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Old 02-25-2008, 06:02 PM
 
Location: Southeast Texas
586 posts, read 656,423 times
Reputation: 360

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I was reading something on the DOL (Department of Labor) website and ran across a page talking about the different states with their differing minimum wages. I was rather surprised to see that Tennessee is among a handful of states that does not have a minimum wage law. Does that mean an employer can legally pay you (for example) $1.50 an hour since there is no minimum wage there? Or am I misunderstanding something? The DOL is not very specific about that part.

I'm confused!

Blessings
pnc
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Old 02-25-2008, 06:09 PM
 
12,546 posts, read 18,491,737 times
Reputation: 13596
Quote:
Originally Posted by pnc66 View Post
I was reading something on the DOL (Department of Labor) website and ran across a page talking about the different states with their differing minimum wages. I was rather surprised to see that Tennessee is among a handful of states that does not have a minimum wage law. Does that mean an employer can legally pay you (for example) $1.50 an hour since there is no minimum wage there? Or am I misunderstanding something? The DOL is not very specific about that part.

I'm confused!

Blessings
pnc
Like Texas, Tennessee follows the federal law in regards to minimum wage.
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Old 02-25-2008, 08:34 PM
 
Location: Lake Worth, Fl
364 posts, read 722,770 times
Reputation: 75
Yea Federal usually rules. States can in crease min wage but it cant be lower then Federal laws.
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Old 02-26-2008, 01:31 PM
 
12 posts, read 51,266 times
Reputation: 23
Thank goodness that Tennessee has not raised its minimum wage. Such a move could only be described as pure political pandering. If only everyone had a basic understanding of economics!
Let's say that the equilibrium wage in the market (the interception of the supply and demand curves) is $5.00/hr but the government artifically sets a $6.00/hr minimum wage. What do you think happens to the kid whose productivity is only worth $5.50/hr? He will be scheduled for fewer hours, or more than likely won't be hired in the first place.
Another example: a business makes $100 per hour and keeps its labor cost at 20% of revenues. If the equilibrium wage is $5.00/hr, then it can afford to hire 4 people. If you raise the minimum wage to $6.00/hr, then the company has to either schedule only three people or it has to raise its prices. Multipy this by the entire economy and you can see the results of price supports and minimum wages: unemployment and inflation. And who will be hurt the most by this? Obviously those who are less intelligent, less educated or otherwise less productive.
Another myth concerns who is paid minimum wage, but that's enough for me. Here are some lessons from one of the worl'ds great economists about the inefficacy of minimum wage laws.
Townhall.com::Minimum wage, maximum folly::By Walter E. Williams
Townhall.com::The minimum wage vision::By Walter E. Williams
Townhall.com::Minimum wage, maximum folly::By Walter E. Williams
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Old 02-27-2008, 06:10 PM
 
Location: Southeast Texas
586 posts, read 656,423 times
Reputation: 360
Thank you for the replies. I had a very long day at work on Monday and was so tired, my brain simply wasn't functioning. Had I been more awake and alert, I probably would have thought about it and figured out that the federal law would override the state law (or lack thereof).

This has been a long week and it's only Wednesday!

Thanks again!
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Old 02-28-2008, 01:09 PM
 
Location: Whiteville Tennessee
8,257 posts, read 11,358,519 times
Reputation: 9757
Of course there are exceptions. I believe waitresses/waiters make a base pay of $2.13 p/h but the employer has to gaurantee that the tips will bring them up to the federal minimum.
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Old 02-28-2008, 01:21 PM
 
Location: Gainesville, FL
58 posts, read 108,302 times
Reputation: 29
Quote:
Originally Posted by rabok416 View Post
Such a move could only be described as pure political pandering. If only everyone had a basic understanding of economics!
You and me, both.
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Old 02-28-2008, 01:30 PM
 
9,103 posts, read 21,778,923 times
Reputation: 5901
Quote:
Originally Posted by rabok416 View Post
Thank goodness that Tennessee has not raised its minimum wage. Such a move could only be described as pure political pandering. If only everyone had a basic understanding of economics!
Let's say that the equilibrium wage in the market (the interception of the supply and demand curves) is $5.00/hr but the government artifically sets a $6.00/hr minimum wage. What do you think happens to the kid whose productivity is only worth $5.50/hr? He will be scheduled for fewer hours, or more than likely won't be hired in the first place.
Another example: a business makes $100 per hour and keeps its labor cost at 20% of revenues. If the equilibrium wage is $5.00/hr, then it can afford to hire 4 people. If you raise the minimum wage to $6.00/hr, then the company has to either schedule only three people or it has to raise its prices. Multipy this by the entire economy and you can see the results of price supports and minimum wages: unemployment and inflation. And who will be hurt the most by this? Obviously those who are less intelligent, less educated or otherwise less productive.
Another myth concerns who is paid minimum wage, but that's enough for me. Here are some lessons from one of the worl'ds great economists about the inefficacy of minimum wage laws.
Townhall.com::Minimum wage, maximum folly::By Walter E. Williams
Townhall.com::The minimum wage vision::By Walter E. Williams
Townhall.com::Minimum wage, maximum folly::By Walter E. Williams
EXCELLENT post. I've always thought that heck, if we're going to have a minimum wage (or a "living wage" as some people want here in Knoxville) then why not make it $20/hour? or $50/hour?? Clearly, even the most liberal leftist will admit that at some point we can't have a minimum wage that's very high because it will cause rampant inflation and ultimately lead to much higher unemployment rates. And if that's the case, then why have a minimum wage at all?

