$9/h minimum wage

[Courier]

Really? Are you arguing that it will increase unemployment?! have you read those links?

The links show that its not fully known whether raising minimum wage increases employment, or reduces it.

It would be arrogant to say either way, as a statement of fact.

 

[thaiboxerken]

The links show that its not fully known whether raising minimum wage increases employment, or reduces it.

It would be arrogant to say either way, as a statement of fact.

So your evidence is that there is no evidence? Is evolution just a theory to you?

 

[Courier]

So your evidence is that there is no evidence? Is evolution just a theory to you?

What sort of mindless crap are you talking about?

The fact is that some believe that raising minimum wage helps employment numbers, while others believe it hurts employment numbers. Both sides have data and research to support their claims.

Does this little fact make you nervous? It appears you're one of those "My way or the highway", kinda people.

 

[respect]

What sort of mindless crap are you talking about?

The fact is that some believe that raising minimum wage helps employment numbers, while others believe it hurts employment numbers. Both sides have data and research to support their claims.

Does this little fact make you nervous? It appears you're one of those "My way or the highway", kinda people.

No, it is pretty clear that it has some negatives that come along, it just isn't mass layoffs like talking heads yap about which partisans on the other side have misconstrued to mean there aren't negative costs. There could be layoffs although they aren't likely to be significant, the costs can be spread out in other ways such as reduced new hiring, a transfer of compensation from benefits to wages, an increase in skilled employment at the expense of unskilled employment and a reduction in hours.

If there isn't negative consequences it would mean both the old and new minimum wage are well below the market clearing rate and/or the costs are being transferred to consumers. Some advocates of wage hikes seem to sort of grasp this as they might say something along the lines of $9.00 an hour would be good but $20.00 an hour would produce too many negative consequences.

 

[TubbaBlubba]

I think that there's too much emphasis on college education, too much subsidizing of low-value liberal arts degrees, and not nearly enough of a trade school track for students. Our high-schoolers are producing too many fry clerks, too many indebted college students, and not nearly enough apprentice welders or entry-level IT support technicians.

Well said! This seems to be a prevalent problem in the Western world right now.

 

[Courier]

Anyone who thinks the experts have decided for sure, whether or not raising minimum wage hurts or helps employment numbers, is a liar.

The jury is simply still out. There are various views on the subject.

 

[respect]

Anyone who thinks the experts have decided for sure, whether or not raising minimum wage hurts or helps employment numbers, is a liar.

The jury is simply still out. There are various views on the subject.

Decided for sure? Of course not, that isn't how science works, but there is consensus. To re-post, this accurately gives an overview of that consensus. The alleged controversy exists mostly in the minds of the media.

 

[Skeptic Ginger]

Kaosium, I am sorry but I simply cannot take a claim The Nation is a Stalinist Commie publication seriously. I'm incapable.

As for the National Bureau of Economic Research, your information has led me to take a closer look.

I cited evidence for who funded the organization.

Funding

Between 1985 and 2001, the organization received $9,963,301 in 73 grants from only four foundations:
John M. Olin Foundation, Inc.
Lynde and Harry Bradley Foundation
Scaife Foundations (Sarah Mellon Scaife)
Smith Richardson Foundation

These are organizations founded/funded by people with extreme ideological beliefs:

John M. Olin Foundation, Inc.

"Olin was committed to the preservation of the principles of political and economic liberty as they have been expressed in American thought, institutions and practice."[1] The foundation closed in 2005, after more than two decades of setting the stage for the NeoCon wave of the Reagan era. [2]

Lynde and Harry Bradley Foundation

Harry was one of the original charter members of the far right-wing John Birch Society, along with another Birch Society board member, Fred Koch, the father of Koch Industries billionaire brothers and owners, Charles and David Koch.[2]
According to the Milwaukee Journal Sentinel “from 2001 to 2009, it [Bradley] doled out nearly as much money as the seven Koch and Scaife foundations combined.” [3]

Scaife Foundations (Sarah Mellon Scaife)

The Scaife Foundations consist of the:
Sarah Scaife Foundation ( $244 million (fair market value) in 2009) [1]
Carthage Foundation ( $24 million (fair market value)in 2009) [2]
Allegheny Foundation ( $47 million (fair market value) in 2009) [3]
Scaife Family Foundation ( $70 million (fair market value) in 2009) [4]
All four have been heavily involved in financing various conservative and Islamophobic causes under the direction of reclusive billionaire Richard Mellon Scaife, whose wealth was inherited from the Mellon industrial, oil, aluminum and banking fortune.

Smith Richardson Foundation

The Foundation gave approximately $99,686,911 to a total of 266 grantees. Conservative and centrist think tanks that received substantial sums were: [see link]...
...The Foundation funded the early 'supply-side' books of Jude Wanniski and George Gilder. It is also listed in the acknowledgements for Dennis King's study of the LaRouche movement, Lyndon LaRouche and the New American Fascism (1989).

