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Minimum Wage Mendacity
Submitted by Gary Galles via The Circle Bastiat Mises Economic blog,
With President Obama’s State of the Union Address and its associated campaign prominently featuring increased minimum wage, tired arguments for raising the minimum wage are being once again retreaded. Unfortunately, they compound failures of logic, measurement and evidence.
It would stimulate the economy. If I pay $1 more than necessary to hire a worker, I get $1 less in services for my money. The increase in the workers’ consumption enabled by that $1 is a transfer from me to them, not a net gain.
It would increase others’ wages as well. Unfortunately, higher minimum wages reduce available jobs, and fewer alternatives don’t create higher wages. Unions and other competitors would see wage hikes, because alternatives become more costly, but other workers get fewer goods and services in exchange for their labor —i.e., decreased real wages.
It would make work more attractive, reducing government dependence. That would require additional jobs became available at a higher wage. However, fewer jobs will be available, so fewer people would be able to work their way out of dependence.
The minimum wage hasn’t “kept up” with inflation since the 1960s. This presumes without justification that the 1960’s minimum wage was economically justified. However, it was a Great Society aberration that coincided with a virtual stop in progress against poverty.
It also ignores that much of employers’ compensation goes to Social Security, Medicare, workmen’s compensation, new Obamacare mandates, etc., rather than as wages. As government- mandated employment costs ballon, the minimum wage substantially understates compensation.
The claim uses the CPI, widely known to overstate inflation, to calculate “real” wages. And the bias was even larger in the past. So going back to the 1960s for comparison mainly introduces a half century of compounded overstatements of inflation to dramatically understate real wage growth.
It would decrease the number of families in poverty. Unfortunately, as labor economist Mark Wilson put it, “evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels.” One reason is that most minimum wage workers are secondary workers in non-poor households, while very few are heads of households.
Even important businesses endorse raising the minimum wage. Unionized businesses and those who already pay more than the federal minimum gain from raising it, by increasing rivals’ costs. That those employers who would gain at others’ expense endorse a higher minimum wage says nothing about the validity of arguments against it.
A higher minimum wage will pay for itself in higher productivity, lower turnover, employee morale, etc. Every employer who believed that to be true in their circumstances would pay more without needing any mandate. Are those businesses always accused of being too greedy not greedy enough? Further, why do those states with the highest state minimum wages have higher unemployment rates and lower economic growth rates?
Even if some lose their jobs, most low-wage workers will gain from a higher minimum wage. This assumes that other terms of work will remain unchanged, which is false. For those who keep their jobs, fringe benefits, on-the-job training, etc., will fall to offset additional mandated wages. And the increased wages may well be less valuable (as well as taxable) than what is given up, especially on-the-job training that helps people learn their way out of poverty. That is why labor force participation rates fall and quit rates rise when the minimum wage rises, in contrast to what would happen if those workers were made better off.
Supporters of a higher minimum wage claim altruism to help working families as their motive. But it actually harms most of those supposedly be helped, while benefitting supporters by raising costs facing competitors. They may claim, as did the Chairman of Ben & Jerry’s Board, “I support a living wage economically, morally and with deep conviction,” but it is really a self-interested infringement on freedom that is economically stupid and morally abusive.
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The key phrase in your argument is: "others will take their place if they quit." By which it can be inferred that there will ALWAYS be low-paying jobs which miserable employers will fill with the help of government (taxpayer) subsidies in the form of food stamps, medicaid, housing assistance and earned income credits.
Nothing stands the test the time anymore, not even shoes.
Given the horseshit argument that tax cuts create jobs, (Bush tax cuts anyone???, 8 years and basically flat job growth) why would we expect the right asshat think tanks get it right on this???
We've watched the leftist assfuck think tanks for the last five years led by your hero Zero. No thanks.
Projecting much? Are we?
the middle class will benefit from the raising of the minimum wage.......who writes this shit
If you define middle class as the middle 60% of wage earners you would be surprised at where the "middle class" now begins...
Solution is very simple, any company with more than 1000 employees (including franchises/subsiduaries) has a min wage of $15.00...
And if you Big Mac meal costs an extra $0.05, deal with it...
Why stop there?
Why not make it $25?
Why not make $5 and give the corporations even a bigger subsidy through the EITC??
Aaah. Interesting.
Why not just end the EITC and never have to worry about who is subsidizing whom?
Sure and why not let people simply starve in the streets...
It's a hell of a motivator.
yeah, it's a hell of a motivator .... to break into your car, your house...mug you... do you really want to live in a society full of desperation and homeless people?
So you are paying people not to steal from you? Makes sense.
So our only choice is EITC or starvation?
Oh my!
I believe that that is what is known in formal logic as the "false dichotomy" --- proposing two possible outcomes as the ONLY possible, mutually contradictory outcomes.
Flak excels in making such arguments, though.
No. Flak only excels in perpetuating his/her narrow opiniion. Flak is very good, though, at making his opinion seem like your opinion.
Here's a news flash! Since flak and his ilk started with his "global warming" bullshit, I've been freezing my ass off.
Because the temperatures in your back yard have always defined the global averages....
I'll link this but I bet you fail to grasp it:
http://tamino.wordpress.com/2014/01/30/global-temperature-the-post-1998-...
Yeah, that's a credible source. I'm not qualified to believe my lyin' eyes, and all that.
Well dipshit, he gives to links the data he uses, explains what he does in a concise manner and allows you to verify his claim on your own...
Go ahead show that his mathematically sound analysis is wrong..
Ball is in your fucking court...
Brother Flak,
I have spent some time time considering your challenge. In doing so, I have decided that "the ball" must be implanted firmly above your anal sphincter.
Most people have mulled this thing, in light of its champion Al Gore, and the hubbub about the falsified IPCC data, and have concluded that you, my friend, are beating a dead horse. The whole thing is analogous to the ozone scare awhile back. That one got us "summer blend" (more expensive) gasoline, nonhydroflourocarbon (more expensive) refrigerants and cars equipped with (more expensive) catalytic converters. After a short time, the ozone hole miraculously shrank, well in advance of the so-called scientists' math-modeled predictions.
Huh, turns out it was just natural phenomena. We still have more expensive than necessary gasoline, refrigerants and cars though.
Can you connect the dots? Probably not.
Dear Ace,
You are debating with someone who is fully entranced with the theory of climate change and has made it an unquestionable law. I have made my own journey down this path as I have seen you have as well and I have come to the same conclusion the science in this area is very biased. Data is made to fit premises not the reverse. When I started to read scientific papers criticizing these proponents I left the flock realizing the science was propaganda to further a cause not to find truth. I am not saying there isn't climate change but to extrapolate conclusions based on a few years of temperature data when the planet 7 billion years old is laughable.
I think I should inform you that your salutation may be in error. My understanding is flak is a woman (though we can never truly know who anyone is but, of course I am absolutely who I say I am ;-) ). The saucy guy fuck humor is an over compensation many women feel they must employ " to be one of the guys" in a predominantly male arena. I prefer to be myself and not resort to such tactics to feel acceptance. I guess others don't have that kind of confidence.
Miffed;-)
Ok, your go, where is the consensus wrong?
How do YOU explain 800,000 years of high quality data?
Balls in your court...
Come up with something that has not been completely discredited upon closer inspection of the methods or the data used...
Make a new argument, old made up shit don't count....
Eight hundred thousand years' worth of quality data? Why am I even talking to you?
