Should the minimum wage be raised to it's original value?

Great Debates
41

Yes, I think the minimum wage should be raised, with exceptions for people who live in a household that’s some amount above the poverty line (to allow children, spouses, etc. to work).

I don’t believe that “the market” should determine the value of labor; I think human life is sacred and deserves to be approached differently then, say, wheat. We don’t live in a country that has a good welfare system. Healthcare for the uninsured sucks. Housing options for the poor suck, especially if they have to live in or near gentrified urban or suburban neighborhoods. Education sucks (because of funding inequities they probably went to a shitty high school, and their prospects for a higher education ain’t great). And, all along the way, there’s companies exploiting their ignorance and stupidity: check cashing companies, credit card companies and subprime financial lenders, diploma-mill vocational schools, modern snake oil, etc.–God bless the fucking free market!

If we had universal health care, equal opportunity in education, housing and transportation that the working poor could afford, and so on (either through a welfware system, some fancy negative income tax system, or whatever) then I’d say fine, get rid of the minimum wage.

But we don’t, and we won’t, so in the meantime raising the minimum wage seems like a reasonable way to throw the proles a bone.

42

Gee, I thought the idea was to help the poor out. News flash! The poor (those who work minimum wage type jobs) don’t pay a lot of taxes. They do however pay for things like gas, McDonalds and other products and services who’s price would go down if the market set the price for the lower end labor. Personally I think John Mace is dead on…get rid of MW, which has a negative effect on the market, and instead stop screwing around. If you want to help the poor, the help them directly instead of trying to do it via the back door. For one, it doesn’t really help all that much…for the other it costs us all (including the very poor you are supposedly trying to help) by costing us more when we buy things.

-XT

43

If we were all brain dead lemmings this may indeed be true. However, there are still the laws of supply and demand - especially in today’s labor market. I’d wager that most businesses already exceed the MW just to attract dependable employees.

As for the argument that a worker can’t support a family earning MW, well no s**t. There’s the news flash of the century :rolleyes: The MW is for entry level type positions. If you are an adult trying to raise a family on MW, you need to take advantage of some of the multitude of programs available to increase your skills. I don’t have a problem with society (my tax money) assisting in this regard but I do have a problem with someone that depends on society to hold their hand until they retire from a MW job.

44

The federal minimum wage in Atlanta is $5.15 same as the feds.

I heard a piece on the radio a few weeks ago that said the living wage in Atlanta was $10.40 an hour. (IIRC)

The actual wages paid at suburban burger doodles and retail places in Atlanta is $7 to $8 an hour, but employers who pay such wages tend to keep their employees’ work week at less than 40 hours – more like 20 or 30 hours – to keep from having to pay full-time employee benefits, and to keep an excess supply of trained employees on hand as turnover at such jobs runs at 30-60 percent per year – for whatever reason.

I’m not sure what conclusion these facts point to, except that the federal minimum wage is fucking joke.

45

The workers can or at least theoretically could live off the MW instead of costing me (indirectly) money.

I didn’t say anything about the poor paying taxes. The idea that the MW hurts the poor instead of helping them is in my opinion laughable. Businesses cut wages to make more money not make their goods cheaper to consumers. A poor person without the MW would have less purchasing power not more.

46

How dare they pay more than the minimum wage :rolleyes:

As for the average number of hours worked - how much of that is due to a significant percentage of their employees still being students.

47

Yes. Every economic group experiences raises periodically to adapt for inflation, so should the poor. The argument that ‘raising the minimum wage will cut down on employment’ has never made sense to me. Every profession has experienced wage increases to adapt to inflation. I can’t speak for other professions, but as a studying chemist (and as a result the only profession I can quote actual numbers for) I know median salary for a BS degree in 2002 was $58000 and in 1997 it was $49000, it is probably closer to $63000 in 2006. The minimum wage has remained constant at $5.15 since 1997 until today. This makes no sense to me. Physicians, construction workers, scientists, pharmacists, nurses, everyone gets wage increases to adapt to inflation. So should the working poor.

48

I suspect you’re wrong. In 1983 I was making sub-minimum wage (state college food service wasn’t required to pay fed minimum). I was poor. Very poor.

And I did not support a minimum wage then, either.

