$12 minimum wage

[mark the shoeshine boy]

ok,,,,,maybe it wasn't 12 bucks an hour that congress has a bill to vote on, i think it is more in the 7's per hour....how do you feel about this idea.

Will it hurt small businesses ? what will happen to retailers ? Resturants ?

I hear every time the wage goes up so does the prices....

What do you think ?

mark tssb

[Mama Bear]

I can't fathom how anyone can make a living, much less support a family on $5.75/hour. This is an obstacle that I think drives folks to 'easier' ways of making money...and creates an impossible environment for someone to realize the American Dream. Many of the folks working for minimum wage have no insurance.. we end up paying their hospital bills for them via our tax payments!

What is wrong with making enough to live on??

Hugs,

Sue (Mama Bear)

[randomtw]

imagine how much gas is now and how most ppl drive 1-2 hrs just to get to work

even at $7 for min wage it takes like 1-2 hrs just to pay for a 30min-1hr roundtrip back and forth from work

[TheChefs]

We have it in australia and it's a good thing. No ghethos or anything like that. Every one who has a job has enough to live on.

[EL Alamein]

Personally, I support getting rid of the minimum wage. It actually hurts people more than it helps them, especially minorities. The market is what determines what a job is worth not government. When government tries to give people a raise (a very very small percentage of the working population - about 3 %) it actually eliminates jobs for other people and shrinks the job pool. Prices don't go up - jobs goes down. You temporarily help the person in the minimum wage job who will probably move on to a higher paid job very soon but again, you hurt many others who get the minimum wage job as an entry level position. This is because now the employer cannot create as many jobs because the one's he's got cost him even more. He may actually have to lay off someone to stay in business and in that case what is better - a minimum wage job or no job at all?

I say get rid of it. It's an artificial price that impedes the market from creating even more entry level jobs from which people can step up the ladder to greater success. And if we're not ready to get rid of it, leave it where it is.

Chris

[Jim]

I think it would be great if every job paid enough to support a family of 4 but its not going to happen. As a small business owner there are jobs that are only worth paying 6 bucks an hour for to have done, if I had to pay 30.00 an hour (a living wage in NY) they would not be done at all. I believe a minimum wage is an essential tool to prevent exploitation of children and others,but it is designed as an starting point, not a place to live from and stay. I certainly do not have the answers- but you cannot transfer wealth with legislation.

[ada8356]

A few articles that can articulate points better than I can.

The Minimum Wage: Washingtons Perennial Myth (http://www.cato.org/pubs/pas/pa106.html)

Minimum Wage, Maximum Folly (http://www.jewishworldreview.com/cols/williams060799.asp)

[moses]

I really do not think there is a good direct solution to this.

I agree with Sue that the minimum wage is not enough to live on, and it seem very problematic to me that a lot of jobs do not provide enough for one person to live on, much less enough to support a family. Fine for high schoolers trying to make a little spending money, but what about unskilled people trying to get of public assistance, or just generally trying to support their family?

At the same time, I think raising it causes serious problems. It is inevitable that some jobs will be lot. Further, it will put greater pressure on small business, which are probably the major driving force in our economy, and which are under a great deal of pressure already.

Also, an argument made a lot less often is the impact on retirees and others on a fixed income. Raising the minimum wage is a strong inflationary force, so the net impact is that pensioners effectively get a cut. Again pinching people who often can't really afford it.

Btw, although as pointed out earlier only a very small percentage of the work force makes minimum wage, and change will impact a rather larger group, for better or for worse. There are an awful lot of jobs that pay just over minimum wage. So an increase in the mimimum might directly force them up. Also, competitive forces will likely cause wages close to the minimum to go up as an indirect effect of an increase.

[ada8356]

I don't think the minimum wage, or pushes by politicians to increase it, have anything to do with actually helping folks... it is simply a vote buying scheme... don't we have mid-term elections around the corner?

[jscott]

couple of points i think are problematic with this all.

- current minimum wage has not increased with inflation and is not nearly enough to support a family on

- many of the people that make ONLY minimum wage are younger people without families working at retail stores/fast food who do not have families and which its only dispossable incoming for them to buy cd/movies/shoes..etc etc.

- increased minimum wage obviously cuts into business profits which can lead to small businesses shutting down or passing along these costs to shoppers which means we are spending more so at some point the question is if the increase in minimum wage going to be enough to offset the increase in prices and how much bitching will the majority of people paid salary who are not getting an increase in wage going to have about paying these new higher prices on goods/services?

- on the larger scale there is the huge problem of import/exports due to our higher cost of making goods becuase of this minimum wage. it goes up, cost of our exports have to go up and then we dig a bigger hole against 10cents an hour people working in china. how are we ever going to catch up. our ecomony is very dependant on imports.

- will higher minimum wages push jobs overseas? outsourcing to places like china/india where 10k $ a year salary is very good and you will get all college graduates applying.

- back to the US. i am a big fan of paying someone what they are worth. is there any need to pay a burger flipper more money? what added benefit are they bringing to the business that makes them worth more money? i think people deserve raises as they work somewhere, learn the business, can do activities faster and thus more efficient. however starting offf someone new with no schooling and no hands on experience...why?

- there is the idea that perhaps more knowledgable and schooled people will apply for jobs if the pay rate was higher. someone more qualified whos working at 7$ an hour beucase its higher then minimum wage. perhaps they would be willing to fill a roll if both positions were offering 7.25$ minimum wage.

