Aileron Posted April 6, 2004 Report Posted April 6, 2004 But then the company loses money, and goes broke.Not really. Either way they are paying for the same number of hours. What I am talking about merely divides those hours amongst more people. It costs as much to get 4 people to work 6 hours as it does to get 3 people to work 8 hours. The losers here would actually be those who have jobs, but they would lose less than others would gain. Increasing minimum wage has its costs. If a company has to pay more per employee, they will have to hire less employees. $6.50 per hour is better than no job. Better income distribution is caused by schooling. The middle class is made up of educated people, not factory workers. What we really need is more secondary education and positions which require them. We shouldn't be worried about minimum wage - in a battle of unskilled labor, India will beat the US 9 out of 10. We need to worry about increasing the number and need of educated workers.
Dav Posted April 6, 2004 Report Posted April 6, 2004 They just raised the minimum wage in California from like $6.25 to $8.50... Thats gonna hurt a lot of businesses (30% wage increase.) And now we are suppesed to expect the amount of jobs to go up based on that? Definately not... BUT Government officials do have the ability to "create jobs." Just one example:Gov. Official, Mrs. A, pitches a project to create low income housing in Cityville. She gets her funding from a number of places: donations, business investors, and government funding. So there ends up being $2 million to go into this project... to pay for materials, labor, planning, etc. These are all jobs that weren't there last year, hence "jobs have been created."Just remember, this is just 1 scenario I made up in a few seconds, imagine how often this actually happens. If Kerry budgets things the right way, he could get those numbers published. And actually, a lot of telemarketing and phone tech support is being moved to India and the Middle East.well that will just cause inflation. More pay = people have more money, also busnesses have less. This means businesses raise their prises and everything is the way it was wioth some inflation.
Bargeld Posted April 6, 2004 Report Posted April 6, 2004 A related scenario, but a little off this exact topic: Tobacco companies already consider the amount of money they have to pay for lawsuits, yearly, into their accounting. If they expect an additional 1 billion in lawsuits next year, then they raise the price of a pack of smokes by $.05. Do you think the consumers see this increase? No... The businesses absorb this cost and the price of smokes remains the same.Remember that businesses are run by a diversity of people, all with different ways of thinking, and many decision makers come up with creative solutions to these situations.
MonteZuma Posted April 7, 2004 Report Posted April 7, 2004 "Only 1.2 percent of all minimum wage workers (about 58,600) were adult heads of households with less than $10,000 of income." That's why I doubted you knew anyone who lived on it. I was saying that raising it only hurts the people it tries to help. They get shafted. I also lived in poverty for a long time. Not a decade, but close. > "Paying $8 per hour won't make your economy collapse. But it may result in a better workforce and fairer distribution of wealth." HAHAHA!!! No, you are right, it wont collapse the economy, but it will hurt it. And it wont result in a better work force. In fact, people will get layed off because of the new minimum, prices will go up, and increase the distance between the rich and poor. Socialism isn't the way to go. If you want money, work for it.The stats in the second link are filled with bias and false !@#$%^&*umptions. I could pick apart many of those stats... Most basically, almost all of these stats conveniently ignore people who earn $0.05 or so per hour more than the minum wage rate. As we both agree (for different reasons), the minimum wage is political BS. The real issue should be poverty. I suspect that raising the minimum wage also raises incomes for other low income earners who are paid above minimum wage rates, but still live at or near the poverty line. Some random observations: "Teenage unemployment rose sharply when the minimum wage was increased from $3.35 to $4.25 in 1990 and 1991." This unemployment was linked to the recession, not minimum wage increases. The recession was caused by the credit crunch, which was not related to wages at all. "...the unemployment rate for nonwhites is about twice the rate for whites, and changes in the unemployment rate for nonwhites closely parallels changes in the real minimum wage." This is clever misuse of statistics. Yes. When there was little or no social security and no protection for workers then people did work for peanuts and allow themselves to be exploited. Today there are safety nets that protect people. Social security is one of those safety nets. Unemployment sucks but it is far better than living a hand to mouth existance and being simultaneously worked to death. "The minimum wage reduces on-the-job training opportunities that allow low-skilled, low-income workers to rise up the job ladder out of poverty. " -*BAD WORD*-. Being trained to wash dishes and serve fries does not allow low-skilled, low-income workers to rise up the job ladder out of poverty. We don't need to create minimum wage jobs. We need to create real jobs that can sustain families. Education and training should have little or nothing to do with minimum wages. "Evidence demonstrates a link between minimum wage increases and the recessions of 1990-91 and 1974-75. " What evidence? Minimum wage rates at that time increased in line with inflation. Inflation was very high in the 70s. Real minimum wages didn't increase much if any. As for 1990...the credit crunch. Bah...This could go on forever. I don't have the time to destroy every 'fact'. Here are some stats of mine..."71% of minimum wage workers are actually adults, almost half are full-time workers, and 58% are in families at the bottom of the income scale." random source Socialism isn't the way to go. Socially responsible capitalism is the best system we have for the moment. The US system is clearly socially irresponsible.
