$15 dollars an hour for the minimum wage?

[Jeffwhosoever]

Here is how it should work. Leave it up to the States.

On Jan. 1, minimum wage jumps in 13 states - Dec. 29, 2013

 

[super animator]

What kind of proof do you want?

I think the 1920's is a good example of this.

 

[Jeffwhosoever]

I think the 1920's is a good example of this.

What was the minimum wage in the 1920's?

The proof is, show where the minimum wage existed, was dropped, then the rate floor dropped subsequently.

 

[super animator]

What was the minimum wage in the 1920's?

There isn't a minimum wage in the 1920's. That's the point.

 

[1Sam15]

Where is the proof that removing the minimum wage would have this opposite effect in the USA? I must have missed that in US History class.

Oh...it isn't just in "history" class...do you know why ILLEGAL IMMIGRANTS get jobs here in the US?

I guarantee you it isn't because they are tops of their classes at Harvard.

It's because there is, effectively, NO MINIMUM WAGE and almost NO SAFE WORKPLACE standards!

Now ask yourself if YOU would like to live the highlife that most illegals live here in SoCal!

LOL!

 

[iluvatar5150]

What was the minimum wage in the 1920's?

As has been pointed out, there wasn't one. A federal minimum wage wasn't instituted until 1938.

The proof is, show where the minimum wage existed, was dropped, then the rate floor dropped subsequently.

The real value of the minimum wage drops every time it's allowed to stagnate while the cost of living rises. The proof for which you're looking is any employer who pays minimum wage at some point and doesn't adjust those wages with the increasing cost-of-living. Real wages slowly drop, but people continue to take those jobs, removing pressure from employers to raise wages.

 

[abdAlSalam]

The factory job was just an example for the sake of debate (I know most 5-6 year factory workers make more than that), we can change the occupation if you'd like

I would hope that anyone who worked for 5-6 years would be making more than minimum wage. Unfortunately, except for those states that peg their minimum wage with inflation, stagnant wages affect minimum wage earners even more than others.

So this aggregate demand you mention, do you think it's feasible for an employer to give a raise a cross the board for all of their employees?

Why not?

While people like to use the Big Box store model to illustrate how "a wage increase really wouldn't impact prices all that much", there are more businesses out there than just Wal-Mart. If you were to take a small business of 50-100 employees, doing that could have a very negative impact.

There isnt much evidence of this really. Furthermore if a business has a work force of 50+ employees and cant afford to pay their employees a living wage, they have a bigger problem than labor costs.

They'd have no choice but to raise their prices to cover the costs,

The level of labor costs dont track perfectly with prices. If a firm would have to raise their prices to make up for a wage increase to stay competitive, why would their prices not already be at that level so as to maximize their profits? They either eat the cost, cut expenditures, (reduce overhead, executive pay cuts, etc.) or raise their prices. But the amount they raise their prices wont be very high as compared to the greater amount of compensation. There is also the less tangible benefits of paying someone a higher wage: lower turnover, higher productivity, etc.

thus making the small businesses actually less competitive against the Wal-Marts of the world (which is the opposite of what you guys want right?)

Except that Wal-Mart already outprices its competitors, and an increase in labor costs across the board wont do a damn thing different to Wal-Mart than it would to a Mom and Pop shop.

...unless that is, you expect the business owners to eat the wage increases out of their own pockets (and part of me thinks that is what the plan is).

They can eat the cost personally, they can reduce other areas of inefficiency, etc. They can also reap the benefit of an increase in aggregate demand. Remember that the people who work minimum wage are often in poverty:

{EDIT} pic removed, it broke the page

People in poverty have no choice but to spend the vast majority on necessities. An increase in the minimum wage would 1) increase their buying power and therefore their market participation 2)reduce the need for assistance programs and 3)allow them to save more money. This leads to the possibility of education, specialized training in a trade, etc.

Why? Are you saying that the person who tears tickets at the movie theater is providing such a valuable service that their work is worth a living wage?

Usually theaters only have one or two ticket tearers. And yes, I would say that just by being there, they pay for themselves in the fact that they reduce the amount of people who skip paying for a ticket. How much money they save movie theaters in lost revenue isnt clear, but they definitely deserve a fair cut of the profit that their very presence brings the movie theater.

Part time employment has always been popular...mainly because the jobs that offer part time employment are geared toward teenagers who live at home who are already covered by their parents' benefits.

That may be the way that they are geared, but the perception that all part time workers are teenagers is a myth. About half of all part time employers are persons 20 years or older.

...that, and the 16 year old will happily do the job for some extra spending money. Why would you pay a 35 year old $30k+benefits when the 16 year old is thrilled to do the job to have a couple hundred extra dollars a week?

A 35 year old who needs to work to eat is far more motivated than some yuppie kid who wants some more spending money for the weekend.

Heaven forbid the business owner actually have the final say in the business that they founded and built.