- if someone can work hard and earn minimum wage all day everyday for a year and make 14k a year or sit at home doing anything they want with their free time and be on welfare and make 10k a year plus get benefits of cheaper housing, medical insurance and then with their all day free time do some work under the table or even illegal and make more then the 4k difference why would they want to bust their ass working for minimum wage? i think this is more of a problem then most are aware of. free time + welfare > working minimum wage. perhaps increasing the minimum wage will tilt this back towards working thus bringing in new job seekers.

- a huge problem that most people do not realize is that the very largest % of people that will benefit from increase in minimum wage are union employees. most think that the person down at mcdonalds deserves 7.25$ an hour instead of 5$... but they are not realizing that the union painter that gets 32$ an hour is actually paid at 27$ + minimum wage via his contract..and so he is now going to make 34.25$ an hour and likewise majority of unions people are also. is this the person you are trying to help out by this incentive? do you want to pay more for good/services becuase you are helping the plumber make 45$ vs 42$ an hour?


in the end who knows. i think its about time to raise the minimum wage as it has stagnated for long enough not moving with inflation and cost of living. but i am aware that this will cuase problems that will have larger effects on our economy then the benefits of paying the pure minimum wage workers higher payouts will be.

[Gatorade]

It's funny that the people who say raising the min wage would hurt things haven't lived on min wage in years.

Min wage is used as a level to keep profits in the pockets of the ones with the deepest pockets.

A single mother that has to take a min wage job because she has to be able to take care of a young child would disagree with you that we don't need to raise the min wage.

Min wage creates a level that allows businesses to lower the wage ammount by meeting legal necessity.

[Jim]

couple of points i think are problematic with this all.

- current minimum wage has not increased with inflation and is not nearly enough to support a family on

- many of the people that make ONLY minimum wage are younger people without families working at retail stores/fast food who do not have families and which its only disposable incoming for them to buy cd/movies/shoes..etc etc.

- increased minimum wage obviously cuts into business profits which can lead to small businesses shutting down or passing along these costs to shoppers which means we are spending more so at some point the question is if the increase in minimum wage going to be enough to offset the increase in prices and how much bitching will the majority of people paid salary who are not getting an increase in wage going to have about paying these new higher prices on goods/services?

- on the larger scale there is the huge problem of import/exports due to our higher cost of making goods because of this minimum wage. it goes up, cost of our exports have to go up and then we dig a bigger hole against cents an hour people working in china. how are we ever going to catch up. our economy is very Dependant on imports.

- will higher minimum wages push jobs overseas? outsourcing to places like china/India where 10k $ a year salary is very good and you will get all college graduates applying.

- back to the US. i am a big fan of paying someone what they are worth. is there any need to pay a burger flipper more money? what added benefit are they bringing to the business that makes them worth more money? i think people deserve raises as they work somewhere, learn the business, can do activities faster and thus more efficient. however starting off someone new with no schooling and no hands on experience...why?

- there is the idea that perhaps more knowledgeable and schooled people will apply for jobs if the pay rate was higher. someone more qualified who's working at 7$ an hour because its higher then minimum wage. perhaps they would be willing to fill a roll if both positions were offering 7.25$ minimum wage.

- if someone can work hard and earn minimum wage all day everyday for a year and make K a year or sit at home doing anything they want with their free time and be on welfare and make 10k a year plus get benefits of cheaper housing, medical insurance and then with their all day free time do some work under the table or even illegal and make more then the 4k difference why would they want to bust their ass working for minimum wage? i think this is more of a problem then most are aware of. free time + welfare > working minimum wage. perhaps increasing the minimum wage will tilt this back towards working thus bringing in new job seekers.

- a huge problem that most people do not realize is that the very largest % of people that will benefit from increase in minimum wage are union employees. most think that the person down at mcdonalds deserves 7.25$ an hour instead of 5$... but they are not realizing that the union painter that gets 32$ an hour is actually paid at 27$ + minimum wage via his contract..and so he is now going to make 34.25$ an hour and likewise majority of unions people are also. is this the person you are trying to help out by this incentive? do you want to pay more for good/services because you are helping the plumber make 45$ vs 42$ an hour?


in the end who knows. i think its about time to raise the minimum wage as it has stagnated for long enough not moving with inflation and cost of living. but i am aware that this will cause problems that will have larger effects on our economy then the benefits of paying the pure minimum wage workers higher payouts will be.

You make a some fine points above- the flaw in all these augments is that you cannot "live' on 6-7-8 -10 bucks an hour independently in most urban areas at 10.00 bucks an hour you would bring home 270.00 a week at the most, a studio apartment in a basement is 1200 a month! I submit that 15.00 an hour is not a living wage.. 18.00- 25.00?? or should we just say if you work you get paid 50,000.00 a year for any job... its a slippery slope. If the minimum wage was renamed the ''start at the bottom and work your way up wage'' would it be more palatable? (please Do not confuse my pragmatic statements with a lack of compassion for the working poor.)

[NMMB]

This is a difficult topic... as an economist I certainly understand the "let the market take care of it" line... but that gets me thinking... if we are going to let the market take care of minimum wage (so people would probably end up working at a wage as low as or lower than present minimum wage) should we also let the market take care of the prices for fuel, electricity, food, etc (all of which are heavily subsidized - especially in North America, and if my memory is correct more in the US than Canada, but don't quote me on that)? In our economies we have so many artificial prices (either artificially high, such as Cigarettes and Dairy - in Canada at least - or artificially low, such as gas or lettuce grown in the deserts of the Southern US that is sold for less than the price of pumping the "free" water to the farmers).

