Paul Krugman's The Great unraveling
For all those interested in American economics--I recommend this book.
For all those interested in American economics--I recommend this book.
CADsortaGUY
Lifer
And you base these figures on? Is where you live the only determining factor in minimum wage?
The point is - if minimum wage = "living wage" then you'll have unskilled teenagers making as much as someone supporting a family of 4 as you say. Do teenagers really deserve to be paid that much when they are untested and untrained? You want the gov't to force companies to over-pay unskilled kids?
You can't just ignore this. Do you really think that people won't move to where the higher gov't mandated minimum wage is? Right now min wage is low enough to not make this an issue, but it it was jacked up to a "living wage" you can bet that there will be those that move to get a "raise".
You want the FED to tell you which city/state should pay more for the same work?
Again, how much is "enough"? Is "enough" the same for everyone? Why should a single person get paid the same as a person with a family to support? You brought that argument in so why are numbers OK for one part but irrelevant for another? Why do you pick a family of 4? Why does who you have to support have anything to do with what your labor/time is worth to an employer? My wife is pregnant and we'll be having our third kid - do you really think it'd work if I went to my employer and told him to give me a raise because I have another mouth to feed?
So it's a feeling that determines wages?
Wrong - you think you've proven that minimum wage doesn't cause it - but you are talking a whole different thing here with this "living wage" nonsense. When you artificially set wages higher than the market demands you will cause inflation - and in this scenario you'd be doing just that. You are arbitrarily setting one's wages based on feelings, family size, and an interpretation of "enough" - not market value of work performed. I don't see how people don't understand this will cause inflation(atleast at the local level). It would be a disasater for the FED to set a "living wage" like you support.
CsG
Inflation is only bad for some people. For most people with fixed rate morgatiges or credit cards and little savings inflation would be great. They would see their real income increase at an amazing level.
CADsortaGUY
Lifer
Sure, it might have a temporary artificial boost - but is it "real" when it comes in this form?
CsG
lots of replies since yesterday; let me touch on a few key issues
INFLATION
This is by far the most commonly confused economic term. Inflation is not a rise in prices. That is a possible sympton of inflation. The true, classical definition of inflation is an increase in the money supply. With that in mind, you can toss out the government's figures on inflation. When the stock market goes up, that is inflation since more "money" was created. When the value of your home goes up, that is inflation since more "money" was created. In both cases, nothing physical is created. The only change is the amount of money in circulation. The '60s and the '80s-90's had an incredible bull market in stocks. While this made some people rich - those that cashed out at or near the top - it has placed a burden on everyone else. Look at what a comfortable living wage salary was in the early '80's compared to now. Why does a husband (and now wife) have to make more money now than before just to have the same living standard? Answer: inflation. I remember when gas was .89/gallon and movies were $3.50 for a matinee. Not anymore. If you look at a chart of M3, you can see that it shot up during Reagon's years as he outspent (outdebted) the USSR. This continued with Bush Sr and Clinton took it into overdrive in the mid-90's to ensure his re-election. Bush Jr is doing the same thing now. Whereas Clinton's money-pump went into the stock market to fuel a mania, Bush Jr's money-pump is going into the housing market to fuel a mania. The first ended badly and so will the second.
LIVING WAGE
Look at any illegal alien working on a construction site and you'll see someone making a "living wage." You'll see someone who knows what real poverty is and decided that it was better to take a risk, enter the US, and do manual labor than die in Mexico. (And, no, I do not admire them - they should all be deported.)
The free-market has always been and always will determine the fair compensation for one's work. Illegal aliens being employed by Americans, manufacturing jobs relocated to Mexico and overseas, and outsourcing of white-collar jobs to India are proof that the free-market is in use and works AND that it will get worse in the US as regulation increases.
GLOBAL ECONOMY
Like it or not, we operate in a global economy. We import nearly everything we consume in our daily lives except for food. Our trade deficit is at record numbers - $54 billion in the latest monthly report. Corporations will not stand for governments interfering with their profits and will move to most business-friendly countries: China, India, Mexico, etc. This is creating sound infrastructure and wealth in China and the rest of Asia. China already is a major player in the global economy - they are competing with us for oil imports and is one of the reasons you see oil at $54/barrel and the US in Iraq. They now have McDonald's and other Western businesses. This means that as the business conditions get better in China and worse in the US, there will come a day when it is not profitable for McDonald's to pay Americans mininum wage and they will close. This has already happened to the manufacturing industry thanks to the unions who demanded higher and higher salaries - a "minimum wage" if you will for manufacturing. The corporations just closed and moved into Mexico and overseas. $25/hour minimum wage? If that were to happen in 2005, fast food joints would close down, gas stations would be charging ~ $5/gallon for gas, and our entire economy would grind to a halt. The Indian programmers that we use are only making $10/hour. College graduates starting salaries are only $15-20/hour.
