The Minimum Wage Is No Friend of the Poor

[Denny Crane]

Michael Heumer is a rather famous professor of philosophy at University of Colorado, Boulder. If you've ever watched the TED talks on Netflix or other sources, you may gave seen his presentation. He is a Libertarian.

He wrote this tl;dr essay for the Social Theory and Practice publication.

http://spot.colorado.edu/~huemer/immigration.htm

If you want to know where I'm coming from, his essay sums it up extremely well.

I do not advocate open borders worldwide. What other nations do is their own doing. I see the USA as an island of Liberty in a sea of everything else. It matters not, for example, if Mexico allows free immigration. It matters if we insist on being better and right and lead by example.

If we believe in human rights, more so than other nations, then let's give people human rights. In this case, the right to immigrate.

After considering the cases made by opponents of open borders, I am just not convinced. Heumer addresses the economic argument about immigrants hurting civilians' job quality and opportunity:

In popular discourse, the most common sort of argument for limiting or eliminating immigration is economic. It is said that immigrants take jobs away from American workers, and that they cause a lowering of wage rates due to their willingness to work for lower wages than American workers. At the same time, economists are nearly unanimous in agreeing that the overall economic effects of immigration on existing Americans are positive. These claims are mutually consistent: there are certain industries in which immigrants are disproportionately likely to work. Preexisting workers in those industries are made worse off due to competition with immigrant workers. According to one estimate, immigration during the 1980’s may have reduced the wages of native-born workers in the most strongly affected industries by about 1-2% (5% for high school dropouts). At the same time, employers in those industries and customers of their businesses are made better off due to lower production costs, and the economic gains to these latter groups outweigh the economic losses to the workers. Some economists have accused immigration opponents of overlooking the economic benefits of immigration due to a bias against foreigners or members of other races.

 

[Sinobas]

The unemployment rate in Oregon is 1.1% higher than the national average. You're not going to drive industries out of business, you're going to drive people into homelessness.

If you want to start up a big business that does $billions in profit and give it all away, go for it. Otherwise, I'm not sure anyone but the shareholders should be deciding what Walmart should do with theirs.

1.1% even if you could directly attribute that to minimum wage seems like a small price to pay for a 23% increase in wages over the national average. We have 150,000 minmum wage earners. So if you chalk up the 1.1% to minimum wage, that means 1,500 people in Oregon will be put out of work due to the min wage laws. But the $1.7 more they are making per hour results in 530 million extra into the hands of workers. That money goes back into our economy.

For a frame of reference, that's over $350,000 per person put out of work.

 

[Denny Crane]

1.1% even if you could directly attribute that to minimum wage seems like a small price to pay for a 23% increase in wages over the national average. We have 150,000 minmum wage earners. So if you chalk up the 1.1% to minimum wage, that means 1,500 people in Oregon will be put out of work due to the min wage laws. But the $1.7 more they are making per hour results in 530 million extra into the hands of workers. That money goes back into our economy.

For a frame of reference, that's over $350,000 per person put out of work.

1.1% of all workers, not minimum wage only.

 

[maxiep]

Who says people who immigrate here must become citizens? When you lived in countries overseas, were you citizen of those countries?

I'm guessing not, or at least not in most cases.

The constitution talks about Persons (capital P) to cover those who aren't citizens.

I'm not an internationalist, just if you want "FREE" markets, then the source of Labor needs to be free. Not some subset.

Again, nice try. You can pull your barfo routine of nit picking every word and distorting its meaning, but it won't work with me. You and I disagree. You think I'm wrong, and I think you're equally as wrong. Neither you nor I will ever convince one another on this point. But you can have the last word so you can be the big winner.

 

[maxiep]

1.1% even if you could directly attribute that to minimum wage seems like a small price to pay for a 23% increase in wages over the national average. We have 150,000 minmum wage earners. So if you chalk up the 1.1% to minimum wage, that means 1,500 people in Oregon will be put out of work due to the min wage laws. But the $1.7 more they are making per hour results in 530 million extra into the hands of workers. That money goes back into our economy.

For a frame of reference, that's over $350,000 per person put out of work.

And, pray tell, who pays for additional money?

 

[barfo]

Again, nice try. You can pull your barfo routine of nit picking every word and distorting its meaning

Yeah, Denny. Quit stealing my act!

barfo

 

[Sinobas]

And, pray tell, who pays for additional money?

The business owners. With there being such a huge wealth disparity in our nation, I think they can afford it.

