Obama plans to raise the min. wage to $9 an hour.

Great Debates
1

In the State of the Union address, Obama proposes the idea of raising the minimum wage to $9 an hour, and tying it to inflation to help middle class families.

During the speech, he said the following:

“Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. Let’s declare that in the wealthiest nation on earth, no one who works full-time should have to live in poverty.” - Obama

Personally, I agree. And I’ll add also, that it’s about damn time. I think it should be even higher, at least $11-12 an hour. In most developed countries it is higher, and in some like Australia, it’s as high as $15.75 an hour. But, at least it’s a start.

Also, several studies show that it would be a big boost for the economy. Here is an article from www.addictinginfo.org, showing many studies that prove this very point.

http://www.addictinginfo.org/2013/02/13/obamas-minimum-wage-increase-would-have-minor-impact-on-jobs-huge-benefit-for-economy/

From the article:

“While it is true that there is some disagreement among economists about whether increasing the minimum wage increases or decreases employment, there is a consensus on the essential point: the impact of a minimum wage raise on jobs, whether positive or negative, is small; the benefit of increasing the minimum wage on the economy as a whole is large.” - Addicting Info

The only major wrench I see being thrown here is the political climate we have today. Many major orginizations threatened to cut workers, or their hours, in response to the ACA, or even the election of Obama himself. It seems that they can’t stand the thought of sparing a few dollars here and there for their work force, however irrational it may be.

I imagine that there is probably already consensus behind the idea here on the SD, but I’d like to explore the thought further.

2

Can you do the math for us and tell us how much money will be “injected” into the economy if the MW is raised to $9.00? And, considering our economy is about $16T/year, what percent does that “injection” represent?

I did a back of the envelope calculation in another thread, but I’d like to see you do it and convince us that this will have a measurable effect on the economy.

n.b.: I’m not averse to the idea of incremental increases in the MW, especially tying it to inflation. I’m doubtful that it would have a measurable, positive effect on the economy.

3

Hah. No, I can’t. But the couple of studies linked in the article do.

But, that’s why I started the thread. In the hopes that I could learn something.

4

Great idea. Before, 10 people had 8/hr jobs. Now, 9 people will have 9/hr jobs, as business owners layoff staff to drop inefficient headcount who aren’t worth the higher wage. No free lunch.

5

Speaking as someone who is surely much more pro-market than most of this board, I don’t think the empirical history of the minimum wage bears this out. Generally, businesses don’t hire minimum wage workers with the intent of making 50-cent per hour profit margins above their pay. They will still make more profit with 10 people than with 9 and will thus keep them.

6

Which studies are those?

7

Good. Wages should keep up with inflation. Even dumbass teenagers should be granted an honest day’s wage for a hard day’s work. Especially in light of tings like gas prices. I know, cry me a river Europe. But $4 a gallon is expensive for everyone here that doesn’t have a mass transit option.

8

Those are interesting opinions. Care to convince us as to why we should agree with them?

9

I doubt that. American businesses these days are generally staggering along with fewer workers than are needed to actually do the job right. If management thought they could fire more people, they already would have.

10

So, you think that firing decision are made independently of wages? Did you learnt that in an economics class, or somewhere else?

11

How about because the alternatives are either massive welfare programs or starving hordes?

12

Just how massive will the welfare program have to be?

13

Simple observation. For many years the managements of most American companies hves essentially been on a crusade against the ordinary worker, trying to hire as few as possible for as little as possible, with the highest workload and lowest training possible. Which leads to companies with overworked employees who don’t really know what they are doing and don’t much care about doing a good job.

14

Enough to keep all the people whom you say shouldn’t be paid enough to keep up with inflation alive, so they aren’t forced to, say, break into your home and rob you for food. Despite the fantasies of the right wingers, the common people are not all going to just quietly sit in a corner and starve to death.

15

I was hoping you’d give us an actual number. And that you would show your work.

What’s the bill to be paid if we don’t raise the MW to $9?

OK, so it wasn’t an economics class where you learned this. I’m shocked.

16

RationalWiki sez:

17

Why don’t you show how it’s even possible for people to survive if their wages don’t keep up with inflation? Magic? I notice that you aren’t even trying to counter anything I say, you’re just making sneering little comments.

18

For years, the increase of corporate profits have easily outpaced the increase of minimum wage. Its about time. The current rate is pathetic.

19

Any studies on what happens to prices of consumer goods when minimum wage goes up? Is it just a dead loss, as the costs go up and eat that “extra” money?

20

Also, the number of full-time family breadwinners making minimum wage is really small, precisely because you can’t support a family on it so most people don’t start them. I don’t think changing the minimum wage is likely to cause either unemployment or a raise in the standard of living, because very few people will be affected. In addition to the historical fact that the mass layoffs based on minimum wage hikes haven’t come to pass, look also at the kind of place that pays minimum wage–fast food restaurants and the like are ALWAYS hiring and understaffed. They’re not firing anyone who can manage to show up on time and not spit in the burgers.