Heaven forbid the worker get paid a fair share of the profits that they help produce.

Crony capitalism is a broken system, however in the pure free market (as long as it's void of monopolies) the market will always maintain itself.

Crony capitalism and free market capitalism are one and the same. Crony capitalism is the natural end result of a free market compounded with a state. So unless you are anarcho-capitalist (which is an even more hilariously broken ideology), then the distinction is one without a difference.

If a company offers a wage that way too low, people are going balance that with the decision of whether or not to even work at all. For example...if Mr. Greedy CEO decided he wanted to only pay .02/hour, people are going to say "if my choices are to be a bum and starve, or work a 40 hour week and still starve, I just won't bother working", and in that moment, that greedy CEO just lost his labor force and now he's not making any money either.

And thus you show the need to have a social safety net. It reduces the ability of private entities to use economic coercion against the working class.

In a pure free market, there are checks & balances based on the basic laws of economics (supply & demand), in crony capitalism (IE: subsidized industries, unions, and bail-outs), people get the twisted notion that their company should work for them instead of the other way around.

There are no laws in economics, only loosely applicable observations. A truly Free Market would eventually degenerate into a handful of monopolies, even moreso than they are already. Without a state to regulate and trust bust, the end result of unrestrained capitalism is neo-Feudalism.

Look at the Auto industry, all of those workers were willing to risk their livelihood altogether rather than accept a reasonable pay cut for non-production jobs. Union wages drove the prices up so high on American cars that everyone who couldn't afford a new middle of the road chevy for $40k ended up buying Toyota's and everyone who could afford that kind of money ended up buying Audi's & BMW's (because nobody wants to pay that kind of money for a mediocre car).

Except Ford also deals with the UAW and, surprise surprise, they still found a way to be competitive domestically. Hmm, its almost as if you can make a profit while still paying workers fair compensation...

Now, if we took a lesson from our Neighbors to the north, we would've seen a workable solution (The CAW got their house in order), however the American unions have become so entitlement minded that it was a lost cause.

There are certainly problems with American Unions, but being 'entitled' is hardly one of them.

 

[abdAlSalam]

What was the minimum wage in the 1920's?

The proof is, show where the minimum wage existed, was dropped, then the rate floor dropped subsequently.

All the proof you need then is in the fact that wages have stagnated since the 1970s. Workers are making less in real dollars today than they were back then.

 

[Jeffwhosoever]

All the proof you need then is in the fact that wages have stagnated since the 1970s. Workers are making less in real dollars today than they were back then.

Then we need to stop illegal immigration so that labor supply isn't artificially excessive, right?

 

[abdAlSalam]

Then we need to stop illegal immigration so that labor supply isn't artificially excessive, right?

Wrong.

Well to be fair, maybe wrong.

Economist's View: "Do Immigrants Raise or Lower Wages?"

 

[ThatRobGuy]

But what happens is that Mr Greedy CEO raises his wages to a point where his employees can be "mildly miserable and nearly broke,"

Then another greedy CEO who wants quality laborers will look at the more talented workers, and offer them a little more to jump ship and come work for him to improve his productivity numbers...so if the original CEO wants to keep his best people, he'll have two choices, outbid the other CEO, or lose his best people (which would cause him to lose money)...just like what happens in other levels of employment that aren't in the minimum wage range.

It's kind of odd, we would never have this conversation about a software company that pays a developer $70k instead of $80k...if a mediocre developer was in that situation, people would tell him "hey, either be happy with the $70,000, or work harder and get better at your job so you can get an offer from the place that pays $80,000.

Yet, when the scenario is talking about $20k instead of $30k, it seems to be an entirely different conversation.

It seems that the lower we go down the income totem pole, the more the conversation shifts from personal accountability to "what can the government do to get them more money?"

People also seem to focus more on the wage gap in situations where people are in lower level income jobs.

You never hear anyone say "Hey, Bill Gates is raking in $3 Billion per year, but his software engineers only make $150k that's not fair!"...however, if the discussion were about a CEO who makes $1 million a year and his minimum wage workers, we'd be hearing about the wage disparity all day long. (even though the wage disparity between Gates and his engineers is much higher than the disparity between a $1M/year CEO and his minimum wage workers)

 

[stamperben]

$150k is a liveable income. $30k is not. THAT'S why we're having the conversation. Duh.

 

[[serious]]

$150k is a liveable income. $30k is not. THAT'S why we're having the conversation. Duh.

Actually, $30k is livable in most of the country. $15k is not.

 

[iluvatar5150]

Then another greedy CEO who wants quality laborers will look at the more talented workers, and offer them a little more to jump ship and come work for him to improve his productivity numbers...so if the original CEO wants to keep his best people, he'll have two choices, outbid the other CEO, or lose his best people (which would cause him to lose money)...just like what happens in other levels of employment that aren't in the minimum wage range.