And the idea that the cost of the increased wages will be passed onto the consumer is not necessarily true either. If Burger King is selling a whopper for $2.99, they've set it at a price they think will maximize revenue. If they believed they could sell just as many for $3.50, they'd be selling them for $3.50. Point being, the product is being sold in the same competitive marketplace.

 

[maxiep]

The business owners. With there being such a huge wealth disparity in our nation, I think they can afford it.

And the idea that the cost of the increased wages will be passed onto the consumer is not necessarily true either. If Burger King is selling a whopper for $2.99, they've set it at a price they think will maximize revenue. If they believed they could sell just as many for $3.50, they'd be selling them for $3.50. Point being, the product is being sold in the same competitive marketplace.

And the minimum wage affects everyone equally, not just one business. A market will not just continue to decrease prices; they'll be forced to raise prices along with everyone else. Consider the fast food chains with the increase in the price of beef. They haven't been holding prices steady; they've been increasing, no matter which chain it is.

 

[jlprk]

After decades of a Republican brick wall at the Federal level, Democrats are progressing at the municipal level. First Seattle, then other cities, now even Los Angeles.

http://www.latimes.com/local/la-me-broad-caruso-wage-20140302,0,5239368.story#axzz2umvisatv

 

[MARIS61]

The unemployment rate in Oregon is 1.1% higher than the national average. You're not going to drive industries out of business, you're going to drive people into homelessness.

LOL. A large percentage of Oregonians who only earn minimum wage are already homeless, and have been for several years. Many of them used to actually own homes. I know a woman older than I am who commutes to her 2 minimum wage jobs in Bend from a tepee 30 miles East of town where she lives with her husband who is disabled with heart disease.

But hey, as long as a few hundred billionaires with no moral compass or conscience can lead fairytale lives I'm sure she feels the effort is worth it.

 

[MickZagger]

 

[Denny Crane]

LOL. A large percentage of Oregonians who only earn minimum wage are already homeless, and have been for several years. Many of them used to actually own homes. I know a woman older than I am who commutes to her 2 minimum wage jobs in Bend from a tepee 30 miles East of town where she lives with her husband who is disabled with heart disease.

But hey, as long as a few hundred billionaires with no moral compass or conscience can lead fairytale lives I'm sure she feels the effort is worth it.

If the unemployment rate was 4% instead of 8%, the minimum wage jobs would be paying well over minimum wage. Supply and demand.

We're already taxing the billionaires to pay for what we don't borrow. Use the money to give the people you describe homes and food. It's called welfare, and sounds like they need it.

 

[Denny Crane]

Speaking of billionaires...

http://money.cnn.com/2014/03/03/news/economy/buffett-minimum-wage/index.html?iid=s_mpm

Warren Buffett said he would love to see the minimum wage double to $15 an hour. But he admits that wouldn't be a good idea.

Speaking on CNBC Monday morning, Buffett said a minimum wage hike could hurt jobs.

"If you could have a minimum wage of $15 and it didn't hurt anything else, I would love it," he said. "But clearly that isn't the case."

However, he added, he wouldn't argue with President Obama's proposal for a more modest increase, to $10.10 an hour from $7.25 an hour currently.

Buffett, the second richest man in the United States behind only Bill Gates, suggests a different way to help the working poor.

He argues for raising the Earned Income Tax Credit, which gives tax money back to those earning below a certain income level.

"I think you can accomplish way more through the earned income tax credit without negative effects," Buffett said.

 

[donkiez]

Speaking of billionaires...

http://money.cnn.com/2014/03/03/news/economy/buffett-minimum-wage/index.html?iid=s_mpm

Warren Buffett said he would love to see the minimum wage double to $15 an hour. But he admits that wouldn't be a good idea.

Speaking on CNBC Monday morning, Buffett said a minimum wage hike could hurt jobs.

"If you could have a minimum wage of $15 and it didn't hurt anything else, I would love it," he said. "But clearly that isn't the case."

However, he added, he wouldn't argue with President Obama's proposal for a more modest increase, to $10.10 an hour from $7.25 an hour currently.

Buffett, the second richest man in the United States behind only Bill Gates, suggests a different way to help the working poor.

He argues for raising the Earned Income Tax Credit, which gives tax money back to those earning below a certain income level.

"I think you can accomplish way more through the earned income tax credit without negative effects," Buffett said.

I don't hate or love that idea yet. Isn't that just subsidizing the labor market for businesses? Why not give tax breaks to certain business instead? I think this pollutes your free market some also.

