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EITC makes far more sense than increases to the minimum wage. Minimum wage should represent a inflation-adjusted floor to keep workers from scraping the bottom.
should and are are two different things. The US minimum wage peeked at 55% of the average hourly wage back in the 1950's. Adjusted for inflation including that brought about by the higher minimum wage it would be about $30 an hr now.
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Originally Posted by darkeconomist
It is not an effective means of doing more than that.
Really? The housing market is showing signs of starting a new bubble. You can get wage price inflation with the minimum wage. Turn the new bubble into inflation.
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Originally Posted by darkeconomist
Most people for whom the minimum wage is designed to help--adults with children--earn above it and are, therefore, not helped by it.
They earn a multiple of it. Up the minimum wage and it puts pressure on their wages as well.
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Originally Posted by darkeconomist
Most of the minimum wage earners are youths living with parents, working at part-time jobs.
The current macro economic environment is conducive for lower wages. Hostes went broke because they didn't have more money to spend.
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Originally Posted by darkeconomist
Direct payments to working parents is far more effective at keeping families above some multiple of the poverty line.
Really? Where does that money come from? Taxes on whom?
Create a macro economic environment that has a high demand for labor and then up the minimum wage and the bottom is far better off as well as the middle. The top gets it as lower profit margins.
should and are are two different things. The US minimum wage peeked at 55% of the average hourly wage back in the 1950's. Adjusted for inflation including that brought about by the higher minimum wage it would be about $30 an hr now.
Really? The housing market is showing signs of starting a new bubble. You can get wage price inflation with the minimum wage. Turn the new bubble into inflation.
They earn a multiple of it. Up the minimum wage and it puts pressure on their wages as well.
The current macro economic environment is conducive for lower wages. Hostes went broke because they didn't have more money to spend.
Really? Where does that money come from? Taxes on whom?
I'm not familiar with what happened to Hostess, so I'm not going to comment on why they filed for bankruptcy.
You seem to well versed. You should already know, then, that a minimum wage is, effectively, a tax on the economy. So, we're already paying that tax, but we're "spending" it ineffectively. It is better to use an actual tax to pay for direct intervention via direct payments to heads of households.
I'm not familiar with what happened to Hostess, so I'm not going to comment on why they filed for bankruptcy.
You seem to well versed. You should already know, then, that a minimum wage is, effectively, a tax on the economy. So, we're already paying that tax, but we're "spending" it ineffectively.
You are talking the dead weight loss. The math that defines the economy was set up by people with political agendas. How the math is set up defines what you see. It doesn't define the true nature of the economy. The math was written by people who worked for the Rich.
If it isn't worth $30 an hour it isn't worth doing in the US of A. In our financial condition as a country we can't afford to have an able bodied and minded person working at less than that dollar value.
What is our budget short fall each year? Cut spending and up taxes what happens to our economic growth? This will get us a massive expansion in employment and higher pay correct? (I know that it will do the opposite.) So where does the money to pay the heads of households come from? The printing press. Who pays the inflation tax?
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Originally Posted by darkeconomist
It is better to use an actual tax to pay for direct intervention via direct payments to heads of households.
"Better" It is better to pay someone for doing something useful than to give them money for not doing anything more productive than being reproductive.
"Better" The minimum wage in what would become Utah back in the day was enough to feed the workers family. The unit of exchange was wheat flower. The reason was that there wasn't enough gold coinage in the Great Salt Lake Vally to use coins for money.
“Better” To do an honest days work for an honest days pay that is better than getting money for free.
It is “Better” to pay the minimum wage tax than an actual tax to accomplish the same end.
You are talking the dead weight loss. The math that defines the economy was set up by people with political agendas. How the math is set up defines what you see. It doesn't define the true nature of the economy. The math was written by people who worked for the Rich.
If it isn't worth $30 an hour it isn't worth doing in the US of A. In our financial condition as a country we can't afford to have an able bodied and minded person working at less than that dollar value.
What is our budget short fall each year? Cut spending and up taxes what happens to our economic growth? This will get us a massive expansion in employment and higher pay correct? (I know that it will do the opposite.) So where does the money to pay the heads of households come from? The printing press. Who pays the inflation tax?
"Better" It is better to pay someone for doing something useful than to give them money for not doing anything more productive than being reproductive.
"Better" The minimum wage in what would become Utah back in the day was enough to feed the workers family. The unit of exchange was wheat flower. The reason was that there wasn't enough gold coinage in the Great Salt Lake Vally to use coins for money.
“Better†To do an honest days work for an honest days pay that is better than getting money for free.
It is “Better†to pay the minimum wage tax than an actual tax to accomplish the same end.
DWL is DWL. It's not "set up" by anyone. The minimum wage can, and does, distort the economy. Is it useful? Yes. Is it overused? Yes.
A direct payment to an HOH, however, provides economic support to individuals who are working to support a family, but for whom wages are not enough to keep the family above some multiple (1x, 2x, etc.) of the poverty line. A direct payment system negatively distorts some individual's choices, but they represent only a small % of the system. Meanwhile, direct payments avoid the grand market distortion of minimum wages.