INFLATION
This is by far the most commonly confused economic term. Inflation is not a rise in prices. That is a possible sympton of inflation. The true, classical definition of inflation is an increase in the money supply. With that in mind, you can toss out the government's figures on inflation. When the stock market goes up, that is inflation since more "money" was created. When the value of your home goes up, that is inflation since more "money" was created. In both cases, nothing physical is created. The only change is the amount of money in circulation. The '60s and the '80s-90's had an incredible bull market in stocks. While this made some people rich - those that cashed out at or near the top - it has placed a burden on everyone else. Look at what a comfortable living wage salary was in the early '80's compared to now. Why does a husband (and now wife) have to make more money now than before just to have the same living standard? Answer: inflation. I remember when gas was .89/gallon and movies were $3.50 for a matinee. Not anymore. If you look at a chart of M3, you can see that it shot up during Reagon's years as he outspent (outdebted) the USSR. This continued with Bush Sr and Clinton took it into overdrive in the mid-90's to ensure his re-election. Bush Jr is doing the same thing now. Whereas Clinton's money-pump went into the stock market to fuel a mania, Bush Jr's money-pump is going into the housing market to fuel a mania. The first ended badly and so will the second.
LIVING WAGE
Look at any illegal alien working on a construction site and you'll see someone making a "living wage." You'll see someone who knows what real poverty is and decided that it was better to take a risk, enter the US, and do manual labor than die in Mexico. (And, no, I do not admire them - they should all be deported.)
The free-market has always been and always will determine the fair compensation for one's work. Illegal aliens being employed by Americans, manufacturing jobs relocated to Mexico and overseas, and outsourcing of white-collar jobs to India are proof that the free-market is in use and works AND that it will get worse in the US as regulation increases.
GLOBAL ECONOMY
Like it or not, we operate in a global economy. We import nearly everything we consume in our daily lives except for food. Our trade deficit is at record numbers - $54 billion in the latest monthly report. Corporations will not stand for governments interfering with their profits and will move to most business-friendly countries: China, India, Mexico, etc. This is creating sound infrastructure and wealth in China and the rest of Asia. China already is a major player in the global economy - they are competing with us for oil imports and is one of the reasons you see oil at $54/barrel and the US in Iraq. They now have McDonald's and other Western businesses. This means that as the business conditions get better in China and worse in the US, there will come a day when it is not profitable for McDonald's to pay Americans mininum wage and they will close. This has already happened to the manufacturing industry thanks to the unions who demanded higher and higher salaries - a "minimum wage" if you will for manufacturing. The corporations just closed and moved into Mexico and overseas. $25/hour minimum wage? If that were to happen in 2005, fast food joints would close down, gas stations would be charging ~ $5/gallon for gas, and our entire economy would grind to a halt. The Indian programmers that we use are only making $10/hour. College graduates starting salaries are only $15-20/hour.
CubicZirconia
Diamond Member
- Nov 24, 2001
- 5,193
- 0
- 71
Ok Zebo, time for you to explain a few things to me. First of all, let's refrain from the pointless personal attacks, they don't help anyone's argument. I don't claim to be an intellectual, nor do I claim to be smarter than anyone here. Finally, I'm not a conservative.
Admittedly I'm not an expert, and there's something I honestly don't understand. Throughout your little explanation on competition you didn't explain how abolishing the minimum wage would somehow hamper competition. I understand that competition holds down prices and thus increases real disposable income, but I don't understand why the minium wage is necessary to have competition.
Now this is funny. You can't honestly believe that raising the minimum wage this high wouldn't result in unemployment. Let me go ask my old employer how many people he would have working for him if he had to pay them $15 an hour. I guarantee you it would be less than he does now.
And while you're thinking about that, take a look at
Characteristics of Minimum Wage Workers in 2002 (from the BLS)
Among other things, it states that only 3% of all workers paid hourly make at or less than minimum wage. It goes on to say that a relatively smaller amount of workers not paid hourly are making the equivilent of minimum wage. If we look at the breakdowns we find that only 1.8% of people over the age of 25 that are paid on an hourly basis make at or below minimum wage. We can say then that less than 1.8% of the entire labor force is over the age of 25 and making minimum wage. The overwhelming majority of people with families to feed are not paid minimum wage.
