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[GuyIncognito]

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.

No, I was saying that a minimum wage is a wealth transfer to those making minimum wage from those not making minimum wage, which it undeniably is.

What is debatable is if such a wealth transfer is desirable and if yes, if a minimum wage increase is the most effective mechanism for achieving such a transfer.

And for what it's worth, I think the term "class warfare" is ridiculous and really needs to find its way out of american political discourse asap

 

[KHarvey16]

Well, that just proves awm8604's point that the US government/Fed's current definition of inflation is crappy and insufficient.

No it isn't. If you're trying to measure the change in the value of a dollar, why would you include goods whose value is changing for reasons other than fluctuations in the value of the dollar?

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.

You aren't understanding. The inflation that minimum wage will be indexed to is monetary inflation, which means citing price inflation in that way doesn't make any sense.

 

[Something Wicked]

You aren't understanding. The inflation that minimum wage will be indexed to is monetary inflation, which means citing price inflation in that way doesn't make any sense.

Hey, the way is came off to me was akin to:

saying essentially oil prices aren't important because only currently defined monetary inflation is important, but then saying everyone can't forget the importance of oil prices for inflation... is to me- contradictory.

 

[GuyIncognito]

No it isn't. If you're trying to measure the change in the value of a dollar, why would you include goods whose value is changing for reasons other than fluctuations in the value of the dollar?

Every good's value changes for reasons except fluctuations in the value of the dollar (except the dollar, of course). That's why even price inflation is measured relative to a diverse basket of goods to mitigate the various idiosyncratic moves of the different underlying components.

Oil's a pretty bad example though since supply/demand volatility definitely outweighs and masks the inflation component

 

[CrunchyFrog]

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

My counter to this is that an increase in minimum wage means an increase in money being paid out to employees/local money pool and thus more money to potential customers, including ones who would not have perused your wares otherwise. If you keep your prices static, in the end you end up selling more product because in addition to your usual customer base there are more potential customers out there than before and those who were already there are more inclined to spend more than they did previously. This is especially effective on the low end when people can get themselves off of food stamps and other publicly funded government services and funnel that newfound money into private companies, coincidentally also lowering the public tax burden previously necessary to shelter said people. There's obviously a plateau to this effect depending on costs/potential demand for said products, but most would argue that the current minimum wage has not hit it for the vast majority of businesses. The other issue is that this effect would likely not be immediate, so short term profits would of course decline. Then again, this wouldn't even effect your business if you had little to none of your workforce on minimum wage anyway. But I've never taken an econ class sooooooooooo

/nonMBAeconomicsrant

 

[krae_man]

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.

Wages at jobs that were above minimum wage probably do get adjusted eventually. They paid above minimum wage because they wanted higher quality applicants for vacancies then minimum wage would attract and the desire for a higher quality employee doesn't change. Maybe not right away but eventually.

The people working at minimum wage jobs that have earned raises do get royally screwed however.

 

[KHarvey16]

Hey, the way is came off to me was akin to:

saying essentially oil prices aren't important because only currently defined monetary inflation is important, but then saying everyone can't forget the importance of oil prices for inflation... is to me- contradictory.

I don't know how you got that from what I said or even how you think that's contradictory.

Every good's value changes for reasons except fluctuations in the value of the dollar (except the dollar, of course). That's why even price inflation is measured relative to a diverse basket of goods to mitigate the various idiosyncratic moves of the different underlying components.

Oil's a pretty bad example though since supply/demand issues definitely outweigh and mask the inflation component

Agreed.

 

[ClassyPenguin]

Hey, the way is came off to me was akin to:

saying essentially oil prices aren't important because only currently defined monetary inflation is important, but then saying everyone can't forget the importance of oil prices for inflation... is to me- contradictory.

Oil prices are futures based, which is not a good indication of inflation by using those prices.

 

[Something Wicked]

Oil prices are futures based, which is not a good indication of inflation by using those prices.

To me, the traditional view of "inflation" is archaic. Raising oil/commodity prices are another form of inflation that the Fed woefully underestimates.