I expect that letting the market take care of it is more palatable when it is applied to minimum wage than when it is applied to fuel/energy (which should be far more expensive but is subsidized) - since the line is most often, but not always, spoken by those who haven't seen a minimum wage cheque in years but consume a great deal of energy.

[Nick]

Michael,

Your support of minimum wage makes the baby Milton Friedman cry. :tongue_sm

-Nick

[moses]

Michael,

As to the minimum wage, you make a very good point. As to fuel and energy costs, I would note that they tend to impact people making minimum wage more than the rest of us. We all use a lot of energy as a rule (although I've saved a lot there by making it through this NYC summer without AC - in my apartment anyway), but I doubt energy consumption changes a huge amount relative to income (within a given country). Certainly it is a much higher percentage of income for low income folks. Growing up in a rural area, I am very aware of the impact higher fuel costs have on people who do not make much and have to drive a fair distance as part of daily life. This is compounded by the fact that lower income usually equals forced to live farther from work in order to have lower housing costs.

[thatbrian]

Personally, I support getting rid of the minimum wage. It actually hurts people more than it helps them, especially minorities. The market is what determines what a job is worth not government. When government tries to give people a raise (a very very small percentage of the working population - about 3 %) it actually eliminates jobs for other people and shrinks the job pool. Prices don't go up - jobs goes down. You temporarily help the person in the minimum wage job who will probably move on to a higher paid job very soon but again, you hurt many others who get the minimum wage job as an entry level position. This is because now the employer cannot create as many jobs because the one's he's got cost him even more. He may actually have to lay off someone to stay in business and in that case what is better - a minimum wage job or no job at all?

I say get rid of it. It's an artificial price that impedes the market from creating even more entry level jobs from which people can step up the ladder to greater success. And if we're not ready to get rid of it, leave it where it is.

Chris


I agree 100%. Although the min. wage seems like a good idea, it actually keeps wages too low, remove it, wages go up and that will really help the poor.

[Andre]

This is a subject where you need to separate "common sense" and knee-jerk reactions from reality.

If you ask someone on Min wage whether they need to earn more, they will say yes, inevitably. Just as anyone would. Likewise, everyone would agree that everybody would like a raise. Personal opinion is no answer.

You have to look at the facts of U.S. wage demographics: Only 3-4% of the population makes min wage. 64% of them are the children of middle class families working a temp job. Min wage jobs are not, and never were INTENDED for working families. Min wage jobs are ENTRY LEVEL jobs that one takes to gain experience for entering the real job market. Nobody should be looking to spend their career at min wage (and almost nobody, if anybody, does), if they are, they are not doing what they need to do. Government can't mandate that people work to improve themselves. If you break the American workforce into quintiles, after a decade, only 4% of the bottom quintile (20%) are STILL in the bottom quintile. Most move up to the middle class.

That said, it's basic economics (at least as it's taught in non-socialized countries): You raise the price of anything, you sell less of it. If you raise the price of labor, less of it will be purchased (fewer hires). It works this way every time it is studied, to the point where you will see it as an example in most every econ book (except in France). Raising the min wage costs jobs.

The REAL fix is to increase the value of what you are selling. Be a good worker, work to better yourself. take a job, any job, that will move you toward your eventual goal and perform your best at it. If you need more schooling - get it. The only person in the U.S. who makes min wage does so because they are either not qualified for anything else (say a high schooler on his first job), or they haven't bothered to aquire the skills neccessary to get a better job - and that's THEIR fault, not mine. Nobody is preventing ANYBODY from getting ahead, except themselves.

Statistically, if you finish high school, don't have kids before marriage, and don't get married until you are a little further along in life than right out of high school, you have a 90% chance of being successful. Contrarily, if you do these things, you have more than an 80% chance of living in poverty. You tell me if the solution is raising the min wage?

Furthermore, why stop at $12/hr. Why not $15...$25...$50? After all, who wouldn't want $50/hr? Think of how far ahead a person could get with that kind of raise? Except that the cost of living would go through the roof and nobody would be better off, least of all the poor. Talk about mean reversion!

Andre

[NMMB]

Your support of minimum wage makes the baby Milton Friedman cry. :tongue_sm

:lol: :lol:


...As to fuel and energy costs, I would note that they tend to impact people making minimum wage more than the rest of us...
I wasn't even considering any compound effects - just noting that fuel (especially gas) prices are artificially low in North America (especially US)... and while the ratio of energy costs to total income is certainly more of a concern for a low income individual I do think that if people were to be charged a "real" price for their energy we would see fewer North Americans driving large SUVs with the AC cranked as they move slowly through city traffic between their air conditioned office and air conditioned homes. While the well-off may have a different energy cost to total income ratio, they certainly use more energy.


...If you ask someone on Min wage whether they need to earn more, they will say yes, inevitably...
Ah, self-selection bias - the bane of social scientists.



...The REAL fix is to increase the value of what you are selling. Be a good worker, work to better yourself...
Indeed - but it is not always that easy... like many things it is easy to prescribe a simple and eloquent solution when you are not directly facing the problem.


