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17 year old kid working his first summer job
30 year old mom trying to raise a kid
This is the problem.
Yup!
When "households" are referenced for the poverty stats mentioned in that article to which I referred, it is highly doubtful that many 17 year olds had their own household. Unfortunately, people who are in the 20s, 30s, and perhaps even in their 40s--with limited education, no advanced work skills, and children of their own--are frequently working for the same minimum wage as that high school kid.
Quote:
Originally Posted by banger
You are not supposed to LIVE on minimum wage...
It is for entry level positions.
Think of it as allowing high school kids to get a first job.
Personally, I have no problem with a "two tier" minimum wage structure, allowing an adult who has the responsibility of child rearing to receive a couple of dollars more per hour than the teenager who is not attempting to support a family. However, the logistics of this type of system are probably very unwieldy, and would be unlikely to be implemented.
But, to return to the original point, there are significant numbers of adults who are trying to live on those minimum wages--and that is the real reason for the push to increase that wage.
First off, the "poverty" article and study is bunk. They defined poverty as being twice the federal definition because "NJ has a high cost of living"...well, it does, but not double the rest of the country. The report and it's basis were flawed. The national statistics from the census bureau peg the national poverty rate at 15.1 percent and show NJ's poverty rate at 10.7 percent, or much lower then the national average.
Broken down by state, Mississippi had the highest share of poor people, at 22.7 percent, according to rough calculations by the Census Bureau. It was followed by Louisiana, the District of Columbia, Georgia, New Mexico and Arizona. On the other end of the scale, New Hampshire had the lowest share, at 6.6 percent.
In New Jersey, 10.7 percent of residents had household incomes below the poverty line last year. That means New Jersey remains among the least impoverished states in the U.S., even though its poverty rate still jumped by more than 1 percentage point.
It was 9.3 percent in 2009 and 9.2 percent in 2008.
Also, before anyone goes there, the census bureaus figures are adjusted based on the national COL index, so NJ has a higher dollar threshold for poverty then say, Alabama does. However, it isn't foolish enough to use some arbitrary "doubling" of the limit and statistical voodoo to make a case like the study being cited around here does.
On the topic of minimum wage increase...
I'm against it. The imposition of a "minimum" wage has long been shown to have an overall negative impact on economic activity and has never managed to achieve its intended purpose, which was to alleviate poverty. When you impose a minimum wage, labor costs for businesses increase, when costs increase businesses need to charge more for their products to recoup the losses. When businesses charge more for their product, the purchasing power of a dollar decreases in the market and essentially cumulatively over a short period of time wipes out the added purchasing power that was given through the minimum wage. Increases in minimum wage therefore are essentially a DECREASE in pay via reduced purchasing power for everyone who currently makes more then minimum wage.
Further minimum wages stifle economic activity. There is an elastic relationship between labor supply and wages. The higher the labor supply, the lower the wages and vice versa. By creating a false floor you deny businesses the opportunity to exploit the availability of excess labor cheaply and convert that labor into economic productivity. Previous to the creation of a minimum wage when unemployment rates rose, wages dropped in relation to the increase and unemployment quickly went back to more sustainable levels.
Currently lets say I want hire people for a job, but it's only worth say $5 an hour to me to pay someone to do it. Any less then that and people won't want to do the job. Anymore then that and I am better off doing it myself or simply not doing it at all. Since I cannot hire workers for $5 an hour chances are whatever economic activity I would have generated won't happen, despite the fact there were plenty of people who would have been fine earning $5 to do the job. The higher we make the minimum, the more things get included in that discussion. Wages should be negotiated between an employer and an employee not arbitrarily imposed.
The last piece is tax revenue. The higher the minimum wage, the less incentive to hire workers for businesses, the more missed economic productivity and the greater reliance on illegal or "under the table" labor, the greater the losses in tax revenue to the government.
It defines the poverty rate as twice the federal poverty rate. According to those studies, yes it's 25%, but officially it's less than that.
In any case, I do agree that the minimum wage should be raised, but it shouldn't go up to something like $13, because then you'd get a large increase in the unemployment rate. But $8 - $10 would sound about right.
First off, the "poverty" article and study is bunk. They defined poverty as being twice the federal definition because "NJ has a high cost of living"...well, it does, but not double the rest of the country. The report and it's basis were flawed. The national statistics from the census bureau peg the national poverty rate at 15.1 percent and show NJ's poverty rate at 10.7 percent, or much lower then the national average.
