreased demand for more expensive goods and services will mean some people get laid off. So don't forget to include their non-existent purchasing power in the equation. The free market is the best system we have at allocating supply to demand, so there is no minimum wage that is going to be more optimal. (And btw don't believe everything you learned in elementary school. Working conditions were terrible back then and Ford had to pay people a lot to stay on the job to produce enough model Ts. That is the market in action.)

One could also argue that food, rent and other necessities should have artificial price ceilings so that poor people can afford to buy enough of them. With smaller prices, the suppliers would actually sell more in total since more people could afford to buy the products! Sounds silly right? It's the same thing as artificially raising wages.

The more efficient way to help the poor is to just give them money / resources directly. That is why Warren Buffet supports negative taxes. Although I don't like that idea it's more efficient than the government setting prices. That way you will maximize employment, get the most efficient prices, and the poor can have money for the things you think they desperately need (although notice that nobody is starving in the US and most homeless people are simply mentally ill).

 

[Throckmorton]

You act like everyone will be making $20. Remember, decreased demand for more expensive goods and services will mean some people get laid off. So don't forget to include their non-existent purchasing power in the equation. The free market is the best system we have at allocating supply to demand, so there is no minimum wage that is going to be more optimal. (And btw don't believe everything you learned in elementary school. Working conditions were terrible back then and Ford had to pay people a lot to stay on the job to produce enough model Ts. That is the market in action.)

One could also argue that food, rent and other necessities should have artificial price ceilings so that poor people can afford to buy enough of them. With smaller prices, the suppliers would actually sell more in total since more people could afford to buy the products! Sounds silly right? It's the same thing as artificially raising wages.

The more efficient way to help the poor is to just give them money / resources directly. That is why Warren Buffet supports negative taxes. Although I don't like that idea it's more efficient than the government setting prices. That way you will maximize employment, get the most efficient prices, and the poor can have money for the things you think they desperately need (although notice that nobody is starving in the US and most homeless people are simply mentally ill).

OK, you're right. The government redistributing wealth from taxation does sound more efficient. Let's do it.

 

[Cogman]

OK, you're right. The government redistributing wealth from taxation does sound more efficient. Let's do it.

To some extent, we already are (food stamps, unemployment checks, tax refunds, etc). The question then becomes "How much should the government give out and how should they give it out?" Which is a completely different topic all together.

I do, in fact, support the idea of the government providing basic necessities to all citizens. But, I limit those necessities to food and shelter. The government should be very careful in the tax money that it gives away. Abuse of the welfare system should be something that is decreased at all costs. And I mean that, all costs. Even if it costs more to reduce abuse than it does to accept a higher abuse rate. Welfare can be very detrimental to society if not watched close enough (see england's giant console housing situation).

 

[Infohawk]

To some extent, we already are (food stamps, unemployment checks, tax refunds, etc). The question then becomes "How much should the government give out and how should they give it out?" Which is a completely different topic all together.

Agreed. We've already got the basics covered. We're pretty spoiled as a country. As others in this thread have pointed out, you can live on a small wage. The vast majority of Americans don't even get to the point where they live with their extended families and the like.

 

[Throckmorton]

Agreed. We've already got the basics covered. We're pretty spoiled as a country. As others in this thread have pointed out, you can live on a small wage. The vast majority of Americans don't even get to the point where they live with their extended families and the like.

That's very common in Hawaii. Drive through any working class or poor neighborhood and you see 4 or 5 cars parked in each yard.

I'm sure it will be like that everywhere soon.

 

[glenn1]

This is the basic notion Henry Ford seems to have hit on when he doubled workers' salaries, helping to drive wages up and increasing the spending for his goods.

Save234

I love how the Ford thing gets brought up in every conversation about minimum wage, since those raising it have minimal knowledge of history. When Ford started raising wages from $2something a day to $5/day, Ford was outselling every other automotive company by 5 or 6 to 1. Within a dozen years or so, Ford was surpassed in sales by General Motors, so it would appear that the "pay above market rates for labor" wasn't the great a business decision as you make it out to be. Henry Ford was also a union buster who had the sh!t beat out of union organizers; Ford was the last major auto manufacturer to allow a union. Plus add in his anti-Semitism and you have one heck of a guy to be looking at as a role model.

