I’m not sure what you’re getting at here, but Soylent Gold is, I hear, not REALLY better than Soylent Green. It’s all marketing.
The single greatest predictor of someones status earning and social ,is his parents.You dont often rise above your environment. Surviving is asking too much?
Also you can,t have it both ways. If the mimimum wage earners are an extremely small slice of our working force,then a raise in minimum wage can not be enflationary to the whole ecomomy. If it is then the minimum wage affects a lot more people than stated.
I didn’t say numbers working for minimum wage are great. And I didn’t say the way out of poverty is to raise the minimum wage. I said that the numbers of working poor; those living in poverty, are great. They may be above the government’s idea of poverty, but that doesn’t mean they’re healthy, adequately fed and sheltered, or able to sustain employment due to transportation and childcare issues. The poverty line is too low. Without services, it’s a constant struggle for many low-end workers to stay afloat. Or stay employed.
Its hard to understand why you continue to struggle against Shodan’s awesome command of the issues, Kal. Good Heavens, man, he has offered you a cite from the Heritage Foundation who’s reputation for strict non-partisan truthiness is the stuff of legend, and respected across the political spectrum from center-right to rabid reactionary, and cited by political pundits as diverse as Sean Hannity and Anne Coulter. Hot off the presses as well, being a mere five years old. (March 8, 2001)
Not that there’s any real comparison, but lets offer the scurrilous and ill-informed views of liberal hack Paul Krugman, who is rumored to have some minor expertise in the field of economics.
http://www.rollingstone.com/politics/story/12699486/paul_krugman_on_the_great_wealth_transfer/print
Now, to be sure, I would not make so bold as to state that such a reference proves an opponents point of view is “demonstrably false”, such an assertion would be unseemly for a modest and self-effacing Doper such as myself. But there are nuggets of relevent information here, to wit:
Oddly, this spot of news seems to have escaped the notice of Heritage’s economic wizards, eager as they are to protect the investing class from the jack-boot of leftish thuggery. Those noble Americans who are the true source of our economic well being, as they rise from their weary beds and trudge out to watch their money make more money. You don’t hear these stalwart Americans sniveling about transportation costs in the Hamptons, not the rising expenses of day-care provided by Groton! Made of sterner stuff, they are.
What, exactly, does that quote about the MW have to do with the info that Shodan posted, which was about mobility between income quintiles?
Not to mention that your quote from the **Krugman **editorial leaves out the important fact that many states have raised their MW levels above the federal minimum. In fact, most Americans live in states where the MW is higher than the federal level. I don’t know what the exact figure is, but in Jan (when new state laws kick in) I’d estimante that 60 - 70% of Americans live in states where the MW is > than the federal MW.
Besides, we know that Congress is going to raise the MW, and Bush has already said he’d sign a bill raising it $2.00 over the next two years. He put some stipulation about it being tied to tax cuts for “small businesses”, but I bet he signs whatever bill Congress gives him. Raising the MW is just too popular and it could probably get a veto proof majority in Congress even if didn’t.
I really think the debate about raising the federal MW is over in this country, and it would be nice to get back to the topic of this thread-- the Living Wage. (Not directed at you, 'luc, but to the posters here in general).
I recognized his cites as being decidedly right-wing, as well…I was more or less correcting his assertion that I was referring to the MW as opposed to poverty.
Thank you for that cite.
Oh, its ok, John, just having a bit of fun with friend Shodan. He never reads them anyway, so there is little threat that I might penetrate his cognitive carapace. And pointing out his consistent habit of presenting partisan web sites as citations, without the sort of disclaimer that I, personally, regard as good form.
But Mr Krugmans thesis of wealth transfer, while not directly relevent to a “living wage” discussion, offers a background of the environment in which the discussion takes place, and is relevent to the larger context. I also suspect he is right, but my knowledge of economics is diddly squat.
What is this thread about, except to debate whether the minimum wage should be enough to support a family on? I understand that the ‘minimum wage debate’ isn’t necessarily the same as the debate about whether you should be able to support a family on minimum wage, but the topic is still highly relevant to this thread. (To me at least.)
In fact, I’m thinking about starting a minimum wage debate thread, as in “should there or shouldn’t there be one?” but I’m not sure to what extent it’s been done before. I guess it’s searching time.
