What do you have against the 19th century? Global GDP per capitawent up about 10% from 1400 to 1800. From 1800 it 1900 it went up about 800%. The industrial revolution was probably the most important economic event in human history other than the invention of agriculture. During the 1800’s life expectancy went up by 38% in the UK after having not gone up appreciably in the previous 350 years.
Company towns were not bad deals for the workers living in them and scrip was mostly an advance to tide the workers over until payday. This is good because company towns exist today, such as that hellholeMountain View California.
Well I’m referring to the notion being spread in the media and pop culture that entry levels should provide a “living wage”. It’s out there, trust me. Similarly the talk of a 15 dollar per hour minimum wage. Trust me, I get it the whole thing is buggered beyond repair - able bodied paid not to work, employers looking to offshore, low wage workers imported into the country driving the wage base down, the list is endless.
There used to be direct feedback mechanisms in place, the political class has managed to short circuit this and cost shift everything on to the backs of the middle class and themselves act like they are spectators in all this, and who coulda node. It’s disgusting.
The better way to do it would be to raise it to $35/hr so people can see how unambiguously bad the concept is without it being disguised by other economic factors. And if one can’t live on $35/hr than we still have foodstamps and soup kitchens to help one out.
Good point but people work for free already. Unpaid interns and volunteers are two such groups. Scrip would be a pay raise. And what’s to stop companies from exclusively working with contracted labor? At some point the demand for the national currency will be a necessary limit to how many work for scrip or a sack of potatoes if their negotiating skills are that terrible. They’ll still need money to pay taxes and other things and thus will need to negotiate for dollars.
People also are willing to work for relatively low dollar amounts in exchange for stock which may or may not gain or retain value.
With a robust safety net, which we may or may not have, do workers need this additional protection.
Not getting what is unclear.
Option A is raise the minimum wage to some X amount as the floor across the country. Option B is have a Federal mandate that localities set a local minimum wage based on local costs of living.
I am familiar with EITC and CTC. Raising taxes to fund it however means it is a no-go from word go. The lump sum also makes it less useful (although Rubio has proposed, in non-specific terms, using an EITC-like tool that manifests as wage-enhancement arriving monthly). And even though it has some support in GOP circles I have little dobt it would quickly be attacked as another entitlement program.
Still I can live with a little of both.
We are living in a time of great and increasing income and even more so wealth inequality. The middle is being hollowed out. For more and more “entry level” is also the level they will be at for always, if they are lucky enough to continue to have a job. No not all are at minimum wage but many are pretty damn close and well below a living wage, the so-called “near-minimum-wage-workers.”
The causes are manifold; no single action will fix it. Making an income base be a living wage is not a replacement for investment in education, for addressing the increasing tremendous wealth accumulation at the very top, not the 1%, but the 0.01%, for the impact of the global economy and of increasing capacities of automation to take on the jobs of the middle (both of which cut in many directions, bad and good, and have had their own threads). But it does provide a base.
I appreciate that there is debate about what impact an increase in minimum wage would have on employment, positive or negative and how large. Would there be trickle-up?
What is your goal? What are you trying to accomplish? We can’t tell you which method is “better” until we know what we’re bettering.
Your scenario is vague. What sort of geographical granularity do you propose for determining the wage floor? Or is that up for debate too? Again, that depends on your objective.
Oh. No, I do not believe that more government assistance is the better answer. Someone with a full-time job should be able to live without government handouts. Philosophically EITC and CTC as solutions, for example, because they subsidize industry by adding extra to what they pay but do it in a way that appears as “another hand-out to the poor.” If American industry needs to be subsidized to both pay a living wage and be internationally competitive then pay a living wage and use the money that would otherwise have gone to increasing EITC and CTC to subsidize them directly.
Why a locally indexed living wage? $10.10 in the Southern rural localities is a lot more lifestyle than $10.10 in many cities. From that earlier Pew cite: “near-minimum workers generally were more common in the South than elsewhere.” A one size fits all raise high enough to provide a living wage in many urban areas overshoots the mark in areas that more of the lower wage earners exist.
Ruken I just tried to answer your post. Maybe you missed it but if you read it and it was not clear: I believe that drastically increasing income and wealth inequality are major problems for the very nature and fabric of this country and I believe that those who have full time jobs should not have to be sucking at the public teat. A living wage addresses the latter well and is one component of addressing the former.