...Statistically, if you finish high school, don't have kids before marriage, and don't get married until you are a little further along in life than right out of high school, you have a 90% chance of being successful. Contrarily, if you do these things, you have more than an 80% chance of living in poverty...
Two questions on this... (1)where did you get these stats and remind me again (2) what the official and accepted definition of "successful" is (I've not been able to find one)?

[Andre]

Two questions on this... (1)where did you get these stats and remind me again (2) what the official and accepted definition of "successful" is (I've not been able to find one)?

The data comes from the most recent U.S. Census data. I don't remember what data point was used as the deffinition of "success" in a paper I read on the subject once, nor do I care to try to find it all again. It was basically some wage point in the middle class - a reasonable number as I recall it. As an economist, you shouldn't be acting surprised by any of it...but then you are Canadian! :biggrin:


Indeed - but it is not always that easy... like many things it is easy to prescribe a simple and eloquent solution when you are not directly facing the problem.

You know, LIFE isn't easy sometimes. Sometimes you've got to get up early, stand in line somewhere, and then spend 10 hours doing something you don't really want to do. And maybe you have to do that for YEARS. Maybe adding another few hours of schoolwork on top of your workday. But then EVENTUALLY you will be able to get where you want to go. I worked damn hard to get where I am in life and I've got nothing but opportunity open to me now. Why should I now pay for someone else, who doesn't want to do the work involved, to get up to my level for free? I HAVE been poor, and I said screw it, that's not for me, and worked hard to get past it. There are VERY FEW people in America that can offer the excuse legitimately that they can't do the same thing. The net should be set for them, not people who just think it's unfair that they aren't rich by Governmental fiat! It's a cop out to claim that you just can't understand it unless you are IN the situation.

Andre

[mr_economy]

Without getting into the nitty-gritty of minimum wage laws, I have a question for those who oppose them: why is it that everybody ignores the automatic yearly salary increase (paid 100% from the pocketbooks of American citizens) for members of Congress, who are already making well over $100,000/year, yet those same people hit the roof when speaking of something similar for the lower wage earners?

[moses]

Primarily becaue the salary of Congressional representatives has no direct impact on the US economy and not even a very appreciable impact on the federal budget (about $70m, I'm thinking). Frankly, I think they should be paid more. Hell, no one is ever going to do it for the money, but I would not want anyone to NOT do it because of the money. And, frankly, $133k is not really that much, especially for a job that requires maintaining two homes, one of them in a pretty expensive area. Someone with the skills, talent, and experience I would like to see in congress is likely to be able to make a lot more than that elsewhere.

[Gatorade]

Primarily becaue the salary of Congressional representatives has no direct impact on the US economy and not even a very appreciable impact on the federal budget (about $70m, I'm thinking). Frankly, I think they should be paid more. Hell, no one is ever going to do it for the money, but I would not want anyone to NOT do it because of the money. And, frankly, $133k is not really that much, especially for a job that requires maintaining two homes, one of them in a pretty expensive area. Someone with the skills, talent, and experience I would like to see in congress is likely to be able to make a lot more than that elsewhere.

I thought they had a housing allowance for the DC residence. Same thing with transportation.

[ouch]

Primarily becaue the salary of Congressional representatives has no direct impact on the US economy and not even a very appreciable impact on the federal budget (about $70m, I'm thinking). Frankly, I think they should be paid more. Hell, no one is ever going to do it for the money, but I would not want anyone to NOT do it because of the money. And, frankly, $133k is not really that much, especially for a job that requires maintaining two homes, one of them in a pretty expensive area. Someone with the skills, talent, and experience I would like to see in congress is likely to be able to make a lot more than that elsewhere.

I'll admit that 133K won't get you far at the Aston dealer, but let's remember that these folks generally paid millions to get into office. I don't see any of them struggling.

I'll also submit that one can scrape by quite nicely on 133K, if you get the free health care, gym memberships, transportation, generous pension, the ability to not pay into SSI, and countless other perks these clowns have voted for themselves.

Do you really think that when they go out anywhere, they're picking up the check?

[moses]

Fair point about the housing allowance, not to mention various other things. I agree, $133k (actually, I think it is maybe a little more than that now) is not such a shabby amount, all things considered. The real points though, are 1) that these people, fortunately or unfortunately, run our country - it should be a high paying job, and 2) frankly, how much they get paid, while it does come out of our pockets, does not really impact much of anything, including our pockets, because it is so insignificant by conparison.

Oh, and I would definitely want some kind of automatic cost-of-living increases, if nothing else to minimize the frequency of the unseemly process of having people have to vote on their own salaries.

[Mama Bear]

I totally agree that people should be paid what they are worth. Some are overpaid and some underpaid. I think a person who has a drive will work their way up a ladder.. but for others the thought of working for $13k a year (less taxes) or doing something illegal that would bring home more money in less time probably prompts a lot of low income folks to do the wrong thing. It is too easy to make money the wrong way... so what is the incentive to make small amounts of money and work your way up a ladder that is probably stacked against you already as you need a min wage job! Probably all the illegal immigrants are getting the min wage jobs already anyway......

I used to be a mid sized biz owner... no-one I could have hired for $6/hour would have worked very hard for me....

Sue (Mama Bear)

[EL Alamein]

I wasn't even considering any compound effects - just noting that fuel (especially gas) prices are artificially low in North America (especially US

NMMB,

For everyone's benefit it may be beneficial for you to explain why you think gasoline is subsidized in the United States.

It may be appropriate for such a tangent to be carried over in another thread on the Barber Shop.

MTSSB,

Would you care to start the thread please and put it in the appropriate location if NMMB is agreeable?