Here ya go:
http://cdiac.ornl.gov/trends/co2/ice_core_co2.html
here is 65 million years of very good data was well
http://commons.wikimedia.org/wiki/File:65_Myr_Climate_Change.png
Now run along troll....
Dear ZeroHedge, I point above to an idiot who doesn't yet know s/he is an idiot. S/he has not exhibited antisemitic tendencies, to my knowledge. Still, s/he is simply too stupid for this forum, and is incapable of retrieval. Any and all rebuttals are welcome.
Dear Miffed, and I mean that;
I have been known to beat a dead horse or three myself. I dunno Flak's gender, but if you're right, Flak is a militant lesbian.
Key-rist! I couldn't care less. Each of us should be allowed to pursue happiness.
However, when their pursuit of happiness requires that I subsidize their wet dream, I say fuck 'em. No pun intended.
My dear Ace ( in true heartfelt friendship)
All of us have been impassioned by something. I have often gone down swinging to the end on many an issue so no apologies are necessary. Even so, I do make it a mission to try to keep an open mind in all things. Many here have chipped away at some old prejudices and dogmatic beliefs of mine and I thank them for it and allowing growth when there was only stagnation.
I think Flak loves derisive attack. She reminds me of someone who tried to teach me speed chess. Wild unpredictable moves to unnerve your opponent. I never could master it and always lost. I realized this was not talent I could learn and rightly chose not to play.
The only issue I have with you is the term "militant lesbian". In my personal experience that is an oxymoron. ;-)
Miffed;-)
Sounds like you too would like to be alone....
BTW, if I ever need a court jester good at playing parodies of fools, I'll keep you mind...
Toodles...
You play the court jester so well here who am I to horn in on your gig? I could never in my wildest dreams do such a job as you and will gladly leave you the honor.
Miffed;-)
I love you Miffed, and Mr. Miffed too. You are the most "aware" lab rat I've ever encountered. I mean that in the most loving way. I don't mean to imply that you are a rodent, as I'm sure you know, but I add this note for those unaware of the vernacular of the technically inclined.
Upon consideration, I accept your observation that the term "militant lesbian" is, indeed a special case oxymoron. Thank you for makin' me think about that.
Dear Ace,
I use to refer to myself as a plate jockey but now lab rat is certainly the best description of my life now. A poor little rodent running on a spinning wheel going nowhere. Certainly not by choice but by circumstance. The good thing is I still have my obstreperous fiery nature that will never allow me to give up and be pliantly lead to slaughter. I have a wonderful husband that loves and respects me. I have some great awake friends ( only one ex marine friend in the lab) who have accepted me in their circle. Plus I have found ZH and met some wonderful people such as you that have given me hope that I am not alone. I have much to be grateful. Take care. Be well and Always Be You. ;-)
Miffed;-)
You're not going nowhere m'lady. You're going where I'm going. We can't quite see, or say, where that is, exactly, but we know it must be out there, somewhere. Meanwhile, we toil at our jobs and wonder- Dear God! What must I do to gain your favor?
And this is, imho, the source of our folly. There is nothing that you or I could do that would please God. We live in the realm that was given to His best, and first angel, Lucifer, who was cast out.
For the longest time, I thought all that stuff was bullshit. Then again, I thought Denver would hand Seattle their ass on this Super Bowl evening. Shows what I know, huh?
Yes we walk alone on our path as we all do. Although together we are infinitely alone. I have accepted this. For me, I can't understand what God wishes for me but there is one thing I can claim. I am true to myself. I have made peace with all the horrible things I had done, all the poor decisions I had made and all the people I had hurt. I have made reparations as best as I am able and I have given up my guilt which serves no one. In many ways I could die tomorrow with a clear conscience knowing I have done my best. This is all any of us can do. The alternative is to fret and worry constantly trying to guess something unknowable for fear of punishment. This is living in a constant state of duress and fear. Many cry out for a just God. I am not so sure of this. Where would we all be if God were just? I pray there is a merciful God who is Love and full of forgiveness so there is some hope for those like me. ;-)
Miffed;-)
If you are going to troll, you gotta do better than that...
When everything you write is just made up shit, it's a real tell....
So, you are saying I just created Al Gore and the IPCC? Who is the troll?
Now that I know who you are- well you know the rest. Sleep well, Flak.
For starters, like good little corporate slaves, we could drop to our knees and pretty please, beg American corporations who made billions in profit, you know, TO ACTUALLY PAY SOMETHING MORE THAN ZERO in taxes.
EITC is small potatoes and pales in comparison to the revenue lost by having corporate behemoths pay ZERO TAX on billions of dollars of net revenue. A little 4th grade back of the envelope math usually makes it clear to anyone except the most obdurate and obtuse ideologues.
The problem is that serious presentations are not sound bites or talking points for the short attention span theater that most people demand. In order to get past a mere pretense of knowlege, one actually has to (gasp!) take some time, get accurate info, and apply critical thinking skills.
Here is a very simple 8 page starting point for anyone who actually cares and wants to start getting informed.
http://www.ctj.org/pdf/notax2012.pdf
...brilliant....and Moochele's get skinny program will work ! < Big Macs the size of a quarter >
Why not $50? The douchbags can just print moar money and pay it directly to the serfs, much like they do to Obama's puppeteers; bankers and wall street types, and those very corporations which run the White House and CONgress. You know, the ones flak talks about, with their profits and such.
Yeah, let's put in price caps for food and fuel toooo.
/sarc
The tired arguments are right here in this piece by a Mises disciple. Currently, EMPLOYERS of minimum wage workers are being subsidized by government in the form of food stamps, medicaid and housing. If the minimum wage is increased, these government disbursements would be decreased, thereby decreasing the deficit. Similarly, workers receiving higher wages will have more money to spend, thereby fueling expansion of other enterprises. Von Mises arguments are being trotted out by miserly employers who would love to have the wages they pay subsidized by taxpayers. They also occupy the available time of their employees, preventing them from seeking better-paying jobs.
End the subsidies then.
I agree they are very unfair.
Fine, pay a living wage and do not let the top 1% pocket all of the productivity gains...
You have defined a true problem.
I am not sure a government committee or agency legislation is the right solution however.
Yep, just let the free market take care of it...
Funny how you guys understand the problem and then get hopelessly tied in knots when your ideology is shown to be intellectually bankrupt when examining solutions...
the solution is anarcho-capitalism; aka, voluntaryism.
Are you going to wave your magic wand to make that happen?
The Kochs and socipaths of their ilk would become the de facto state which you decry...
The Human Condition abhors a power vacuum....
I knew the Kochs would show up to the party sooner or later.
I call Popper's law. Whenever Kochs are brought up in an argument the argument is over lol
Exactly. Their beef isn't with _the_ state, but this state or that state. Just another brand of freedom-hating authoritarians in constitutionalists' clothing.
I would suggest the problem is caused by barriers to capital and labor flows as well as socialism of losses and privatization of gains.
You're a regular Chatty Cathy doll...
Any other slogans devoid of real content that you can parrot when you string is pulled?
PSST, the barriers to Capital were lowered and the jobs left with it...
You must be trying to Poe us all....
The spectrum runs from statism to voluntaryism, not 'democracy to dictatorship' and the like.
People need to wake up and have respect for privacy and private property as they used to in this country.
Only the barriers that advantaged the one percent have been lowered. There are a ton of other barriers some subtle some not so subtle
Thought experiment, haven't dragged this to its logical conclusion yet.
