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Old 03-20-2013, 04:02 AM
 
Location: Tianjin, China
3,062 posts, read 2,557,929 times
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Well, first off the cost of hiring a minimum wage worker is about 25% higher than the actual minimum wage. If the cost back then was 5%, the number should be $18. Still much higher, but not $22.

But I think the biggest reason the minimum wage has not kept up is this
1. Productivity in this field has not increased
2. The quality of workers is lower than before
3. Due to high illegal immigration, and then amnesty, the supply is very large
4. The enforcement of the minimum wage is stricter now than before. Now even small businesses in Puerto Rico has to follow it. A minimum wage of $12 would be no problem in New jersey, but it would not work in Puerto Rico.
5. Inequality has increased
6. Cost of hiring employees and running a business has increased. A lot more regulations and tax than before.
7. Minimum workers receive a lot more welfare, meaning they can afford to take a lower paying job. That means larger supply.

I think it is better if states increase their own minimum wage instead of waiting for the federak government.

Last edited by Camlon; 03-20-2013 at 04:10 AM..
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Old 03-20-2013, 07:59 AM
 
Location: Cincinnati near
2,509 posts, read 3,353,735 times
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Almost everyone in this thread has not considered the context of her statements and misinterpreted the meaning. She does not propose raising the minimum wage to $22/hour. She was just commenting that minimum wage earners are falling precipitously behind the rest of the earners in the country. In fact, she proposes a gradual increase to just over $10 an hour. Obviously, the skills and productivity of minimum wage jobs have not kept pace with the skills and productivity of other professions. This is the bigger problem.

Raising minimum wage can be a good thing for businesses only if it is accompanied by an increase in worker productivity. If a minimum wage position is a disposable job that no one takes seriously, then increasing the pay would be counterproductive. However, a higher minimum wage could make businesses more selective in who they hire but also more willing to invest time and money in training to increase productivity.

In the end, a productive society should not have a non-working poverty stricken underclass. There is no magic solution, but minimum wage laws have shown some marginal success in the past. Personally, I think minimum wage is something that should be set by the states rather than the federal gov't. If you look at higher minimum wage as a motivation for getting people off of welfare rather than as charity it is a little easier to stomach for fiscal conservatives.
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Old 03-20-2013, 08:23 AM
 
Location: Beavercreek, OH
2,194 posts, read 3,013,856 times
Reputation: 2334
Quote:
Originally Posted by matzoman View Post
It would sure get workers to get out and start spending again on new cars, appliances, vacations, and college education for the kids. Do you think big corporate employers will be excited about this new idea? Just think what will happen when the all of the corporate conglomerate low level employee's can actually buy in abundance what they sell! Do you think corporate shareholders will like this idea?
Hi matzoman--

I don't like the idea. It sounds brilliant in theory, but would quickly crash and burn as companies simply raise the prices to make up the difference. Plus, flooding the market with all that extra money would only aggravate the inflation problem we have.

I wrote about it at length on my blog a while back (although I discussed a hypothetical raise to $10 an hour instead of $22):

Raise The Minimum Wage? | Auston Hensley

Quote:
But would it actually lift millions out of poverty? I don’t think so.

As Milton Friedman once said, inflation is always and everywhere a monetary problem. There is only one way bad monetary policy causes inflation – and it’s when the Federal Reserve expands the money supply by printing too much money. The inflation can result in one of two ways: cost-push inflation or demand-pull inflation...

...Raising the minimum wage on the other hand will be a form of demand-pull inflation. By raising the minimum wage by 30% and increasing income by a similar amount, there is now that much more demand for product. Prices will thus rise correspondingly – although not by the full 30% due to the poor constituting a rather small proportion of the economy’s aggregate demand – and thus eat into that 30% gain that the working poor might have made. Their real gains will be smaller consequently – I’ll throw out a bone and say the real gain is in the 10-15% range.
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Old 03-20-2013, 08:25 AM
 
20,979 posts, read 15,620,573 times
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Hell, why not $1,000 an hour?
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Old 03-20-2013, 08:42 AM
 
Location: WA
5,293 posts, read 20,709,725 times
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Too much of this discussion, starting with the dim-witted comments that started it fail to understand worker productivity. It has very little to do with the effort by the workers but mostly to do with business investment. A firm that moves oil with a bucket brigade has very low productivity compared to one that uses tanker trucks but that gain has to do with technology and investment. Better information, tools, and procedures is where this gain comes from and it makes no sense to boost worker pay because of it.
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Old 03-20-2013, 09:13 AM
 
17,749 posts, read 15,031,977 times
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Quote:
Originally Posted by alphamale View Post
Hell, why not $1,000 an hour?
For the same reason you have inflated your point already made, which was challenged and unanswered?