Chris

[Mama Bear]

Gas prices, taken from MSNBC

Elsewhere in the industrialized world, the actual cost of gasoline ranges from $2.15 a gallon (France) to $2.61 in the Netherlands. But the after-tax price is $5.80 in France and over $6 a gallon in most other major European countries. Japanese drivers get off relatively easy: taxes there only push pump prices to about $4.50 a gallon.

So much for Europe and Japan. In less-developed parts of the world, some countries actually subsidize pump prices to keep them below what the gasoline actually costs to make. China, which recently raised fuel prices, still keeps them well below international market rates. Chinese drivers — and farmers — still pay the equivalent of less than $2 a gallon. As a result, the oil refining industry there is losing billions of dollars. That’s why the Chinese government is expected to continue to try to raise retail prices, while trying to avoid a major consumer backlash.

The cheapest places to top off, not surprisingly, are in countries that produce the most oil. In Iraq, until recently, pump prices were capped at 10 cents a gallon. Prices have recently risen to nearly 40 cents a gallon — still a bargain compared to the U.S. Iran also keeps pump prices low — less than 35 cents a gallon, according to a recent Reuters survey.

But for a real bargain, drive on down to Venezuela, where President Hugo Chavez has made a name for himself lately by delivering heating fuel to low-income American families at bargain prices. In Venezuela, you’ll pay just 12 cents a gallon to fill your tank.

[Mama Bear]

I don't even want to touch the prices of cigarettes and booze.... you are right, these are artificially inflated... Marlboro the most I think. Smokers are now paying the fines the govt imposed on Marlboro as well as buying their smokes.... I have to admit I am included in this list of people.....

Sue, who is drinking booze and smoking cigarettes..... :blushing:

[Mama Bear]

Did I get off the subject...... :w00t: :blushing:

Sorry!

[Creslin]

Well I've never been eloquent enough for debates such as this so I won't actually voice an actual argument; instead I would lke to ask a question. In a country where "regulated" companies such as Enron can pull off what they did, where a corporation like Wal-Mart can become known for making people work off the clock and whose manager's actually shave hours from people's timecards, do you actually want to let the corporations regulate themselves as to what a wage should be?

Someone made the remark that low wage earners would like to make more money. Of course they do. So does Bill Gates. So does the CEO of Exxon with his huge retirement deal (isn't it something like 400 mil?). The nature of people is to gain as much as they can. Some people feel that there is enough for each of us to make a fair wage, others will scratch tooth and nail for everything they can get. A whole lot of people could get hurt trying to figure out who the good guy is.

[EL Alamein]

Well I've never been eloquent enough for debates such as this so I won't actually voice an actual argument; instead I would lke to ask a question. In a country where "regulated" companies such as Enron can pull off what they did, where a corporation like Wal-Mart can become known for making people work off the clock and whose manager's actually shave hours from people's timecards, do you actually want to let the corporations regulate themselves as to what a wage should be?

Just as an aside everything you mentioned above was and is illegal. The fact that it is illegal did not stop anyone from breaking the law. The simple fact is that the market will keep a company in line far more efficiently than the law ever will. Most wages are regulated by the market. It's very simple - if you want people to work for you then pay the price to get the kind of talent you need. No one is going to work for you if they feel that you are not paying enough.

Chris

[JAG]

I also believe that the market functions to keep participants in line but only in the ideal situation where all players have equal power. When one or a few participants achieve a position within the market where their power allows them to dictate the terms of economic interaction you get exploitation. Current examples: Microsoft, WalMart, big Pharma.

This power can come from many sources - controlling the supply chain (WalMart), controlling the customer(Microsoft) or controlling the regulator (big Pharma). But in every case other participants suffer without any recourse within the market. It is in these situations that a case can be made for regulation in the interest of the public good.
This is because our economic system urges participants to grow towards a monopolistic position - to 'corner the market' but has no adequate mechanism for dealing with those who actually succeed in that endeavour.

As for the minimum wage, most arguments seem to debate the consequences on the macro level of changes up or down. In my opinion a more effective method for increasing the standard of living of society as a whole would be to absolve the poor of their duty to pay taxes until their income rose to some agreable level instead of making the truly wealthy even wealthier. Or constraining the ability of corporations to outsource production to low wage jurisdictions thereby increasing their quarterly profits at the cost of sacrificing the velocity effect that paying wages into the domestic economy would have. Or by acting to limit the influx of people willing to work at truly slave wages/conditions; this is just importing poverty at the macro level.

Nothing to see here. Keep moving. Just the late night raving of a mad man.

Bob

[NMMB]

...For everyone's benefit it may be beneficial for you to explain why you think gasoline is subsidized in the United States...

I'll keep it short. Gasoline is subsidized in the US, as it is in many countries, including Canada, indirectly as the price paid at the pumps does not, in any way shape or form, include the costs of the product. When we buy a liter of gas we do not pay for the irreversible environmental damages caused during the extraction and processing of the fuel, we do not pay for the environmental damages caused by consumption of the fuel (such as global warming, acid rain, poor air quality, etc) and we do not pay for the ill-health effects suffered by people who endure the pollution (this is especially the case in the case of the US with it's less-than-universal healthcare).

In the event that you require further explanation I would suggest that you consult ANY introductory level environmental economics text book... T. Titenberg might be a good place to start.

[Jim]

(this is especially the case in the case of the US with it's less-than-universal healthcare).