In order to remove the wage subsidy paid by society which benefits employers at taxpayer expense we A) abolish minimum wage, and B) tax corporations for 100% cost of government subsidies received by their employees. They can pay the wages on the front end or the assistance cost on the backend. At least then when prices are raised to pass cost on to consumers the per-business subsidy is clear.
Lots of problems with this I'm sure, just tossing something out there for discussion, not suggesting it's a bulletproof solution.
Let me also add: audit, prosecute, end the fed.
So my choices are subsidizing another persons income directly through tax or indirectly through price control at the register. I like having choices when forced to give someone my money.
Democracy; politicians buy votes.
Fascism: Capitalists buy govt
I should understand the idea of politicians buying votes but it never quite matches up with reality. Reality is that politicians break their promises all the time. They are not voted in by what they do, they are voted in by what they say and they change their minds all the time. Promises are ignored. Even referendums are ignored. The best you can hope for is to buy a couple of years before the voice of the people is ignored.
Things might be different in your neighbourhood but I've met plenty of members of the FSA, hell I've even met plenty of workers, who have absolutely no idea which political party gives them all the bennies. (Maybe that's why they had to colour-code your President?)
So how does the Free Shit Army manage to get any free shit? I'm guessing that there is always a PTB that is skimming a bit off the side. EBTs by JPM? "Housing affordability" translates into "borrowing more money per income" instead of "lower prices?"
You think pot-head welfare queens actually drag themselves down to the voting booth because they realize that something is in their best interest? I've seen the videos that suggest this is true but when I look at people in real life, I just don't see it.
Yeah, can't have the Aussie tradition of a fair go for everyone can we? Explain how the Australian minimum wage of $16 hour + has destroyed our economy as compared to the USA? My wife gets $47 an hour casual rate working as a cleaner in the Adelaide CBD on a Sunday. That can get her 47 loaves of bread or 47 litres of milk. Must have really fucked up this country! (a bit of sarc here)
Would those loaves of bread and litres of milk cost less if the labor costs to produce them were less?
First go to Google and look up Peter Schiff's "15 for 15" campaign, where he effectively suggested that a doubling of the minimum wage ( to $15 per hour ) would lead to a 15% increase in Walmart prices. Now you can interpret that backwards where by the minimum wage earners accepting a 50% pay cut, Walmart was successful in keeping prices 15% lower. Fucking whoop-de-doo. But don't take Schiff's word for it. Look at the minimum wage component of anything. The % price inflation will always be lower than the % minimum wage inflation ... until you run out of resources, at which point you have to re-assess the problem.
Is above worker going to buy, eat, drink more bread and milk if it is cheaper?
Worker has a machine that lets one man do the job of one hundred men. Does he suddenly get paid 100 x more when the other 99 men lose their jobs? Why is he only getting paid the wages of half a man?
I am fine with a minimum wage if my workers can't quit, come in late or dick around.
Employment at will allows me to quit when I want, hire when I want, fire when I want (except the current state has already stuck its hand in here) and should allow me to pay what I want.
Yes suh massa....
You da boss...
Lol. You werent always such a leftard. You been hanging out at Daily Kos secretly havent you? I told you that you would catch something over there. It has spreas to your brain.
Looks like you graduated to the Hedge, what 15 weeks ago? What was it like at Yahoo! before then?
Lol. Flake we used to chat with one of my 50 other avatars. You have land in arkansas right? If i remember corectly
Yeh, it's a get away place for me...
When I am in town I call up your ol' lady to come and suck my cock for $6.25 per hour...
She is not very skilled but she is eager and willing to pop her teeth out...
Lol. Meth will do that to a lady.
I tried to warn her.
What? You don't just sack 'em when they dick around? Plenty more where that came from.
A rising minimum wage lifts all skirts.
some shit someone said
"The claim uses the CPI, widely known to overstate inflation,"
I stopped reading right here. Saying there is no inflation is OVERSTATING inflation? Is the author totally fucking retarded?
Hahahaha, wow...that is one unbelievable statement.
That one made me laugh too anyone who eats or drives or heats their home, etc. knows better. And chained CPI substitutes hamburger for cat food.
But on the other hand I don't agree with minimum wage increases and I'll tell you why. Pretty much everyone on the socialist side of the fence looks at this as big business screwing the little guy (for the record I always try to look at both sides of the issue). Mandatory minimum wage increases screws small business's many of whom are struggling just to stay open. Plenty of fast food operations are really mom and pop owned franchises something people seem to forget about.
If bigger business's are forced to raise wages, the same people who are struggling will ultimately struggle even more as the cost is passed onto the customer.
At the same time I would pose the argument that if obama was really serious about things being more equal they would have brought criminal charges against the fat cats (I say that jokingly just like he did). He would go after the loopholes used by the likes of warren buffet since capital is taxed less than labor. Supposedly so many 1 percenters really want it to be more equal that would give them the opportunity to put their money where their mouth is and also help with the debt which in turn would help the younger generations who have to pay the interest.
I think a lot of the problems come from politicians who say one thing and then get into office, line their own pocketbooks and forget about what they told the people. As for government I think it's bloated and out of control. However, it's the system we have and even people like Ron Paul believe we need it, just on a smaller level.
So many people forget that minimum wage increases apply to CUSTOMERS as well as workers. Why would ma & pa business owner struggle if their customers get richer? I can buy $5 shitburgers from McConglomerate or I buy $15 excellent tasting quality hamburgers from Ma & Pa Nonamehamburger shop. So how's that price elasticity thing going?
Double the minimum wage, prices go up by 15%, but most of the workers are still better off by 73% so they buy more, if you have the resources to keep up with the demand. (see other posts to see why I chose those numbers)
Where are the holes?
1. You become less competitive against foreign countries, who do not raise their wages.
2. If everyone else demands proportionate raises then you end up exactly back where you started, but with bigger numbers on everything.
3. You dilute debt. You think that would be a problem?
Regarding 1. Workers are crushed between foreign wages and local real estate prices. Sort that one out first.
Regarding 3. As long as banksters artificially inflate the price of everything else and get endless bailouts, we are totally fucked, no matter what happens to the minimum wage.
On the way to hyperinflation, people may start blaming minimum wage increases. The wages are following, not leading. You need to sort out debt first.
The fact that Napoleon Dynamite is trending on Twitter Mid-day tells me youth unemployment is higher than estimated. People unable to get a first job don't get unemployment and are not counted in Labor Participation rate either.
Just thinking out loud here:
Low income (and generally low educated) folks spend nearly 100% of their income. Many can't keep money in their pocket for more than a few hours. They are the ones who have thoughtlessly bought in to the American consume consume consume charade (in order to try and keep up with the Jones'...). They are the ones who have seen their wages stagnate the most. A large reason why many low-end retailer's revenues are suffering massive declines. Seems that the more educated people, who also happen to make more money, have woken up to the nonsensical, consume at all costs economy. In addition, these same people seem to be choosing to spend their money at more respectable establishments, or drastically pulling back the spending reigns (deleveraging credit card debt, investing and saving more). Wouldn't it make sense for the McDonald's and Walmart's of the world to increase their wages since their workers are their main consumer, a consumer who currently has zero disposable income? This seems like it would especially apply to Walmart considering they receive nearly 18% of all food stamp dollars and food stamp levels are consistently being cut back. If your main consumer has ZERO dollars to spend how do you expect to sustain business?
