# What would happen if we reduced the minimum wage in the US? **URL:** \ **Category:** Great Debates\ **Created:** [August 26, 2011, 11:42pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244 "2011-08-26T23:42:17Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [August 27, 2011, 4:34pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/21 "2011-08-27T16:34:48Z")
Only 5 states have no minimum wage laws. 17 states have a MW higher than the current federal MW. The rest peg their MW at the federal level. I doubt many of the last group would lower their wage, but some of the first group (all in the South) might set state MW levels lower than the current rate. I’m not sure that the Federal MW has much effect the overall MW in the US since states set a MW, too. Personally, I think it makes much more sense to delegate that authority to the several states. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [August 27, 2011, 5:01pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/22 "2011-08-27T17:01:12Z")
> [@gonzomax](#): > > Hire them to do what? You hire when you need people to meet an increase in demand. If workers had to work for a buck an hour, would a company hire a bunch of them to sit around? No, they’d hire them to do something that made the company a profit of $2/hour that simply doesn’t get done today. Somewhere out there there are jobs to do that are worth paying someone $6 a hour for. Somewhere out there there are people willing to work for $6, but not worth paying $7.15 an hour. There’s a fast food joint that closes at ten that would stay open all night, if they didn’t have to pay quite so much in minimum wage, because the late night stoner market would make them some money, but not quite enough to cover the $7.15 an hour. There’s a guy who’d be happy to take that shift at that wage, but they don’t need him otherwise. > [@](#): > > ``` > Nope, it would just hurt the poor and help the rich, something we love to do nowadays. People starting out at the bottom would have a terrible time making ends meet. The economy would suffer from decreased demand. It would be a lose for the workers. A lose for the economy. It would be a win for owners. > > ``` This I more or less agree with. These are good reasons to have a minimum wage. But it does have a negative impact on employment. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 27, 2011, 7:19pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/23 "2011-08-27T19:19:01Z")
So you suggest that the terrible price of 7.15 an hour forced companies to let work go due to the burdensome cost? I doubt that. If there was a late night market, it would be met now. The extra fleecing of workers would not create customers where none exist. Wage cossa are about 30 percent or less of the cost of running a restaurant. Chopping a buck or 2 off would not appreciably cheapen the operation. ---
**Author:** ![AndyLee](https://avatars.discourse-cdn.com/v4/letter/a/898d66/32.png) [@AndyLee](https://boards.straightdope.com/u/AndyLee)\ **Post date:** [August 27, 2011, 7:27pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/24 "2011-08-27T19:27:22Z")
The problem with things like ths is there are really two questions. Would it make new jobs, or just make the old jobs more profitable. I know when IL bumped up it’s minimum wage to 8.25, the people making $9.00 were mad they didn’t get an increase too. Since their jobs were supposed to be more important, therefore paid more, they felt they should also get a bump. They didn’t as the company was laying people off anyway. So what happens to Mr Jones Company that makes a million a year with minimum wage employees at $8.25. Does he create new jobs or just make more profit. The thing I noticed as a new comer to the job hunters lot, is that a lot of companies simply reduce hours. As I said before, 24 hours is NOT full time. I don’t care how YOU define it. Employers also will do things like send you home early. My first job at a fast food place was great for that. They effectively reduce the wages that way. It was a pain, if they sent 5 people home and it got busy. A lot of businesses are marginal to begin with. We have a local grocer in my neighborhood, who uses his kids to sweep up and stock. They can’t be over 12 years old. They live in the apartment above the store. If those kids of his weren’t helping, I wonder how long he’d last? ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 27, 2011, 7:42pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/25 "2011-08-27T19:42:35Z")
> [@AndyLee](#): > > A lot of businesses are marginal to begin with. We have a local grocer in my neighborhood, who uses his kids to sweep up and stock. They can’t be over 12 years old. He is in violation of [federal child labor laws already](http://boards.straightdope.com/sdmb/newreply.php?do=postreply&t=622012). If he can’t obey the law, he should be shut down. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 27, 2011, 8:08pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/26 "2011-08-27T20:08:28Z")
