Along with raising the government minimum wage I think we ought to look at what is driving down wages. To me I see;
Increases in immigrant labor. This is depressed wages in areas like house painting, lawn care, roofing, and domestic help where often workers (many illegal) work under the table for lower wages.
The sending of high paying manufacturing jobs overseas.
Frankly if they would deal with those issues we might not need an increase in the federal minimum wage.
This CBO report provides some estimates. In short, an increase to $10.10 would boost GDP by about $22 billion by 2016.
The comments in this thread are flabbergasting! 
:smack:
That price reduces demand is so obvious that to mention it would be like
What’s relevant is the precise relationship between rising wages and minimum-wage employment. Links are made, by me and others, every time this topic comes up. The link above isn’t to research specific to minimum wage hikes; the very fact that demand elasticity isn’t uniformly 1 seems lost on many of you.
This is supposed to be an intelligent message board, but you sure wouldn’t know it in some of these threads.
All politics, all economics, involve trade-offs. Do you need a cite for that?
Most impartial observers would agree that, from the collective standpoint of low-income workers, a 10% wage hike would be good, even if coupled with 0.6% layoffs. Use the Google calculater for help understanding which of 10% and 0.6% is larger.
I’m afraid I’ve gotten exasperated and turned sarcastic.
But it really appears in this thread that some people have an emotional aversion to minimum wage hikes which have impacted their objectivity, made them unwilling to review real economic research, and even affects their simple arithmetic and common sense.
How does one measure the effect of a .1% shifting of wealth around in the economy on the “strength of the economy”?
Low income folks tend to spend a much greater proportion of their income then businesses and higher income folks.
You failed to address the question. *Why do you treat it as a given that one potential outcome (higher aggregate earnings with lower employment) is better than the other (lower aggregate earnings with higher employment)? What value judgment are you making to come to that conclusion? *
And as a follow up, is there a breakpoint where this is no longer desireable? What if you could increase overall wages by 60%, but at a cost of decreasing employment by 50%. Would that be okay with you as well? If not, where is the line you draw and why?
Everyone would collectivley be better off if we confiscated the wealth of 100% of the top 5% of wealth holders in the country and redistributed it to the bottom 95% as well. Sucks for those 5% right?
“It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that does pay $2.00 an hour.” - Friedman
Indeed.
There are other trade-offs as well. And anyway, I’m in favor of a social safet net (e.g. government-paid healthcare) that would make the whole issue much less urgent.
But my judgement is, that regardless of where I’d ultimately “draw the line” on this one sub-issue, that 0.6% employment reduction is very minor coupled with 10% hike.
The demand for low-wage workers is surprisingly inelastic. That’s the key point I’ve made, which has been thoroughly ignored by some in this debate. (Sorry, I won’t bothered to reread and see if yours is among the ignorance I’ve fought.)
Let’s turn the tables. Unless yours is just intended as obfuscatory debating rhetoric, you apparently feel that disemploying 6000 low-wage workers to give another 994,000 a 10% raise is a game killer. What if only 1000 lost theor jobs? 100?
You still didn’t address the question. You say that the employment reduction is very minor. That’s a value judgment. Why do you think that? There must be some basis for you to draw that conclusion. In other words, what are you trying to achieve that makes that tradeoff worth it to you?
I don’t support any minimum wage at all, for any reason, as a matter of principle. Government has no business dictating the relationship between employee and employer that is voluntary.
Minimum wage as a tool to combat poverty, or to provide a means of basic subsistence is a poor method. I do support a social safety net, and would rather a negative income tax be employed to achieve it.
All political and economic decisions involve tradeoffs, tradeoffs, tradeoffs.
If noting that 0.6% is much smaller than 10% doesn’t satisfy you, I’ll give up. If you have a *sincere *coherent question, that’s not of the “Duh! 0.6% is OK. What about 60%?” variety, I’ll answer it. There are too many other factors to “draw a line” on that specific parameter even if I had the time, talent, and inclination. If you repeat the same silly question, I’ll repeat mine.
I don’t particularly disagree with this! I once even called myself “libertarian” though the term has been co-opted by nutcases.
Can we get you to admit that a “negative income tax” adequate to fight American poverty ain’t happening anytime soon? Politics is the art of the possible, and if you care about America working-class poverty you need to hold your nose and support minimum wage.
The minimum wage in my state (CA) was bumped up to $9 (or thereabouts) on July 1st, and in a few years it’ll be kicked up to over $10. I believe that the legislature also indexed it to inflation, but I’m not positive about that point.
I already make more than minimum wage at the (admittedly menial) job that I’ve been holding throughout the past few years as I’ve trudged through college. Raises for me are purely by-the-books & incremental based on how many hours I’ve worked in total. Therefore, if I’m still doing this job a few years from now, it’s not inconceivable that I’ll surpass that $10 mark and cap out at $15 or $16 per hour.
Which is fine. I have no problem with setting the wage at $15 and, honestly, that’s the amount which I feel it should be at already.
Now, I understand the concern some folks have expressed about enabling fifteen or sixteen year olds to earn that much money hourly. Unless those kids are emancipated minors, they’re bound to be more frivolous with their cash given that they’re likely still provided for under their parents. Although it’s certainly a legitimate gripe, I don’t think it negates the need for a higher minimum wage.