Yep, you fucking nailed it right there! Walmart and McDs would be the major beneficiaries of an increase in minimum wages.
My comments:
It seems as if the minimum wage was about twice as high as today in the 1960s, adjusted for inflation. Especially if you adjust for Shadowstats inflation figures.
It is probably also true that people would buy more things if minimum wages were adjusted to the 1960s level. But unlike in the 1960s they would not buy domestically produced TV-sets but rather imported ones, for instance. Therefore, increased minimum wages would not stimulate the economy in the same way as in the past. Another problem is that more imported TV-sets, for instance, would impair the US balance of payments. Therefore, I suppose that a radically increased minimum wage may be followed by increased American protectionism.
Adjusted for fake inflation, minimum wage would be over $10. You don't want to know what adjusting it for real inflation does. I love to ask people where the infinite prosperity and surplus of awesome jobs that they claim a lower minimum wage would bless us with are.
RKDS:
My comments:
According to official CPI figures published by the Bureau of Labor Statistics provides (BLS), the $1.60 minimum wage in 1968 equaled $10.70 in mid-2013, see
http://www.zerohedge.com/news/2013-08-05/40-us-workers-now-earn-less-196...
But if inflation had been calculated in the same way as in 1980 (i. e. no adjustments for things like more powerful computers at the same price) it seems as if the minimum wage would have been about twice as high in 1968, adjusted for inflation.
However, it seems as if Shadowstats don´t simply use the 1980 CPI calculation method. It also seems as if their method doesn´t give an accurate calculation of the inflation over longer periods.
But my point was that radically increased minimum wages would might force the US to become more protectionist in order to make people buy domestically produced goods since a large portion of the increased income probably would be used for buying Asian consumer electronics and other imported goods.
It also seems as if the US, like many other countries, has an excessive supply of labour. Supply and demand therefore results in reduced wages or more unemployment.
Countries need to be more protectionist, otherwise you get what we have got: Workers can not enjoy the fruits of their labour as it is all sold overseas to richer customers. Don't worry, the problem is slowly sorting itself out as the "richer customers" lose their jobs to the poorer workers ...
Good. We haven't had any hint of protectionism for decades. Maybes it's time for Americans to look out for Americans for a change. Because cozying up to Chinese communists and catering to the Israelis isn't working.
Fight club, Bitchez
I been waiting for Tyler to toss some red meat all day.
Now if only George Washington were brave enough to blog about Zionists like he used to we could have us a real slapfest!
Somebody should slip a cunt over your head and fuck some sense in to you....
I wonder if posting here were classified as work if you'd stop? Since them thar evile right wingaz said you should work and be fruitful an shit.
Mustache rides!
I seriously like the idea of a cunt over my head.
if you want to piss some guys off and get the party started, just talk smack about the Contrails Vortex.
ELEVENTY !!!!1111!!!! It will kill us ALL.
http://steshaw.org/economics-in-one-lesson/chap19p1.html
"Even if some lose their jobs, most low-wage workers will gain from a higher minimum wage. This assumes that other terms of work will remain unchanged, which is false."
Nothing occurs in a vacuum. Newton's law. For each action there is an opposite reaction.
The problems with a "minimum wage" are so blindingly obvious it is depressing that there is any argument at all.
The problem with a minimum wage is that countries without a minimum wage have to export to countries with a minimum wage in order to profit.
On this side of the world, we have workers crushed between cheap foreign labour and expensive local real estate prices.
On that side of the world, workers work their guts out to build stuff that they will never be able to afford to buy.
The free market minimum wage is a bowl of rice ( or porridge ) and a bed on the factory floor. When one of my previous boss's bought his new "labour-saving, productivity - increasing" machine, he first saw it demonstrated in a foreign country and that is the condition the workers were already working under. Are those workers buying cars? Furniture? TV sets? Refrigerators? No. The rich customers have to be found in a foreign country.
If you raise the cost of something, then you get less of it. That's true but you need to consider price elasticity and the fact that people are not a commodity. The labor market is fairly inelastic. For one, the supply has little to do w demand. If demand drops off, then what you get is unemployment not a drop in supply. If demand picks up, then what you get is a labor shortage in many job markets as requirements are both geographical and skill based.
So cut out the stupid Peter Schiff idiocy. Raising the min wage is going to take a bite out of profits and not increase prices therefore no jobs will be lost. Executives may not like that as their bonuses are on the line but the increased influx of capital into lower wage labor is going to increase the velocity of money which would have positive effects on the economy. The ACTUAL economy and not the S&P 500.
Why not raise the min wage to $100? Those who ask this question are idiots. They shouln't be allowed to drive. Revoke their drivers licenses because they apparently step on the gas all the way all the time.
Um, why not raise it to $25? People who denigrate this question are avoiding to point, because they know they can't answer it. If they try, they fall into the trap that has been set for them. So, it's alway better to call poeple who ask this question names, call them stupid. It's the only option for you.
If you raise the min wage to a point that actually matters, the negative effects will be obvious. Profits are not so inelastic either. You need them or your company dies. Break-even is not an option. Given that it takes eight to 12 months to implement any non-trivial automation project, on average, you might seem to be right for a few months. Then you will see the headline of so and so laying off a couple thousand people ten months down the road, and not realize this was directly due to the hike in minimum wage. It can take even longer to build a $500 million manufacturing plant in China, but again, when the Motorola or Nokia plant in your state shuts down a year or two later, you will blame it on anything other than minimum wage. Of course, in the latter case, it is not just a couple thousand min wage jobs lost when the plant shuts down, but all the good-paying jobs as well.
Hey, how about "if we don't need min wages, why not let employers use slaves??".
I hope that explains why we think people that use the "if a little is good, more is better" fallacy aren't terribly logical.
Hey if a few aspirins make you feel better, why not 1000?
What a farce. People want higher rents, higher dividends, higher socialist security checks, etc. And then they balk at higher anything for those at the bottom who are expected to pay for all of them?
Inflation does a fine job of raising prices all by itself. What opponents of the minimum wage are really doing is slowly stealing the value of somebody else's labor. Do more and more work for the same dollars that buy less and less. The demands are delivered with an entitled sneer to boot and they wonder why people shun those jobs or have an attitude?
People believe in a happy ending to the minimum wage story for the same reason that people still believe in perpetual motion designs. Something for nothing, or getting more out than you put in, is a wonderful thing if only we could somehow make it be true, and what better way than to just legislate it?
Over the space of seven years, I saw what used to cost $65k go on to cost $300k. Over the space of several years I saw what used to cost $100k go on to cost $400k. I saw what used to cost $200k go on to cost $900k. That is your "something for nothing". Real estate. Not one iota in increased productivity. Just the same block of dirt, with seven years worth of deterioration.
I saw minimum rent go from under 30% minimum wage to 60% minimum wage. I saw minimum mortgages go from below half the minimum wage to 100% of the minimum wage. For some people, the perpetual motion machine exists ( for now ). Some people have been getting "something for nothing" for the last two decades.
The minimum wage workers have been continuously screwed, and yet still you proclaim, "There is no better way". Get real. Productivity is not the problem. Something else is.
Lost it at CPI overstates inflation. Lulz wut?
Yes, it overstates inflation, which is exactly why when one good in the comparison basket gets too expensive it is replaced with something less expensive, also why it excludes things required by most for modern living such as housing and energy.