There are a shit ton of factors that go into oil prices, but the "fear of future inflation" is absolutely one of them. Talk to commodity traders throughout the world- they very much partially trade on the monetary policy of the US government.

 

[KHarvey16]

To me, the traditional view of "inflation" is archaic. Raising oil/commodity prices are another form of inflation that the Fed woefully underestimates.

There are a shit ton of factors that go into oil prices, but the "fear of future inflation" is absolutely one of them. Talk to commodity traders throughout the world- they very much partially trade on the monetary policy of the US government.

We can track inflation expectations directly. It's actually pretty important. Why would we rely on a volatile commodity like oil as a proxy for expected future inflation? Why would we want expected future inflation to influence the measurement of what inflation is right now?

I don't understand the benefit you see in looking at the price of something subject to so many factors that go beyond fiscal and monetary policy when evaluating inflation.

 

[bomma_man]

As Thomas Sowell says: As imposed wage rates rise, so do job qualifications, so that less skilled or less experienced workers become “unemployable.” Think about it. Every one of us would be “unemployable” if our pay rates were raised high enough.

Just what is a living wage? It usually means enough income to support a family of four on one paycheck. This idea has swept through various communities, churches and academic institutions. Facts have never yet caught up with this idea and analysis is lagging even farther behind. First of all, do most low-wage workers actually have a family of four to support on one paycheck? According to a recent study by the Cato Institute, fewer than one out of five minimum wage workers has a family to support. These are usually young people just starting out.



The minimum wage is one of the ultimate "sounds good, makes you feel good" ideas that does not hold up to scrutiny. It only works to keep people with no experience out of the job market. Also, it's ridiculous that the government should step in between an exchange between two consenting adults.

Late but... Never hear of equity law?

 

[Arksy]

Late but... Never hear of equity law?

To be fair it seems like you are the one who has never heard of equity law. Equity is a different division of the common law that derived from the old English Courts of Chancery. I'm not sure how the doctrines of equity are relevant here.

 

[Kevtones]

Lower it.

 

[bomma_man]

To be fair it seems like you are the one who has never heard of equity law. Equity is a different division of the common law that derived from the old English Courts of Chancery. I'm not sure how the doctrines of equity are relevant here.

Well his "should never get involved in in the dealings of two consenting adults" point is kind of undone by it (to be fair I don't actually know its penetration in American common law). The law takes into account balance of power all the time, it's not ignorant enough to think that parties are always equal. It's fantasy. The minimum wage is just the legislative way of eliminating some of that power gap.

Just anecdotally I know a fair few people that have moved from Australia to the UK to work, and almost all of them have complained about the stupidly low wages and massive inequality, even if they're not well versed in economics or social science. Things may be expensive here - and our labour laws could certainly be better - but I'd never give up that baseline. Everyone should be able to live with some level of comfort.

 

[Arksy]

Well his "should never get involved in in the dealings of two consenting adults" point is kind of undone by it (to be fair I don't actually know its penetration in American common law). The law takes into account balance of power all the time, it's not ignorant enough to think that parties are always equal. It's fantasy. The minimum wage is just the legislative way of eliminating some of that power gap.

Just anecdotally I know a fair few people that have moved from Australia to the UK to work, and almost all of them have complained about the stupidly low wages and massive inequality, even if they're not well versed in economics or social science. Things may be expensive here - and our labour laws could certainly be better - but I'd never give up that baseline. Everyone should be able to live with some level of comfort.

The law of equity is its own beast. It's a bunch of principles made to limit the inequities of the common law. That was its historical basis but today equity is the branch of law that gives you various doctrines like estoppel, detinue and equitable holdings in land. It's not there to equalise the bargaining power of contracting parties. You'll never have total equality in a contractual relationship but that doesn't matter, both parties are bound to perform their end of the bargain.

Also, yeah of course people would complain, they're incredibly high over here. They're so high that jobs are flowing overseas at a ridiculously high rate and it's shot our productivity and competitiveness.

 

[Rubbish King]

So the average work shift is gonna be like 12 hours, right?

This would suck

 

[Aaron Strife]

If businesses can't support paying their employees a living wage for a 40 hour workweek they done fucked up.

Yes, raise that shit.