49

The problem is twofold

  1. There are several ways to improve job creation. You can improve manufacturing and transportation technology, improve communication, improve infrastructure, improve consumer confidence, etc.
  2. Who wants to live in a world of 2% unemployment where 30% of the public is making $3 an hour? I personally do not want to live in a world like that. I don’t think the majority of minimum wage earners are comfortable with the idea of abolishing the minimum wage in the hopes that they may be able to work 60 hours a week at two jobs for the same income they used to get at one job and working 40 hours a week.

All in all this may be moot though. Even many intro service jobs do not actually pay the minimum wage, they pay $6 or higher. But if the MW was abolished those wages may drop to $4 or so. Whatever economic growth that could potentially occur from raising the MW (it can also cause economic downturns as it will just prevent the poor from being able to afford consumer goods) is not worth the cost in human suffering and misery that it would cause.

50

These increases (if accurate) have nothing to do with inflation and everything to do with market competition between employers.

51

If employers are having to pay in excess of the MW now to attract employees, how on earth could they possibly drop the wages and survive?

52

Was your food service job part of a financial aid package?

53

Not totally. Employers are not motivated solely by Adam Smith’s rules. Some employers negotiate with unions for standard of living increases for example. The point is that every profession and economic group experiences wage increases over time. The poor should be no different, in fact they need wage increases more than any of the other groups.

54

I know nothing of Adam Smith’s rules - just practical experience in the HR sector.

55

Are there jobs that could be done, but which don’t have enough value to warrant minimum wage? Sure. Given a wage low enough, you could hire people to pick up trash in ditches, sweep streets, and everyone could hire people to mow their lawns, clip their hedges, wash their cars, etc.

Anyone remember full-service gas stations? There are a handful still around, but they largely went the way of the dodo. Why? Because people weren’t willing to pay enough of a premium to pay the wage of someone to wash their window and pump their gas. We’d still LIKE to have it done for us, but we won’t pay much. So, the gas station attendant industry has almost vanished. I wonder how many people it used to employ?

But this isn’t necessarily the fault of the minimum wage. It may simply be that the lowest rung in America got wealthy enough that they were no longer willing to do that job for the wage it is worth. After all, fast food places in my city all pay well over minimum wage, 'cause that’s what they have to pay to attract the workforce they need. If the lowest amount of money people in America will work for is more than minimum wage, then moving the minimum wage amount around under that ‘floor’ will do nothing. That may be what has happened in the last minimum wage hike - it didn’t cost jobs because it was still below the prevailing wage after the increase.

But if you raise it enough, you WILL cost jobs. First, jobs that people would like to have done and which are done today will be lost because no one will be able to hire people to do them while still making a profit. And that loss of economic activity is a real net wealth loss to the country, which means either the poor lose as well, or the rich have to be taxed more, which will also cost in economic activity…

There are no free lunches. You can’t increase the value of someone’s job by fiat - you can only increase the price of it. If the price rises above the value, that job is gone, and we have removed a productive person from the economy and made him sit aside and do nothing. This is not good for anyone.

Another problem with raising the minimum wage is this: You make the economy more ‘brittle’ and prone to damage in a recession. If you let the minimum wage float up with real productivity gains, it might not do much damage, if any at all. But now if you have a recession and a real productivity loss in the workforce, suddenly the market can’t employ the natural mechanism for this - price reductions to match the declining value of labor - and you suddenly cause a whole bunch of unemployment during the recession, making it deeper.

The market needs the free movement of prices to work properly. When you institute price controls you create shortages, and you prevent the market from functioning correctly. This is not a good idea.

John Mace’s idea of abolishing the minimum wage and substituting welfare might help, because the market would still be free to work. It’s now, however, being subsidized as well (welfare is essentially a labor subsidy). You’re you’re still messing with it, just in the other direction.

To those who believe that absent a minimum wage, competition would drive the price of labor into the ground, ask yourself - how come most wages are already above minimum wage? Why haven’t wages all been driven down to the minimum wage?

The answer is because the labor pool has its own demands. We aren’t serfs. Even the poor can tell you go go stuff it if they don’t like what you have to offer. The laws of supply and demand work both ways. Companies have to bid for labor, aganst each other. If one decides to ‘drive the price down’ by lowering salaries, he’ll soon find that either he can’t find the people he needs, or the ones he gets are the ones that weren’t good enough to work at the places they tried first - the ones with the higher wages. So now he’s at a competitive disadvantage, and will have to start offering more money to get the people he wants.