Dammit - just fix it once and for all !!!
$75 per hour.
And give everyone a $5,000,000,000,000,000 bonus check every year.
All debt/insolvency problems just solved !!!!
C'mon you dumb fucking politicians - step up to the plate and get it done!
'The Invisable Hand of Statism and the Quiet`Coup of a faceless "Bolshevik Revolution" :: Teat`erring on an Asian Pivot... weaving a 'Fluxicating-Yarn' of Democratized Communism?'
The ameican middle-class is becoming an oxymoron for a sub-cultural entropic caste system; reliant on a centralized government for nourishment and deliberate guidance!
The USSA is heading for, if not already there a two-class system! Obviously, haves... and have nots-- what's moar bothersome is the quiet acquiescence,... a tacit capitulation dependent upon government handouts in the form of sinecure'd panacean as in unemployment/ welfare/ foodstamps (SNAP/crack & pot?!?) etel!
Perhaps we should just call it for what it is, "Slavery"... but, with a globalist/corporatist flummoxed tint of altruism?
We (the 99%) are slave's to a system that is worse than the 'Plantation Owners of the South', being that the owners were responsible for clothing, feeding, housing, and medical attention! Afterall, what good is an unproductive slave when outsourcing to Africa was very expensive for a head-of-mankind... be it yellow, black, brown, or white!
There is no job creation to be heard of,... or is the Republic of China & Communist China doing america's middle (poor) class a favor by repatriating FOXCONN to the shores of, 'Plantation Grandiose 'Amerika`'!
jmo
What the writer fails to understand is that without minimum wages everybody (all tax payers) continue to subsidize McDonald's and Walmart profits. All corporations like these avoid sharing their profits and depend on their employees using food stamps on the backs of tax payers. Fuck large corporations.
Min. Wages are NOT an issue for most industries or most jobs.
They ARE a huge problem for industries and jobs whose business model is predicated upon what is effectively modern day "Slave Labor".
So.... for those who believe in the sink or swim of business models (the "Life or Free Enterprise does not owe you a living" mantra), the real question for REAL libertarians-with-brains then is:
1. Should society enable one segment of Free Enterprise to thrive because of the Usury of Slave Wages?
2 Does 'Usury' apply only to the "Jewish Usury" (cost of Finance), but "Christian Usury" (cost of Labor) is OK? Or is "Usury is Usury, regardless of type"?
3. If businesses who pay much more than Min Wage can make decent or giant profits, while simultaneously dealing with a boatload of rules & regulations that drive up their fixed and variable costs, then what makes the Slave Industries so "God-damn fucking special", that they somehow must be exempt from business constraints that raise ONE type of Variable Cost (i.e. the Cost of Labor)?
Fuck 'em, I say. If they can't compete with having their Slave-model shaken up, then they do NOT deserve to be in business. And they can either sit on their cash (most business capital was probably borrowed from banks anyway!), or they compete with their former employees, who are trying to get a job with real wages and real benefits.
p.s. Take Retail for instance... I know for FACT that the large chains have a 30-80% Margin on their wares. I'll pick on Bed, Bath & Beyond (BB&B) as a concrete example: Even when you apply your 20% Off coupon on that one item, BB&B still makes 15-40% margin. On the rest of the items they make 35-65% margin. They have most of their work force on part-time, so they get Min Wages and No Benefits. And not only do they have to provide their own respectable-looking attire, they have have enough brains and interpersonal skills to handle Sales, Cash Registers and Online Orders. They are in deed "Semi-Skilled Workers" -- who are paid the minimum wages of "Unskilled Workers". / And that's just not "Kosher". But good luck in telling that to its two founders (look it up!). /sarc
You forgot one other key point kind sir. That raising the minimum wage makes all other jobs just above minimum wage, including those that require college degrees instantly worth less...unless of course businesses are going to raise all wages equally (which we know they won't).
It makes having a high school or college, etc degree less valuable as the payback from such a thing becomes less when the alternative is instantly worth more. In short the payoff of paying for college becomes less.
The only way raising the minimum wage could work is if it comes out of the pockets of the c-suite by means of a total compensation cap or a "only 30x the pay of the average worker", but in reality that will never happen as it will come out of the pockets of the middle class & upper middle-class whose experience, work, and education instantly would get devalued as the alternative is instantly valued higher. Besides the C-Suite would instantly put their lawyers to work to circumvent such things.
You somewhat hit on it when speaking of how Unions will like it, but it goes well beyond unions to any kid that takes a $30,000 job right out of college as opposed to the former $6.35 that is now $10/hour. Pay right out of college or other similar higher paying jobs would also need to be raised a similar % otherwise, the poor move ahead and the middle class fall even further behind relatively.
What this and every administration seem to forget and you rightly acknowledge is that everything in this world is a zero sum game. You must take from someone to give to someone else and in minimum wage's case it takes directly from the manager just above those min wage employees or that kid right out of school who will now be paid less to compensate for some new law.
I don't disagree with what you're saying. I just want to differentiate between the new grads who make $40-60k/yr, versus the hi-tech engineers I know who make 6-figure salaries ($100-160k). The latter clearly are not impacted by the rise in min. wage, and probably might even root for their 'poor' (fig. and lit.) human beings.
I'm amused how different professions view income differently. E.g. Engineering managers seem to get a rash/hive if their labor costs go up by more than a few percent, but lawyers and accountants don't suffer from that blue-collar 'affliction'. In fact, they are quite happy, because... if their guys earn more, then it forces their own salary up even more -- to keep the wealth gap. Clearly different paradigms at work there.
It's a sop to democrat voters.
In contrast to the quite dynamical and now ubiquitously received modern method of viewing markets as analog computers of price discovery, the Scholastic philosopher (that would be me) employs the concept of the natural price. On the natural price theory, the value of a finished product is worth precisely the cost of its inputs and factors of production, no more and no less. The producer, who in a sense is selling his labor along with his product, is entitled to take a profit based on the amount of labor that he put into it--this is his compensation. The natural price of the product is its input costs plus its labor costs, and this is the price it must be sold at.
It is impossible to argue that the natural price is not the correct price of the product. The natural price is "what it's worth"--literally, ontologically, metaphysically. But the presence of a market, i.e. this chimerical mixture of a poker game and an auction which is supposedly a mechanism of price discovery, disturbs the natural price by introducing the human passions as pricing coefficients. It is not uncommon to hear economists and other semi-learned people today repeat the idea that "a product is worth as much as somebody is willing to pay for it." That simply is not true. If a speculator or some other passionate buyer is willing to bid up the price of something just because he wants it more than the next guy, he actually wounds the functioning of the economy. He who sells at inflated prices, sells something he does not have; and he who buys at inflated prices, buys something he does not get. The difference between the sale price and the natural price is equal to the amount of unreal value in the economy, the ghost-value which is nowhere represented by any actually existing good or service. It is precisely this ghost-value which modern economists call liquidity, which all admit to be synonymous with debt. Money was created to give it some kind of tangible form; banks were created to govern its flows; and businesses, no longer suffered to remain merely the organs of civil existence, must scheme to capture it and soak it up.