Basically, the way I come down on it is that I think there needs to be a decent hourly wage threshold - and at this point, $15 seems fair - wherein individuals with few skills or educational credentials could work to maintain a decent standard of living. Obviously, as you go higher up the ladder into salaried territory I think that education & skills have to take priority, and folks making six figures or more annually must work to secure that benchmark.
But still, the safety net has to be there. That isn’t even touching on the need for access to affordable health care, which I’d argue is equally as important as a high minimum wage. Unfortunately, health insurance is still stupidly tethered to employment - and this is actually reinforced by the ACA, mind you - so a person could conceivably have a job with a strong wage but sans any access to health care. And that’s equally troubling, to be sure.
A lot of people live over their income, they buy what they want, not what they can afford. Even a millionaire will go into debt if he spends more than he takes in, The only way for anyone to get ahead is to learn to live under their income, no matter the pay per hour. Oprah had a woman on her show once that at one time earned $100,000.00 a year she was now living in her Mercedes, and other person(a man earned $25,000.00 a year: he was raising 3 children, he had a camper and took his children on short camping trips, owned a second hand car, had a small house and savings in the bank, a lot depends on how one chooses to live. So it would seem it is not so much as what earns is more like how it is spent.
I personally know people who buy the most expensive foods, I pads etc. and worry that they aren’t making a living, they and all their kids have Cell phones and expensive toys that many do not even play with.
we lived under our income, saved for the future and now in our old age we are not rich but are comfortable. My husband used to say;"It is far better to live on beans when you don’t have to, than to live on them if you do have to. During the dust storm and depression his mother would go to the grainry and cook wheat to eat
I hear people complaining about what they get at the food pantries.
I agree. We need to incentivize people to NOT acquire skills or education. Ideally, the more people in entry level jobs, the better. What we need is people dropping out of high school because, you know, hey… I can make a decent living without skills OR education!!
Considering that $15 is hardly “a decent living”, I don’t think this would be the case at all. And perhaps $15 isn’t the right number – maybe it should be $12.
I’m pretty certain that the current value is too low.
I’d be more supportive of policies that encourage regular work hours so that people can work multiple jobs. You can make $25k/yr on the current minimum wage if you are able to work long enough. Few can. It’s hard to get a second job when you have to be available for the first all the time.
[QUOTE=2ManyTacos]
Basically, the way I come down on it is that I think there needs to be a decent hourly wage threshold - and at this point, $15 seems fair - wherein individuals with few skills or educational credentials could work to maintain a decent standard of living.
[/QUOTE]
Again - people who earn the minimum wage are not typically supporting themselves or a family. They are more likely to be teenagers or students working for extra income.
And again, if you raise the MW to $15 an hour, those whose labor is worth $14.99 or less are out of a job. How do you think that will affect their abililty to maintain a decent standard of living?
Regards,
Shodan
It’s not just the minimum wage earners – it’s everyone who earns a wage below the proposed minimum wage, which includes lots and lots of non-teenagers and non-students.
So maybe $15 isn’t the right number. Maybe it’s $12. And we can look back at past increases – there was no great increase in unemployment. There won’t necessarily be one with a new increase either. If we raise it gradually, with periodic halts to evaluate conditions, then we can avoid any possible negative consequences.
This isn’t a new thing – raising the minimum wage has been done many times before. In the increases from the last few decades, the same arguments and fears from those who opposed an increase turned out to be wrong.
That’s not it, though.
As long as there are working-age people in this country, there are going to be persons who lack the advanced skills or education that would justify more affluent salaries. It’s not about incentivizing those people not to better themselves, but ensuring that no matter what happens they’ll be able to secure a decent standard of living.
Maybe these folks are mentally or physically handicapped in some way. Maybe they lack the financial resources to secure a college degree, or simply aren’t driven or intelligent enough to go to university in the first place. Perhaps they just have a family that they need to support. I don’t know, but the point is that there are dozens of reasons why somebody of working age might have to forgo the kinds of skills or education that would typically facilitate higher incomes.
But that point is largely irrelevant anyway. Regardless of their backgrounds, I still want those people to not live a life of destitution or poverty. A higher MW would address that problem.
You think employers are going to be able to start a “mentally handicapped” person off in an entry level job at $15/hour everywhere in the US? Really? You don’t think that maybe, just maybe that mentally handicapped guy isn’t going to get a job at all? In fact, you haven’t demonstrated what the effect would be on employment for people currently making the MW if we jacked that wage up to $15. You reach that determination because you feel it’s the correct income to make, without one word about how many people it will throw off the income rolls altogether.
Another problem with your logic is that most people making MW do NOT fall into the categories you are listing:
Problem: Some percent (less than 50%) of people making MW have problems acquiring skills and education to advance.
Solution: Force employers to pay everyone more money, even if most of those people affected are simply at the bottom of the income ladder because they are in the process of working their way up that ladder themselves.
Now, as I said above I have no problem indexing the MW to inflation. But picking some arbitrary level for the MW without considering what it will do to the employment situation is not only bad policy, it’s really stupid policy.