# Obama plans to raise the min. wage to $9 an hour.
**URL:** https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366
**Category:** Great Debates
**Created:** [February 15, 2013, 3:33am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366 "2013-02-15T03:33:15Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@panaccione](https://boards.straightdope.com/u/panaccione)
#### Post date: [February 15, 2013, 3:33am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/1 "2013-02-15T03:33:15Z")
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](http://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/](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.
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 3:39am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/2 "2013-02-15T03:39:18Z")
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.
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### Author:  [@panaccione](https://boards.straightdope.com/u/panaccione)
#### Post date: [February 15, 2013, 3:59am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/3 "2013-02-15T03:59:23Z")
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.
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### Author:  [@Vaffanculo](https://boards.straightdope.com/u/Vaffanculo)
#### Post date: [February 15, 2013, 4:02am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/4 "2013-02-15T04:02:16Z")
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.
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### Author:  [@Condescending\_Robot](https://boards.straightdope.com/u/Condescending_Robot)
#### Post date: [February 15, 2013, 4:20am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/5 "2013-02-15T04:20:00Z")
> [@Vaffanculo](#):
>
> 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.
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.
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 4:43am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/6 "2013-02-15T04:43:11Z")
> [@panaccione](#):
>
> Hah. No, I can’t. But the couple of studies linked in the article do.
Which studies are those?
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### Author:  [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)
#### Post date: [February 15, 2013, 4:44am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/7 "2013-02-15T04:44:27Z")
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.
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 4:58am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/8 "2013-02-15T04:58:54Z")
> [@FoieGrasIsEvil](#):
>
> Good. Wages _should_ keep up with inflation.
> Even dumbass teenagers should be granted an honest day’s wage for a hard day’s work.
Those are interesting opinions. Care to convince us as to why we should agree with them?
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### Author:  [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)
#### Post date: [February 15, 2013, 4:59am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/9 "2013-02-15T04:59:00Z")
> [@Vaffanculo](#):
>
> 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.
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.
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 5:00am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/10 "2013-02-15T05:00:45Z")
> [@Der\_Trihs](#):
>
> 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.
So, you think that firing decision are made independently of wages? Did you learnt that in an economics class, or somewhere else?
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### Author:  [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)
#### Post date: [February 15, 2013, 5:00am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/11 "2013-02-15T05:00:47Z")
> [@John\_Mace](#):
>
> Those are interesting opinions. Care to convince us as to why we should agree with them?
How about because the alternatives are either massive welfare programs or starving hordes?
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 5:02am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/12 "2013-02-15T05:02:10Z")
> [@Der\_Trihs](#):
>
> How about because the alternatives are either massive welfare programs or starving hordes?
Just how massive will the welfare program have to be?
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### Author:  [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)
#### Post date: [February 15, 2013, 5:03am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/13 "2013-02-15T05:03:58Z")
> [@John\_Mace](#):
>
> So, you think that firing decision are made independently of wages? Did you learnt that in an economics class, or somewhere else?
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.
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### Author:  [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)
#### Post date: [February 15, 2013, 5:06am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/14 "2013-02-15T05:06:12Z")
> [@John\_Mace](#):
>
> Just how massive will the welfare program have to be?
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.
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### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [February 15, 2013, 5:21am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/15 "2013-02-15T05:21:14Z")
> [@Der\_Trihs](#):
>
> 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.
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?
> [@](#):
>
> 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.
OK, so it wasn’t an economics class where you learned this. I’m shocked.
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### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [February 15, 2013, 5:26am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/16 "2013-02-15T05:26:06Z")
[RationalWiki sez:](http://rationalwiki.org/wiki/Minimum_wage)
> [@](#):
>
> The effects of the **minimum wage,** a legally-mandated lower limit on (usually hourly) pay rates, are the subject of some controversy. Introductory microeconomics would suggest that the setting of a price floor would prevent an equilibrium between price and quantity from being reached, thereby creating a surplus of the resource or product in question.
>
> However, if the labor market is, as sometimes theorized,[1] a monopsonistic oligopoly, the market for labor fails, as firms under-pay workers (due to the transaction costs in switching jobs). As such, depending on the level, a minimum wage might actually decrease unemployment.
>
> Empirical evidence is mixed. David Card and Alan Krueger found that a wage increase in New Jersey increased employment in New Jersey fast food restaurants along the border of Pennsylvania (where the introductory treatment would have expected employment losses).[2] On the other hand, David Neumark and William Wascher found “[statistically] insignificant—although almost always negative” employment effects from the same hike.[3]
>
> **United States**
>
> The current federal minimum wage in the U.S. is $7.25 per hour,[4] though it is higher in some states. Minimum wages in the U.S. have never been sufficient to raise a family out of poverty, if only one member of the family works. The minimum wage has varied from a maximum of 90% of the poverty level in 1968 and has averaged two thirds of the poverty level since 1959, when the poverty level was established.[5]
>
> **Footnotes**
>
> 1.↑ Oligopsony appears to occur mostly in certain agricultural markets such as tomatoes, tobacco, and cocoa. Economists note that oligopsony is “scarcely mentioned” by industrial organization organization economists because “they don’t think it’s very important” and “don’t believe it presents any unique modeling issues relative to seller market power” (Rogers, Richard T. and Sexton, Richard J., Assessing the Importance of Oligopsony Power in Agricultural Markets, Am. J. Agr. Econ. (1994) 76 (5): 1143-1150. doi: 10.2307/1243407); and that “One of the most difficult problems facing economists is to determine from market data whether or not market power is being exercised” (Richard E. Just and Wen S. Chern, Tomatoes, Technology, and Oligopsony, The Bell Journal of Economics, Vol. 11, No. 2 (Autumn, 1980), pp. 584-602). Since oligopsony is all about a few buyers exercising market power, if it is difficult to tell whether market power is being exercised, then it is difficult to determine oligopsony’s existence and influence, and thus the idea that it is “widely held” that the labor market is an oligopsony is dubious.
> 2.↑ David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania,” American Economic Review, Volume 84, no. 4 (September 1994), pp. 774-775.
> 3.↑ Neumark & Wascher, American Economic Review, Volume 90 No. 5.
> 4.↑ [Minimum Wage | U.S. Department of Labor](http://www.dol.gov/whd/minimumwage.htm)
> 5.↑ [Oregon State University](http://oregonstate.edu/instruct/anth484/minwage.html/)
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### Author:  [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)
#### Post date: [February 15, 2013, 5:42am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/17 "2013-02-15T05:42:22Z")
> [@John\_Mace](#):
>
> I was hoping you’d give us an actual number. And that you would show your work.
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.
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### Author:  [@YogSothoth](https://boards.straightdope.com/u/YogSothoth)
#### Post date: [February 15, 2013, 5:43am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/18 "2013-02-15T05:43:47Z")
For years, the increase of corporate profits have easily outpaced the increase of minimum wage. Its about time. The current rate is pathetic.
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### Author:  [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)
#### Post date: [February 15, 2013, 5:47am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/19 "2013-02-15T05:47:35Z")
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?
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### Author:  [@Condescending\_Robot](https://boards.straightdope.com/u/Condescending_Robot)
#### Post date: [February 15, 2013, 5:47am UTC](https://boards.straightdope.com/t/obama-plans-to-raise-the-min-wage-to-9-an-hour/650366/20 "2013-02-15T05:47:43Z")
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.
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