Admittedly I'm not an expert, and there's something I honestly don't understand. Throughout your little explanation on competition you didn't explain how abolishing the minimum wage would somehow hamper competition. I understand that competition holds down prices and thus increases real disposable income, but I don't understand why the minium wage is necessary to have competition.
Now this is funny. You can't honestly believe that raising the minimum wage this high wouldn't result in unemployment. Let me go ask my old employer how many people he would have working for him if he had to pay them $15 an hour. I guarantee you it would be less than he does now.
And while you're thinking about that, take a look at
Characteristics of Minimum Wage Workers in 2002 (from the BLS)
Among other things, it states that only 3% of all workers paid hourly make at or less than minimum wage. It goes on to say that a relatively smaller amount of workers not paid hourly are making the equivilent of minimum wage. If we look at the breakdowns we find that only 1.8% of people over the age of 25 that are paid on an hourly basis make at or below minimum wage. We can say then that less than 1.8% of the entire labor force is over the age of 25 and making minimum wage. The overwhelming majority of people with families to feed are not paid minimum wage.
INFLATION
This is by far the most commonly confused economic term. Inflation is not a rise in prices. That is a possible sympton of inflation. The true, classical definition of inflation is an increase in the money supply. With that in mind, you can toss out the government's figures on inflation. When the stock market goes up, that is inflation since more "money" was created. When the value of your home goes up, that is inflation since more "money" was created. In both cases, nothing physical is created. The only change is the amount of money in circulation. The '60s and the '80s-90's had an incredible bull market in stocks. While this made some people rich - those that cashed out at or near the top - it has placed a burden on everyone else. Look at what a comfortable living wage salary was in the early '80's compared to now. Why does a husband (and now wife) have to make more money now than before just to have the same living standard? Answer: inflation. I remember when gas was .89/gallon and movies were $3.50 for a matinee. Not anymore. If you look at a chart of M3, you can see that it shot up during Reagon's years as he outspent (outdebted) the USSR. This continued with Bush Sr and Clinton took it into overdrive in the mid-90's to ensure his re-election. Bush Jr is doing the same thing now. Whereas Clinton's money-pump went into the stock market to fuel a mania, Bush Jr's money-pump is going into the housing market to fuel a mania. The first ended badly and so will the second.
==========
Not a problem when you raise the minimum wage. 25 dollars an hour sounds good with raises along with inflation.
This is by far the most commonly confused economic term. Inflation is not a rise in prices. That is a possible sympton of inflation. The true, classical definition of inflation is an increase in the money supply. With that in mind, you can toss out the government's figures on inflation. When the stock market goes up, that is inflation since more "money" was created. When the value of your home goes up, that is inflation since more "money" was created. In both cases, nothing physical is created. The only change is the amount of money in circulation. The '60s and the '80s-90's had an incredible bull market in stocks. While this made some people rich - those that cashed out at or near the top - it has placed a burden on everyone else. Look at what a comfortable living wage salary was in the early '80's compared to now. Why does a husband (and now wife) have to make more money now than before just to have the same living standard? Answer: inflation. I remember when gas was .89/gallon and movies were $3.50 for a matinee. Not anymore. If you look at a chart of M3, you can see that it shot up during Reagon's years as he outspent (outdebted) the USSR. This continued with Bush Sr and Clinton took it into overdrive in the mid-90's to ensure his re-election. Bush Jr is doing the same thing now. Whereas Clinton's money-pump went into the stock market to fuel a mania, Bush Jr's money-pump is going into the housing market to fuel a mania. The first ended badly and so will the second.
==========
Not a problem when you raise the minimum wage. 25 dollars an hour sounds good with raises along with inflation.
actually it wold decrease tax revenue, you think that money comes out of thin air? The money would increase expenses for the company, thus decreasing thier profit, and since taxes are paid on profit, and not gross revenue, and companies/owners pay a much higher tax rate than someone on minimum wage, the amount of total taxes paid decreases. Your statement proves to be completely backwards.Originally posted by: gutharius
A minimum wage increase would increase the taxes from income generated and help balance the budget by increased income tax revenue without increaseing the tax rate. Now that is SMART leadership there is no way in hell bush would have thought of that.
