What do you all think?
I’m all for raising it so a person working can support themselves.
However I also believe in the market and if its working correctly, wages should be in line with demand. Also a lower minimum wage makes it easier for young people to enter the work force.
So I’m conflicted. I heard that cities like Seattle which raised their minimum wage have not had problems with it.
We should raise the minimum wage, in my opinion. Raising the minimum wage has not hurt the economy at all, each time it’s been done, over the last several decades. And it’s probably helped – people who make more money spend more money, and rely less on social services. Effectively, we’re subsidizing companies to pay low wages with food stamps and other benefits for the poor – without these services, even families with two working parents could starve and have no health care at all.
But there is a value at which it would hurt the economy, and I’m not sure what that value is.
So I’d say we should raise it incrementally – perhaps a dollar a year – and then stop at $11 or $12, and evaluate the effect. If there’s no evidence of ill effects after a few years, then start again with the incremental increases, and stop at $15. If no ill effects at $15, then institute a small increase per year to keep up with inflation.
Or something like that.
I’m conflicted on this topic.
On the one hand, a low or non-existent minimum wage is in effect a government subsidy of businesses as employees that do not make a living wage must supplement their income with taxpayer funded government handouts.
On the other hand, a mandated minimum wage will necessarily be passed on to consumers. This, given the nature of consumption, is effectively a tax on some goods and a regressive tax at that.
In a perfect world, I think having no minimum wage is better as it distorts the free market less as long as it is coupled with a good social safety net and a relatively progressive tax system. As it is, however, I think having a minimum wage close to the living wage is probably better for our society.
It depends on the business and the location, but raising minimum wage could be inflationary. I certainly would raise my prices, and I don’t have employees.
Prices will increase to some degree for businesses with min-wage labor, but many of their customers are low-wage workers – so an increase in their pay will mean more money to spend.
But the price increases will probably not be that big. According to the research discussed in this video, (sorry for linking to a video – it explains it very well and succinctly, and I couldn’t find a similar article) if Wal-Mart increased wages paid such that no employees were eligible for food stamps, they would have to raise prices in the store by 1.4 %. That’s not much at all – a $10 product is now $10.14.
If raising the minimum wage to $15 per hour is good for business because people have more money to spend, then raising it to $50 per hour is better and $100 is better still.
Regards,
Shodan
If someone is “subsidizing”, whether it be general taxpayers through welfare or consumers through higher prices, it would seem preferable that the people buying Product x pay for the wages to make and sell it, rather than the general populace.
However, I wouldn’t say employers raising wages and passing the costs on to consumers is a tax, at all. It’s the cost of the product.
It is a tax in that it is a cost imposed by government mandate. No, it is not a direct tax, but it could be considered a tax, nevertheless.
This is a complex issue. Raising the wage to X value might be good, but X+10 might be bad. There is a value at which it would start to hurt the economy, and we shouldn’t raise it to that value. I don’t know if $15 is too high, but the present minimum wage is too low. So we should raise it bit by bit, and stop subsidizing companies to pay their workers less than enough to live on.
This is the same logic that gives us Laffer-based absurdities. If raising the tax rate on the rich to 100% is bad, then raising it to 36% (or even raising it to 3%) is also bad. Except the real world doesn’t work that way. Just because a huge amount of something is bad doesn’t mean that a smaller amount is. A $100 minimum wage is so unlike a $15 minimum wage that any comparison between the two is meaningless.
I was going to say that too extreme of an increase too quickly might be a shock to the economy, but that well’s pretty well poisoned now. Good job, Shodan, you’ve prevented prudent conservativism from being able to play any part in this conversation.
I too believe in carrying things to ridiculous extremes.
I see the logic, but this would also equally apply to any extra costs associated with the safety of employees, building codes, etc. which no one calls taxes.
I don’t know about $15.00 dollars an hour as a minimum, but something above it’s current amount is way past due.
I’d be okay with a different amount for people under 21 who still live at home. But if McDonalds wants to argue that the wage they pay is good enough for entry level positions, then only entry level people can fill the position. I know that can get complicated, but most of our laws are anyway.
So maybe if you’re 21 and under and live at home and/or at college, a $10.00 minimum might be okay, but anyone over 21 gets at least $13.00.
Something along these lines is where I fall.
I was wondering who would be the first to Appeal to Extremes. Way to jump on that grenade for us, Shodan!
So raising the minimum wage to $15/hour will generate free money, but $50/hour will not. What factor kicks in between those two points?
Regards,
Shodan
It won’t generate free money.
You’re welcome for correcting your misconception.
Who said anything about free money? What’s the point of debating so dishonestly?
Or, alternatively, that lowering the minimum wage would be good. If the logic held through, we could lower the wage to $3 an hour and see prices go down!
I’m not a huge fan of “living wage” - in part because I have teenagers that I really don’t want to be making a living wage right now. That’s a lot of money in the hands of teens who live at home. Although, honestly, around here the McD’s already pays $11 an hour. And, in part, because I’m not sure how much I buy the idea of a living wage. When I got paid minimum wage (and it was so long ago that it was still $3.35), I thought $7 would be great. My college job paid that, and I was still broke. My job out of college paid $12 (it was a LONG TIME AGO and $24k a year with benefits was a reasonable wage), and if I only made $15 life would be sweet. Your needs expand to fill your income. Which doesn’t mean that we shouldn’t put people in indentured servitude, but I suspect $15 will turn to $20 pretty fast when people discover $15 doesn’t go so far. On the other hand $15 goes a lot farther than $7 something.
I’d rather see other things - free drop off daycare for low income workers, so the closing shift at Starbucks doesn’t involve dropping your four year old off with the neighbor who moved in last week and you barely know - $15 an hour doesn’t fix that issue. Universal Healthcare -so you don’t have to worry about the bureaucracy of health care as we have it (which is way better for most low income workers than what we had - but still, your employer can offer a plan that costs nearly 10% of your income and only covers 60% of your costs - insufficient for what we need). Legislation on shift work - so that if you get that job at Starbucks your hours have some amount of predictability and aren’t completely at the convenience of your employer, you aren’t swinging from close to open on an hour bus ride and three hours of sleep. A minimum commitment to pay you for a certain number of hours in a week - or let you go (and then you can file for unemployment) - that number might be different depending on employee needs - a high schooler might not get such assurance at all - a stay at home mom working for pin money might waive it
Then the question is, what wage does a person need to support themself? The answer to that would be very different now than it would have been when I was young. Is a person who can’t afford a car supporting themself in America? Not so much these days but certainly so in my youth. Our definition of normal has changes substantually over the years. My kids see a cell phone, a car, a computer, central heat, AC, air travel and so much more as the average, any less is poverty.
If raising the prices on my busy restaurant’s menu by 10% will increase my overall profit, then raising them by 1000% must be a great idea!
Or, wait, could there be such a thing as curves and equilibria in economics? I mean, that sounds like liberal nonsense to me. Namby-pamby wind-sailing nuance. But I don’t really want to risk my restaurant business. What should I do?