All my Canadian relatives come to New York for their medical treatments! thats Universal!:biggrin:

[htownmmm]

Let's be real here- the minimum wage is the governments way of telling you that your employer would like to pay u less, but cannot because its against the law.

Everyone in america cannot become a doctor, lawyer, consultant, etc,etc- but should they have to suffer because they want to work but cant afford to?

the current minimum wage does not even reach poverty levels( if u worked 40 hrs per week u still would be POOR!


Marty

[jmhUT]

Some good points made here along with some outlandish claims. Ultimately, and sadly, I believe Aaron nailed it on page 1 though. Our legislators do not care about the working poor or minimum wage or immigaration reform or gay marriage or stem cell research or healthcare or social security, or....or...etc......... They care about beating the other party and midterms are around the corner. The rest is philosophy and can (and should) be argued but not likely settled legislatively. In the end policy will be set by the lobbyists that put the most candidates in office. While sad and perhaps unfair this is not wholly without merit. Greed and lust for power are powerful motivators that are quite useful. I personally do not feel betrayed that my government does not actually have my best interests at heart. I believe this to be the case regardless of a country's national system. My employer does not have my best interests at heart either. This was a tough realization for me but there are greater tragedies.

We are all responsible for our own fortunes. Those that make theirs should not be punished for their success. However, I also believe that the worth of a civilization can be measured by how it treats its most vulnerable members. Those that prosper should feel compelled to provide aid of their own free will.

In the end I don't believe that legistlating a minimum wage will impact the greater problem of poverty; which cannot be cured by this or any other congress. Better to let the market find its own level and encourage the private sector to willingly pick up the slack. All that needs be done to accomplish this is to make it "cool". Empty campaign promises are worthless. Better results can be achieved when we hold each other accountable and demand more from ourselves.

[EL Alamein]

I'll keep it short. Gasoline is subsidized in the US, as it is in many countries, including Canada, indirectly as the price paid at the pumps does not, in any way shape or form, include the costs of the product. When we buy a liter of gas we do not pay for the irreversible environmental damages caused during the extraction and processing of the fuel, we do not pay for the environmental damages caused by consumption of the fuel (such as global warming, acid rain, poor air quality, etc) and we do not pay for the ill-health effects suffered by people who endure the pollution (this is especially the case in the case of the US with it's less-than-universal healthcare).

In the event that you require further explanation I would suggest that you consult ANY introductory level environmental economics text book... T. Titenberg might be a good place to start.

OK, thanks. This is what I thought you meant but couldn't be sure. I myself don't think these are true costs as none of them can be measured and quantified or even attributed to one cause or another. But I know that environmentalists have a different point of view. Just my 2¢.

Chris

[Andre]

I'll keep it short. Gasoline is subsidized in the US, as it is in many countries, including Canada, indirectly as the price paid at the pumps does not, in any way shape or form, include the costs of the product. When we buy a liter of gas we do not pay for the irreversible environmental damages caused during the extraction and processing of the fuel, we do not pay for the environmental damages caused by consumption of the fuel (such as global warming, acid rain, poor air quality, etc) and we do not pay for the ill-health effects suffered by people who endure the pollution (this is especially the case in the case of the US with it's less-than-universal healthcare).

In the event that you require further explanation I would suggest that you consult ANY introductory level environmental economics text book... T. Titenberg might be a good place to start.

Well I have yet to read an economic text of any sort that raises the issue of the pricing of a product not covering such periphery issues. Why? Because you quickly head into "that's just nuts" territory. Should the price of childrens clothing be taxed according to its dorkiness - the idea being that children who wear it might have later self esteem issues that lead them into one lifestyle or another, costing society in the end? Should the price of every product reflect the abilty to return the land it was made on to some pre-historical state of nature? If you buy a pen from Bic, should you also pay some small tax to subsidise the eventual bulldozing and return of Bic's factory land to Yellowstone Park quality? Of course not, and no serious economist would ever suggest any such rediculous policies.

Gas is not subsidised in the U.S., it is simply not taxed as much as it is in the Socialist paradises of the world that love to hand out "free" stuff or force their citizenry to pay for every program under the sun "for the good of society," though it's mostly just to keep someone employed and busy. American gas companies make about 3-4 cents a gallon of gas. The American Government makes about 42 cents average per gallon. You simply pay for other things (like environmental cleanups) when you buy other things or get taxed otherwise.

The REASON gas is cheap in places like Venezuela and the Middle East is because they HAVE the oil and don't have to move it all over the planet and use part of the $70+/bbl to subsidize their local production and use.

As far as wages, if you believe in "fair wages" and paying people "what they are worth," how is this to be decided? Who will get to decide the worth of spending seven years going to school at night, while working full time to support a family, vs. going for four years while supporting nobody? Will people disadvataged in some way automatically get a higher wage because they overcame more? Or will they get less because they might not have the same abilities no matter what (maybe they are in a wheelchair)? While those who come from certain public schools get a higher or lower salary because of it? What about people who work in public interest jobs, vs. self-interest? Will there be a graduated scale according to what advanced degree you have, and who will decide that scale. Will gender make a difference in physical jobs? In what way? Will certain people be excluded from certain professions, because they will have and advantage or disadvantage over others, thus skewing the scale? Will everyone HAVE to live near their job; will further out employees get transportation subsidies? Will the same job in differnt cities that might be more or less expensive pay more or less? How ill the scale be decided? Will there be any way to appeal your salary if you feel you should receive more? How will the guidlines for merit increases be set up? Will these things be decided at a local or national level? If you work for company X in CA, what will happen to your salary if you transfer to FL with the same company and job? A different one?

