will removing minimum wage accelerate job growth?

[Throckmorton]

http://www.amazon.com/Myth-Measureme.../dp/0691048231

 

[Modelworks]

I want the government out of everything possible. W need the fed to stop mandating employers on everything. If I want to employ someone for $2 an hour, offer no health care, work them for 80 hours a week, that should be my choice as long as the employee is not forced to take the job and knows before he starts that those are the terms then the fed should stay out of it.

Why people are willing to accept the 'you don't know any better, so we will make choices for you' mindset makes me think they never understood the concept of freedom.

 

[drebo]

Historically speaking, tiny changes on minimum wage had ~0 effect on unemployment rates. All that changes are the numbers of hours worked.

And the prices of goods.

The side of things that advocates of minimum wage don't realize is that price is far more determined by labor than by the cost of raw materials. If the wage of your largest segment of workers goes up, you have to do one of two things: cut jobs or raise prices. Small changes in minimum wage don't reduce the number of jobs, but they do raise prices.

Minimum wage causes inflation, which is worse for the poor than for the rich.

Of course, I've noticed most of the people who agree with the entitlement-type of thinking don't believe that a company's prices are set by any sort of equation and are just arbitrary values that BIG BID'NESS uses to keep the poor, stricken masses down.

 

[BigDH01]

And the prices of goods.

The side of things that advocates of minimum wage don't realize is that price is far more determined by labor than by the cost of raw materials. If the wage of your largest segment of workers goes up, you have to do one of two things: cut jobs or raise prices. Small changes in minimum wage don't reduce the number of jobs, but they do raise prices.

Minimum wage causes inflation, which is worse for the poor than for the rich.

Of course, I've noticed most of the people who agree with the entitlement-type of thinking don't believe that a company's prices are set by any sort of equation and are just arbitrary values that BIG BID'NESS uses to keep the poor, stricken masses down.

Price is determined by a lot more than minimum wage and price of materials. You oversimplify this.

For example, Hong Kong has no mimimum wage at all yet have inflation rates higher than our own. They also have more problems with poverty and wealth disparity.

I believe most people with "entitlement-type of thinking" really just see minimum wage as a tool to combat disparity. If you reduce the profit margin of an item by increasing input costs, you can regain that margin by modifying other input costs. For example, you could pay less in dividends (which would primarily not impact minimum wage earners) or reduce or freeze executive salaries. The effect on margin would probably be more noticed in highly competitive efficient markets, and much less noticed in less efficient markets. Markets with high margins probably wouldn't notice the minimum wage increase much at all.

Now, does a minimum wage increase freeze executive-level salaries? I don't have the quantitative data, but I doubt it. If you want to reduce wealth disparity, more progressive tax systems and aggressive enforcement is probably the better tool.

 

[BigDH01]

I want the government out of everything possible. W need the fed to stop mandating employers on everything. If I want to employ someone for $2 an hour, offer no health care, work them for 80 hours a week, that should be my choice as long as the employee is not forced to take the job and knows before he starts that those are the terms then the fed should stay out of it.

Why people are willing to accept the 'you don't know any better, so we will make choices for you' mindset makes me think they never understood the concept of freedom.

Your's is a road to serfdom. In a country with forcefully defended private ownership, there is always the assumed threat of force or eviction. Although you cannot physically force someone into a labor agreement with you, you can do so with economic coercion which ultimately results in physical coercion (if I can't pay my mortgage, my bank will forcefully kick me from my home and because land is privately owned and defended either by the landowner or an instrument of the state, I cannot sustain myself on nature's bounty without the risk of further force being applied). Economic coercion in this case is simply implied physical force at some point down the line.

You shouldn't pretend that people enter into these economic arrangements completely voluntarily. It would be like feudal Lords claiming that the men in their army fought voluntarily, even if not fighting meant getting kicked off their land and starvation for their family. I always thought this was a serious flaw with right-Libertarianism.

 

[daishi5]

It's a myth. Post one credible study saying the minimum wage is a net negative to the poor.

Clearly, liberals like it because it hurts the poor, and anti-poor people hate it for the same reason.

Do you include welfare and unemployment in the "net negative?" The negatives are a lot less if you include those benefits, and you get to spread the cost out over the entire population of employed people. And, at certain levels, that is a good thing, but it is not a pure good, some people are harmed by it, if you are willing to recognize that at some levels it is bad, then we can have an honest debate about what is the level of "most benefit" to society.
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Take this as two seperate posts, the first from before I did the search, and everything after this from after a search.
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Aw hell, looks like my initial assumptions are wrong at least according to what I can see in the studies. Well this is interesting, I guess I have to change my stance on the minimum wage.