If funding for something that has significant bipartisan agreement is a no-go (which I agree with …sadly) getting any real support from the GOP on federal minimum wage is like me shooting flying monkeys, mounted on unicorns out of my ass. 
The same chunk of my party that looks at any tax increase as slightly more evil than zombie Karl Marx carrying smallpox is going to be able to get the support of a good chunk of the GOP on opposing significant minimum wage increases. If it’s going to take all Democrats to ram it through they should be able to pick which tool best reaches the goal with the minimum of other disruption. l do give Obama credit for trying on the EITC.* Still the focus I’ve seen on the left is mostly minimum wage not the tax credit. Maybe it’s just because it’s easier to sell “living wage” in a 30 second sound bite. Maybe Bill Clinton’s involvement in expanding it makes it seem too centrist. It still seems odd to me to be focusing on the harder to pass and less effective tool if the aim is to actually address poverty.
*- That admission likely just got me demoted from even my current RINO status. What’s lower in Tea Party terms? 
[QUOTE=puddleglum;18805763Company towns were not bad deals for the workers living in them and scrip was mostly an advance to tide the workers over until payday. This is good because company towns exist today, such as that [hellhole]
(http://www.nytimes.com/2010/02/19/us/19sfvalley.html)Mountain View California.
[/QUOTE]
:rolleyes: The company towns being referred to had a single major employer with most residents working for that employer, and were geographically isolated to make it harder for an employee to leave. Large cities with a major employer who donates money to the town are slightly different. You might as well call Cambridge, (our fair city) MA a company town. Detroit, referred to in the linked article, was that kind of company town. Dominant industry, but competition and no scrip or company stores.
People who live in Mountain View don’t all work for Google - for instance few people who work down the hall from me. Google employees don’t all live in Mountain View. You might have heard of the Google bus affair in San Francisco. And I don’t think Google gives out a lot of scrip. Google giving money to Mountain View to get favorable position in their growth plans do not a company town make.
You think you people had never heard of Sixteen Tons.
The issue is selling it successfully to rural Americans and making it a key issue.
EITC and CCT come off as hand-outs and rural Americans may take a fair amount of those government hand outs but they don’t want to vote for them.
OTOH the idea that they personally should not need any hand outs if they are working a full time job is an easier sell.
If it is sold to rural Americans then I believe that it will be supported by those who want their votes.
Naive I am.
What about a 17 year old HS student with a part-time job, whose primary goal is to earn enough money for a weekly trip to Applebee’s with his friends? Should he also earn this same wage?
This is where a ‘handout’ is able to distinguish between these two groups of workers, where a minimum wage cannot.
But the handout is the government subsidizing low wage employers. Why do you want to do that for?
As for 16 - 19 year olds, maybe some of them are saving to be able to go to college, something their parents can’t afford. Not everyone gets a scholarship, and even those who do still need living expenses.
Here are the demographics. About 80% of those affected by the minimum wage are over 20. It is also broken down into hours worked - parity is reached only for 20 hours and under. I might be okay to not raise the wage in that case - assuming you can figure out some way that employers wouldn’t cut hours to 20 or below to benefit, like those who cut hours to 30 to avoid paying benefits.
If we raise the minimum wage there will be a few people who benefit who don’t really need it. If we keep it low there are many people who will find it difficult. I’d rather come out on the side that helps people who need it, wouldn’t you?
I don’t think the inflation adjusted minimum wage has caught up to what it was a few decades ago, so it is not like it is going to break the bank.
More government assistance is the answer and the reason is an employer or a company can hire contractors, pay under the table, or just outsource and then whatever job was “worth” minimum wage is no longer so. The idea that wealth can be created by government fiat and by ignoring basic economic law ought to be debunked at this point.
If you want an example of the results of wage floors and the impact on an economy look at the rise of China in large part due to supplanting American manufacturing. Go to a store and check out the goods and see country of origin. That’s what wage floor does. It moves the jobs from our low economic value citizens to other countries and it prices our least valuable economic citizens out of the global market.
Why would you want government subsidizing low wage workers? It’s simply the fact that need based aid is much better than an approach to shoe-horn everyone into one category based merely on income. If necessary expenses are low than the shortfall to live may be non-existent. Minimum wage is a flawed tool. For example in a two income family children who work don’t need $15/hr. A parent that is retired and staying with the children may not need $15/hr. Someone who has $5 million in retirement savings and wants to work for whatever reason doesn’t need a wage floor.