 

[DaLincolnJones]

QT Denny "Buffett, the second richest man in the United States behind only Bill Gates, suggests a different way to help the working poor.

He argues for raising the Earned Income Tax Credit, which gives tax money back to those earning below a certain income level.

"I think you can accomplish way more through the earned income tax credit without negative effects," Buffett said.
You hear the one about the fella who died, went to the pearly gates? St. Peter lets him in. Sees a guy in a suit making a closing argument."

I dont know what this really does except encourage poverty..

 

[Denny Crane]

I don't hate or love that idea yet. Isn't that just subsidizing the labor market for businesses? Why not give tax breaks to certain business instead? I think this pollutes your free market some also.

I've repeatedly suggested this same thing Buffett does in this thread.

I've suggested that the refund be paid monthly since barfo thinks people are idiots and would spend the money all at once. But I'm not seeing why that would be bad.

It isn't subsidizing the labor market for business. Business subsidizes welfare for the taxpayer.

Again, this sort of thing gets money to the people that need it to not be poor, and does not force businesses to hike prices and hire less employees so some high school kid can earn a bigger allowance.

I can't stress enough that supply/demand will raise minimum wage if job creation is encouraged. It's discouraged.

http://www.nytimes.com/2013/03/03/b...-income-distribution.html?pagewanted=all&_r=0

(Christina D. Romer is an economics professor at the University of California, Berkeley, and was the chairwoman of President Obama’s Council of Economic Advisers.)

It’s precisely because the redistributive effects of a minimum wage are complicated that most economists prefer other ways to help low-income families. For example, the current tax system already subsidizes work by the poor via an earned-income tax credit. A low-income family with earned income gets a payment from the government that supplements its wages. This approach is very well targeted — the subsidy goes only to poor families — and could easily be made more generous.

By raising the reward for working, this tax credit also tends to increase the supply of labor. And that puts downward pressure on wages. As a result, some of the benefits go to businesses, as would be the case with any wage subsidy. Though this mutes some of the direct redistributive value of the program — particularly if there’s no constraining minimum wage — it also tends to increase employment. And a job may ultimately be the most valuable thing for a family struggling to escape poverty.

 

[maxiep]

I agree with this sentiment, which to me is an argument for no minimum wage. If you want great employees, pay them well to attract the best and retain them. If you want to run on high turnover, then don't pay well. It should have nothing to do with the Federal Government.

 

[MARIS61]

Speaking of billionaires...

http://money.cnn.com/2014/03/03/news/economy/buffett-minimum-wage/index.html?iid=s_mpm

Warren Buffett said he would love to see the minimum wage double to $15 an hour. But he admits that wouldn't be a good idea.

Speaking on CNBC Monday morning, Buffett said a minimum wage hike could hurt jobs.

"If you could have a minimum wage of $15 and it didn't hurt anything else, I would love it," he said. "But clearly that isn't the case."

However, he added, he wouldn't argue with President Obama's proposal for a more modest increase, to $10.10 an hour from $7.25 an hour currently.

Buffett, the second richest man in the United States behind only Bill Gates, suggests a different way to help the working poor.

He argues for raising the Earned Income Tax Credit, which gives tax money back to those earning below a certain income level.

"I think you can accomplish way more through the earned income tax credit without negative effects," Buffett said.

As I said, no moral compass or conscience.

By hoarding wealth at a rate second to only one other person, Buffett has created more poor people from former middle class people than we could possibly calculate.

Now his solution is to overtax what's left of the middle class so they can join the poverty level. One big happy family of slaves.

 

[MARIS61]

I agree with this sentiment, which to me is an argument for no minimum wage. If you want great employees, pay them well to attract the best and retain them. If you want to run on high turnover, then don't pay well. It should have nothing to do with the Federal Government.

Not quite. It is an argument for employers to man up and have a moral compass and conscience.

For the most part, they haven't. History tells us they won't.

Hence the need for a minimum wage.

 

[Denny Crane]

Not quite. It is an argument for employers to man up and have a moral compass and conscience.

For the most part, they haven't. History tells us they won't.

Hence the need for a minimum wage.

When did companies become charities instead of businesses?

 

[MARIS61]

When did companies become charities instead of businesses?

Thanks for bringing that up. Nearly all large businesses and 1%ers now create their own charitable organizations as a way to launder their profits and further avoid paying taxes.

Few charitable organizations, and practically no churches, actually work toward a charitable end. They are all simply private clubs seeking to line their pockets by avoiding their taxes.