Some summary statements from the first page of studies that I got from a search for "effects of minimum wage" on Google scholar.

David Neumark and William Wascher "a 10% increase in the minimum wage causes a decline of 1-2% in employment among teenagers, and a 1.5-2% in young adults.

Stephen Machin and Alan Manning
"... a decline, that is, in the level of the minimum wage relative to the average wage - significantly contributed to the widening wage dispersion... however, no evidence of an increase in employment resulting from the weakening bite of the Wages Council minimum pay rates.


Richard Dickens
London School of Economics

Stephen Machin
University College London

Alan Manning
London School of Economics

Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by empirical work in some labor markets. We present a general theoretical model whereby employers have some degree of monopsony power, which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact. Studying the industry‐based British Wages Councils between 1975 and 1992, we find that minimum wages significantly compress the distribution of earnings but do not have a negative impact on employment.

I need to see if I still have access to Jstore, I think I do I just haven't looked in a while, so maybe I will have some more educated input later tonight.

 

[nobodyknows]

Dictionary.

Invest in one.

LOL, if only your problem could be fixed so easily.

 

[HeXen]

I want the government out of everything possible. W need the fed to stop mandating employers on everything. If I want to employ someone for $2 an hour, offer no health care, work them for 80 hours a week, that should be my choice as long as the employee is not forced to take the job and knows before he starts that those are the terms then the fed should stay out of it.

Why people are willing to accept the 'you don't know any better, so we will make choices for you' mindset makes me think they never understood the concept of freedom.

The problem there is, eventually you get to a point where no one has a choice but to accept just jobs. So many employers would do just what you described and that leaves many who cannot get work elsewhere, so they then become "forced" to take the slave labor just so they can feed their kids some rice since thats all they could afford. At $2 an hour, even many working at 80hr days would be homeless considering the cost of living.....all this helps america how exactly?
This will not lower prices on anything else due to corporate greed, CEO's, Executives..etc would just make more money and the rest make less.

Listen to people who lived during the great depression of early 30's. Many took jobs for 10-25 cents per hour, they had no choice and only offered a living of barely surviving. There are reasons why the Govt got involved..to protect people from sweatshop horrors, force companies to be more fair instead of more greedy.

 

[ChunkiMunki]

If a majority of people have subsistence jobs, who's going to purchase the products and services offered by rich people? without a big stable middle class nobody will be offered any opportunity to advance, including rich folks. I think it's in everyone's best interest, including the wealthy, to increase living wages.

 

[drebo]

If a majority of people have subsistence jobs, who's going to purchase the products and services offered by rich people? without a big stable middle class nobody will be offered any opportunity to advance, including rich folks. I think it's in everyone's best interest, including the wealthy, to increase living wages.

Decreasing living costs (including taxes) will do far more to help everyone than increasing wages (causing inflation).

 

[mav451]

I took a International Business Cultures class as a "b.s." course (it was my easy A compared to engineering). The case study on Ikea wasn't surprising, but I just don't see that same culture being integrated in the US. US has such a focus on executive entitlement (i.e. I'm the boss, so I should make many folds more than the underlings) it's amazing that the disparity isn't bigger than it already is.

You see executives in the US, good or bad, having great pay. Obviously my bone to pick is with the bad. The bad execs come away with millions, while the worker drones (good or bad) are fired so the execs can keep padding their pockets.

 

[nobodyknows]

I took a International Business Cultures class as a "b.s." course (it was my easy A compared to engineering). The case study on Ikea wasn't surprising, but I just don't see that same culture being integrated in the US. US has such a focus on executive entitlement (i.e. I'm the boss, so I should make many folds more than the underlings) it's amazing that the disparity isn't bigger than it already is.

You see executives in the US, good or bad, having great pay. Obviously my bone to pick is with the bad. The bad execs come away with millions, while the worker drones (good or bad) are fired so the execs can keep padding their pockets.

You mean we have welfare for the rich? But, but, but I thought they were against welfare amd handouts?

 

[mav451]

Nah I'm talking about how executives feel they are entitled to a 7-figure salary when the company is in the dumps. That's what I mean by "executive entitlement" - entitled to wealth regardless of performance.