Yet a mother of 5 who is single and has a sick child might only be able to work 20/hrs a week and a one-size fits all, arbitrary and counterproductive wage floor isn’t going to help her. It’s going to price her out of a job if she has no economic skills. Why would I pay her $15/hr to mow my lawn, as an example, when you may be able to pick up a crew from Home Depot to do it cheaper and better and in cash.
Policy should be tailored to solve the problem it professes to solve. Not a “feel-good” policy that the economically ignorant will fall for so a politician can maintain a position of power.
Perhaps, but is there a reason this ought to be so?
Of course, you’ll starve in the streets, but that’s your business.
I’m in favor of replacing the minimum wage with UBI, really. Then people realy would be free to walk away.
I really don’t see the benefit to employing more people for less money. Except to the employers. I mean, XT asserts that people aren’t going to take $1/hr, but people working for pin money might, and people in a society that regards being out of work as a moral failing will certainly feel a lot of pressure to (though I realize it’s gauche to consider such things in these arguments; homo economicus, don’t you know). People take jobs that don’t pay enough to live on already. If more people are working, but for pay that falls even further short, is this actually an improvement? Or, to make it clearer, if we could get full employment but with the lowest-paid jobs having a salary of $0.01/day, would that be an improvement over the current situation?
Also, I am skeptical that a company is going to hire fewer people than it needs because there’s a minimum wage, or, conversely, hire more people than it needs because there isn’t one.
One thing people are overlooking about the labor market is that sellers are (directly or indirectly) buyers as well; if the steel mill pays people more, and they go and buy more Chipotle, and Chipotle opens more stores and needs to buy more tortilla presses, and the tortilla press maker needs to buy more steel, this can be a net gain for the steel mill.
I’m sorry, go on what?
Ok so you want someone working 40 hours/week to be able to live without public assistance. And you want to restrict options to a high, across-the-board wage floor, or several floors based on local cost of living. I’ve got it? I maintain that this is not helping most of the people who need helping, but I’ll go with it for now.
If I understand you right, both proposals should do what you want. People who lose their jobs due to the wage increase aren’t of concern, because they aren’t covered by the premise. But if we add that in, I’d go with the multiple local floors to minimize any deleterious effects in low-cost parts of the country. That said, the highest costs of living that I could find for an individual at http://livingwage.mit.edu/ were all <$15/hour (caveat: I only spot-check certain areas I know are expensive, like San Francisco.) That’s higher than the federal minimum wage has ever been, historically, but I’ll WAG that it won’t push us into a region of hugely negative PED for minimum wage labor, so it might not be a disaster. But I’m ready to hear otherwise.
You didn’t address my question about geographical granularity for cost of living. I’m not sure what’s ideal. My office in DC is a short subway ride from zip codes in the 99th and 13th household income percentiles:
http://www.washingtonpost.com/sf/local/2013/11/09/washington-a-world-apart/
When I lived in El Paso, it’s only 15 miles between a zeroeth-percentile zip code and a 93rd-percentile one. Income in an area is obviously a poor indicator of cost of living, but an informal check of rents on Zillow shows some correlation. The point here is that high-cost areas can be near low-cost areas, so too small a geographical granularity will subsidize people’s desire to live in a nicer area. Maybe we’re ok with that, but I can see it rubbing people wrong.
Cities tend to be more expensive to live, but rural dwellers may need to pay more for transportation. I don’t know if the living wage calculator I linked to accounts for that.
You mentioned districts in your OP. If you mean congressional districts, I’m not sure that’s the best way to draw boundaries. They come in such funny shapes. But I don’t have a better solution to offer just now. I’ll think on it. And please clarify if I misinterpreted you.
I’m all on board with helping the poor but I’ve come to the opinion that MW is a poor way to do it. XT has already said most of what I believe but I will reiterate.
If a company is forced by MW to pay a higher wage then it believes it is paying too much (otherwise MW wouldn’t be necessary). Therefore they will look for ways to reduce hiring, likely through automation. In the long run this hurts the poor.
What you’re trying to do is force is a wealth transfer from the rich to the poor. We might as well do this efficiently with something like a universal government income (say $10k/year) and let companies pay what they want. Getting rid of MW will help the economy.