$9 Federal Minimum Wage

[DaLincolnJones]

I think free market means exploiting the stupid people and eventually leading to near monarchies of the super wealthy. (see Heinz being bought out)

hey I will do that when I get a chance

 

[Eastoff]

What are the economic benefits of such a minimum wage? What are the projected job losses under such a plan?

Well I make a poor assumption that it would help our economy by stimulating more purchasing. I have not researched if this is true. I think that companies have already pushed for workers to be much more efficient, and that we are nearly at peak efficiency (but that is not necessarily for minimum wage, because I have no knowledge of the subject. So yes it could potentially cost jobs, BUT I think the minimum wage jobs are ones that cannot be outsourced and cannot be cut back further. maybe I'm wrong, but we probably will never find out. It simply won't happen. Here's an article I found interesting and perhaps your ilk will flaunt. http://online.wsj.com/article/SB10001424127887323717004578157331091972730.html

 

[Eastoff]

Monopolies and oligopolies are bad (generally) for economies too (unless it's an industry or activity that has really high barriers to entry and needs massive economies of scale for efficiency), but typically what happens with an artificially high minimum wage is that those increased operating costs get passed on to the consumer, increasing inflation and suppressing hiring which keeps unemployment up. I'm certainly no dyed in the wool conservative, but the invisible hand (when left to operate mostly freely) has a funny knack for finding a point of equilibrium.

Perhaps, but I think the oligopolies know how to play the game and cheat the system, then run away when they won. (example 1)

 

[Denny Crane]

Well I make a poor assumption that it would help our economy by stimulating more purchasing. I have not researched if this is true. I think that companies have already pushed for workers to be much more efficient, and that we are nearly at peak efficiency (but that is not necessarily for minimum wage, because I have no knowledge of the subject. So yes it could potentially cost jobs, BUT I think the minimum wage jobs are ones that cannot be outsourced and cannot be cut back further. maybe I'm wrong, but we probably will never find out. It simply won't happen. Here's an article I found interesting and perhaps your ilk will flaunt. http://online.wsj.com/article/SB10001424127887323717004578157331091972730.html

Minimum wage is a regressive tax that hits the lowest wage earners the hardest.

When faced with being forced to raise wages, companies may lay off some workers to compensate. The alternative is the "tax" - raise prices.

But those who favor this sort of thing favor all sorts of taxes, so it's no surprise.

 

[Eastoff]

Minimum wage is a regressive tax that hits the lowest wage earners the hardest.

When faced with being forced to raise wages, companies may lay off some workers to compensate. The alternative is the "tax" - raise prices.

But those who favor this sort of thing favor all sorts of taxes, so it's no surprise.

I just wanted to share this liberal view:
http://www.cepr.net/documents/publications/min-wage1-2012-03.pdf

Since 1968,
however, productivity growth has far outpaced the minimum wage. If the
minimum wage had continued to move with average productivity after
1968, it would have reached $21.72 per hour in 2012

 

[Denny Crane]

Productivity is what happens when employers are encouraged to get more work out of existing workers' hours.

What do you think the price of a gallon of milk would be if minimum wage was $21.72 right now?

Of a burger at MacDonalds?

 

[Eastoff]

Productivity is what happens when employers are encouraged to get more work out of existing workers' hours.

What do you think the price of a gallon of milk would be if minimum wage was $21.72 right now?

Of a burger at MacDonalds?

Let's take Australia for an example. Minimum wage is basically 16AU$/hr. Let's take the price of Maccas(McDonald)

Their "McOz," which is probably close to a cheeseburger, costs 4.95Au$. Which is 5/16 one hour's worth in minimum wage. So I would speculate it would mean the cost of a burger at this MacDonalds (which I've yet to hear of before) would be close to 8$ if the US minimum wage were 22$/hr.

 

[mook]

Really interesting article that refutes a lot of the right wing arguments here.

Claim: Instead of helping low-wage workers, an increase in the minimum wage will cause them to lose their jobs.

Certainly that’s the prediction from the classical model of the labor market. Everyone’s being paid precisely their marginal product (their value added to their firm’s production at the margin) and to increase their pay by mandate is to render them unaffordable. In fact, the prediction from the simple model is that even a few pennies increase in the minimum wage would lead to extensive job losses.

And yet…we’ve had dozens of federal minimum wage increases and now have 19 states with minimums above the federal level. Surely if the classical model were correct, we’d have clearly seen its negative impacts by now.

Which makes it, like all good economic questions, an empirical one. Thankfully, there’s been extensive research on the question which is very usefully reviewed here by economist John Schmitt of CEPR. Pay particular attention to the results from all those natural experiments created by all the variation among the states.