Actually, that's not what happens at all. Over the last couple decades, a fair amount of effort has been expended by large corporations to figure out how to break down skilled positions into unskilled positions, because skilled employees command premium wages and expect some level of autonomy (which carries risk), whereas unskilled employees generally don't. (I don't really like the term "unskilled," because it's disrespectful, but for the purposes of clarity in this discussion, I'll use it)

Most companies that rely on predominantly unskilled workers don't seem to be too interested in retaining quality employees. I would think that would be the more expensive way to do things, but I'm not going to argue with Wal-Mart on how to make a profit. I may not like the way they run their stores, but I can respect their skill at making money.

It's kind of odd, we would never have this conversation about a software company that pays a developer $70k instead of $80k...if a mediocre developer was in that situation, people would tell him "hey, either be happy with the $70,000, or work harder and get better at your job so you can get an offer from the place that pays $80,000.

Yet, when the scenario is talking about $20k instead of $30k, it seems to be an entirely different conversation.

It seems that the lower we go down the income totem pole, the more the conversation shifts from personal accountability to "what can the government do to get them more money?"

People also seem to focus more on the wage gap in situations where people are in lower level income jobs.

You never hear anyone say "Hey, Bill Gates is raking in $3 Billion per year, but his software engineers only make $150k that's not fair!"...however, if the discussion were about a CEO who makes $1 million a year and his minimum wage workers, we'd be hearing about the wage disparity all day long. (even though the wage disparity between Gates and his engineers is much higher than the disparity between a $1M/year CEO and his minimum wage workers)

That's because at either $70k or $80k, the engineer isn't going to have much trouble feeding his family and keeping the lights on. At $20k, that's a real struggle.

 

[ThatRobGuy]

$150k is a liveable income. $30k is not. THAT'S why we're having the conversation. Duh.

$30k is a livable income...did you mean to say a different number?

So if wage disparity between the common worker and the CEO isn't really the problem, then why does the left constantly use it as a talking point?

For what you describe (that being everyone has to be paid a 'living wage'), when a person who owns a small local grocery store has to essentially almost double his labor costs, how do you think that'll impact his business? For a person who owns a smaller store like that, they're not a multi-millionaire CEO so eating that cost himself (lowering his own salary) isn't an option so prices would have to go up to cover those additional costs.

 

[iluvatar5150]

$30k is a livable income...did you mean to say a different number?

That depends on where you are. In small towns and rural areas, it is. In urban areas, it's borderline at best.

So if wage disparity between the common worker and the CEO isn't really the problem, then why does the left constantly use it as a talking point?

It's one problem, but it's not the only one. It's a convenient talking point and a more obvious problem when the workers are making a pittance - in that case, it just highlights how much more the CEO is taking. He's getting rich off the backs of poor people.

For what you describe (that being everyone has to be paid a 'living wage'), when a person who owns a small local grocery store has to essentially almost double his labor costs, how do you think that'll impact his business? For a person who owns a smaller store like that, they're not a multi-millionaire CEO so eating that cost himself (lowering his own salary) isn't an option so prices would have to go up to cover those additional costs.

Yes, he's going to have to raise prices. Fortunately for him, his competitors are going to be in the same (or similar) boat, so he should be able to remain competitive. Meanwhile, people will still have to buy most of the products they're buying now (i.e. they can't completely give up his products), and his employees will have the ability to buy more stuff from him.

 

[Cactus Jack]

30k is not livable income? LOL! I make do on 18k.

 

[iluvatar5150]

30k is not livable income? LOL! I make do on 18k.

It's a lot cheaper to live in Utah than it is in NYC, Boston, or San Francisco.

 

[Deacon001]

It's a lot cheaper to live in Utah than it is in NYC, Boston, or San Francisco.

The obvious answer, then, is to not live in Boston, NY, or SF.

 

[ThatRobGuy]

Yes, he's going to have to raise prices. Fortunately for him, his competitors are going to be in the same (or similar) boat, so he should be able to remain competitive. Meanwhile, people will still have to buy most of the products they're buying now (i.e. they can't completely give up his products), and his employees will have the ability to buy more stuff from him.

So the rest of us would have to pay more then?

Small business are going to have to raise prices more than a big box store like Wal-Mart. Wal-Marts and Targets have other areas they can make cuts to streamline to keep prices under control, "Average Joe's Grocery" isn't going to have that luxury.

More people are going to switch and shop at Wal-Mart which leaves the smaller grocery store hurting...hurting after they've just increased their labor costs on top of that. It'd be like a double whammy. The only way to keep their prices even somewhat competitive after a mandatory wage increase would be to fire 1/5 of their staff and have everyone else work extra to makeup the difference.

Is it safe to assume that these folks who demand a higher minimum wage are willing to increase the unemployment rate to get it?
(not to mention the increase like that is going to make outsourcing more tempting...but that's another topic)