Since the government can't tell a landlord what the allowable "minimum rent" should be on his/her apartments, or tell McDonald's what the "minimum charge" should be on a hamburger, why do we think the government should tell a business owner how much s/he should pay his/her workers?
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Old 02-28-2008, 01:35 PM
 
Location: Gainesville, FL
58 posts, read 108,302 times
Reputation: 29
Quote:
Originally Posted by JMT View Post
why do we think the government should tell a business owner how much s/he should pay his/her workers?
Because the naive among them believe it (perhaps unknowingly) as wealth redistribution--and that's a "positive thing"
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Old 02-29-2008, 12:39 PM
 
Location: Somewhere in northern Alabama
11,786 posts, read 27,479,564 times
Reputation: 14641
I find it somewhat puzzling that Tennessee, whose citizens benefited from minimum wages more than many other areas of the country, seems to be a hotbed of hatred towards it.

I think I'm qualified to respond to those comments. I have worked (for pay) since I was 14, been paid on piecework as a paperboy, had to work within guidelines to hire sub-minimum wage students as a manager, worked as employee, in management and as owner of my own unsuccessful and successful businesses. I've read every word that Ayn Rand wrote, visited her offices, as well as reading the writings of Alan Greenspan from that era. I've read my American history, the Federalist Papers, the Constitution, writings on the causes and effects of the great depression, and so on. I've watched the changes in attitudes of employers from the 1950s to today, and watched with increasing fascination how the government increasingly controls the economy and manages to get more taxes out of an unsuspecting citizenry. In short, I've had a lifetime of experience, and I find the negative responses to minimum wages in this forum naive at best. I'm sure this will upset some readers, and I'm sure there will be those who disagree for sound reasons, but the discussion needs to rise above sound bits and talking points.

Minimum wage serves a number of purposes, including but not limited to:

1. Weeding out businesses that have no earthly potential for success, and diverting the labor to ones that do. Ma and Pa Joad might continue their buggy whip manufacturing operation long after the market has dried up, as long as they can keep lowering the wages of long-time employees, or hire new ones based on promises and no money.

Minimum wage in this case is a merciful killer that prevents loyal employees within this country from being taken advantage of. That isn't to say that some employers might still try to short the hours of workers to effect the same results. It also isn't to say that the business owner might still think their business makes sense and works harder until reality sets in. I've had that happen to me as well.

Minimum wage has had the effect of taking many of the most menial, stinking jobs, and moving them to poor countries. That has had positive and negative effects. On the plus side, work in the U.S. tends to be more productive because of minimum wage laws. On the negative side, it has created a haughtiness in U.S. workers that limits them. In working with young employees, I have increasing found them unwilling to handle a mop, clean up a spill, or do any work "beneath their 'dignity'". Many times I've had to do the job myself as a manager, and then try to re-educate or remove the employee.

2. National minimum wage laws assisted the country in coming out of an era when folks in poor pockets of the nation were ripe pickings for "company stores", tenant farming, and the excesses of the robber barons. I still remember some of my first historical research, where I discovered that a railroad owned by a state governor (not TN) was able to string along construction workers without pay for four months, and when they finally rioted, have them dispersed by government force, allowing construction to continue with a new crew, again without ever having paid those workers a penny. Sometimes laws like minimum wage laws are needed to protect the worker. Be thankful that the word "blackballing" has fallen into such disuse that many don't know the definition. Threats of that were what many of those men on the job without pay.

3. Minimum wage provides a basis for taxation. The government requires "contributions" to social security and unemployment from employers and employees based on a percentage of income. If income is not kept above a minimum, then the "contribution" revenues fall.

Life for seniors before social security was predicated on their having enough offspring to support them, or their admission into poorhouses, which were funded in part by work of the residents and in part by the citizens of the local town, with no state or federal assistance. Toss social security out, and you go back to that, or more likely, pay for nursing homes out of your property tax.

FWIW, local taxation for poorhouses, and care for parents was a huge burden for many of our ancestors, and the federalization of the system allowed them greater spendable income, freedom, and more time for productive pursuits.

4. Minimum wage allows the government to add to inflation (which is another form of rarely understood tax) without incurring the wrath of the masses. By periodically increasing the minimum wage to compensate the people most affected, the government can achieve some stability and keep focus away from inflationary monetary policies.

Minimum wage is only a tiny part of the managing of the economy. To single it out for derision is simplistic. If the government was to go back to no income tax, and a complete outlawing of sales tax (contrary to Huckabee's plan), with revenues generated only from trade tariffs, as it was in the past, then perhaps the concept of a minimum wage would need review. However, the nation is no longer a simple republic, and gave up raw capitalism long ago for some very compelling reasons.

Readers can continue to depend on political rhetoric to inform their opinions, or do their own research from a broad spectrum of sources to make a more considered position.
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