Real World Effects Of Minimum Wage

[DucatiMonster696]

I'll be more than happy to pay you less than minimum wage as my domestic servant if it bothers you that much.

If your employees output isn't worth more than, what 7.25/hr, you shouldn't be in business to start with.

And if your labor is not valued at 7.25hr what is the alternative? Oh yeah unemployment.

The crux of the debate isn't that businesses will be put out of business. Must businesses will just pass on the cost to the consumer (thus increasing the standard of living for everyone in society over a period of time) if their business model is viable.

However the real issue is the effect of such policies have on individuals for which the ardent supporters of minimum wage laws claim to want to help, i.e. aka young people, the poor, etc. You're not improving the unemployment rates with a minimum wage and worse you're just phasing them out of the economy completely by preventing them from being able to compete with others workers who are indeed worth the wage rate set by minimum wage laws.

 

[DucatiMonster696]

The problem with the minimum wage is that employers don't like to be told how much they pay their workers. In fact many would prefer to have slaves. Thus, I think the answer is simple, not only set a minimum wage but make people hire. That way businesses will have to compete. Say for ever three people you have you have to hire another at the minimum wage and the employer gets to pick which one gets it, the one he has to hire or one of the three he wanted. This will create some worker competition. Also the employer has a person working for him at less than he would normally have to pay to add a fourth worker. That means he gets a cheap advantage if he finds a way to use him profitably. This will force weak businesses out of business and promote aggressive and competitive ones. Employment goes down, productivity goes up, more money to spend boosting the economy, and off we go to the races. Everybody wins.

This is laughable at best.

 

[sandorski]

To what exactly?

You do realize that every-time you raise the minimum wage significantly you effectively price out certain segments of the population. In addition to adding to the cost of businesses (employees being their biggest cost) which they then pass onto consumers thus increasing the costs of living in parallel to minimum wage hikes for sectors of the economy which are directly effected by this hike.

Take the year the Minimum Wage was last set, increase by the accumulated Rate of Inflation, voila.

Untrue.

 

[hans007]

One can argue that if there was say no minimum wage and no welfare then we'd find a clearing price and eventually everyone would have a job or else starve. For example for $1 an hour you could hire someone who would otherwise be unemployed to say wax your car every single day etc

It would become an option if people would take $1 an hour. Instead we have social programs so people dont have to sink that low , steal , be prostitutes etc.

And obviously we pay for those programs. So in effect we pay money to subsidize minimum wage and keep people who can't get those jobs out of the market. Economically the clearing price of working raises because it makes people have A choice of welfare etc instead. Most economists would argue its inefficient but who knows what would happen with crime etc if people were forced to work for say $3 an hour.

 

[DucatiMonster696]

Take the year the Minimum Wage was last set, increase by the accumulated Rate of Inflation, voila.

Untrue.

Show me where minimum wage laws have increased employment rates or where it has had a net decrease on the cost of living or better yet reduced operating costs for employers vs having it raised significantly and keep pace with inflation.

Furthermore notice I said "raised significantly" which means the rate would need to spike upward in dramatic fashion for it to keep pace with inflation which would have a dramatic effect on the bottom line of many employers in many parts of this nation and ::surprise:: cause some people to be priced out their job and the marketplace.

 

[Exterous]

Conservatives live in a fantasy world where it's possible to survive on less than minimum wage.

Well, first off, perhaps you do not know the definition of 'survive' but it is actually possible to survive on less than minimum wage. As luck would have it the BLS has a report that shows people are, in fact, living (ie surviving) earning less than minimum wage.

Now - if you would instead want to say that the lifestyle of someone trying to support themselves on minimum wage is not a very good one then you would actually have a chance at making an argument.

Semantics aside it is also important to look at who is making minimum wage. Almost half of the workers are 25 and under - meaning a large chunk making minimum wage or less are high school and college students - people who typically do not need to support themselves on their job income alone. I think it should also be noted that only ~3.5% of the working population makes at or below minimum wage.