56

Improve manufacturing? What does that mean? “Improve” by whom for whom with what money? Sounds like you’re talking about make-work projects. You need to be more specific.

But what about a world of 2% unemployment where 100% of the workers make at least $10/hr? Where did I get those numbers? The same place you got yours-- I made them up.

Nothing pisses me off more than when someone takes half my proposal and then says how much misery it will create. I never said eliminate the MW and do nothing else. Read my fucking posts if you want to debate with me.

57
      • The problem with a minimum wage is that it does not bear logical extension:
        —if you raised the minimum wage to $100 an hour, you would see very quickly that it would only cause inflation–and people living in poverty would still be living in poverty–their pockets would just be stuffed full of paper bills that were worth much less than before.
        —Conversely, if you abolish the minimum wage, employers will not all cut wages to nothing, because then nobody would work at all.
        …
  • Also untrue is the observation that “an employer is more at the advantage to dictate wages than the employees are”. In a totally-free labor market, any particular employee is relatively powerless–but the general labor market would still detirmine wage levels. A neurosurgeon is very likely to get paid a lot more than someone flipping burgers, if there is a minimum wage law in place or not.
  • I would debate the conclusions given in that link. Raising minimum wage primarily affects jobs at the mnimum-wage level, and after a few years, the wage inflation drives up other job wages as well. I don’t know enough about the Alaskan economy to know how big a part minimum-wage jobs play in it–but the article shoots its own foot when it says:
  • Why does the author of the article think that manufacturing jobs ever left the US in the first place? It’s because low-level wages were cheaper elsewhere. …Also, Washington is a difficult state to base an analysis on–especially in the short term–because so much of its economy is tied to the defense industry.
  • The one for Oregon is especially idiotic (bolding mine):

,Umm, yea. No kidding, really? What happened was–the state increased the minimum wage to a level that the current job market there could not support–and then it took some number of months for employers to “naturally dispose” of redundant employees–that is, for them to quit normally through attrition, or to get fired–and then (because the employers could not afford to do so) they didn’t rehire as many people. And then it took some number of more months for those facts to get noticed in the jobless rates. Raising the minimum wage most certainly did erode the number of minimum-wage jobs in Oregon.
~

58

You speak as though there is massive unemployment.

You aren’t seriously arguing that the minimum wage isn’t keeping wages up? If thats what you believe then what do you care if there is a minimum wage. Its not doing anything to affect the marketplace becuase the marketplace has already set the minimum wage higher.

59

No I don’t. Obviously, job growth occured elsewhere to offset those jobs. That’s the point. I never said the demise of pump jockeys was due to the minimum wage. It was due to the fact that the job become uneconomical for the wages people asked for doing it. If gas stations could hire people for $1/hr, I’m sure we’d all still have full service for our cars. But they can’t. Maybe it’s because of the minimum wage, or maybe it’s because people simply won’t agree to take such a job. More likely the latter.

Yes, I am. It may have some effect in some areas, but none in others. A good experiment would be to look at the black market in labor. In southern states, a lot of low-paid labor is being carried out by illegal immigrants. They are paid under the table. The people who hire them could hire Americans under the table too, but they don’t. Why? Because Americans won’t work for those wages and conditions. The minimum wage doesn’t enter into it, because it’s all unreported.

When you look at states that don’t have access to illegal immigrants, you don’t see much of that kind of labor. That suggests to me that this is good evidence that there is certainly an amount somewhere very close to minimum wage that Americans will not accept for a wage, regardless of any laws.

There may be some locations where minimum wage laws keep wages slightly higher, but not by much.

Frankly, as long as the minimum wage stays roughly where it is and moves up in reasonable increments as the economy grows, I don’t think it’s a real big deal to the economy one way or the other. Its effects are certainly dwarfed by other government meddling, such as tariffs, farm subsidies, and 10 trillion dollars a year in regulatory costs.

60

The problem with minimum wages is that they place burden of helping one group of people (minimum wage earners) on another group of people (a small section of businesses). If we as a society feel that it is a problem that some people are poor then the entire society should help pay the bill for helping those people (for example via tax cuts to those groups or perhaps welfare payments or whatver else we can come up with).

I’ll let my favourite economist, Steven Landsburg phrase it better.
From Slate