Myth Pro and Con about the Minimum Wage

[Dancing David]

There is a lot of myth in economics, just as there is myth in much of psychology. And I hope that we can discuss the myths both for and against the minimum wage. I personally support the minimum wage but I am open to hearing any ideas. The first myth that I have heard goes like this:
1. “Historically increases in the minimum wage lead to increases in prices.”, which is very silly, traditionally increases in wages occurred when the economy was already in an inflationary cycle, and there fore the argument is like saying, ‘air conditioning creates temperature increases. The same people who say the historical proof of the detriment of wage increases in the minimum paid workers is true are the same people who say that the Regan tax cuts led to an improved economy, despite the fact that the Regan tax cuts occurred in one of the inflationary cycles, so by the same logic on could say that the Regan tax cuts led to inflation.

2. The second myth is that minimum wage increases will lead to an increase in costs that will counter the increasing wage. But this is ridiculous, rents go up, even when the minimum wage does not go up or factor into the cost of maintaining rental property.
The only way this myth would be true would be if the percentage of cost passed on to the consumers was out of proportion to its actual value. The percentage of minimum wages in say the cost of a MacDonald hamburger is a fraction of other costs such as shipping and building maintenance. So for this to be true, the fact that the minimum wage has remained steady would say that the cost of hamburgers would not go up, well it sure has.

So those are my thoughts, and I look forward to myths pro and con the minimum wage.

 

[Mephisto]

Regarding the minimum wage, I like the myth that Congress espouses - we deserve several wage increases over a period of time, but we can't raise the minimum wage because it will cause undue stress on major employers.

 

[WildCat]

So there's some magical pixie that exempts wages from free market forces? And you can raise one specific input price (wages) yet have no effect at all on costs (and therefore profit)? Well damn! Just raise the minimum wage to $35/hr. Then everyone will be instantly middle class!

You're also making the fallacious argument that wages are the sole input cost, re your McDonald's example and the rent example is a non-sequitor.

What school of economic thought is this anyway? The "click your heels together three times and it will come true" school?

 

[slingblade]

Gee, I don't know what the magic answer is, nor when the Snide Fairy will decide to show up to give everyone their refills.

[rule 8] it. Y'all just have a ball with this one. I'm too sick today to give an almighty good crap.

I hate it when people who don't have to try to exist on min. wage sit around and discuss it like they have a clue.

 

[shuize]

You know what I like? People who don't have the skills to earn anything more than minimum wage that still have kids and then cry about having to raise a family on such meager wages. Because, after all, when all you can do is push a mop, it really should be the employer's responsibility to pay as much as you need.

 

[Tailgater]

Do you have any evidence of these facts being myths or did you just make it up?

I started working when minimum wage was at $2.85. I hated when I would get raises after each review period and then minimum wage would go up and void any progress.

One thing I see where I live is people going to all cash under the table to avoid minimum wage. Or getting paid per job. ie: Paying Bob $300 to paint a house instead of per hour.

 

[slingblade]

You know what I like? People who don't have the skills to earn anything more than minimum wage that still have kids and then cry about having to raise a family on such meager wages. Because, after all, when all you can do is push a mop, it really should be the employer's responsibility to pay as much as you need.

Oh, there; that's a good start.

 

[Mephisto]

You know what I like? People who don't have the skills to earn anything more than minimum wage that still have kids and then cry about having to raise a family on such meager wages. Because, after all, when all you can do is push a mop, it really should be the employer's responsibility to pay as much as you need.

You know what else I like? People who work their way through college in order to better themselves only to have their jobs outsourced to India. Rising above minimum wage in this country isn't simply a matter of the right education or enough determination.

Maybe you'd consider a law limiting "uneducated" households to one child worthwhile?

(edited to add) You know what else I like? People who immediately assume that the poor are at fault for their poverty because they are lazy.

 

[This Guy]

Wage and/or Price controls will always be a hot button item I think.

I know that it's hard for anyone to live a decent life on min. wage. And as pointed out above, not every one earning min. wage is unskilled. Many things can happen to a person that places them in the unskilled labor pool.

Does that mean they deserve more money, because they are skilled, even though they are doing unskilled work? Of course not. But at the same time, shouldn't people that put in a 40 hour work week make enough to feed/cloth/house themselves, and their families?

I don't know the economic impact of raises to the minimum wage. But I bet some of you Google hounds out there can find some stats to show what effect past increases have had.

I'd sure like to know, but with my Google skills, it'd take all day, and I'm sleepy (or lazy

 

[geni]

You know what I like? People who don't have the skills to earn anything more than minimum wage that still have kids and then cry about having to raise a family on such meager wages. Because, after all, when all you can do is push a mop, it really should be the employer's responsibility to pay as much as you need.

You want to end up like certian parts of europe with demographics from hell?

 

[HarryKeogh]

approx. 520,000 people earn the minimum wage (0.7% of the workforce) and nearly three times that (1.4 million people or 2.0 of the workforce) earned less than that. How will raising the minimum wage help those 1.4 million people who aren't even making the minimum?

and of those 520,000 people who earn the minimum 168,000 are between 16-19 years old (approx. 1/3 of minimum wage earners). Presumably these are students and young people who are probably not depending on their income for housing and clothing themselves.

date is from 2004. Here's the source:
http://72.14.205.104/search?q=cache...rly+Rates."&hl=en&gl=us&ct=clnk&cd=2&ie=UTF-8

 

[Beerina]

Maybe you'd consider a law limiting "uneducated" households to one child worthwhile?