 

[spittledip]

Nah I'm talking about how executives feel they are entitled to a 7-figure salary when the company is in the dumps. That's what I mean by "executive entitlement" - entitled to wealth regardless of performance.

Agreed. Also, I agree with pay scale, but make the scale a bit more just.

 

[piasabird]

It will only make the poor poorer and make corporations richer. Greedy people tend to just know more greed.

 

[3chordcharlie]

Decreasing living costs (including taxes) will do far more to help everyone than increasing wages (causing inflation).

You're right, if everthing was pretty much free, we could all afford pretty much anything.

What a load.

 

[k3n]

Anyone notice how the States with the lowest minimum wages yet have the highest amount of poverty per capita compared to states with higher minimum wages. *Cough* the south.

I saw an interesting digg.com link that stated states with the highest minimum wages had fewer amount of people on minimum wage.

 

[BigDH01]

Decreasing living costs (including taxes) will do far more to help everyone than increasing wages (causing inflation).

How, per se, do you reduce living costs? Do you insulate American displaced labor from Chinese competition (world consumer supply)? Do you insulate American labor from local capitalist competition who've been receiving above-normal returns from mobile capital?

You need to move away from the idea of "cost" to the conceptualization of purchasing power. It doesn't matter if wages decrease if there is still a similar aggregate amount of wealth chasing a similar amount of goods. You'll just reduce purchasing power of working Americans and further expand the divide between the top earners and bottom earners.

 

[IceBergSLiM]

How again will the problem be solved by giving people with college degrees and other skills the opportunity to shovel shit for 3 dollars an hour?

 

[3chordcharlie]

How again will the problem be solved by giving people with college degrees and other skills the opportunity to shovel shit for 3 dollars an hour?

$3 an hour is probably too much, but once Americans accept third-world wages, American companies will stop taking American money to the third-world.

A domestic underclass of impoverished labourers is necessary to the continued richness of the very rich.

The old 'jobs to Mexico' thing is so over. Now the jobs are leaving Mexico because Mexicans are 'overpaid'.

 

[nobodyknows]

Nah I'm talking about how executives feel they are entitled to a 7-figure salary when the company is in the dumps. That's what I mean by "executive entitlement" - entitled to wealth regardless of performance.

Just like people who don't make enough money to pay all their bills "feel" they are "entitled" to more money? Isn't this just welfare for "the good ole boy's club".

 

[nobodyknows]

$3 an hour is probably too much, but once Americans accept third-world wages, American companies will stop taking American money to the third-world.

A domestic underclass of impoverished labourers is necessary to the continued richness of the very rich.

The old 'jobs to Mexico' thing is so over. Now the jobs are leaving Mexico because Mexicans are 'overpaid'.

Yep, the companies that can are moving to China. So be honest, trustworthy, true and always work hard for your company. It'll pay off in the long run, nod, nod, wink, wink, know what I mean.

 

[WhipperSnapper]

Sure, not having a minimum wage might lead to job growth. But what kind of growth? Third world poverty wage job growth? Is that what we really want?

America can have all of its jobs back. We can have all of our manufacturing, engineering, IT, accounting, computer programming, legal-related, animation, and science-related jobs back--just as soon as Americans are willing to work for third world wages and third world conditions (no labor laws, no environmental regulations). We can have our jobs back if we agree to live the way people live in India and China.

Global Labor Arbitrage -- Are you ready to join the third world?

 

[WhipperSnapper]

How again will the problem be solved by giving people with college degrees and other skills the opportunity to shovel shit for 3 dollars an hour?

It could lead to widespread anger and resentment at the upper classes, politicians, economists, and pundits who cheered on the destruction of the U.S. economy and its transformation into a third world country.

The end result might be an outpouring of anger and rage resulting in streets flooded with blood. Americans could find temporary employment in the guillotine, hangman's rope, and crucifixion cross manufacturing industries. Others might find jobs as executioners.

After all, someone's going to have to produce the guillotines that we're going to need to rid ourselves of the bankers, the wealthy, and pro-foreign outsourcing and pro-immigration intellectuals, and someone's going to have to make the crosses that we're going to use to crucify the politicians up and down Pennsylvania Avenue with, right?

 

[Hayabusa Rider]

Yep, the companies that can are moving to China. So be honest, trustworthy, true and always work hard for your company. It'll pay off in the long run, nod, nod, wink, wink, know what I mean.

So if you found your paycheck cut in half, that would be good with you?

Now that's commitment!