Well, anyone is free to hijack any thread they want. But we’ve done precious little debating in this thread about the Living Wage. What is it and is it a good idea or not. Talking about wether we should or shouldn’t raise the current MW by a buck or two has nothing to do with the Living Wage argument. I just get frustrated by posters who respond to the few arguments being made here about the Living Wage with: But do you know how hard it is to live off the WM and how long it is since we raised it? Yes, we all know that. But what we don’t know very much about is what a Living Wage would do.
Yeah, do a search first. We’ve had a lot of MW debates and they get very nasty.
I quite agree. There is a philosophical opposition to the MW (or LW) but then there is the assertion that an increase in the MW will lead to unemployment! massive inflation! creeping socialism! (Sarahfeena was last seen heading to the Trans-luxe to hiss Roosevelt.) Perhaps in your search you’d find us a cite saying that a MW increase has ever done any of these things?
The LW hasn’t been well defined in this thread - my searches didn’t find anything much more exact than the OP. I personally am not sure how the LW is different from a MW set to get people out of poverty.
There is another argument against the living wage which is being ignored here, which is that it fundamentally breaks the market for the allocation of labor and makes the class of jobs that exist between minimum wage and a ‘living wage’ much less productive, and ultimately hurts the poor and stifles job creation.
Consider all the jobs that exist between minimum wage and a ‘living wage’. How is the labor for those jobs sorted out? If I start a new company, how do I know how much I have to pay my workers? Well, I can start by offering minimum wage. If I don’t get the quality of worker I need, I have to offer more. Eventually, there will be a price negotiated between myself and the applicants for my job that results in me getting the workers I need, and them getting the salary that prevents them from going elsewhere for work.
Let’s say the living wage in an area is $40,000/yr. Minimum wage is $20,000. What separates a job that pays $30,000 from one that pays minimum wage? It could be work conditions. I have to pay more because my company requires workers to work outdoors in the winter. Or perhaps there’s more responsibility involved. My workers don’t just flip burgers - they have to build things and take responsibility for what happens if they do shoddy work. Or perhaps I have a higher educational requirement. Maybe not a university degree, but a trade ticket, or experience in the field, or something else that the average burger flipper doesn’t have.
So how does the pool of labor get sorted out? People find out what skills they are lacking. They work to improve them. This gets them higher paying jobs. Or they make the conscious choice to accept harsher working conditions in exchange for higher pay. There are incentives to go to night school or seek on-the-job training so that they can move up the income ladder.
On the other side of the equation, companies don’t start up if they can’t hire labor at a price low enough that they can make their product profitably. I could start a business tomorrow collecting bottles from the roadside and selling them for recycling. The problem is, such a job isn’t productive enough to pay minimum wage (or really, any wage that an American worker would accept), so I cannot find labor, and my company does not start up.
Another factor: Low productivitity companies don’t start up in Manhattan, because there is no pool of cheap labor available. So they relocate where the poor people are, which brings new jobs into communities that need it. The work follows the pool of labor. This is a good thing.
Another factor: As the labor in an area gets better, and prices rise, the cost of living starts to go up as people buy nicer houses and the tax base grows and provides a better infrastructure. This means the pool of labor for minimum wage jobs drops, and those types of companies stop forming. The labor market begins a transition to a higher quality of job.
In between all these extremes, there is fluid job movement as workers improve their skills, new workers come into the workforce, companies improve productivity, etc. When you let labor and business freely choose whether or not to contract with each other, the price for labor matches the entire value of the job. Not just the salary, but the salary, benefits, working hours, working conditions, productivity of the work, and the educational level of the worker. This means that workers get the information they need through prices to help them best maximize their ability and find the work that suits them best. It also means that businesses get the information they need through labor pricing to determine if their business model is cost effective. It forces non-productive jobs out of the market, and encourages increases in productivity.
There are millions of other interactions in the free market that get sorted out when prices can seek their own levels.
Now let’s imagine a world in which we declare by fiat that all jobs must pay a ‘living wage’. What does that mean? Well, millions of things, but let’s look at a few to give you an idea of the effects of this:
First, since we don’t have a magic pen that can also dictate that productivity will increase to match the new wage, a lot of jobs will be lost. In fact, all the jobs that currently exist between minimum wage and the ‘living wage’ will be lost. Maybe a few people on the margins will be bumped up a bit, but no one making minimum wage will be kept on at two or three times their salary.