Also, before anyone goes there, the census bureaus figures are adjusted based on the national COL index, so NJ has a higher dollar threshold for poverty then say, Alabama does. However, it isn't foolish enough to use some arbitrary "doubling" of the limit and statistical voodoo to make a case like the study being cited around here does.
On the topic of minimum wage increase...
I'm against it. The imposition of a "minimum" wage has long been shown to have an overall negative impact on economic activity and has never managed to achieve its intended purpose, which was to alleviate poverty. When you impose a minimum wage, labor costs for businesses increase, when costs increase businesses need to charge more for their products to recoup the losses. When businesses charge more for their product, the purchasing power of a dollar decreases in the market and essentially cumulatively over a short period of time wipes out the added purchasing power that was given through the minimum wage. Increases in minimum wage therefore are essentially a DECREASE in pay via reduced purchasing power for everyone who currently makes more then minimum wage.
Further minimum wages stifle economic activity. There is an elastic relationship between labor supply and wages. The higher the labor supply, the lower the wages and vice versa. By creating a false floor you deny businesses the opportunity to exploit the availability of excess labor cheaply and convert that labor into economic productivity. Previous to the creation of a minimum wage when unemployment rates rose, wages dropped in relation to the increase and unemployment quickly went back to more sustainable levels.
Currently lets say I want hire people for a job, but it's only worth say $5 an hour to me to pay someone to do it. Any less then that and people won't want to do the job. Anymore then that and I am better off doing it myself or simply not doing it at all. Since I cannot hire workers for $5 an hour chances are whatever economic activity I would have generated won't happen, despite the fact there were plenty of people who would have been fine earning $5 to do the job. The higher we make the minimum, the more things get included in that discussion. Wages should be negotiated between an employer and an employee not arbitrarily imposed.
The last piece is tax revenue. The higher the minimum wage, the less incentive to hire workers for businesses, the more missed economic productivity and the greater reliance on illegal or "under the table" labor, the greater the losses in tax revenue to the government.
To be a bit of devil's advocate to your point on minimum wage:
1. So let's say the $5/hr job you want to create is cutting your grass, and there are plenty of people who would do it. So we use this to justify eliminating the minimum wage.
What would happen to every person's compensation that works at McDonald's, Burger King, Taco Bell, etc.? We're talking a lot of people who would almost immediately take a 30% pay cut. What impact do you think that has on demand for goods and services in NJ?
To be a bit of devil's advocate to your point on minimum wage:
1. So let's say the $5/hr job you want to create is cutting your grass, and there are plenty of people who would do it. So we use this to justify eliminating the minimum wage.
What would happen to every person's compensation that works at McDonald's, Burger King, Taco Bell, etc.? We're talking a lot of people who would almost immediately take a 30% pay cut. What impact do you think that has on demand for goods and services in NJ?
Why do you assume that the people working those other jobs would immediately take a pay cut? The general premise is that there is a wage that is commenserate with the labor required to perform it. In that case there is no need for a "minimum" as when wages are too low, people will simply choose not to take the job. By setting an arbitrary "minimum" there is economic activity (aka jobs) that are not created because the cost of labor to have them done makes it unfeasible.
If the minimum wage was repealed and the immediate reaction of the fast food companies was to immediately cut wages, then that is actually clear evidence that the minimum wage has created a situation where we are overpaying for jobs. When companies are forced to overpay for jobs, they are forced to increase prices in order to compensate. In effect a minimum wage is a form of short term wealth redistribution, we are charging people more for a product so that we can afford to overpay for the labor to produce the product. Eventually the scale rebalances and the impact of the added pay to the lowest tiered workers has vanished and now all we have done is "inflate" the cost of goods.
What controls against the companies cutting the wages to nothing and creating virtual slave labor is that there is a minimum amount people will accept to perform the job. If the fast food companies cut wages to say $4 an hour, they would lose employees because they can come cut my grass for $5 or go dig a ditch for $4.50, etc. By enforcing a minimum there is no stratification of low end, low skill labor. All jobs at that level are paid equally and that restricts opportunity and competitiveness in the labor market.