Bargeld Posted April 7, 2004 Report Posted April 7, 2004 my favorite: Only about half of them (155,900) of a total 311,600) work full time. The number of poor people earning the minimum wage is small in part because most poor people of working age are not working.
MonteZuma Posted April 7, 2004 Report Posted April 7, 2004 my favorite: Only about half of them (155,900) of a total 311,600) work full time. The number of poor people earning the minimum wage is small in part because most poor people of working age are not working. Heh. Indeed. That is truely the work of a statistical genius. Dav. Higher pay for a small segment of the community does not necessarily result in inflation. I suspect that the wages of low-income earners are a relatively small portion of the cost of most goods and services. The spectre of inflation is no reason to make people live in poverty in a wealthy nation. As Bargeld says, it is possible to find creative solutions.
Aileron Posted April 7, 2004 Report Posted April 7, 2004 Monte, minimum wage increases lead to more unemployment (or less employment if the economy is REALLY good) in minimum wage positions. It is an economic law both proven by theorhetical methods and statistical methods from EVERY minimum wage increase. You are right however in that we don't need to help minimum wage jobs. I believe I beat you to that point though. First world countries cannot compete with third world countries in minimum wage jobs, and in order to build a strong middle class, one needs educated professional positions.
Bacchus Posted April 7, 2004 Report Posted April 7, 2004 Our minimum wage augment every year, sometimes twice a year. And employement is up, people have more money to spend and economy is not doing so bad. Whose models? what theory? speaking out of your -*BAD WORD*- again?
Aileron Posted April 7, 2004 Report Posted April 7, 2004 Have you even taken ANY macroeconomic class in your life? That statement will be in any textbook you can find on the subject. Why the heck do I have to prove basic facts of life to you?
Bacchus Posted April 7, 2004 Report Posted April 7, 2004 i'm an idiot Ail but i want to learn, show me your sources...macroeconomics... here: Job watcheconomic policy ins!@#$%^&*uteeffect of minimum wage anything else? If most states proceed to raise minimum wage there should be a reason for that, no? Those ARE macroeconomists btw, and senior one at that.
Dav Posted April 7, 2004 Report Posted April 7, 2004 minimum wage incre!@#$%^&* are designed to help the poorer families survive the pressures of inflation, it just makes sure people are not suffering because of rising prises as much.
Dr Brain Posted April 8, 2004 Author Report Posted April 8, 2004 Poor families don't live on the minimum wage, and it also increases inflation, so you are wrong on both counts.
MonteZuma Posted April 8, 2004 Report Posted April 8, 2004 Poor families don't live on the minimum wage, and it also increases inflation, so you are wrong on both counts.The US federal minimum wage was introduced in late 1938. The minimum wage increased by 20% one year later. Yet in 1939 the inflation rate decreased from -1% to -2%. There were no increases in federal minimum wages until 1945 and yet inflation skyrocketed to +10.5% in 1942. In 1945 the federal minimum wage increase 30% and yet inflation increased only +6.5% from 2% to 8.5% The next minimum wage increase was in early 1950 when it increased a whopping 90%. In 1950 the inflation rate was 1.5% and 8% in 1951, but dropped back to 2% in 1952. In the 1970s minimum wage increases were exactly in line with inflation. The cost of VietNam and the Oil embargo, and the effect of these on business confidence, were bigger contributors to inflation than minimum wage rates. Inflation in the US has steadily declined since 1990 despite minimum wage increases in 1990, 1991, 1996, 1997 and more recently. Clearly, even if there is a link between minimum wage increases and inflation, the impact is minimal and temporary. And clearly workers on low wages are better off even if inflation is totally responsible for inflation increases (which it isn't) and even if they bare the full inflationiary impact (which I doubt). Inflation is caused by lots of things. Wage increases for the poorest 10% of society is insignificant.
Dr Brain Posted April 8, 2004 Author Report Posted April 8, 2004 Inflation is caused by lots of things. Wage increases for the poorest 10% of society is insignificant.Thats what I keep saying. The bottom 10% isn't living off minimum wage.
MonteZuma Posted April 8, 2004 Report Posted April 8, 2004 Inflation is caused by lots of things. Wage increases for the poorest 10% of society is insignificant.Thats what I keep saying. The bottom 10% isn't living off minimum wage. We've already covered that. Half of the bottom 10% are unemployed. Half of the rest are living off part time jobs. The rest work full time and earn a pittance. For low income earners (not just minimum wage earners) a small wage increase is very significant. For the economy, it means 50% of 50% of 10% of sweet FA.
Dr Brain Posted April 8, 2004 Author Report Posted April 8, 2004 But because they aren't making minimum wage, they get hurt when prices go up and their salary does not (Because they are making more than minimum wage).
Yupa Posted April 8, 2004 Report Posted April 8, 2004 I'm content in knowning that I don't have to care about politics at all
Dav Posted April 8, 2004 Report Posted April 8, 2004 But because they aren't making minimum wage, they get hurt when prices go up and their salary does not (Because they are making more than minimum wage).thats also true. Mini,mum, wage sets the base for the smallest compionies that want to pay as little as possible. Larger companies pay more to persuade people to work for them so thay can get the labor they need to run.
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