 

[Infohawk]

I love how the Ford thing gets brought up in every conversation about minimum wage, since those raising it have minimal knowledge of history. When Ford started raising wages from $2something a day to $5/day, Ford was outselling every other automotive company by 5 or 6 to 1. Within a dozen years or so, Ford was surpassed in sales by General Motors, so it would appear that the "pay above market rates for labor" wasn't the great a business decision as you make it out to be. Henry Ford was also a union buster who had the sh!t beat out of union organizers; Ford was the last major auto manufacturer to allow a union. Plus add in his anti-Semitism and you have one heck of a guy to be looking at as a role model.

Yep but as I pointed out in a recent post he also raised wages because working conditions were hard (long hours) and people were quitting left and right. He needed them to meet demand so he raised wages. So it may very well have been a good business decision especially if his assembly line was an advantage he had over other manufacturers.

 

[glenn1]

Yep but as I pointed out in a recent post he also raised wages because working conditions were hard (long hours) and people were quitting left and right. He needed them to meet demand so he raised wages. So it may very well have been a good business decision especially if his assembly line was an advantage he had over other manufacturers.

Quite possibly, but even so it basically led directly to the legal principle of "shareholder value" which is the bête noire for the left:

http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company

 

[nobodyknows]

Again, supply and demand. When the cost of a product rises, less people will purchase it. So you might decide to keep buying burgers, but other people won't and will stay at home. The business will serve less burgers and in turn hire fewer employees. Hence higher unemployment.

Again, we don't NEED dirt wages in anything, including retail. It just so happens that there is a great enough supply of unskilled labor to warrant low wages. Forcing businesses to pay employees more just reduces sales and leads to more unemployment than would otherwise exist.

Isn't it nice we are able to bring in all the illegal labor we need while at the same time outsourcing jobs overseas and then preach about "supply and demand".

 

[Infohawk]

Isn't it nice we are able to bring in all the illegal labor we need while at the same time outsourcing jobs overseas and then preach about "supply and demand".

I'm not a fan of illegal immigration.

Lots of people like to preach about being nice to illegals and then they complain that wages are low and that we can't fund social services anymore.

 

[catilley1092]

Illegal labor is the problem at hand here. Many skilled jobs (carpenters, brick layers, painters) that once paid good money (in the '70's) are being paid not much more now. Because illegals will work for less.

Same with minimum wage jobs.

Cat

 

[xj0hnx]

Lots of people like to preach about being nice to illegals and then they complain that wages are low and that we can't fund social services anymore.

As long as they parrot that "they are only doing the jobs Americans don't want to do" it's all good.

 

[nick1985]

As long as they parrot that "they are only doing the jobs Americans don't want to do" it's all good.

:thumbsup:

 

[Throckmorton]

As long as they parrot that "they are only doing the jobs Americans don't want to do" it's all good.

I thought low wages were good for America... Imagine if we didn't have illegals! Our tomatoes would be $25!! OH GNOES

 

[Infohawk]

I thought low wages were good for America... Imagine if we didn't have illegals! Our tomatoes would be $25!! OH GNOES

You're only making fun of senseamp right now. He's the one who's obsessed with keeping fruit and veggie prices down by any means necessary. Most economic conservatives feel that letting the market set prices is the best way to go even if we don't like those prices.

 

[Throckmorton]

You're only making fun of senseamp right now. He's the one who's obsessed with keeping fruit and veggie prices down by any means necessary. Most economic conservatives feel that letting the market set prices is the best way to go even if we don't like those prices.

Good. Illegal immigrant slave labor is bad for America and bad for illegal immigrants.

Give them all work visas (Bush called them braceros) and apply the minimum wage law to them too.

 

[Infohawk]

Give them all work visas (Bush called them braceros) and apply the minimum wage law to them too.

Very few of them would be employed if employers had to give them minimum wage. You still don't get it do you?

 

[Throckmorton]

Very few of them would be employed if employers had to give them minimum wage. You still don't get it do you?

I don't think you get it. That's my point. If they have to be paid the same as citizens and residents, employers will have no reason to hire them, unless they just work harder.