With the advent of machine industry and other technological advances having by now been long established in the West, it should be clear that the natural price of life's necessities has dropped to nearly nothing. By all rights we should be living in an age of stupendous deflation and general contentment. But this deflation would have been crippling to the financial sector, for without an ever-billowing thunderhead of debt to service there is nothing for a financial sector to do. Through their techniques of credit creation and usury, acting in concert with the greed, small-mindedness and concupiscence of ordinary people, the banks prevented deflation from materializing. Instead, everybody now needs to work as hard as they can and borrow as much as they can simply to avoid being trampled out of the onrushing herd and losing their ability to hold their own in the world. When my neighbor borrows money and spends it, he inflates the price of everything for me. Now I must borrow money to make up the difference, and so on ad infinitum.
This massive distortion in the value-field has gone to subsidze the many bizarreries in the culture we see around us. This is what pays for the bloated budget of the Federal Governmnet, for example. And the ordinary citizen has not been without his benefits either, if one can truly call them benefits, for the refined fruits of a cosmopolitan existence have been placed within his reach; but he pays for this cosmopolis through the inflated price of his necessities, which amounts to an unlevied, unacknowledged tax on his consumption. What would the undistorted cost of an average man's living be today? A carton of eggs might cost only a few pennies, merely a fraction of what it currently does. A cell phone or an airline ticket should probably cost many times more and would have retained their old status as luxury items. But instead of a natural system of prices related to one another through an organically derived hierarchy of values and social classes, what we have is a massive imputation were everything is simply assigned a value based on a political algorithm the source code for which nobody now remembers.
The argument over the minimum wage is simply an argument about rearranging the imputation for those on the lower end of the social spectrum. Economic rationales are perfectly inapplicable here, for economics per se has left the building long ago. This is more about caste structure, social cohesion, and political economy than anything else. No matter where you think the minimum wage ought to be set, I will take the first step and say that we need protectionist tariffs and closed borders before any solution can even begin to take shape.
Your last sentence is incongruent with your thesis. No? Closing the borders doesn't offer maximum open market operations. (Yes, illegals are disruptive) Naturally occuring FX fluctuations can absorb illiquid price differentials. Should our progeny close the inter-cosmos trade barriers in the future? The Real Estate in Florida has since increased by way of the FX international speculator. The dominoes can then fall from US currency to a cheaper currency. Market protectionism is the exact ideal you are arguing against? Don't mistake me for disagreeing with your deflationary approach, but the social fabric shouldn't be cut at borders. A human is a human regardless of the vastness of the ocean and the time of travel. Kepler couldn't measure the earth's position without two other points, should a society limit it's points of price measurement to one culture? Maybe it isn't politically approachable, but it should be if the surreptitious banking/political class allowed it.
Any idiot can under-pay his workers, cut his prices and steal market share all the way down to zero, at which point the workers can not buy anything because they have no money and the idiot still has bills and debt breathing down his neck. A generous, TBTF banker can help you steal all the market share you want.
If you want a "fair" economy, where those who produce get to consume their share of what is produced, then you need, at a minimum, a common minimum wage for all those in that economy. Is it really fair that the Chinese worker has to work many more weeks than a US worker, just in order to buy what he himself has produced? Is it really fair that the US worker has to compete with the Chinese worker on wages when the price of real estate is out of whack? Given all that the US produced in the past, is it really a good idea to just throw that all away and force them back into third world conditions just so they can "compete in the global economy"?
I don't think it's so black and white as this author makes out.
Work by Edward Lambert strongly suggests that there is an optimal level for labour share of income that drives effective demand, (hence profitability of producers). Here's a synopsis: http://effectivedemand.typepad.com/ed/synopsis-of-the-effective-demand-r...
The mechanics are straight forward:
- demand constrains supply. A producer can't profit from selling goods and services if there is no demand for them, thus effective demand sets a constraint on supply (and profits).
- effective demand is driven by incomes. Consumers spend less money if they have less to spend, therefore the ability of a producer to earn profits depends on the ability of consumers to earn wages. If employers (net) increase profits by reducing wages paid then they erode their own customers' ability to buy their goods and services, hence they erode future profits (there is a balance to be struck here).
- where real incomes are decaying, low interest rates can cause debt to be used as a replacement for lost incomes. This is like Wil-E-Coyote running off the cliff, things are fine (floating on debt) until he looks down (impoding down to real incomes). This is the situation America is currently in: high levels of consumer indebtedness to make up for declining real incomes. Corporations require low interest rates to keep making money. Eventually it all collapses in a deflationary bust.
- when labour has too much power over wages (strong unions), labour share of income rises too high, forces businesses out of operation and increases unemployment (this is the case being presented by this article).
- when labour has too little power over wages (strong lobbyists, globalization providing access to cheap foreign labour), labour share of income falls too low, reducing consumption (unless debt is used), producing a deflationary oversupply situation and ultimately eroding company profits, forcing businesses out of operation and increasing unemployment (this is the case being ignored by this article). This is the reason nations offering terrible wages rely so heavily on exports to prosper (China).
- oscillation of effective demand (driven by labour share of income) matches the business cycle. For a compelling overview of this see figure 3: http://effectivedemand.typepad.com/ed/2013/07/productivity-really-is-dem... At this moment, productivity is constrained at the effective demand limit caused, predominantly by a level of labour share of income that is too low (wages need to rise). In the current state, if labour share of income is not improved then productivity cannot improve unless debt levels rise, which is no solution (and highly unlikely given the already high indebtedness of US consumers).
I've picked through most of the articles on Edward's site and I think he has nailed it. Corporations took full advantage of cheap Chinese labour because, in the short term, it massively boosted profits. For a time, US consumers used debt as a stop gap but eventually the lost jobs and lower real wages (due to Chinese competition) eroded labour share of income to the point where it started to effect the profitability of producers selling into the US market. In the longer term, outsourcing labour to cheaper Chinese workers ultimately destroyed the profitability of producers while gifting manufacturing IP and skills to China at America's expense (capitalists will happily sell you the rope to hang them with: too short sighted in the pursuit of the next quarter's numbers).
Furthermore, this situation ensures that when American consumers are finally tapped out (now), China's ultra low labour share of income will result in a crisis as the Chinese consumer cannot afford to fill the consumption hole left by unemployed, debt-laden US consumers. If nothing is done then corporate profits will implode and deflation will cripple the global economy. The same thing happens if interest rates ever rise.
To avoid this, wages need to rise, which can't happen in America while US corporations continue operating with cheap Chinese labour, unless the US government is prepared to run up more debt to fill the gap (which China will then be forced to fund if it wants to keep the situation as is). Running up more government debt is not a long term solution.
Raising the minimum wage at this time seems like a good idea, but it won't really work to fix the problem of labour share so long as China is still able to pay workers a pittance (unemployment will rise as more jobs will simply be outsourced to China to protect short term profits (with no care given to the long term consequence)). Ain't globalization a bitch?
Raising minimum wage could be a good idea if it coincided with China doing the same. It seems the Chinese do see the writing on the wall as they are taking steps in that direction, but it's happening too slowly. At some point tariffs may become necessary. It's messy.
Enough rambling. The point is that there's a balance to be struck, an optimal level of wages as a % of revenues and protection from excessively cheap Chinese labour. In the current environment, where wages and interest rates are too low, the one sided perspective presented here by the Mises author is more wrong than right (but it would be completely right if labour share of income was too high). Global wages need to rise, as do interest rates. Here's Lambert again explaining why low rates and low wages impair productivity: http://effectivedemand.typepad.com/ed/2013/06/the-solution-to-the-econom...