Second, since the minimum price of labor has to track the local cost of living, we destroy the informaton and incentives people who live in high-cost areas have to relocate to areas where their own level of productivity will allow them to live comfortably. The few minimum wage jobs that might exist in a place like San Fransisco, which largely employ second income workers, young people, or immigrants starting out will vanish. if the job floor in San Fransisco starts at $70,000 a year, there will be no way for young people to enter the job market and gain experience. No way for immigrants to get a start in life. And startup businesses will find it extremely difficult. You’ll destroy the local economy.
And what of those $30,000 jobs in the middle? The ones that pay more because their working conditions are harder, or educational requirements greater? If you flatten the market and make everyone pay $40,000, why would a worker ever choose a more difficult job? Why wouldn’t everyone become, say, a sales clerk a best-buy? No responsibilities, easy work, no education required.
Let’s assume that through some magic, no jobs were lost. All the employers were still out there, but now all those salaries between $20,000 to $40,000 are now flattened at $40,000. What would happen to the labor market?
If businesses can’t differentiate between workers worth $20,000 and $40,000, the market for labor will collapse. Companies that would normally pay $40,000 will find shortages of labor unless they raise their wages even higher to attract the better workers. So you wind up with wage inflation. Except that this ignores the fact that many of those workers aren’t worth $40,000 to begin with, so no one will hire them at all.
On the other side of the coin, if all jobs pay $40,000, there’s no incentive for a person who is productive enough to make $20,000 to increase his productivity to $30,000. Why go to trade school? Why take on job responsibility? Why stay in school? Take away the incentives to move between $20,000 and $40,000, and you cut off the bottom rung on the ladder to upward mobility. The result will be stagnation, productivity that doesn’t increase, and stasis. This means that in a world of ever-increasing productivity and competition, these people will become less and less able to compete. This is what happens whenever you use protectionism to insulate people from the dictates of the market. Eventually, the entire set of industries that employ such workers collapse and you have a disaster.
I really wish that those who continually argue for this type of arbitrary government intervention in the economy would actually take the time to understand how the market works, instead of engaging in the usual hand-waving and sneering about our ‘religious faith in the almighty market’. This isn’t faith. It’s not even a difference between equally valid opinions. It’s a debate in which one side seems habitually ignorant in their understanding of a thing they wish to eradicate or control at their whim.
I posted a link to Milton Friedman’s Free to Choose video series a couple of days ago. Here it is again: Free to Choose. Particularly appropriate to this discussion is volume 8 of the 1980 series, titled “Who protects the worker?”
In that episode, Milton points out that when the minimum wage was debated in 1980, the main supporters of the bill weren’t representatives of the poor, but the AFL-CIO, whose members don’t make anywhere near the minimum wage. Why would they support it? Because minimum wage workers compete against them. By raising the minimum wage, they kill competition at the low end. It hurts poor people, but it helps the well-off and high paid trade union members. And without the competition form the low end, the AFL-CIO is capable of negotiating for even higher wages in the future. Wage inflation ensues.
Sam: I think you know that I largely agree with you on these matters, and I don’t want to address each item in that last post of yours, but you’re making too much of a leap here. For example, the statement I quoted above simply isn’t true. Maybe it would be if the LW were set at $40k, but that’s so far above what anyone is talking about as to be laughable. Living Wage rates tend to be on the order of $12 - $15/hour. Santa Fe, which has a LW ordinance set it at $9.50 right now. That’s less than half your $40k/year hypothetical. At that level, more than half the workers in the US would be at the minimum allowable wage level.
The key to understand how much it will affect things is how many people will end up at that wage level. With the MW we have right now, only a small fraction of workers are at that level, so it’s no big deal. If that fraction rises to 10%, then you’re going to probably have a noticeably effect on the economy, especially unemployment. If it starts to hit 20 or 30%, then the “massive inflation” that some have talked about could become a reality-- especially if the LW were tied to to the inflation rate.
But as long as the LW workers remain a relatively small percentage, it just isn’t going to have much of an effect on the economy. The trick is defining a meaningful LW where that percent stays “small”. I don’t think that can be done.
n.b.: I don’t mean the % numbers I’ve been using to be hard and fast data points, but rather reference points. Maybe it’s not 20 -30%, exactly, but it’s going to around there somewhere. You can’t just jerk that much of the economy around without having lots of unintended consequences.
It doesn’t change my point at all. I didn’t say anything about how many workers overall would lose their jobs. I said that the subset of workers whose productivity is greater than minimum wage, but lower than whatever the ‘living’ wage is set at, will lose their jobs, except for a few workers on the margins. Marginal workers who only make slightly under the living wage may keep their jobs as employers find the transitional costs of firing them and reorganizing to be higher than the cost of simply absorbing the new wage. But the workers on the other end of the spectrum, who clearly are not productive enough to warrant their salaries will lose their jobs.
