Should we lower the minimum wage?

[Cogman]

Because of wealth disparity, raises to the minimum wage making a big difference to people are very cheap overall to cost of living. And those people spend the money in the economy.

Your missing an effect. While it is true that instantly those earning minimum wages will be better off, in the long run it is nothing more than a method of inflation. More expensive labor = more expensive products.

Short term, it does help. Long term it doesn't do anything.

 

[RU482]

trickle up economics. yeah! and engineering job that pays $12000/yr

 

[her209]

trickle up economics. yeah! and engineering job that pays $12000/yr

Go to the defense industry. You'll get 5-10x that.

 

[CPA]

We should eliminate the minimum wage.

 

[CPA]

I would rather abolish the stock market then minimum wage. It would do more good for our country. Get away from the profit at any cost mentality and maybe the world wouldnt be the shit hole it is today.

Yes because the USSR style of business was soooooo much better. Jeez, some of you need to take an econ class, even a basic one.

 

[CPA]

14 states are rallying for $3.25 hr and yes they want tent cities that they can police the serfs easily.

It's all been planned out.

Just like the $5/gallon gas, right.

 

[Anarchist420]

It seems to me that we can increase our exports and lower unemployment by lowering the cost of wages. If we were to lower the minimum wage, labor could be cheaper, and exports should increase. Also, because labor is cheaper, there should be less outsourcing of jobs. Good idea, or no?

We should abolish the minimum wage. Not only does it stop companies from hiring, as you point out, companies also have to lay off workers because of the minimum wage.

 

[Craig234]

Yes because the USSR style of business was soooooo much better. Jeez, some of you need to take an econ class, even a basic one.

Reducing the excesses of Wall Street is not the same as the USSR.

How many thousands of times do we need to deal with righties who don't get that?

 

[Craig234]

Your missing an effect. While it is true that instantly those earning minimum wages will be better off, in the long run it is nothing more than a method of inflation. More expensive labor = more expensive products.

Short term, it does help. Long term it doesn't do anything.

I disagree. It's not a global wage increase; increases have an umbrella effect, but not for the more expensive labor; and labor is only part of the cost.

In other words, the benefits are greater than the very minor inflation.

To make up numbers to make the point, a 20% increase in the minimum wage might have a 1% inflationary effect - that is then reduced or even reversed by the economic growth.

In a way, you could call those terrifying words - income redistribution - which are sometimes a very good thing.

Having a few dollars go from excessively concentrated wealth into the poor's pockets and active economic use can be good for the economy and society, reducing oligarchy.

 

[ElFenix]

depends on if we're beyond the maximization point or not.

obviously a minimum wage of $50 would result in no body getting hired and so no one makes any money.

a minimum wage of $0.50 would also result in no one making any money, but for the opposite reason (because $0.50 a hour isn't enough to do anything)

somewhere is a point where you find the maximum of (number of hours worked)*(minimum wage). that's where the minimum wage should be set.

 

[werepossum]

depends on if we're beyond the maximization point or not.

obviously a minimum wage of $50 would result in no body getting hired and so no one makes any money.

a minimum wage of $0.50 would also result in no one making any money, but for the opposite reason (because $0.50 a hour isn't enough to do anything)

somewhere is a point where you find the maximum of (number of hours worked)*(minimum wage). that's where the minimum wage should be set.

If only that point could be determined mathematically. Instead we have one party being lobbied by businesses not to raise their costs, and one party being lobbied by labor unions for whom an increase in the minimum wage represents an automatic contractual raise whether the employer can afford it or not. There is no science applied except pseudoscience to support each side's predetermined point of view.

It's worth saying though that we cannot just legislate wealth creation. Raising the minimum wage represents at best either a temporary increase for all minimum wage workers (until inflation makes the new wage equal to the old wage), or a semi-permanent increase for some and job loss for others as those jobs already borderline profitable drop away. If it were possible to create wealth simply by raising the minimum wage, then we'd regularly increase it until we were all millionaires. In reality this would be good only for wheelbarrow manufacturers. (Folks have to be able to carry their money to buy bread, after all.) The most a minimum wage can do is benefit those unskilled workers in jobs that would still be profitable at the higher wage, but for which the available labor pool is so large, and the value of job experience so low, that there is no internal pressure to increase wages.

 

[Atreus21]

It would greatly increase the profits of McDonalds, Taco Bell, and Burger King though. So there's that...

- wolf

Who would in turn, lower their prices to stay competitive unless they're in collusion...