> [@OneMissedPost](#): > > As a graduate student, I am struggling even to keep up with rent and tuition fees. Many other students are in the same boat as me as far as graduate school is concerned. Right now, I am dependent on the jobs that pay that $7.25 minimum wage to afford textbooks and pay rent (and tuition of course). > > \ > It might motivate people to become more educated and more qualified; however, you have to take into consideration that somehow, they are going to half to pay their student loans, because I doubt they would be able to afford tuition on their own. In other words: Let’s make it more difficult for people to make a living wage unless they have higher education, and let’s make it more difficult to get a higher education. > [@gonzomax](#): > > There are no jobs. There is no work to be done. All it would do is cut the wages of the poor working class who have bad jobs. It would hurt the overall economy more by decreasing the purchasing power of American citizens. It would put more profits in the pockets of the poor suffering rich though. > > If you are keeping up with demand now, why would you hire workers if they were cheaper? Would you pay to have people sit around? > > The premise that the economy would get a boost is ridiculous. Yep. If people were buying stuff, the economy would be better. Reducing the buying power of consumers is not the way to get the economy moving. Corporations are already sitting on piles of cash, as a dragon sits on its hoard. More money in their coffers won’t make them hire, because they don’t need more people to make more stuff people aren’t buying. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [August 27, 2011, 8:16pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/27 "2011-08-27T20:16:30Z")
> [@Fear\_Itself](#): > > He is in violation of [federal child labor laws already](http://boards.straightdope.com/sdmb/newreply.php?do=postreply&t=622012). If he can’t obey the law, he should be shut down. Your link doesn’t work. Perhaps you were looking [here](http://www.dol.gov/elaws/esa/flsa/cl/exemptions.asp)? > [@](#): > > Youth younger than 16 years of age working in nonagricultural employment in a business solely owned by their parents or by persons standing in place of their parents, may work any time of day and for any number of hours. That’s if “his kids” means he is their father, and if the parents own the business. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [August 27, 2011, 8:23pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/28 "2011-08-27T20:23:51Z")
I posted this before in another thread. In order to answer the OP, we need to know who earns minimum wage. I can’t find any recent stats. > [@Is it reasonable for an employee to expect a living wage?](https://boards.straightdope.com/t/is-it-reasonable-for-an-employee-to-expect-a-living-wage/592348/87): > > Does anyone know if the stats for “[who earns minimum wage?](http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=who+earns+minimum+wage)” have changed much in the recent downturn? Last I checked, only a couple percent of workers earned federal minimum wage, and \>50% of minimum wage (or less) earners were under 25. “Minimum wage or less” includes folks who might actually make more than minimum wage after tips are included. You can currently get by on minimum wage if you can find enough work (\>$25k at 70h/week and 50 weeks/year). I don’t think you can do that on 1/2 minimum wage without public assistance. However, it appears that very few people out there are supporting themselves on just one (federal) minimum wage income. ---
**Author:** ![OneMissedPost](https://avatars.discourse-cdn.com/v4/letter/o/8e7dd6/32.png) [@OneMissedPost](https://boards.straightdope.com/u/OneMissedPost)\ **Post date:** [August 27, 2011, 8:28pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/29 "2011-08-27T20:28:11Z")
> [@Johnny\_L.A](#): > > In other words: Let’s make it more difficult for people to make a living wage unless they have higher education, and let’s make it more difficult to get a higher education. If minimum wage was decreased to the amount mentioned by the OP, it would be nearly impossible to make a living wage without higher education. Additionally, it would be more difficult for the impoverished to escape poverty because additional schooling requires money. Even if they were to get student loans, they would have to pay back the loans. It might take even longer for graduates to pay back their loans. My point is I am fine with minimum wage being where it’s at right now. I’m against minimum wage being decreased. Many people are dependent on minimum wage being where it’s at right now. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 27, 2011, 9:04pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/30 "2011-08-27T21:04:19Z")
> [@Ruken](#): > > Your link doesn’t work. Perhaps you were looking [here](http://www.dol.gov/elaws/esa/flsa/cl/exemptions.asp)?That’s if “his kids” means he is their father, and if the parents own the business. Here is the link I was looking at: > **[Fact Sheet #38: Child Labor Rules for Employing Youth in Grocery Stores under...](https://www.dol.gov/agencies/whd/fact-sheets/38-child-labor-grocery-stores)** > > Wage and Hour Division Fact Sheet - U.S. Department of Labor I did not get the impression he was talking about his own children. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [August 27, 2011, 9:15pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/31 "2011-08-27T21:15:19Z")