I’ve often said the true elasticity of job loss with respect to a minimum wage increase hovers about zero. I’ve seen good studies finding small negatives and good ones finding small positives. John presents this very cool graph from a “meta-analysis”—a study of a bunch of studies—showing precisely that result. There are outliers on both sides of zero, but the strong clumping around zero provides a useful summary of decades of research on this question.

These results don’t mean that no worker ever loses her job when the minimum wage goes up. But they do mean that the vast majority get a raise and that anyone blithely citing the classical model, as Rep Boehner did the other day (“When you raise the price of employment, guess what happens? You get less of it”), is speaking from prejudice, not from the evidence.

Claim: If the minimum wage is so great, why not make it $90 an hour instead of $9.

Keith Hennessey, whose work is usually thoughtful, lapses into the thoughtless as today’s purveyor of this silliness:

If raising the minimum wage is good economic policy, why stop at $9 per hour? Why not increase it to $90 per hour? By the President’s logic, doing so would dramatically increase the income of not just millions of working families, but tens of millions of working families, and indeed of almost all working Americans.

This just betrays a lack of knowledge of the wealth of literature reviewed by Schmitt, including the important insight, shown in Schmitt’s table 1, about the share of workers picked up in the “sweep,” i.e., the area between the current and the proposed new minimum wage. Historically, as shown in the figure below, increases have affected less than 10% of the workforce. As Keith points out, a $90 minimum would affect about 100%. There’s a difference.

Claim: The increase doesn’t reach the folks who really need it.

Since eligibility for the minimum wage isn’t conditioned on income, critics complain it that while it reaches low-wage workers, it doesn’t reach low-wage workers in low-income families. Instead, the critics maintain, it goes mostly to part-time kids.

Nope. Most—certainly not all—low-wage workers do in fact reside in low-income households and the demographics of those in the sweep belie the part-time-kids claim.

From new analysis by the Economic Policy Institute of the President’s proposal:*

–84% of total affected workers are at least 20 years old.

–73% of the benefits of the increase go to those in the bottom half of the workforce by income level.

–47% of affected workers are full-timers, 83% work at least 20 hours per week.

–The average worker in the sweep brought home 46% of her household’s earnings in 2011 (from the White House fact sheet).

 

[EL PRESIDENTE]

Let's take Australia for an example. Minimum wage is basically 16AU$/hr. Let's take the price of Maccas(McDonald)

Their "McOz," which is probably close to a cheeseburger, costs 4.95Au$. Which is 5/16 one hour's worth in minimum wage. So I would speculate it would mean the cost of a burger at this MacDonalds (which I've yet to hear of before) would be close to 8$ if the US minimum wage were 22$/hr.

Yeah, except you can't take Australia's demographics and apply it to the USA and think you'll have similar results.

 

[Eastoff]

Yeah, except you can't take Australia's demographics and apply it to the USA and think you'll have similar results.

Maybe you're right! Should we look at the demographics of US in the 1960s? Or should we look at the imaginary demogrpahics of make-believe land where we can use theories and possibilities?

 

[Denny Crane]

Let's take Australia for an example. Minimum wage is basically 16AU$/hr. Let's take the price of Maccas(McDonald)

Their "McOz," which is probably close to a cheeseburger, costs 4.95Au$. Which is 5/16 one hour's worth in minimum wage. So I would speculate it would mean the cost of a burger at this MacDonalds (which I've yet to hear of before) would be close to 8$ if the US minimum wage were 22$/hr.

Cheeseburger costs $.99 now. So you're talking about inflating the price by 8x.

That's some tax!

As for mook,

The economists who write that kind of stuff have us $16T+ in debt, unemployment at near 8%, with increasing need to raise taxes and close loopholes. Where does it end?

 

[EL PRESIDENTE]

Maybe you're right! Should we look at the demographics of US in the 1960s? Or should we look at the imaginary demogrpahics of make-believe land where we can use theories and possibilities?

what works in Australia won't work here nor the 1960s. So "B", have to try to come up with realistic scenarios.

 

[Eastoff]

Cheeseburger costs $.99 now. So you're talking about inflating the price by 8x.

That's some tax!

Yes I noticed that it's approximately 8 times as much and the minimum wage would be 3 times as much, so effectively it's 2.5 more.

 

[Denny Crane]

Yes I noticed that it's approximately 8 times as much and the minimum wage would be 3 times as much, so effectively it's 2.5 more.

Like I said, it's a tax.

It may put McDonalds out of business since they wouldn't be able to charge what their customers could afford.