I got this far then looked at all the contributions from Krugman (one of the good guys ) and the timing of those donations. I need to look a lot deeper, including looking closer at the NBER papers cited in this thread. It'll take a while.

 

[Courier]

http://www.econlib.org/library/Enc/MinimumWages.html

Several decades of studies using aggregate time-series data from a variety of countries have found that minimum wage laws reduce employment. At current U.S. wage levels, estimates of job losses suggest that a 10 percent in crease in the minimum wage would decrease employment of low-skilled workers by 1 or 2 percent

fascinating article

 

[balrog666]

http://www.econlib.org/library/Enc/MinimumWages.html

Several decades of studies using aggregate time-series data from a variety of countries have found that minimum wage laws reduce employment. At current U.S. wage levels, estimates of job losses suggest that a 10 percent in crease in the minimum wage would decrease employment of low-skilled workers by 1 or 2 percent

fascinating article

Rather obvious to any employer of same.

If I hire a teenager for $x per hour to wash my office windows and he agrees to work for that, why is that any of the government's concern? Really, where do they get the Constitutional authority to screw me over for a mutually voluntary transaction?

And yet, if I hire the same kid to work at $y per window, without regard to how long it takes him to do the job (and it is the same number of hours), why is it suddenly no longer the government's concern because I no longer track the time? :confused at government absurdity:

Anyway, we all know this idiotic proposal is nothing but a corrupt payback to the unions for their spending of hundreds of millions to re-elect the Zero in the White House ...

I say dump the minimum wage entirely before they screw over the us small business owners yet again ...

 

[jflower]

I'm concerned that another increase in minimum wage will cost more jobs and cause employers to cut back on hours even more than they already have. I was concerned about the same thing when they increased the wage to $7.00/hr, and I was right.

Do we really want more the same?

Mudcat, is there any chance that this minimum wage hike that your complaining about occured during the biggest recession since the Great Depression?

 

[Kaosium]

Kaosium, I am sorry but I simply cannot take a claim The Nation is a Stalinist Commie publication seriously. I'm incapable.

I said (or meant) it was, at the time, when they were parroting the propaganda like it was legitimate, even after the Nazi-Soviet Pact which at least gave others such as Norman Thomas pause. I'm pretty sure all of the writers I mentioned repudiated it eventually, bad for the 'brand' you see, p) but not so much Stone who they were still trying to rehabilitate last I looked into it.

My point was no one who accepts that legacy gets to call anyone an 'extremist' without a belly laugh and no claim of anyone else being paid propagandists deliberately lying to achieve an agenda is going to be accepted without scrutiny from me at least.

As for the National Bureau of Economic Research, your information has led me to take a closer look.

I cited evidence for who funded the organization.

Incidentally, what percentage of their budget do you suppose those grants made up? This site seems to suggest those grants were exclusive, but that's chump change over the course of ~15 years for an organization like that, for example what do you think a nice building like this costs to maintain in Cambridge MA? I am skeptical of the implication that those foundations dominated their revenue.

These are organizations founded/funded by people with extreme ideological beliefs:

John M. Olin Foundation, Inc.

Reagan was not an extremist, they just called him that. I'd like to hear the argument he was a neo-conservative as well, that's a pretty odd statement to make, and they aren't 'extremists' either. These labels and 'brandings' are especially destructive to understanding in politics and economics in my view.

Lynde and Harry Bradley Foundation

Scaife Foundations (Sarah Mellon Scaife)

Smith Richardson Foundation

I got this far then looked at all the contributions from Krugman (one of the good guys ) and the timing of those donations. I need to look a lot deeper, including looking closer at the NBER papers cited in this thread. It'll take a while.[/QUOTE]

Do you know what the saddest thing was about that whole Krugman MSNBC appearance and the aftermath? You know who he reminded me of on that show? Jack Kemp. That probably surprises you, but it's an example of how those ideological brandings or 'schools' can mislead people. First it was for his demeanor which was friendly and upbeat, the 'happy warrior' and also that the argument he was making on the debt could have been heard from Kemp in his latter years (note he had to keep his mouth shut about that running with Dole) and wouldn't be considered out of the mainstream except for the circumstances today call into question just how much debt we can afford to run in part simply due to the sheer volume of ~12T public debt that must be financed and what might happen with interest rates and the budget impact. The man to listen to most during that appearance was Richard Haass from the CFR.

If you're interested I could give you a short primer on just why, and how the debt is financed, and how some say that we can run (just about) as much debt as we want and it doesn't matter, and others are worried about a debt crisis. It just so happens that the economic proposal that Krugman is proposing is a variation of a brainchild of one of the founders of NBER, the guy known as the 'American Keynes' as he was the grey matter behind the WWII economy, and has been referred to as the 'perfect economy on paper.' Would you like to know how it would work?