Anyone else excited about Senator Elizabeth Warren's inquiry into a 22$ minimum wage?


Heck why not just say it a 3rd time and ignore the replies?


junk economist....
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Old 03-20-2013, 09:23 AM
 
Location: Cincinnati near
2,509 posts, read 3,353,735 times
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Quote:
Originally Posted by cdelena View Post
Too much of this discussion, starting with the dim-witted comments that started it fail to understand worker productivity. It has very little to do with the effort by the workers but mostly to do with business investment. A firm that moves oil with a bucket brigade has very low productivity compared to one that uses tanker trucks but that gain has to do with technology and investment. Better information, tools, and procedures is where this gain comes from and it makes no sense to boost worker pay because of it.
It makes no sense to boost worker pay for doing the same job. However, a minimum wage gives an incentive for businesses to invest in worker productivity. For example, it may be profitable to hire 10 fast food workers at $5 an hour, but with a $10 minimum wage it might make more sense to hire 3 workers at $10 an hour and to invest in the technology/training that would permit those three workers to be 3.33x as productive. The side effect of productivity gains are less jobs in the short term.

I am aware that inflation would be a side effect and I don't think a federal minimum wage change makes sense at this point. However, there are some sectors and regions of the country that I think could benefit from a minimum wage.
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Old 03-20-2013, 09:34 AM
 
17,749 posts, read 15,031,977 times
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Quote:
Originally Posted by cdelena View Post
Too much of this discussion, starting with the dim-witted comments that started it fail to understand worker productivity. It has very little to do with the effort by the workers but mostly to do with business investment. A firm that moves oil with a bucket brigade has very low productivity compared to one that uses tanker trucks but that gain has to do with technology and investment. Better information, tools, and procedures is where this gain comes from and it makes no sense to boost worker pay because of it.

That applies to low skill minimum wage work . It is equally dimwitted not to realize that true capital begins as labor, typically skilled labor. All those capital improvements must be engineered. We also have increases due to better divisions of labor and economic scale.

In the context of minimum wage you have a point, otherwise efficiencies are almost all due to some form of actual work to create efficiencies.
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Old 03-20-2013, 09:40 AM
 
17,749 posts, read 15,031,977 times
Reputation: 6377
Quote:
Originally Posted by Chemistry_Guy View Post
It makes no sense to boost worker pay for doing the same job. However, a minimum wage gives an incentive for businesses to invest in worker productivity. For example, it may be profitable to hire 10 fast food workers at $5 an hour, but with a $10 minimum wage it might make more sense to hire 3 workers at $10 an hour and to invest in the technology/training that would permit those three workers to be 3.33x as productive. The side effect of productivity gains are less jobs in the short term.

I am aware that inflation would be a side effect and I don't think a federal minimum wage change makes sense at this point. However, there are some sectors and regions of the country that I think could benefit from a minimum wage.

Yes, well I suppose its wage price fixing....


Low Fed Rates 'Akin to Price-Fixing': JPMorgan Strategist - Yahoo! Finance


So again what is more justifiable? Price fixing for one and not the other or price fixing for both? Seeing as the market system was all but abandoned some time ago, the market system seems to be applied after someone is mugged, beaten over the head, and left in a ditch. So there , by your own boot straps....but who stole the boots?
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Old 03-20-2013, 09:57 AM
 
953 posts, read 1,252,168 times
Reputation: 1847
Quote:
Originally Posted by juggerburn View Post
Why is that when ceo's get a x300 raise, the prices stay the same, but give minimum wage workers 2-3x raise, oh, everything has to go sky high to compensate.
Do you seriously not know the answer to that question?

22-10 (current minimum wage) = 12. 12 x 40 (hours per week) = 480. 480 x 48 (work weeks) = $23040
1 employee x $300million = $300 million per year
500,000 employees (for a company like mcdonalds) x 23040 = $11,520,000,000 per year
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