 

[drexlersdad]

not sure if the aussie mcdonalds prices were linked, heres one i found



shows a burger being 2.20, a big mac at 4.45, seems a little more, but certainly none of this "8X" nonsense

heres the worldwide big mac index

http://www.economist.com/content/big-mac-index

 

[Denny Crane]

The minimum wage in Australia for people under age 20 is as low as $5.87.

 

[Eastoff]

The minimum wage in Australia for people under age 20 is as low as $5.87.

I'd be fine with that sort of thing. Maybe 18 instead of 20, but still okay with that idea!

 

[Eastoff]

not sure if the aussie mcdonalds prices were linked, heres one i found



shows a burger being 2.20, a big mac at 4.45, seems a little more, but certainly none of this "8X" nonsense

heres the worldwide big mac index

http://www.economist.com/content/big-mac-index

the 8x is because I proposed a 22$/hr min wage and tried to scale it off them.

 

[drexlersdad]

well no, it was from the assumption that whatever burger was the 1 dollar burger in america

 

[THE HCP]

Anybody on here make min wage right now? Any of you ever had a min wage job?

 

[THE HCP]

I did for 8 years after HS all the way up until I started doing what I am right now........ Mid 90s..... I was making $4.75/hr. I do not miss those years FAMS!

 

[KeepOnRollin]

I was on minimum wage as a 16 year old. Dishwasher and Prep Cook. It was $5.15/hr then I believe.

 

[EL PRESIDENTE]

Anybody on here make min wage right now? Any of you ever had a min wage job?

Yeah, in High School working at Sbarros at the Washington Square Food Court.

 

[Eastoff]

Anybody on here make min wage right now? Any of you ever had a min wage job?

Yes at a couple temp jobs and at a Subway

 

[Draco]

I'm fine with a $9 min wage. Heck I'd be fine with a $12 minimum wage. That is still pretty damn cheap. That would total out to less than one Benjamin a day. I agree if you can't afford to pay people that much you shouldn't be in business.

Chains like McDonalds and Walmart aren't going to go out of business from this... they actually WANT the minimum wage to go up since so much of their sales come from people below the poverty line. Giving that segment a bit extra disposable income will increase sales. The difference in $3-4 of hourly wages is almost immaterial when you look at the total billions of expenses those corporations incur.

 

[MickZagger]

I'm reading a lot of self righteousness from the Repubs in this forum on this issue. Who are you guys to decide what kind of income level a certain job should recieve.

Oh, and someone needs to go back to 'collage'.

 

[magnifier661]

I'm fine with a $9 min wage. Heck I'd be fine with a $12 minimum wage. That is still pretty damn cheap. That would total out to less than one Benjamin a day. I agree if you can't afford to pay people that much you shouldn't be in business.

Chains like McDonalds and Walmart aren't going to go out of business from this... they actually WANT the minimum wage to go up since so much of their sales come from people below the poverty line. Giving that segment a bit extra disposable income will increase sales. The difference in $3-4 of hourly wages is almost immaterial when you look at the total billions of expenses those corporations incur.

As long as they get taxed. Our starting salary is $12 per for even the lowest position.

 

[magnifier661]

I'm fine with a $9 min wage. Heck I'd be fine with a $12 minimum wage. That is still pretty damn cheap. That would total out to less than one Benjamin a day. I agree if you can't afford to pay people that much you shouldn't be in business.

Chains like McDonalds and Walmart aren't going to go out of business from this... they actually WANT the minimum wage to go up since so much of their sales come from people below the poverty line. Giving that segment a bit extra disposable income will increase sales. The difference in $3-4 of hourly wages is almost immaterial when you look at the total billions of expenses those corporations incur.

As long as they get taxed. Our starting salary is $12 per for even the lowest position.

 

[EL PRESIDENTE]

I'm fine with a $9 min wage. Heck I'd be fine with a $12 minimum wage. That is still pretty damn cheap. That would total out to less than one Benjamin a day. I agree if you can't afford to pay people that much you shouldn't be in business.

Chains like McDonalds and Walmart aren't going to go out of business from this... they actually WANT the minimum wage to go up since so much of their sales come from people below the poverty line. Giving that segment a bit extra disposable income will increase sales. The difference in $3-4 of hourly wages is almost immaterial when you look at the total billions of expenses those corporations incur.

Why not $25 an hour? After all, a business shouldn't be able to exist if they can't afford to pay their workers middle class wages!

Everyone should be at least middle class! No exceptions! Even High School students!

 

[EL PRESIDENTE]

As long as they get taxed. Our starting salary is $12 per for even the lowest position.

Do you have any standards in hiring whatsoever? You shouldn't. Your sole purpose in business is to provide people a living wage.