 

[Courier]

Forcing employers to raise their wages, unrelated to their rise or fall of sales, only forces employers to lay off current employees or cancel any planned new hires, or cancel any planned new raises for those who make a penny more than the new minimum wage.

How is this a good thing?

 

[Cavemonster]

Forcing employers to raise their wages, unrelated to their rise or fall of sales, only forces employers to lay off current employees or cancel any planned new hires, or cancel any planned new raises for those who make a penny more than the new minimum wage.

How is this a good thing?

This math only works if the funds to pay wages are absolutely fixed and the need for employees is absolutely elastic.

Neither are the case.

 

[Courier]

This math only works if the funds to pay wages are absolutely fixed and the need for employees is absolutely elastic.

Neither are the case.

Why would a businessman cut into his profits to raise wages, when he could instead lay people off, raise prices, or cut wages?

Folks don't start businesses to be Santa Claus, they do it to make money.

 

[Cavemonster]

Why would a businessman cut into his profits to raise wages, when he could instead lay people off, raise prices, or cut wages?

Folks don't start businesses to be Santa Claus, they do it to make money.

But staffing isn't divorced from profit. it's you who's acting like staffing decisions have nothing to do with making money.

Any business running for profit will either be operating at the minimum required staffing to operate the business, or each staff member beyond the minimum generates profit greater than what they're paid.

This is economics 101.

So that means that laying off staff either makes the business inoperable or it decreases income by more than the cost of a worker.

You don't preserve profit by laying off a profitable worker.

Laying off employees based on a raised minimum wage only makes sense if the profit made off a given employ is less than the raise in the minimum, which I'll concede, can happen in industries with razor thin profit margins, but it's far from the assumed outcome.

The same goes for new hires as well. Because owners are in it to make a profit, they wouldn't be hiring if it wasn't either profitable or necessary. A raised minimum wage may make it slightly less profitable, but it doesn't make those changes you described unless it's large enough to make these decisions unprofitable.

 

[respect]

This math only works if the funds to pay wages are absolutely fixed and the need for employees is absolutely elastic.

Neither are the case.

The inverse is also true. For unskilled workers to pick up none of the tab there must be inelastic demand for their labor.

Characteristics of the firm's profits, elasticity of labor demand and elasticity of consumer demand for their products will determine the breakout, but unskilled workers, profits and consumers will in some manner combine to pay the higher wages.

 

[respect]

Laying off employees based on a raised minimum wage only makes sense if the profit made off a given employ is less than the raise in the minimum, which I'll concede, can happen in industries with razor thin profit margins, but it's far from the assumed outcome.

No, this is a very noticeable effect of minimum wage hikes, especially in that it makes experienced employees more attractive relative to inexperienced employees.

Few minimum wage jobs stay at minimum wage. Firms (especially in retail) often hire inexperienced employees and pay them minimum wage during a training period (often referred to as a probationary period) and give them a scheduled raise when it is completed. Training unskilled workers becomes less attractive as the minimum wage increases. Statistically lateral labor movement stays the same but new hires of unskilled labor declines. Which not only hurts currently unemployed labor now but reduces their job opportunities in the future as well. On the job training is a form of compensation that can pay future benefit to the employee. The more expensive that is for the firm, the less they will do of it.

This is why the harm is often described as "invisible" by economists. It is easy to see the increased spending of the beneficiaries, those harmed by not getting hired at all and not developing marketable skills are comparably invisible.

ETA-Note that this happens at all levels of employment. Apprenticeships, manager trainee programs and even minor league baseball are examples of on the job training where the employee is paid less than experienced workers as they train. And the training programs would be reduced or outright eliminated if their employers had to pay them more.

 

[jflower]

Politics.

Perhaps an example will help.

Walmart worker qualifies for Medicaid and food stamps despite working full time. Taxes pay for medical benefits instead of Walmart. Walmart's competitors pay employees' medical benefits.

Walmart has cheap products because the cost of the tax subsidized food stamps and medical care are not included in the price of the items for sale.

Walmart labor costs are essentially subsidized by the taxpayer. The end result, Walmart gets the government to subsidize their costs, more profits go to the owners.

It looks like those taxes were redistributed downward to the people getting government 'free stuff'.

In reality those taxes were distributed upward to the people benefitting from subsidized labor costs.

Walmart funds political message that taxes are going to freeloaders. It's smoke and mirrors. Taxes are going to the working poor while Walmart benefits.

Eventually Walmart's competitors have to adopt the same business model of an underpaid work force. The taxpayer subsidizes more and more big box stores. You buy that cheap laundry soap not knowing you are also paying an unseen tax that goes to the employees who need it to survive.

Wait, why is Wall-Mart campaining against taxes that benefit them? That makes no sense.

 

[Courier]

If I have 10 employees making minimum wage, and am forced to give them all a $1 raise, I would cancel any plans to hire another minimum wage worker, as the other ones just ate what would have been his hourly wage.