Originally posted by: Train
actually it wold decrease tax revenue, you think that money comes out of thin air? The money would increase expenses for the company, thus decreasing thier profit, and since taxes are paid on profit, and not gross revenue, and companies/owners pay a much higher tax rate than someone on minimum wage, the amount of total taxes paid decreases. Your statement proves to be completely backwards.Originally posted by: gutharius
A minimum wage increase would increase the taxes from income generated and help balance the budget by increased income tax revenue without increaseing the tax rate. Now that is SMART leadership there is no way in hell bush would have thought of that.
We all know Bush eleminated any corperate taxes so that argument is full of crap.
so your saying corporations pay no taxes? got any proof?Originally posted by: Spencer278
Originally posted by: Train
actually it wold decrease tax revenue, you think that money comes out of thin air? The money would increase expenses for the company, thus decreasing thier profit, and since taxes are paid on profit, and not gross revenue, and companies/owners pay a much higher tax rate than someone on minimum wage, the amount of total taxes paid decreases. Your statement proves to be completely backwards.Originally posted by: gutharius
A minimum wage increase would increase the taxes from income generated and help balance the budget by increased income tax revenue without increaseing the tax rate. Now that is SMART leadership there is no way in hell bush would have thought of that.
We all know Bush eleminated any corperate taxes so that argument is full of crap.
Zebo
Elite Member
- Jul 29, 2001
- 39,398
- 19
- 81
Now this is funny. You can't honestly believe that raising the minimum wage this high wouldn't result in unemployment. Let me go ask my old employer how many people he would have working for him if he had to pay them $15 an hour. I guarantee you it would be less than he does now.
------------------------
Not if he has a lot more customers now able to buy his warez than he had before. He would even hire more people just like is demonstrated time and time again when policies increase wages at the bottom. Why? because the majority of americans spend every dime they make which gets fed right back into the economy, creating fortunes for wise investors, more jobs and generally more productivity.. Demonstrated in minimum wage examples above to heavy union areas that have a thirving small business community because there is actually people there to afford things now.
And while you're thinking about that, take a look at
Characteristics of Minimum Wage Workers in 2002 (from the BLS)
Among other things, it states that only 3% of all workers paid hourly make at or less than minimum wage. It goes on to say that a relatively smaller amount of workers not paid hourly are making the equivilent of minimum wage. If we look at the breakdowns we find that only 1.8% of people over the age of 25 that are paid on an hourly basis make at or below minimum wage. We can say then that less than 1.8% of the entire labor force is over the age of 25 and making minimum wage. The overwhelming majority of people with families to feed are not paid minimum wage.
-------------------
I agree with those stats, the market is such people will not accept minimum wage. Probably due to compitition from self-employment and all the opportunites government provides for those who wish to go it alone. So in general people are paid more than minimum for unskilled/semi-skilled jobs. How much more I don't know, maybe $9-15 and hour? Still hardly enough to really grow IMO since they still can't afford anything but bare nessesities.. Another thing, is how much pride in thier work does someone making these subsistance wages have? Seen construction industry...with crooked walls..and other hatchet jobs? Seen Fast food joints how nasty they are? IMO these employees attitude is negativly effected by such low wage which hurts the community as a whole. And maybe even the business which they work since sensible people will not cater such a place.
Do you think the author felt silly claiming this right after showing data that inflation actually went up in the years following the 1963 increase?
He doesn't mention it, but in 1967, there was another increase to the minimum wage...and in 1968, 1969, and 1970, the inflation rate was higher than it was the year before.
Oops
CubicZirconia
Diamond Member
- Nov 24, 2001
- 5,193
- 0
- 71
The majority of Americans don't make minimum wage. Don't pretend that most working families are directly affected by it. As you have seen in the link I posted, the extreme majority of working families take in more than minimum wage.
Hardly enough to grow? In the '90's the minimum wage was far below where you want it to be and we had no problem growing at a record pace. If anything increasing the minimum wage to some exorbitant amount would have hampered the expansion. It would have increased input costs and decreased output, thereby increasing unemployment.
The vast majority of people in "thriving communities" do not make minimum wage. Quit pretending like everyone and his brother makes minimum wage. Most people don't.
Why don't you tell that to Wal-Mart or McDonalds? They seem to be doing just fine paying their employees super low wages. Besides, what you're really talking about here is the necessity of efficiency wages, not minimum wage. Even without the ineffective minimum wage plenty of employers would choose to pay an efficiency wage- a wage above market equilibrium. This decreases turnover, increases employee moral, and increases overall production. Ironically, minimum wage actually negates the effects of an efficiency wage. People know that they can't be paid less than minimum wage, so their motivation to do a superior job is decreased.
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