Should the Government increase minimum wage?

[minendo]

Well I am setting up a poll to see what you guys think about the question in the title. I just got done doing some research for my AgEcon class and think that it should be raised. For those of you that don't know the current Federal Minimum wage is $5.15/hour.

So what do you think, and why?

 

[Atrail]

I believe in supply and demand.
Market should set the rate.

 

[b0mbrman]

Nope! Doesn't make economic sense...

Woah...deja vu

 

[Hammer]

No.

 

[Russ]

No. The government should stay out of the business of determining what the prevailing wage should be. If a job is truly worth a certain amount, that is the amount that will be paid. Artificially inflating the value of any given commodity doesn't make it more valuable, and only serves to skew economic results.

Besides, nobody is only paying federal minimum wage anyway, so what's the point? Other then a chance for the do-gooders to make themselves feel better at the expense of the small business community.

Russ, NCNE

 

[gopunk]

no, the vast majority of people making minimum wage are doing so because their jobs aren't worth any more.

 

[b0mbrman]

Who wants to hear a smale-scale example of where it would actually help the worker involved? It has to do with bargaining...

Say a worker is willing to work for any amount greater than $4
The factory owner is willing to hire any person at under $6

Under normal bargaining, the wage would probably work out to $5. Both parties are extra-happy => Worker gets a dollar surplus as does the owner

...but if you set it at $5.50, both parties are still satisfied and there's no deadweight loss...You just transfer the surplus from the owner to the worker...

Of course, it all falls apart when you get to the labor market and the hirer market...but we all knew that anyway

 

[AdamDuritz99]

nope

peace
sean

 

[toph99]

what i'd like is to have one set minimum wage. Because i'm under 18, i make $6.40/h, soon as i turn 18 minimum wage becomes $6.85. just because soemone is a year or two older than I am, shouldn't mean they get paid more for the same work done. this is Canadian too, which means i make $4/h usd.

oh, and for those of you that say that no one makes minimum wage, around here(ottawa, ontario) any teenager with a job, unless they were very lucky, starts at 6.40/h. In my last job you got a raise every 500 hours(i think) by about 15 cents...

 

[stonecold3169]

IMHO, and this is the opinion of a 19 year old working at Omax, minimum wage should not be increased. The only thing that happens when minimum wage increases are those at the very, very bottom of the food chain get raised and everyone else gets lowered as prices exponentially rise. As somebody said earlier, very few people actually make minimum wage, most jobs that teens can get around here are at least $6 an hour, and this is in a pretty poor region. More then likely the increase would be less then that, so almost nobody would be affected. Then again, I could be completely off.

 

[Russ]

<< You just transfer the surplus from the owner to the worker... >>



Which then gets transferred to the consumer in the form of higher costs for the goods and services produced. And, who is that consumer? The aforementioned worker.

Russ, NCNE

 

[Anubis]

Yes they should. minimum wage is supposed to be the minimun ammout of money you have to be making in oder to survive. and freekin 5.15 an hour just dosent cut it. I know New York is rasin the min wage to 6.50 so that cool

 

[ultimatebob]

Yes, they should. It is impossible to take care of YOURSELF working a 40 hour week at 5.15 an hour, let alone taking care of a family. If you increase the minimum amount that people can earn, you can also reduce some people's dependence on food stamps and welfare checks. It would allow people less privledged than yourself to earn a living on their own, and support themselves without government handouts.

 

[Russ]

<< It would allow people less privledged than yourself >>



Less privileged? Is that like "less fortunate"? I am neither privileged nor fortunate. I've worked my ass off all my life, including minimum wage jobs. Everyone, outside of those encumbered by physical or mental handicap, has exactly the same opportunity to increase their income as their career progresses.

The job market is NOT static, it is dynamic. Those who work minimum wage today, will not be doing so tomorrow.



<< If you increase the minimum amount that people can earn, you can also reduce some people's dependence on food stamps and welfare checks. >>



Really? The facts prove otherwise. Over the last forty years, the minimum wage has been increased numerous times yet, until welfare began to be reformed, those on the dole steadily increased year after year.

Russ, NCNE

 

[b0mbrman]

<<

<< You just transfer the surplus from the owner to the worker... >>


Which then gets transferred to the consumer in the form of higher costs for the goods and services produced. And, who is that consumer? The aforementioned worker.
Russ, NCNE >>


Okay...I don't want to end up being the one forced to defend minimum wage because I don't believe in it but...

What you said isn't true in that model...the $6 the owner was willing to pay was the amount his business was boosted by that one worker = society value of extra stuff produced by the addition of that worker. In this model, anything the owner pays below $6 is profit.