Well, as long as politicians can use "uneducated" people with "lots of children per household" as an argument to filch money to give to them, poor souls who can't wear a glove, and need money because they're so poor, then there is a problem.

(edited to add) You know what else I like? People who immediately assume that the poor are at fault for their poverty because they are lazy.

There's also stupidity, don't forget. I guess if one is poor because one is stupid, they should vote for people who will give them raises. Or because they can't keep their snake in their pants.

It's interesting there's a correlation with intelligence and fewer children, leading to a decreased average intelligence. This, combined with fiery populist rhetoric, does not bode well for the long-term survival of humanity. At some point we're gonna be running around marvelling at machines prior generations created, saying, "Brain, brain, what is 'brain'?"

 

[This Guy]

approx. 520,000 people earn the minimum wage (0.7% of the workforce) and nearly three times that (1.4 million people or 2.0 of the workforce) earned less than that. How will raising the minimum wage help those 1.4 million people who aren't even making the minimum?

Snip...

I believe anyone earning less than Minimum wage are in positions that receive tips in addition to their wages. I also believe that if the earned tips plus wages does not equal minimum wage, the employer is required to make up the difference between the earnings and minimum wage.

Sorry, but don't have a link to back that up. But I know we have less than minimum wage workers, and they receive tips, and I'm pretty sure I read what I stated. May have been on the Federal Minimum Wage poster every workplace that falls under the Minimum wage guidelines should have posted somewhere prominent.

 

[shuize]

You know what else I like? Being the one who gets to tell some of the minimum wage workers how we'd really like to keep them but since the government cares about low skilled workers so much it's managed to price them out of their jobs.

 

[shuize]

You know what else I like? People who work their way through college in order to better themselves only to have their jobs outsourced to India.

Right. Because raising the minimum wage is sure to keep those jobs at home.

Rising above minimum wage in this country isn't simply a matter of the right education or enough determination ...

You know what else I like? People who immediately assume that the poor are at fault for their poverty because they are lazy.

No, man. You're right. It's all just luck. People who work minimum wage jobs really are as motivated and ambitious as everyone else.

 

[shuize]

deleted

 

[BPSCG]

So those are my thoughts, and I look forward to myths pro and con the minimum wage.

Here are some of the costs of running a business:

1. Rent (if you're renting the building);
2. Mortgage payments (if you're buying it);
3. Repairs and maintenance to the building;
4. Equipment repairs and maintenance;
5. New equipment when 4) isn't an option;
6. Gas;
7. Electricity;
8. Water;
9. Supplies needed to operate the business;
10. Materials needed to make what you're selling;
11. Taxes;
12. Insurance;
13. Losses due to theft;
14. Wages.

Do you believe that increases in any of the items 1-13 will increase a business's expenses? (Y/N)

Do you believe that if a business's income remains the same, but its expenses increase, its profits will decrease? (Y/N)

If you answered "yes" to the above, how are the rules for #14 different from those for 1-13?

 

[chulbert]

You know what else I like? People who work their way through college in order to better themselves only to have their jobs outsourced to India. Rising above minimum wage in this country isn't simply a matter of the right education or enough determination.

Not to be obtuse, but if you work your way through college and earn a degree in a volatile field where outsourcing is a significant risk, isn't it fairly easy to make the case that you simply don't have the "right education"?

(edited to add) You know what else I like? People who immediately assume that the poor are at fault for their poverty because they are lazy.

Nobody said anything about laziness. There is often simply no correlation between the difficulty of work and the value of that work to others. I have heaps of respect that for people that hold down two jobs but that doesn't mean the tasks they perform are especially valuable.

 

[Mephisto]

Right. Because raising the minimum wage is sure to keep those jobs at home.

Don't be silly. Getting a college degree simply means you are more appealing within that area of the job market, it doesn't guarantee that your job won't be outsourced. If you obtain a college degree and THEN your job is outsourced you'll be back at step one - working for minimum wage.

No, man. You're right. It's all just luck. People who work minimum wage jobs really are as motivated and ambitious as everyone else.

No, you're right - people who work minimum wage don't deserve a raise in spite of the rising cost of living, the high price of medical care or gasoline or heating oil - they're uneducated buffoons whom we shouldn't feel sorry taking advantage of because they're too lazy or too stupid to do better.

 

[Mephisto]

Not to be obtuse, but if you work your way through college and earn a degree in a volatile field where outsourcing is a significant risk, isn't it fairly easy to make the case that you simply don't have the "right education"?

Well by that reckoning, why would anyone obtain any other degree than a medical degree or a degree in engineering? I'm pretty certain those two fields are safe from outsourcing.

Nobody said anything about laziness. There is often simply no correlation between the difficulty of work and the value of that work to others. I have heaps of respect that for people that hold down two jobs but that doesn't mean the tasks they perform are especially valuable.

I don't believe you can determine the "value" of a job to others quite so easily. Sanitation workers are fairly low on the job respect scale, but I'll bet if they didn't show up at your home for three weeks, you'd definitely value their help.

And whose fault is it that minimum wage earners have to hold down two jobs (or three jobs) in order to make ends meet? The economy isn't getting any better, and they're still making the same wages they have for years. How many "professional" people here would work for a corporation that ignores the cost of living and doesn't compensate with an annual raise?