Now you can pretend the above are silly questions, but they are the very real questions that you will HAVE to answer before you can change over to some third party based system of judgment. Or will you just be happy when your boss tells you one day that you now earn $10,000 less than yesterday, because it has been decided that widget-makers now earn $X, instead of $Y. In the end, the platitudes about paying people "what they are worth" are meaningless, because the only thing anybody is "worth" is whatever THEY decide it's worth it to work for. Would you rather have the ability (whether it actually happens or not) to get a merit raise because of your own efforts, rather than be "held back" because people in your job are only, according to Form 467738.8876 subsection Y, only worth $X, not $X + 1.

When you take a job, it is not one-sided. You are selling something: Your value as an employee, which the company is buying. If you want to charge more for yourself, then make yourself more valuable. It's just like selling watermellons. What you are worth will be reflected in your salary. If the value of your labor is not worth the price you are asking, then you have a problem, just as if you were selling watermellons, during watermellon season, for $10 each. Good luck.

It's an evil and cruel world that makes people work for a living and doesn't just expect the least from everyone!

Andre

[yasuo200365]

C'mon lets have the free market truly reign...., END ALL REGULATION TO DO WITH WORK..., I like hard work, particularly when I'm paying for it - so no more safety equipment, no need to heat or cool the offices anymore ...., let's get rid of it once and for all (and not just the poor).

Regards
John:biggrin:

[moses]

Andre - they're called externalities, which is a pretty accepted idea in econ.

[NMMB]

Well I have yet to read an economic text of any sort that raises the issue of the pricing of a product not covering such periphery issues. Why? Because you quickly head into "that's just nuts" territory....If you buy a pen from Bic, should you also pay some small tax to subsidise the eventual bulldozing and return of Bic's factory land to Yellowstone Park quality?

The issue that you appear to be unable to wrap your mind around is known as externalities and has been a staple of economics for about a century or so. If you haven't been able to find this topic in economic texts I would suggest that you haven't been reading economics texts. Trust me, it is there. I have been studying environmental economics for the past 6 years and am presently working on my PhD in economics... this is not something that I am making up and is not something new and should not be a difficult concept for anybody to comprehend. If you are really having problems here I would suggest that it is more that you don't want to accept it than you can't understand it, since you appear to be at least a moderately intelligent chap.

As for your question about the bic pen - the answer is without any doubt, "yes" (in theory at least).

[moses]

Also, just to observe one other thing. I am, unlike Michael, not very educated in economics. I've read a few texts, and took a minor in college, but that's about it. One thing I do know, is that there is almost nothing that "no serious economist would ever suggest." Hell, nobel prize winners have suggested that increasing debt load for the country is a good thing. Economics is a very broad field, with quite a number of recognized schools of thought. It is not all Chicago, Neo-Classical, blah blah.

That said, I am pretty sure the principal that externalities exist and are part of the real cost of a product is pretty well recognized accross the field. What that means and what should be done about it - another thing altogether.

[Jim]

I find that the most riveting and informational text about economics to read is my own P&L sheets each month. *No theory just reality.*

:biggrin:

[jmhUT]

I find that the most riveting and informational text about economics to read is my own P&L sheets each month. *No theory just reality.*

:biggrin:

Amen brother.

As an aside, this thread looks to be taking on a bit of a mean-spirited tone. Ultimately we are all arguing opinions here. We should be able to do so without making it personal. I for one engage in these types of debates not only to express an opionion but also to solicit opposing viewpoints. I typically either leave feeling more secure in my own belief or intrigued by a new idea that may ultimately lead to my own better understanding of an issue. Either way I'm better off. It's a bit offputting when the debate degenerates into an argument, which is of less use to all of us. I think it also telnds to chase others away rather than encouraging particupation. Passion is fine but let's keep it respectful shall we?

Just my $.02. It's not my forum, just my preference.
Cheers,
Jeff

[moses]

Jeff,

Thanks for the reality check. If my tone sounded argumentative or, worse yet, mean-spirited, I apologize. Not my intention at all. This is, after all, a gentlemens' forum, so I hear, so I will try not to undo that too much....

Shane

[NMMB]

Jeff,

Thanks for the reality check. If my tone sounded argumentative or, worse yet, mean-spirited, I apologize. Not my intention at all. This is, after all, a gentlemens' forum, so I hear, so I will try not to undo that too much....

Shane

I expect that I sounded argumentative, and I suppose that is what I was doing... but if I sounded mean-spirited then I did a poor job representing myself as it was not in any way my intention. I do apologize if I have offended any other B&B'er.

[Wolfman]

The state of CA is considering another minimum wage increase. My boss has put me on notice that if it does go up, I'll be packing my desk because I earn more than twice the current minimum wage for new hires. In order for the company to remain "politically correct" in the eyes of equal opportunity and the county employment dept. he'll let me go so he can keep his current crop of temp and minimum wage earners. And he wonders why all the management he has are looking for something else, and CALOSHA violations are stacking up like dimes.

[moses]

Wow, I think I'd be looking for something else anyway - doesn't sound like a great person to work for....