Considering who makes minimum wage, where the poverty levels are at and how many people are living on poverty it should be clear that most of the people struggling financially are already making over minimum wage. (This is not the same as saying we should have no minimum wage)

http://www.bls.gov/cps/minwage2010.htm#2

 

[techs]

To what exactly?

You do realize that every-time you raise the minimum wage significantly you effectively price out certain segments of the population. In addition to adding to the cost of businesses (employees being their biggest cost) which they then pass onto consumers thus increasing the costs of living in parallel to minimum wage hikes for sectors of the economy which are directly effected by this hike.

You do realize that by eliminating the minimum wage in an era of oversupply of labor you will create a large number of people who don't earn enough to have a roof over thier heads or eat. Meaning the government will have to step in and help them monetarily. If not you will have food riots,etc. Not to mention destroy our countrys unity since millions of people would have no chance of the American dream.
Hope you like it when a Hugo Chavez type President is elected.

 

[SNC]

The problem with the minimum wage is that employers don't like to be told how much they pay their workers. In fact many would prefer to have slaves. Thus, I think the answer is simple, not only set a minimum wage but make people hire. That way businesses will have to compete. Say for ever three people you have you have to hire another at the minimum wage and the employer gets to pick which one gets it, the one he has to hire or one of the three he wanted. This will create some worker competition. Also the employer has a person working for him at less than he would normally have to pay to add a fourth worker. That means he gets a cheap advantage if he finds a way to use him profitably. This will force weak businesses out of business and promote aggressive and competitive ones. Employment goes down, productivity goes up, more money to spend boosting the economy, and off we go to the races. Everybody wins.

Do you actually believe this, or are you trolling? You do realize this is not North Korea right?
The day the government tells me how may people I an required to hire is the day I.....................

 

[Spungo]

Conservatives live in a fantasy world where it's possible to survive on less than minimum wage.

Yeah but they want the FREEDOM to starve to death in the cold. Didn't you read the constitution? It's at the bottom somewhere: thou shalt be a serf.

 

[Texashiker]

Do you agree that the minimum wage causes more harm than good and should be ended?

Minimum wage should be structured on how much profit the company makes.

Walmart can afford a higher minimum wage then a mom and pop hardware store.

mom and pop hardware store - $5 an hour minimum wage.

walmart - $15 an hour minimum wage + mandated benefits.

 

[Exterous]

You do realize that by eliminating the minimum wage in an era of oversupply of labor you will create a large number of people who don't earn enough to have a roof over thier heads or eat. Meaning the government will have to step in and help them monetarily. If not you will have food riots,etc. Not to mention destroy our countrys unity since millions of people would have no chance of the American dream.
Hope you like it when a Hugo Chavez type President is elected.

Considering only ~3.5% of the workforce makes at or below minimum wage I fail to see how suddenly eliminating it would cause a wage crash. If minimum wage laws were the only reason businesses pay what they do then I would think a much higher percent would be making that wage.

Edit: Changed my % of those making at or below minimum wage to 3.5% in both posts. I had incorrectly gone with 6%. 6% is the percentage of hourly workers making at or below minimum wage. Hour workers make up ~60% of US workers

 

[hans007]

Minimum wage should be structured on how much profit the company makes.

Walmart can afford a higher minimum wage then a mom and pop hardware store.

mom and pop hardware store - $5 an hour minimum wage.

walmart - $15 an hour minimum wage + mandated benefits.

This is damn near idiocy. So you are going to basically punish the businesses who are good at making money?

What if my company is grossly profitable but only has relatively few employees. Do I now have to pay my janitor like $70 an hour. I'd figure this would apply to a place like Google just a few years ago when they only had 3-4000 employees most of which were highly paid anyway.