 

[her209]

Who would in turn, lower their prices to stay competitive unless they're in collusion...

They already hire illegal immigrants so that's probably as low as it goes.

 

[Atreus21]

Economics ala Wikipedia on price floors:

A historical (and current) example of a price floor are minimum wage laws, laws specifying the lowest wage a company can pay an employee (employees are suppliers of labor and the company is the consumer in this case). When the minimum wage is set higher than the equilibrium market price for unskilled labor, unemployment is created (more people are looking for jobs than there are jobs are available). A minimum wage above the equilibrium wage would induce employers to hire fewer workers as well as cause more people to enter the labor market, the result is a surplus in the amount of labor available. The equilibrium wage for a worker would be dependent upon the worker's skill sets along with market conditions.

Seems simple enough. The supply of labor exceeds the demand for labor, creating more unemployment, and as a result more poverty.

 

[Atreus21]

They already hire illegal immigrants so that's probably as low as it goes.

Then at least they'd be de-incentivized from favoring illegal immigrants. Incidentally, can you prove that (that they hire illegal immigrants)?

 

[ElFenix]

The supply of labor exceeds the demand for labor, creating more unemployment, and as a result more poverty.

that's not necessarily true.

the situation may be that the equilibrium wage is still a poverty wage, but the legal floor is not.

now, the people that no longer have jobs due to the legal floor are worse off. they may have been in poverty but not extreme poverty before, and are now in extreme poverty.


a question about poverty: if we're to figure out if the things we're doing to fight poverty are working, shouldn't we make sure to account for those things in the poverty statistics?

 

[soulcougher73]

Yes because the USSR style of business was soooooo much better. Jeez, some of you need to take an econ class, even a basic one.

You dont need a stock market to make the world go round. We went many thousands of years without one and we didnt all die. If people want to expand and grow their business then they take the business ideas and strategies to a bank and get a loan assuming the bank agrees that they have a sound plan. Putting your company in the hands of greedy people who are only after profit at all cost is a fail way to run a business much less base an economy around. If i ever started a company there is no way in hell i would give any kind of control of it over to greedy money hungry immoral people.

Can money be made this way? Sure can. Is it the best way to run a countries business model after? Not at all.

 

[experiences]

The feds should support the dollar by lowering the minimum wage AND federal spending by ONE percent of the previous year each year!!!

 

[Harvey]

The feds should support the dollar by lowering the minimum wage AND federal spending by ONE percent of the previous year each year!!!

Failed economics, sociology and history, I see. :thumbsdown:

 

[Juddog]

Make the poor more poor, while the Rich are already the richest they've ever been, compared to the poor, in the history of the nation? Sounds like a great idea!

 

[experiences]

99% of the previous year for 50 fifty years would equal 60% of today's outrageous government spending. $7.25 x 60%= $4.35 a minimum wage that would be far more valuable than Obama's plan to destroy the American economy with $9.00 minimum wage a 24% JUMP UP.

 

[moonbogg]

We certainly shouldn't raise it. Everything remains relative, and by increasing min wage, I become relatively under paid. Costs will go up anyways. How this makes sense is far beyond me.

 

[glenn1]

In order to compete with someone willing to live twelve in a hut and eat rice three meals a day, we'd have to be willing to do the same AND depress our economy to make housing and rice competitive in cost. Doesn't seem to be much point in that.

If you as a worker don't provide any more economic value than the person living in a mud hut, why should you expect to be paid more? Is simply being an American reason to pay you a premium wage?

If we lower the minimum wage to 50 cents an hour, we'll be able to compete with the Chinese. And if we allow young children to work, we might even be at a competitive advantage.

Many minimum wage jobs aren't competing against Chinese but rather automation.

isn't federal minimum wage 5.15 a hour? If companies that have work that only needs minimum wage people cant do it at that price they aren't going to do it at all.

Progressives have already made it clear that they'd rather people not have jobs than have jobs paying below some arbitrarily defined amount, and the marketplace has kindly obliged them in not hiring people to do those jobs.

 

[Ryan]

We certainly shouldn't raise it. Everything remains relative, and by increasing min wage, I become relatively under paid. Costs will go up anyways. How this makes sense is far beyond me.

Think about this: Adjusted for inflation - the minimum wage in 1970 was $10 an hour. The minimum wage has actually been going down.....

 

[experiences]

please tell me if I failed this course why you forget, after inflation comes depression.