> [@gonzomax](#): > > So you suggest that the terrible price of 7.15 an hour forced companies to let work go due to the burdensome cost? I doubt that. If there was a late night market, it would be met now. The extra fleecing of workers would not create customers where none exist. > Wage cossa are about 30 percent or less of the cost of running a restaurant. Chopping a buck or 2 off would not appreciably cheapen the operation. Of course there’s a late night market. It’s just really, really tiny. Let’s look at undocumented labor, which is effectively unregulated. There is no minimum wage. Does everyone who pays a maid under the table pay her $2/hour? No. Why not? Because there aren’t many people willing to clean house for $2/hour. Now then, let’s say their was a huge influx of people who were willing to work for $2 an hour cleaning house. Would they have trouble finding work? Not at all, because the demand for $2/hour housecleaning is huge. So that market exists. If the market became regulated, and a minimum wage of $2 were put in, it would have no effect at all, because it doesn’t apply to any of the jobs out there anyway. But let’s say the housekeeping minimum wage was $40/hour. Do you really deny that some people who currently have a maid would fire her rather than keep paying her? And that some maid who was willing to work for $10/hour would now be unemployed? Look, I’m not arguing for lowering the minimum wage. I think it’s a great thing. I think lowering it would hurt the economy. But a minimum wage creates unemployment. I’m quoting _Krugman_ on this. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 27, 2011, 9:19pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/32 "2011-08-27T21:19:26Z")
> [@MandaJo](#): > > But a minimum wage creates unemployment. I’m quoting _Krugman_ on this. There are worse things than unemployment. We should not do everything just because it reduces unemployment. Deporting all of the unemployed would also reduce unemployment. Many things reduce unemployment, but have consequences that are worse than unemployment. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 27, 2011, 9:33pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/33 "2011-08-27T21:33:21Z")
It is different discussing a cleaning woman and a company. Labor costs are not a huge part of the cost of a business. Cutting it 20 percent does not change anything but the profit margin. and make the owner wealthier. A house cleaner is all labor. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [August 27, 2011, 9:35pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/34 "2011-08-27T21:35:06Z")
This thread speaks to the basic point of why a minimum wage is unnecessary. Who would work for $3/hr in our world without a minimum wage? You have a 5 hour shift at a fast food joint that you would be paid $15 before withholdings. Chances are you paid five or six dollars in gas plus wear and tear on your vehicle traveling to and from the job. You would do better panhandling for those five hours. And who EVER said that working at McDonalds for 40 hours per week was supposed to pay a wage to support a family? Everyone talks about minimum wage in terms of “You can’t support a family at $X.XX per hour!” Not every job is meant to support a family. As a kid I mowed grass for spending money. You couldn’t support a family on that pay, so were the homeowners exploiting me? Of course not. Teenagers living at home are part of the market for workers. It is unreasonable to insist that a business pay a living wage when the job is capable of being done by a 16 year old who is working for money to party on the weekends. So what do you do? Require all workers to have at least two children to support, or pay 16 year olds living with Mom and Dad enough to support a family of four? Instead of blaming Wal-Mart and McDonalds the blame should go to the people to told these workers that those jobs were worth investing 40 hours per week. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [August 27, 2011, 9:49pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/35 "2011-08-27T21:49:09Z")
> [@Fear\_Itself](#): > > There are worse things than unemployment. We should not do everything just because it reduces unemployment. Deporting all of the unemployed would also reduce unemployment. Many things reduce unemployment, but have consequences that are worse than unemployment. I agree with this. I’ve said I agree with this in every single post I’ve made. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [August 27, 2011, 10:19pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/36 "2011-08-27T22:19:17Z")
> [@jtgain](#): > > And who EVER said that working at McDonalds for 40 hours per week was supposed to pay a wage to support a family? Probably the same people who say, ‘Why don’t those laid-of high-tech workers get off of their entitled asses and get a JOB? Are they too GOOD to work at McDonalds?’ ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 27, 2011, 10:28pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/37 "2011-08-27T22:28:54Z")
Who works 40 at McDucks? They have almost all part time workers. They don’t get benefits. They are supposed to work a part time job and pay for their own healthcare? You try supporting a life on under 200 bucks a week. And you think they make too much? ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [August 27, 2011, 10:31pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/38 "2011-08-27T22:31:15Z")