[Andre]

On the mean spritedness theme, as I told someone else, I don't get overly worked up over impersonal internet posts, because I realize that they can often sound far worse than ever intended. The only thing that will actually offend me is an OBVIOUS personal attack, and I don't think any has been tendered here. Hopefully nobody has interpreted such in mine. Sitting across a table over a beer is about the only way to catch all of the nuance of human speech.

On Externialities. I know about that, but my point is I think that one can take them to rediculous extremes that bear little realistic relation to the original product. In those cases, they go to far and can only lead to consideration that brig things to a halt. I VERY seriously doubt that ANY portion of the current purchase of a Bic pen is earmarked for the costs of bulldozing said factory in 2025. You may, in fact, be paying for PAST issues. Perhaps I overstated, or wasn't really clear.

Anyway, think about this:
Let's say you start with a company making $X. You work really hard to do a good job, to attend school in the evenings, you make the right career choices, etc. After five years of hard work, you are selected for a special training path that will start you at $28,000/yr, and has career opportunities much further. Excitedly, you sign on and look forward to this new opportunity in your life. You worked hard, and this is where it got you.

Six months later, the Government passes a law that the new min wage is $12/hr (for the sake of arguement, about $24,000/yr in full-time America). This means that the person with no real skills, doing a no skill distribute-the-mail job that you started at @ $X, and worked hard to get past, now earned a big chunk of what you do. What should happen? Should your boss raise the wages of everybody with wages that were formerly meritorious in nature, but which now are effectively min wage or nearly so? Can a company always afford such a situation? Have YOU as a hard working go-getter just been screwed (This'll teach you!). Should you just be happy that your fellow workers are now making just about what you make, even though they didn't do anything except avoid getting fired? Should a business that has a lot of min wage workers raise the price of their products, or employ fewer workers (contrary to common sense, lots of businesses can't just absorb the cost). If the price goes up, how will this affect the cost of living for poor consumers (what if the company makes diapers, or milk)? Who decides who gets fired and what happens to them when you do?

Things are not so simple when you operate under the mandate of regulation, because if you regulate A, it usually affects B. If you haven't accounted for B, you end up screwing somebody (often the very people you set out to help).

In the end, it's just fake politics anyway, since in the U.S. most people earning min wage are in middle class families earning extra cash; most people in the bottom quintile don't stay there long; almost nobody works long at min wage; and only about 4% of "the poor" actually remain poor for more than a decade. The majority of the "symbolic" victims of society, the African-American families make $50,000+ (a healthy enough wage). There are lots of common ideas (possibly true somewhere) that simply aren't true in America. We absolutely should provide a safety net for those that need it, but worrying about min wage workers is just a political code to make the elite whites who espouse raising it feel better, since the common sense about it is usually wrong, "but who doesn't want to help the poor?"


C'mon lets have the free market truly reign...., END ALL REGULATION TO DO WITH WORK..., I like hard work, particularly when I'm paying for it - so no more safety equipment, no need to heat or cool the offices anymore ...., let's get rid of it once and for all (and not just the poor).

You're not really thinking this through (and I realize you are being somewhat sarcastic). The REASON a free market, without excessive regulation, will NOT decend into employment anarchy, is because it is not in the best interest of a company to endanger its workers. It won't and doesn't happen. This is just a Shibboleth raised by unions and anti-capitalists to explain why every little nuance of business life MUST be regulated (an absolute necessity under Socialism). How long would you voluntarily work somehwere that had no heat in winter, and which killed on employee every day? Sure, there are dangerous jobs that people do and which need more regulation than working at the Virgin Megastore (Like coal mining), but the vast majority of businesses will simply change voluntarily if they become so dangerous that nobody wants to work there. A register clerk at the Virgin Megastore doesn't need a union or excessive regulation (min wage laws), since they can simply work somewhere else. when the Megastore can't find clerks to work for $2/hr in a non-A/C'd building in Florida, it will quickly get A/C and raise its wages to match its competition. And the wage will always stabilize naturally at the highest point that is reasonable for the overall job (across companies), since if it didn't, the best employees will always work for the guy willing to pay even more. (the basic supply and demand curve). It's only when Government effectively creates subsidies and caps that the natural function of the system falls apart - usually leading to less employment and lower overall wages. The supply and demand curve is so basic to economics that I am always surprised when people pretend it doesn't always work the same. It always does because it is based on how people think and react in real life.

Andre

[moses]

Andre,

Your point that supply and demand pressures will force adequate safety, etc. in the absence of regulation is interesting. And in truth it probably has some merit in the modern US. I think it is worth remembering, however, how bad working conditions really were at one point. And they did not improve through simple supply and demand. They improved as a result of two things. Organization of supply, and regulation. And frankly, even with the regulations we have, there have been some Very Bad Things that have happened where companies chose to ignore regulations. On the one hand that is a demonstration that regulation isn't 100% effectice, but it is also a demonstration that labor supply may not alone be enough to enforce worker and environmental safety.

Might I also point out, on the environmental side, that free market pressures were not enough, despite the public uproar, to directly correct the very dangerous direction we were headed in the 70s. I don't think most people realize how bad this country's air and water would be without the CAA and CWA. And industry submitted to those KICKING AND SCREAMING. Which would not have been the case had the free market alone been enough. Which, after all, is the point of the externality concept. These are called externalities because the cost is not internalized. Which is another way of saying that the free market alone generally will not account for them.

Shane

PS - That does not answer Andre's points about the min. wage at all. Frankly, I think his arguments correctly point out some of the very serious problems with the minimum wage.