So when I say "better" I mean a more effective means of accomplishing the stated goals of any kind of poverty program. I do not mean "better" in the emotional/opinion sense.
DWL is DWL. It's not "set up" by anyone. The minimum wage can, and does, distort the economy. Is it useful? Yes. Is it overused? Yes.
It does distort the economy. The math defining it and the economy was set up by people. The definition of dead weight loss was defined by someone. The way the definitions are defined limits what you can see. You have to see the box before you can see what is outside the box.
I am starting a project. I am building the tools to make the tools that I will need. I am then going to build the tools that I need. I will then build what I want. Done this way the limits on what I can do are my vision and the limits of the materials. My partner keeps wanting me to buy the tools that I need. This is faster but short sighted. I am investing two years in not having any limits on what I can do. 4,000 hrs.
Take a good hard look at what the limits on what you see really are.
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Originally Posted by darkeconomist
A direct payment to an HOH, however, provides economic support to individuals who are working to support a family, but for whom wages are not enough to keep the family above some multiple (1x, 2x, etc.) of the poverty line.
In the limited case of just looking at a head of family and lifting that person and dependents above the poverty line to some multiple of that. That is very effective in the short term. But in the long term Their children wont have work to do to keep them above the poverty line as well. Upping the minimum wage and increasing the demand for labor to the point that the higher minimum wages dead weight loss is eliminated will tend to provide work for everyone.
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Originally Posted by darkeconomist
A direct payment system negatively distorts some individual's choices, but they represent only a small % of the system. Meanwhile, direct payments avoid the grand market distortion of minimum wages.
So when I say "better" I mean a more effective means of accomplishing the stated goals of any kind of poverty program. I do not mean "better" in the emotional/opinion sense.
The way to eliminate poverty is to put them to work and work them hard enough to pay their way and then pay them enough to not need more help than that. Effective. Long term.
How to get people off of SSI is to make it easy for them to get back on. Then set the minimum wage higher than SSI and get a high demand for laber. Done this way they have nothing to loose by working.
P.S. when you buy tools you buy the limits built into the tools.
The way to eliminate poverty is to put them to work and work them hard enough to pay their way and then pay them enough to not need more help than that. Effective. Long term.
How to get people off of SSI is to make it easy for them to get back on. Then set the minimum wage higher than SSI and get a high demand for laber. Done this way they have nothing to loose by working.
A minimum wage of $30 would create a massive distortion. A lot of companies wouldn't be able to hire at that rate. People would become "locked" in to jobs because supply of labor would be so far above demand by employers. Employers would become very powerful. Consumers would become very weak, as so few would have jobs.
Simply, it doesn't work to benefit the US.
Direct payments to an HOH do not create dependency. People don't become poor for "the benefits." Research in to the way people actually operate does not support your view. If the children of those families also need direct payments as parents, it is because some other function of society (eg, education) failed to do its job, not because those payments created chaining dependency.
Direct payments do, however, keep families above the poverty line and do so efficiently.
The bottom line is direct payment go to those in "need," however need is defined, whereas minimum wages are like carpet bombing.
So, you can "tax" everyone in the economy through minimum wage distortion and achieve little benefit to those working low-wage jobs, or you can target whom you tax and who receives benefits with a strong positive effect on recipients.
I don't see an endgame scenario in the US's immediate future. Our country is organic and people will awaken from their slumber when it becomes unreasonable. The first order of business should be focused on policy that focuses on meaningful job creation for the long term unemployed and our young people ready to enter the workforce.
I believe that the US faces an economic reckoning (i.e. collapse)
I see you're awake. Good on you. A collapse of the dollar and government is certainly inevitable. And with the double whammy of the fiscal cliff and debt ceiling, the acceleration of said collapse is occurring as we type. America's national debt will eclipse $17 trillion by March and I predict we'll be close to $18 trillion by the end of 2013. Add on our unfunded liabilities of $100 trillon and you have guaranteed destruction.
My frustration with America and my fellow citizens is how detached many are from the reality we now face. Many bubbles will burst just like housing and the financial market. America has indulged in self excess for too long and now it's time to pay some major deals
Oh, and don't get me started on the Federal Reserve and it's magician chairman, Uncle Ben Bernanke. He's now pulling $85 billion a month from his ass to purchase treasuries and other garbage. It is now the world's largest holder of U.S. debt. And Washington isn't interested in making tough choices to return the country to its roots.
In other words, we're already over the cliff and it's only a matter time before we crash hard. There are many sobering charts out there that tell the truth about the condition of our nation. Whether it's a massive decline in wages compared to decades ago or a trillion in student loan debt, this is not the same America we once knew. The situation here and throughout the world (with the exception of places like Canada, Iceland, etc.) is purely "day to day". I stand by the belief that a major event could happen at any time to cause a sudden implosion that will leave us all speechless and completely unprepared.
Our country is organic and people will awaken from their slumber when it becomes unreasonable
It's already unreasonable and the people are sleep walking. You're more optimistic than I am about the majority waking up.
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