> [@gonzomax](#): > > It is different discussing a cleaning woman and a company. Labor costs are not a huge part of the cost of a business. Cutting it 20 percent does not change anything but the profit margin. and make the owner wealthier. > A house cleaner is all labor. Do you want to call Paul Krugman up and tell him he doesn’t understand economics? That he’s a shill for the capitalists looking to fatten up their profit margins? So jobs that are all labor will be the most heavily affected. That counts as unemployment, too, you know. Though I think you are really underestimating how low profit margins are most places, especially industries that depend on volume. Again, I’m a huge fan of a minimum wage. But to say it does not create some degree of unemployment is really just ignoring the accepted wisdom of pretty much every economist out there. This isn’t a point of controversy. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 27, 2011, 11:05pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/39 "2011-08-27T23:05:38Z")
[QUOTE=gonzomax] Who works 40 at McDucks? They have almost all part time workers. They don’t get benefits. They are supposed to work a part time job and pay for their own healthcare? [/QUOTE] Why does every job have to be one that can support a family and provide all of their needs? Do you understand what a hamburger and fries would cost if every worker at McDonald’s made a ‘living wage’, was full time and got benefits, even minimal ones? Do you understand that if you legislated such conditions by fiat that McDonald’s wouldn’t then be paying their workers more, they’d be laying them off and automating their systems to the extent that customers would be placing orders to call centers and using robotic automation to serve the customer with a bare minimum of staff? You will have effectively cut off the low end of workers, meaning that those jobs just won’t be available anymore. Perhaps you think that’s a great idea, since you so obviously despise places like McDonald’s, but I really don’t think you understand what it will mean if those jobs don’t exist at all anymore. Not every job has to be one that offers a ‘living wage’ and all the benefits one needs to survive in the US. The irony is that well meaning folks like you are killing American jobs and pushing American companies to automate, streamline and/or move their operations to other countries, where their workers are more than happy to work for much less than our minimum wage, in much less safe conditions and with zero health care or benefits. > [@](#): > > You try supporting a life on under 200 bucks a week. Perhaps you were born with a silver spoon in your mouth, but not everyone was or is. If you can’t support ‘a life’ on what you are making then you have choices. You could get a second or even a third job…I worked 3 jobs at a time in the past AND managed to go to school to. Another choice is to look for a better job, and if you don’t have the skills to do it, improve your skills. Again, why should every job have to be for a wage that allows someone to have ‘a life’?? > [@](#): > > And you think they make too much? You just don’t get it. They make what they are WORTH…what their labor and skills are worth at market rates. You are trying to force companies to pay more for their labor than their labor is worth. Companies, not being stupid, will adjust. They will either charge more, stream line their process, automate or move somewhere else…or some combination of some or all of those things. Then folks like you will complain that American companies are offshoring/outsourcing, or automating and cutting staff through streamlining of their process, blah blah blah blah blah. As if when you make some arbitrary (though admittedly well meaning) adjustment for the good of the workers that industry is just going to shrug and go along with it, cutting their profits (which is the sole reason companies are in business for…TO MAKE MONEY, hard as that is for some folks to accept or understand). -XT ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [August 27, 2011, 11:38pm UTC](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244/40 "2011-08-27T23:38:59Z")
**xt** your post is too long to quote, but I have a couple of questions about it. First, it seems like you are saying that any minimum wage is a bad idea, as it will force companies to “adjust” in negative ways (higher prices, layoffs, etc.). Is that an accurate paraphrasing of the thoughts behind your post? [slight detour from subject of the OP] Second, your point that companies are in business in order to make profits is, I think, either incomplete or misplaced. Not all companies are in business to make _as much profit as possible_, or at least, not all of them should be in business for that purpose. IMO, the principle of sustainability is too often ignored in todays economic and business thinking. [/detour] [Previous page](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244.md?page=1) [Next page](https://boards.straightdope.com/t/what-would-happen-if-we-reduced-the-minimum-wage-in-the-us/594244.md?page=3)