As I understand the Mises view, the aim is to get central planning out of everything. Get rid of a centrally planned (suppressed) Chinese wage and get rid of a centrally planned (boosted) US wage to let the market sort out wages itself between nations. Unfortunately, while China insists on undercutting labour through central planning, an equivalent amount of central planning must be engaged in the West to counter it. Raising the minimum wage is part of this.
What about the relative loss in purchasing power of the middle class from a rise in the minimum wage? A rise in the minimum wage makes all jobs above min. wage including those that require college degrees, etc worth less as the trade off of obtaining said degree and postponing work for 4 years is now much more attractive than it was historically (work 4 years earning $10/hour instead of $7/hour)...especially when median household incomes are declining and price inflation is NOT an issue.
From a relative standpoint it makes it that much less desirable a job going from what was $7/ hour to middle mgmt @ $15/hour now only $10 up to $15/hour. It decreases the value of a middle mgmt job at the expense of increasing the value of a min wage job (see my post below).
To me the only way raising the minimum wage will work is if you also raise all wages between it and some magic level before the c-suite so as to not punish the lower middle class, middle class, and even upper middle class which would also benefit from a few more thousand $s/year because in a zero sum world someone has to give up pay or profits to make it work. To me it will only work if you take from the C-Suite and give it to the min. wage and others, but do we really expect this to occur when business serves shareholders and C-Suite execs first and foremost? If Obama wants a 35% min wage increase then shouldn't also the middle class be afforded some wage increase too? and who is going to make sure that happens in a wage inflationless environment?
Your argument that there is an optimal level of labor as % of revenues seems to suggest that if you raise the minimum wage you should also raise it for all labor classes. Yet, I have never heard of anyone speak of the middle mgmt jobs and how they will be affected if a min wage is increased. Will they all get raises? Don't they also "deserve" them? Ceterus Paribus they will be worse off than the minimum wagers.
What about the college kid about to accept his first job paying $30,000/year as an accountant? Would he instantly get 20-35% more now? Of course he wouldn't. Is there any evidence besides the same ole same ole trickle down, raising minimum wage will increase revenues that will eventually trickle down yada yada yada...trickle down to shareholders and that's likely it.
The follow up to your ultimate point, and my point is that Americans don't need protection necessarily from a chinese wage rate that is too low, Americans need protection from a CEO rate that is 40x their average and by far the highest it has ever been. Why not cap CEO and C-Suite total comp to shift more wages downward and increase the labor % that way?
All fair points, I'd agree with all of that. Note that I'm not supporting a minimum wage hike as the be all and end all, just that it's better than nothing at all.
Agreed that the distribution of incomes in America is insane. The whole curve needs to be reprofiled somehow. It's madness that US CEOs receive the remuneration they do given the regularly underperform Japanese CEOs who earn far less. It's also madness to pay so much money to the top given that there are repeated experiments to prove that performance degrades with higher pay (where the job is a "knowledge job", the opposite is true for manual labour). In other words, the science says that US productivity would be boosted if we slashed executive pay and boosted pay for manual labour.
http://www.youtube.com/watch?v=u6XAPnuFjJc
Switzerland recently voted no to a proposal to cap maximum wages to a multiple of minimum wages. Its a shame because I would have liked to see how it turned out.
Lambert again makes the point you finally made (and I agree with) but I can't find the article on the interwebs yet. In it he points out that the excess money currently being hoarded by the top end in the corporate world works out around 5,000,000 jobs paying $50k per year (as I recall). Madness.
Fact is there are many holes that need plugging. Executive raping of the middle class, diminishing labour share, and unfair foreign competition are some of the big ones (and yes, expecting a US worker to be wage competitive against a person in China under the thumb of Communism is not fair).
hmmm.... the bush's and the clinton's are worth ~$500ml +/+ today?
but when they started out as lowly bureaucrats... bush#41 got the nod from william casey and baby boy #43 got the nod from daddy-O were for free trade! and as for slick willy and White(foster free) Water hillary, 'menage et`trois' with the walton's they were nothings ,... but give Walmart a license to rape small and medium size business with their nafta's, cafta-dr's, wto (gatt). reagan even helped as a 'acting?president' from communist propaganda hollywood... wood?!?
so,... in 30 years time we have 3 living breathing presidents approaching billionaire status with obama probably getting there first, and we are afraid of the ungodly precedent of paying a slave a few bucks moar when the us.frb'system has just increased our debt by 150% in 5yrs!
please somebody throw me some red-meat... i'm getting hungry for a fight!!!
What shits me the most about these pricks is that they sold the Walmart model on the story that it makes everything cheaper so you can afford more, which is total bullshit when it also comes with you losing your job.
In a closed local economy, if a product costs $100 then it doesn't matter, because I in turn charge $100 for mine. The money circles around and it doesn't matter. Then along comes the external $10 product, which I buy because it's cheaper, therefore depriving the more expensive local of money and, importantly, sinking $10 out of the local economy to never be seen again. Damn, then that guy goes under and can't afford to buy my stuff anymore so I go under too. Pretty soon none of us can even afford the $10 foreign product and we wonder what the fuck went wrong, remembering how we all used to be prosperous.
Leaky internationalized economies destroy communities and small business, the engines of employment and quality of life. Thanks to our overlords for selling us the lie of globalization making us all* richer (where "all" refers to "them" and fuck the rest of us).
Bingo!
+1 "Leaky internationalized economies destroy communities and small business, the engines of employment and quality of life."
it's so fucking strange. we all know that small business is critical, particularly when it comes to employment, yet when it comes to shape policy, small biz always gets the shaft in favour of Big Biz, Big Pol and assorted other Big Interests
I blame our DNA. We're not that different to chimpanzees only we have technology to amplify our biological foundation.
The alphas (Big Biz) have to cut down any upstart challengers, it's just what they do.
For a tiny period of time we had this amazing, unnatural, power diluting thing known as "democracy". It was great, then it was gone and we reverted back to Chimp behaviour.
As we can see from the rating and some comments, it appears that people are not thrilled about capitalism even though it's done the most to actually lift the lot of the ordinary man. What a shame.
It's not a case of capitalism doing the most to lift people up, it's a case of capitalism doing the least to keep people down! People know what to do with their own lives, the system just needs to get out of their way as much as possible.
Glass half full / half empty argument I know, but I prefer my angle because it prevents me falling on my knees and worshipping capitalism like some crazed fan blind to its flaws (like a rabid Apple fanboy), when the proper approach is to be always critical of every system that has any potential to influence lives.
Churchill embraced the same philosophy when he said:
"Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time." -- Churchill 1947
Certainly the (crony) "capitalism" that we have right now sucks balls. We can do better.
Stupid fucking republicans ought to simply call Obama on this. Put a bill thru to raise it to $20.20/hr, and send it on up to him. If $10.10 is great, $20.20 ought to solve ALL economic problems, right ?
It'll be great. As I explained somewhere else on this thread, it will cause inflation but it will also dilute debt. Until the banksters issue more debt. But the downside is that it will make foreigners more competitive.
i've not even read the article but what we have now in the USA is taxpayers subsidizing the American life style that American corporations don't have to pay a wage that could provide that.
so either companies pay a wage that people can live on our we the taxpayers will pay the difference,
I do believe your simple comment is all that really matters and is the truth. CEOs are making 40x the average worker, the highest ratio ever and public corporation profits and margins are at all time highs. Minimum wage gets raised and CEOs keep their bloated pay, meanwhile the middle class earner continues to get squeezed.