Mom and pop shops are not good at making money because they have overhead. The only reason they exist now is for convenience and if you value that small store atmosphere. If enough people value that they can pay for it and not force Walmart to pay more to subsidize small stores that are not efficient

 

[Texashiker]

This is damn near idiocy. So you are going to basically punish the businesses who are good at making money?

Why should the tax payers be punished because companies use welfare as part of their benefits package?

Why should companies like walmart be allowed to make hundreds of millions in profit, and pay their employees low enough so that the employee can get welfare?

 

[cybrsage]

Because welfare exists. If it did not, companies would have to pay more.

 

[Incorruptible]

The minimum wage must be ended, its the government sticking there nose in private business

 

[OutHouse]

Agreed. Government has no right to get involved

lol your ideas on what is and what is not governments business is pretty dumb. there is a reason why nearly every civilized modern government on the planet has instituted a min wage. I suggest you go educate why that is.

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

 

[Incorruptible]

lol your ideas on what is and what is not governments business is pretty dumb. there is a reason why nearly every civilized modern government on the planet has instituted a min wage. I suggest you go educate why that is.

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

Just because other countries do it then the US should do it as well?

The minimum wage is wrong and must be ended. It seems to me your leeching off of it and that's why you support it.

 

[nehalem256]

Minimum wage should be structured on how much profit the company makes.

Walmart can afford a higher minimum wage then a mom and pop hardware store.

mom and pop hardware store - $5 an hour minimum wage.

walmart - $15 an hour minimum wage + mandated benefits.

This is damn near idiocy. So you are going to basically punish the businesses who are good at making money?

Please provide evidence for this Texashiker. Last time you suggested Walmart raise their wages to $15/hr (with no mandated benefits) some simple math showed they would lose ~$6 billion per year and go bankrupt.

 

[Texashiker]

Please provide evidence for this Texashiker. Last time you suggested Walmart raise their wages to $15/hr (with no mandated benefits) some simple math showed they would lose ~$6 billion per year and go bankrupt.

The "simple math" does not tell the whole story. If I remember right, things broke down when I asked how much walmart paid out to its stockholders.

When the topic came up of paying stockholders VS paying employees, a couple of people derailed things asking why shouldn't stockholders get a return on their investment.

 

[Incorruptible]

Please provide evidence for this Texashiker. Last time you suggested Walmart raise their wages to $15/hr (with no mandated benefits) some simple math showed they would lose ~$6 billion per year and go bankrupt.

You actually expect evidence from liberals who make claims just for fear mongering?

 

[CycloWizard]

Conservatives live in a fantasy world where it's possible to survive on less than minimum wage.

Some live in a world governed by math. If the cost of an employee is worth more than the added revenue, why would anyone hire that employee? Increasing the minimum wage alters the equilibrium of this equation by requiring larger returns per employee to justify employment. I can prove this on an abacus.

edit: The equation is simply this:
N*W<=\sum_{i=1}^N{R_i}
where N is the total number of employees, R_i is the revenue generated by employee i, and W is the wage paid to each employee. On a per employee basis, we could simply write
W_i<=R_i
If this inequality is not satisfied, then no rational person would ever hire this employee.

 

[Texashiker]

You actually expect evidence from liberals who make claims just for fear mongering?

Liberal? I consider myself ultra-conservative.

If the cost of an employee is worth more than the added revenue, why would anyone hire that employee?

Sum of the whole is greater then the parts combined, aka synergism.

 

[Incorruptible]

Liberal? I consider myself ultra-conservative.




Sum of the whole is greater then the parts combined, aka synergism.

What kind of Conservative supports a minimum wage WHICH IS GOVERNMENT INTERVENTION

 

[Texashiker]

What kind of Conservative supports a minimum wage WHICH IS GOVERNMENT INTERVENTION

Free fall capitalism does not work.

A pure capitalist society works no better then a pure communist society.

 

[Incorruptible]

Free fall capitalism does not work.

A pure capitalist society works no better then a pure communist society.

The minimum wage doesn't work and is racist against black people