That's the logic supporters of the minimum wage use but again, it falls apart when more than one worker exists and more than one owner exists.

 

[Spudd]

In the last few decades, the average family income has increased about 9%. The average income of the wealthy has increased 40x over. You can check this out at a number of sites, including the NY Times (I don't have the link right now). As he said, as long as there is no Dead Weight Loss, then no harm is done. You say that taking away producer surplus increases taxes, but there is nothing to stop them from doing that in anycase, regardless of their gain.

 

[b0mbrman]

<< Yes, they should. It is impossible to take care of YOURSELF working a 40 hour week at 5.15 an hour, let alone taking care of a family. If you increase the minimum amount that people can earn, you can also reduce some people's dependence on food stamps and welfare checks. It would allow people less privledged than yourself to earn a living on their own, and support themselves without government handouts. >>


No, you stick more people *on* welfare and food stamps. Getting paid $5.15 means your marginal benefit to society is worth $5.15 per hour...make it more than that and the business is losing money by hiring you.

You just cost that poor guy his job

 

[ultimatebob]

<< I believe in supply and demand.
Market should set the rate. >>



Yeah, right. This method has worked really well for those 13-year Malyasian kids who are sewing together underwear and sneakers 11 hours a day for $5, right?

 

[gopunk]

um for all those saying it's impossible to raise a family, and such, perhaps people shouldn't be having families until they make enough to support them. just a thought.

 

[Russ]

<< What you said isn't true in that model...the $6 the owner was willing to pay >>



Ah, but without specifying within your model the exact intent of the owner; IE, did he budget a price increase along with the wage, or was he factoring it in based on current structure, it is difficult to say one way or the other. In any event, the scenario is not what happens in reality. What happens is that the wage scale must be increased at all skill levels in order to adjust for the unskilled being compensated at an artificially inflated level.



<< In the last few decades, the average family income has increased about 9%. The average income of the wealthy has increased 40x over. >>



Another ridiculous argument because, once again, it is based on static thinking. Those who are on the low end of the earning scale today, will NOT be so in the decades to come. Only a very tiny percentage of the population stays in the lower percentile during their entire career. Earning potential is dynamic just like all economic factors.

Russ, NCNE

 

[minendo]

<< um for all those saying it's impossible to raise a family, and such, perhaps people shouldn't be having families until they make enough to support them. just a thought. >>


True, but what happens if say the father gets laid off from a decent job and then all he can find is a low paying job?

 

[Amused]

Again, simplicity reigns supreme in the name of knee-jerk, feel good nannyism.

If you increase the minimum wage, businesses will simply increase their prices for the goods and services that require minimum wage help.

In short order, the middle class will no longer be able to afford the life style they are accustomed to, and will demand similar wage increases.

Meanwhile, as prices rise for all goods and services to pay for the increased wages, the minimum wage workers are right back where they started.

You don't lift a person up by artificially increasing the worth of his labor. You lift him up by teaching him a skill that makes his labor worth more.

 

[AaronP]

the vast majority of people who make min wage are teens. Do they really need more money? I don't think so. Sure there are people who are making little money that aren't teens, but are most of them really making the minimum? Raising the min wage for the most part doesn't affect the people making 6 or 7 bucks an hour since most employers don't increase their wages in proportion to the minimum.

 

[b0mbrman]

They should raise the minimum wage to a million bucks an hour. Then we'd all be millionaires!

w00t!

Of course we all know that doesn't make sense. No firms would hire anybody and therefore, no firms would produce anything. Everyone would lose their jobs.

Hell, I'd be totally happy working for $500,000 but the government wouldn't let me take it

Okay okay...then how about $1,000 an hour?

Still, almost no firms would be able to hire anyone. No one would have a job except for...uh...that guy that shat golden eggs.

$100 an hour?

Now we're getting somewhere. You just made at least a couple industries profitable...Brain surgery would make sense again and professional sports players would have something to do.

Anyone...this can keep going till the very bottom. Someone's gotta split the peas for split pea soup or patch up holes on tents...

Setting a minimum wage knocks out industries and blocks people who would be willing to get paid less than the minimum wage from getting a job.

And that's an important point...slavery's gone man. No one's forcing those people making minimum wage to take those jobs, they take them because they're willing to do so. And if they weren't willing? Well, there's probably a dozen other guys who have no jobs at all who'd love to take their place

 

[Martin]

I think its reasonable to adjust it according to inflation. IE, if the inflation this year was 2%, then the min wage should be raised accordingly.