Almost everything in the STOU address was pro business at the expense of the taxpayer.
sad! the american corporations have blackball'd the american worker. they don't have a chance when even a medium size company has to go through regulary hoops, and regulations. there are no american corporation's, period! they are like the frb'system? totally unknown with unquestionable authority and anonymity. 1913 turned democracy into a...???
there is a 'reg trap' for the middle class, and a poor house for the 99%,...
ps. i love your simplicity. spot-on!!!
*really nothing should or could add to it, but, i'm fired-up with these poor bastards that pay $4/gal gas driving to work, making enough to buy groceries at the company store and enough gas to get back home after a 6 hr. max day, asnd adding insult to injury--- plus/ plus 4 hr. part time fill-er-up to keep the lights burning,... for these lazy fucks that ain't educated. who the fuck do these high and mighty think they're fooling...
regards
People that say raising the min wage is always bad are as wrong as those that say it is always good. The folks here saying that raising the min wage will automatically raise prices and eliminate jobs, are too simplistic.
I can give you an instance where raising the min wage doesn't affect anything. How about a 1 cent raise? Or better yet, let's say no one in the economy is getting paid the min wage and most make more than $5 over the min wage. Then raising the min wage affects no one, even at a $5 increase.
Here's another scenario. let's say the top 1% are rolling in cash and there's a labor glut. Employers are taking advantage, despite having profits to pay workers, to get cheap labor. Raising the min wage would neither raise prices nor cause unemployment as the employers could afford the increase.
It's kind of silly to be so dogmatic about everything. A min wage is neither good nor bad, it depends on the situation.
Not so BC. The power of compound interest is ignored in your even more simplistic math. Price inceases/decreases are scalable across all frontiers - even yours.
A minimum wage requires GOVERNMENT FORCE. On this principle first and forement, I oppose the minimum wage. You don't even need to argue the economics of it to show its fallacy. You're not a free man if you can't voluntary choose to work for a wage less than what your master overlords in government say is OK. Likewise, you're not a free man if you cannot pay a worker, who would otherwise voluntary accept it, a wage less than what your master overlords in government say is OK.
What's that unemployment rate again? Any idiot can undercut another idiot by under-paying his workers. Two idiots can try it on each other and drive wages down to zero, especially with the help of a TBTF bankster who is willing to wait. The free-market minimum wage is a bowl of rice / porridge and a bed on the factory floor. You'll have to get your consumers from a different country. That is how it works in real life.
The new minimum wage bill should be reworded as follows: "The dollar, previously worth no more than eight minutes and sixteen seconds of unskilled labor, shall henceforth purchase no more than five minutes and fifty-six seconds of unskilled labor."
personally, I don't know why we're drawing this out... just print and hand out US $10M to every man, woman, and child in the US, employed or otherwise, and then tell them to go buy stuff... let's see how that works out...
long spinning rims
One of the brilliant Republican bipartisan compromises is to raise the earned income credit instead of the minimum wage. Given a choice between raising the minimum wage or the earned income credit I’ll take the minimum wage which is at least connected to work.
I would be very interested to know how much poverty and injustice cost to USA. I hear and read a lot of critics advocating that paying 1$ more for a Big Mac is quite a big deal. When you only focus on your wallet, it does make sense. By paying people the less you can, it should at the end help America. It is the overall idea of "Let's get ride of all the waste", that will bring more jobs. That's economic, right? Isn't what our great Peter Shift was saying lately, that you can pay a retard 2$ per hour because everybody "get paid what they worth" at the end?
The irony is that most people against "wealth redistribution" think that they are part of the "richer side" of USA. Or at least they are richer "potentiality" because they read Zerohedge and they might get rich someday by buying some bitcoin, or some gold stocks. But the truth is with their 2 weeks vacation, 50+hours a weeks, with minimal or no health care plan, they are just part of the overall "poor people". The only difference is that they don't know how poor they really are. You can be a billionaire on paper and live like a dog. When you know that social inequality is higher now than it was in the Roman Empire, we should be very carefull while playing with these ideas. One of theses retards might borrow a gun and put it on your fat face.
I think economics and social organization is quite more complex than the final price you will pay for your burger. You can replace "minimum wage" by "buying some peace", the overall idea is that giving somebody a chance to live decently is a clever move. A Society should put more energy on building school and hospital, fighting social injustice, than protecting itselve from the poor people it has created.
At the end, we talking about very little money. Money is not the point, neither the measurement of all things. It's about how you decide to live together in a society.
The big picture is that full-blown capitalism creates poverty, and no matter how big your gun is, poverty at the end will show you its bigger gun. It's only a matter of time.
lol, you have some good points there, but there is one little thing I disagree on: "full-blown capitalism creates poverty"
the sad truth is that full-blown, unfettered capitalism creates riches. the problem is that those riches concentrate
the true enemy of capitalism isn't the poor. it's the successful rich that wants to put the game on hold, and starts to use his money to fix the political and legal setting in his favour. this works manyfold for big, successful corporations, and even more for multi-national megacorporations, and even more when gov is the main customer
economy is similar to ecology. pine trees "do it". they grow, and then they start to poison the ground with their needles, to hamper competition
any "winner takes all" psychology that derives from it is just an expression of this wish, the basis of crony capitalism. in a picture: a forest of giant trees, with no room for the smaller vegetation
similarly, unemployment is also only an effect of all this, then it's small and medium-sized business that creates jobs. megacorporations do the opposite, then they streamline, and so are net "job destroyers"
I totally agree. It also reminds me that in Germany the middlestand (small and medium-sized companies) are a model creating net value in production, quality, and real and lasting jobs.
Not only are megacorporations job destroyers (on a per capita basis), they are also innovation destroyers. Big companies (pharma particularly) are notoriously useless at innovating, instead they bring in huge legal teams to play IP wars and stomp out any threatening innovations before they get a foothold (or buy them up (or rip them off) before falsely calling "FIRST").
The small players take the risks necessary to get new ideas rolling, they're playing offense which is needed for progress, meanwhile the big guys sit on their hoard and play defense to maintain business as usual, too busy being paranoid to imagine a different future. (Eg, big record companies vs the internet).
Trawling around a site like kickstarter shows a vibrant community of small startups brimming with innovative ideas. That's where the action is, with 2 guys in a garage, not with 2000 bored drones in an office block.
I say we cap company sizes to Dunbar's number (http://en.wikipedia.org/wiki/Dunbar's_number) as beyond that level inefficiencies are guaranteed to creep in due to the limits of our cognition. So many times I've heard of mega companies conflicting internally because the left hand didn't know what the right hand was doing. By cappying size, there would be a constant supply of fresh medium businesses (newly split) competing against one another at the product level (rather than the lawyer & lobbyist level) instead of just one mega-corporation that sits statically and relies on captured politicians to twist laws in its favour because that's the only way it can survive.
If anyone thinks this is stupid, then I suggest taking a course in software engineering then getting out there into the real world to see what works and what does not work when writing software. Monolithic mega software that tries to do everything is a terrible idea, being full of bugs and security holes (the windows way). Simple, small programs that each do one thing and one thing only are much more reliable and efficient (the unix way). Connecting small robust programs together to achieve something bigger is more reliable.
We are collectively mad to be allowing the "Windows way" to take over the world.
You are far too erudite, what the fuck are you doing hanging out here?
I've often quietly asked you the same question, for the same reason.
Better to rule in hell than serve in heaven?
;-)