He is approaching it from a perspective that two parties should be able to make a wage agreement out of mutual choice without the government being involved. However, this ignores the reality that most people on minimum wage have no choice. It is either minimum wage or no money at all. They are only consenting in the sense that they don't want to starve. With the economy the way it is with surplus labor, and greed the way it is, I am sure some employers would have people working for $1-2/hr if they were not prohibited from doing so. Sure the turnover would be extremely high. But for no skill jobs, why would they care?
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US lawmakers introduce bill to raise minimum wage, restaurant groups raise opposition
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He is approaching it from a perspective that two parties should be able to make a wage agreement out of mutual choice without the government being involved. However, this ignores the reality that most people on minimum wage have no choice. It is either minimum wage or no money at all. They are only consenting in the sense that they don't want to starve. With the economy the way it is with surplus labor, and greed the way it is, I am sure some employers would have people working for $1-2/hr if they were not prohibited from doing so. Sure the turnover would be extremely high. But for no skill jobs, why would they care?
FutureZombie
Banned
You can hire four people at $5 an hour, or you can pay two people at $10 an hour. Which do you do? You employ two people, and therefore there are two more people without jobs.
Milton Friedman:
http://www.youtube.com/watch?v=ca8Z__o52sk
Pretty much. His "two consenting adults" wording doesn't work in an actual job market. You need the money to survive so you're already going in hamstrung, if you aren't willing to to work for what they offer they can just hire someone else from that line of people who need money behind you. Unless you've got a union behind you, you don't have a whole lot of power.
The Technomancer
card-carrying scientician
What makes you think they would come to such a valued determination? Or rather, what makes you think that that process would cause businesses that already pay minimum wage to raise their wages?
The Technomancer
card-carrying scientician
Not if you need four people
And if you need four people to do the job?
It really sounds like you don't understand how or why businesses hire at all. Why exactly do these businesses have 4 people doing work if they apparently only needed 2? They could have cut that and profited more...
What if you don't have the resources to hire four people? Hiring someone is about more than just what you pay them. If a stove can only hold two chefs then why would you hire four? It makes no sense, you'd be losing productivity and money. There are more costs in an employee than just what you pay them. This is econ 100.
One would presume that jobs are offered when a firm needs work done, not because someone wrote "$20 per hour" on the "Employee Wages" line of the budget.
In other words, if a pizza delivery business needs four people to make all of their deliveries on time, what do you suppose they would do in your little thought experiment?
Go out of business, thus wrecking the economy. Way to go, liberals.
Why stop there? Why not hire twenty people at $1 an hour?
Or hell, just hire two people at that wage, since that's apparently all you need, and save a bunch of cash monies.
We'll never eat warm pizza again.
Why hire anyone at all when you can keep the cash to yourself?
I think everyone's in agreement that anchoring price stability through low rates (not zero) of inflation is desirable. It's just that the minimum wage hasn't been adjusted for inflation, further increasing income inequality.
FutureZombie
Banned
If you need four people, then you have to raise prices to compensate for the increase in cost to your business.
If the government could just decree that we all make more money and there was no negative consequence, that would have already happened. It's just ridiculous that you believe benefits can be created out of thin air.
Why stop at $10 an hour? Let's go to $50! Now we're all rich!
What does that even mean?
Given our current structures, I don't think it would, hence my support for the minimum wage. The only issue becomes one of balance, trying to make sure that it's as far above the poverty line as possible without negatively impacting on the number of people in employment. As such I think the balance in the US isn't quite right, needs to be adjusted slightly higher, in Australia I think that it's too high and is negatively impacting on our economy.
I like this man.
ElectricThunder
Member
Clearly this is a step in a better direction at the very least---claiming otherwise on some thinly veiled appeals to nebulous authorities and quotations smacks tantamount to religious dogma on a wholly mundane and secular issue. It is like what happened to Numerology after the party was over or some such... Corporations are entities created by the government and empowered likewise---said entities have long since outstripped the power balance of the individual and the public at large via tampering with said government so of course some pack of lobbying hyenas is going to proclaim the sky is falling if they can't take advantage of their Special Deals for Special "People" when even a BIT of course correction might actually get some traction.
The balance of agency and self-determination is tremendously off kilter---that anybody can honestly reckon Business on the whole in this country to be some shrinking violet teetering on the brink at the masses of general folks is just nuts.
The balance of agency and self-determination is tremendously off kilter---that anybody can honestly reckon Business on the whole in this country to be some shrinking violet teetering on the brink at the masses of general folks is just nuts.
We have the best of all possible government policy, obviously.
That's not what happened in any job I've had when minimum wage increased in Ontario. And I'm talking both having a job that had a wage that started above minimum wage, and one that stated at minimum wage and I had earned wage increases. In each case the gap shrunk. I did not continue to earn $1.25 or whatever above minimum wage.
travisbickle
Member
Lol, sounds like a great place...hope I can visit someday!
The Technomancer
card-carrying scientician
I think he's saying that if you need four people continuously and their minimum wage goes up then you have to raise the cost of your goods/services as well
Stuff gets more expensive for various reasons whether wages go up or not.
DoomGyver
Member
Increasing the minimum wage to $10.10 hurts people currently making $10.20-$20.00 the most. Inflation occurs due to the higher minimum wage and the cost of living goes up even further. Making more people just scrape by paycheck to paycheck.
I feel like increasing minimum wage does increase costs for this reason. People keep pointing out that inflation already exists, but surely increasing the minimum wage has the potential to accelerate this. I do not see how inflation existing despite minimum wage not increasing nullifies the possibility that minimum wage increasing can increase prices on top of the inflation already occurring.