The macro benefit is that when we allow companies to pay "real wages" it allows the companies to lower prices to be more competitive, if Burger King could sell a Whopper for $1 less then McDonald's could sell a Big Mac, they would have a market advantage, this is why the companies simply wouldn't "pocket" the added profits. The reduction in prices means a freeing of money in the general population and more consumption or investment. The increased economic opportunity puts more people to work, for instance, let's say the fast food companies determine a 30% cut would equal to the "real wage". They could take part of that and cut prices by 15%, but then turn around and hire 15% more workers to improve productivity.
Why do you assume that the people working those other jobs would immediately take a pay cut? The general premise is that there is a wage that is commenserate with the labor required to perform it. In that case there is no need for a "minimum" as when wages are too low, people will simply choose not to take the job. By setting an arbitrary "minimum" there is economic activity (aka jobs) that are not created because the cost of labor to have them done makes it unfeasible.
If the minimum wage was repealed and the immediate reaction of the fast food companies was to immediately cut wages, then that is actually clear evidence that the minimum wage has created a situation where we are overpaying for jobs. When companies are forced to overpay for jobs, they are forced to increase prices in order to compensate. In effect a minimum wage is a form of short term wealth redistribution, we are charging people more for a product so that we can afford to overpay for the labor to produce the product. Eventually the scale rebalances and the impact of the added pay to the lowest tiered workers has vanished and now all we have done is "inflate" the cost of goods.
What controls against the companies cutting the wages to nothing and creating virtual slave labor is that there is a minimum amount people will accept to perform the job. If the fast food companies cut wages to say $4 an hour, they would lose employees because they can come cut my grass for $5 or go dig a ditch for $4.50, etc. By enforcing a minimum there is no stratification of low end, low skill labor. All jobs at that level are paid equally and that restricts opportunity and competitiveness in the labor market.
The macro benefit is that when we allow companies to pay "real wages" it allows the companies to lower prices to be more competitive, if Burger King could sell a Whopper for $1 less then McDonald's could sell a Big Mac, they would have a market advantage, this is why the companies simply wouldn't "pocket" the added profits. The reduction in prices means a freeing of money in the general population and more consumption or investment. The increased economic opportunity puts more people to work, for instance, let's say the fast food companies determine a 30% cut would equal to the "real wage". They could take part of that and cut prices by 15%, but then turn around and hire 15% more workers to improve productivity.
Everything always sounds good in theory however probably isn't true in actuallity. It would make sense for Mcdonalds to lower the price but would they really? They aren't paying workers as much anymore so they just went from making a $2 profit on every big mac to $3. Their profits explode...executives are given a pat on the back for a job well done and oh...maybe a few millions in bonuses. who wins in that scenario? not the workers and not you and me
A minimum wage law does not let a "free" market operate efficiently. Employers should be allowed to pay .50 cents an hour and make billions more in profit.
Everything always sounds good in theory however probably isn't true in actuallity. It would make sense for Mcdonalds to lower the price but would they really? They aren't paying workers as much anymore so they just went from making a $2 profit on every big mac to $3. Their profits explode...executives are given a pat on the back for a job well done and oh...maybe a few millions in bonuses. who wins in that scenario? not the workers and not you and me
Someone will cut the prices. Maybe Burger King. Or Arbys. And then they all would to compete.
It's not like companies are passing the saved money from paying so little to workers to the consumer, they are just keeping it so that's why there is record profits. They are not gonna raise their prices just cuz the min wage goes up cuz a lot of them are already making crazy money, they'll just make less, thas it. They not gon risk raising prices and losing customers. If you don't increase the wage or get rid of it all together, there is prolly gon be people willing to work for $3/hr, and the price of goods will not go down, just the companies' profits will go up. How are people supposed to survive on $7 or even $8/hr in this area? They are talking about a hike like it's a 5 dollar hike at least or something. Also, where I used to live-Oregon, min wage is $8.80 while it's like 3 times cheaper to live there. Why is the min wage here not adjusted to the high cost of living? And the notion that it's posed to be yo first or entry level high school job is bulsht. Do the employers really distinguish or care about that? A lot of people especially in this economy are working at these jobs, long term, grown ass people who got bills to pay. How are they posed to survive? The notion that nobody makes you take that job is also bulsht. What else are you posed to do if you can't find a job? Before people used to work in dangerous conditions and got their hands cut off in the factories on the regular. Nobody made them took the job, but they had to cuz there was nothing else they could do. Is it their fault for taking the job? Same stupid ass logic. If people are desperate enough to put themselves under inhumane conditions, that doesn't make it right to take advantage of them and their desperate situation.
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