I would argue that one reason small increments in the minimum wage have not caused job displacement is because the increase in the minimum wage typically trails the actual wages workers earn, and therefore has little effect at all. If 5% of workers make minimum wage, and the minimum wage is bumped by only a small amount, it will have a negligible effect on jobs. But then, it will also have a negligible effect on the overall welfare of the lower class. But when you’re talking about a ‘living wage’, you’re talking about a major increased - maybe doubling the minimum wage. I guarantee that will have serious consequences for those making close to minimum wage. Whether it has serious consequences for the country as a whole depends on the sheer size of that cohort.
You said almost all the workers with wages between the current MW and the new LW would lose their jobs. That’s not at all likely to happen unless you assume an extremely high LW as you did. We wouldn’t have McD anymore because people aren’t going to pay $10 for a crappy burger (or whatever they’d have to charge to stay in business and play their burger flippers $40k/yr). But they could probably find some way to stay in business, albeit on a smaller scale and a much smaller growth rate, if they had to pay their flippers $10-12/hr. They have to pay almost that in Santa Fe now, and they’re still there.
What you may have there is another example of the Aspen Phenomenon. Briefly, Aspen and its surrounding environs (The Worlds Largest Gated Community (Keep your distance!) has been gentrified half to death, land values and rents have shot through the stratosphere to the absurd levels only sensible to people who don’t have to worry about money at all.
Which means, of course, that working class stiffs are, well, stiffed. They can’t afford to live there. Which means a shopkeeper or restaraunter has to offer a wage high enough so that is practical for a worker to commute some thirty-forty miles for a job that ordinarily would suffice for someone who can barely afford bus tokens.
The ugly part is that even though the workers are paid extravagantly, they are no better off. Their employers might just as well make out the checks directly to Exxon, for all the good it does the employees.
What that highlights relative to our discussion is the living wage is highly variable. And if affordable day care and transportation is not available (which just about invariably means subsidized), the living wage is a level that will never, ever pass Congressional muster for a minimum wage.
But the min wage debate is important for more than any actual legislative progress, as it focuses our attention on the least of us, the underpowered, the underclass whose concerns are given short shrift and lip service. After all, what level of campaign donations can you expect from the poor? They can’t do for themselves, what can they do for you?
The question boils down to community: are we a community, whose citizens have mutual obligations beyond the strict limits of law enforcement? Or are we just a giant game of Monopoly, with special rules for the Top Hat?
Do we give a fuck, or don’t we?
Santa Fe is pretty ritzy, but it’s still NM, and $9.50/hour is pretty damn high for a MW, by any American standards.
What question boils down to that-- whether we should have a LW or not? The LW is one way to address poverty, but it isn’t the only way. Nor has anyone shown that it’s the best way. Nor has anyone shown that it’s even the most politically expedient way-- ie, expanding the EITC program is probbably more politically expedient than creating a LW. I don’t know if you mean to be saying this, but what it sounds like you’re saying is that the only people who “give a fuck” are those who agree with your particular solution to the problem.
Sounds like that to you, perhaps. You could be wrong. Actually, yes, you are.
Well, then, that was a wonderful little lecture you gave us, but hell if I know what we’re supposed to do with it.
I don’t get this whole semantic shuck and jive people are doing with this LW vrs MW. From what I gathered (based in part from your post #100) they are essentially the same thing, except that LW is a drastic form of MW. In my mind, we can even throw out the concept of LW, and change the title of the OP to “Earning a much higher minimum wage.” If I am wrong, please disabuse me, but I see a lot of posters going back and forth, then ultimately saying something to the effect of “but thats MW not LW, so its a moot point.”
Personally, I stand by my last assertion - the MW should be (sightly higher than, accounting for any $ lost to taxes if applicable) the poverty level for a single person household. That means that if you are the worst employee in America, you will still have a roof over your house and food in your belly, with some access to necessary services.
This to me makes more sense than establishing an MW that “feels right” (J.M.'s words) or an arbitrarily high MW that guarantees extra money for people who don’t seem particularly motivated to earn it themselves. Incidently, this would lower the current federal MW, so even the MW haters out there can support it. Whats the problem here?
Should I assume, then, that effusive gratitude is not an option? Pity.