This is sort of from a devil's advocate perspective; I am in favor of raising the minimum wage and automatically adjusting it with inflation -- which I can't believe isn't already done.
And does that mean increasing the minimum wage will not accelerate this?
travisbickle
Member
Well yeah, not exploiting workers probably would reflect on the costs of your product.
I think we're currently the strange-capitalism phase...I mean in the UK you have companies lying about horse meat in their products stating that "they had to lie about it because the public wants cheap meat?"
It's like everyone is running around saying "if we can't exploit people, resources, and legislation then things are going to cost more which will make people unhappy...lets just keep paying people unliveable wages, support undemocratic governments, and grind up horse so that noone complains about the price!!!"
Dark Octave
Banned
I'm sure resturaunt owners wouldn't have a problem with reducing minimum wage. They'd probably tell them to earn more in tips.
Dark Octave
Banned
Double post.
That is what he's saying. What people don't realize is that prices WILL increase. It's not a 'maybe'.
And what about everyone who already makes $10-15 an hour now? They are currently being paid above minimum wage for a good reason, I would suspect. This would put pressure on those employees to ask for raises because their work would be worth more in the market. This basically shifts wages up for everyone across the board (more or less). This means higher prices across the board.
And the middle class gets squeezed even more.
How is the middle class getting squeezed when they're getting paid more?
GuyIncognito
Member
Because this effectively transfers some of their wealth to lower income earners - their prices go up while wages don't, or at least not the the extent of the resulting price increases.
Whether or not that wealth transfer is a justified policy goal is debatable, but this point really isn't
It certainly is debatable. It is in no way clear that increasing the minimum wage would be followed by a decrease in purchasing power in the middle class.
It won't.
GuyIncognito
Member
No, that just means you don't understand it, not that it's debatable. Please, show me a single reputable economic study that demonstrates that minimum wage increase is not a wealth transfer
In a best case scenario (the attainability of which is debatable), no wealth is destroyed in the process, but in every case wealth is transferred. That's pretty much the point of a minimum wage.
Since the middle class by definition does not make minimum wage, they will be part of the group that is giving up wealth in an increased minimum wage scenario.
If you consider government inflation of wages (not limited to minimum wage) based on geographic regions of the country, the results correlate to higher income inequality than other regions and a higher cost of living.
NYC and SF for example have exceptionally small middle class portions of the population, yet large amount of good intention wage regulations.
Something Wicked
Member
How is it possible to contradict yourself in just 3 minutes?
Yeah, I see this being a likely scenario. From just a psychological perspective, a lot of people making $10-$15/hr would feel a bit poorer from this proposed raise.
However, I feel there are legitimate reasons, including housing and energy costs rising over the last few decades, to raise the national minimum wage. Yet, the amount and rate at which the minimum wage are raised is very important.
The dangers are:
-Particularly states with relative low costs of living or at/near the federal minimum wage will likely see local price inflation, considering a $3 raise in one year throughout multiple states is quite a bit from a historically perspective.
- Increased unemployment easily can occur, especially when many small businesses are already running razor-sharp margins and large businesses could be encouraged to become even leaner. It's not too unlikely we could see job losses in the millions to 10s of millions (which would be quite catastrophic at those levels) at even just a $3 raise.
So, perhaps, the federal minimum wage should be raised, but only $1-2 for now.
Wait a second...he's saying it's debatable and unclear and you are the one actually presenting a claim in need of substantiation.
ElectricThunder
Member
I think, maybe, this is a strain of that same odd logic where people intentionally don't want to make more money due to a horrible misunderstanding of tax brackets and how income tax thresholds works---otherwise just some sort of ideological construct to always have some group to spit down upon as The Other. Or some freaky caveat to Trickle Down.
I mean, hell, the Middle Class is all the news goes on about these days alongside Job Creators---poor folks aren't even part of the optics despite how grave the poverty situation and all else is.
Examine your premises.
DanteFox
Member
that's not a strawman at all.
There's no contradiction there. Measures of monetary inflation should not look at volatile commodities like oil.
Oh. Part of the group. Or class. They are part of the class that loses out. I see.
If you are saying the opposition to minimum wage increase is a form of class warfare, I agree unreservedly.
Jason's Ultimatum
Member
I bet you productivity would increase if the min wage was increased to $10.10.
Mr. Wonderful
Member
We'll I'll let your restaurant
be the first to raise prices
in the toughest (all small!) business market around.
High expansion rates? Are you referring to franchising? Because you do realize that each franchise (read, one restaurant location) is managed by a different individual, right? If one can scrap together enough capital with the the little money the franchisee has left over after the franchisor takes a percentage of REVENUE (not Profit!), you might be able to take out loans to open additional franchises, but this is over the course of decades, and this is your livelihood.
You do realize that university students need to live for those two months of summer? Which would require a livable wage to pay for everything that everyone else has to pay for. Not everyone has someone else's money to ride on, or a home to stay in. I've also known high school students whose part-time jobs were a primary source of income in their family for various reasons.
You are out of touch with reality.
Something Wicked
Member
Well, that just proves awm8604's point that the US government/Fed's current definition of inflation is crappy and insufficient.
You're were just trying to dilute his/her argument into a matter of semantics ("it's not that type of inflation and it's this type of inflation"), as I know you're trying to deflect the concept of high US government spending and the Fed's QE program being partially responsible for rises in commodity prices.
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