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Reducing the federal minimum wage also reduces the median wage.
Reducing the federal minimum wage also reduces the purchasing power of the median wage.
Reduction of the federal minimum wage, (i.e. the FMW) would induce creation of additional jobs. The additional jobs’ tasks did not justify the current FMW’s purchasing power. Some people effectively deemed unemployable at the current FMW rate could be employable at a reduced FMW rate’s purchasing power.
The numbers of additional jobs created due to the reduction of the FMW’s purchasing power is positively related to the extent of the FMW’s purchasing power reduction. When the U.S. Congress fails to keep the FMW in pace with the reduced purchasing power of inflated U.S. dollars, such increase of the lower paid jobs actually occur. The effect of FMW’s reduced purchasing power ripples throughout our labor markets.
[The FMW is less a contributor and more a victim of the U.S. dollar’s inflation. The FMW inversely and proportionally affects ALL USA wages and salaries; wage rates of lesser paying job proportionally benefit more, and higher paying job rates proportionally benefit less due to the FMW; but USA’s median wage an all other wages and salary schedules benefit due to the FMW].
FMW reduction would to some extent reduce prices but at the cost of reducing the actual net purchasing powers of wages and salaries. Eliminating the FMW replaces a legally specific minimum bench mark with an uncertain and lesser bench mark that would be the most extreme possible reduction of the minimum ‘s purchasing power during whatever national economic conditions exists at any given date.
Reduction of the FMW’s purchasing power will not decrease but rather increase needs for public assistance. It will drive the working poor deeper into poverty and they will be joined by many that are now our middle income earners dependent upon wages and salaries. This is not conducive to improving an economy.
I’m an advocate of annually cost of living adjusted FMW in the same manner as we now update Social Security retirement benefits.
Largely I agree with you there are some finer points that I'd like to add tho and these are based on my personal experience.
Quote:
Originally Posted by Supposn
Reducing the federal minimum wage also reduces the median wage.
Reducing the federal minimum wage also reduces the purchasing power of the median wage.
Reduction of the federal minimum wage, (i.e. the FMW) would induce creation of additional jobs. The additional jobs’ tasks did not justify the current FMW’s purchasing power. Some people effectively deemed unemployable at the current FMW rate could be employable at a reduced FMW rate’s purchasing power.
Back in 2001 there was a national recession. That was largely missed in my life. I live in Utah and we were getting ready for the Olympics. $3 billion in government spending over the three years leading up to the Olympics and about the same amount of privet investment. Unemployment was 2% or there abouts when it was far higher nationally. Those that are considered unemployable were getting jobs back then. A high enough demand for labor will put everyone to work. Your argument relies on a more or less fixed A/D line. Pushing the A/D line (up) does nice things to the dead weight loss.
Quote:
Originally Posted by Supposn
The numbers of additional jobs created due to the reduction of the FMW’s purchasing power is positively related to the extent of the FMW’s purchasing power reduction. When the U.S. Congress fails to keep the FMW in pace with the reduced purchasing power of inflated U.S. dollars, such increase of the lower paid jobs actually occur. The effect of FMW’s reduced purchasing power ripples throughout our labor markets.
[The FMW is less a contributor and more a victim of the U.S. dollar’s inflation. The FMW inversely and proportionally affects ALL USA wages and salaries; wage rates of lesser paying job proportionally benefit more, and higher paying job rates proportionally benefit less due to the FMW; but USA’s median wage an all other wages and salary schedules benefit due to the FMW].
FMW reduction would to some extent reduce prices but at the cost of reducing the actual net purchasing powers of wages and salaries. Eliminating the FMW replaces a legally specific minimum bench mark with an uncertain and lesser bench mark that would be the most extreme possible reduction of the minimum ‘s purchasing power during whatever national economic conditions exists at any given date.
Reduction of the FMW’s purchasing power will not decrease but rather increase needs for public assistance. It will drive the working poor deeper into poverty and they will be joined by many that are now our middle income earners dependent upon wages and salaries. This is not conducive to improving an economy.
I’m an advocate of annually cost of living adjusted FMW in the same manner as we now update Social Security retirement benefits.
Respectfully, Supposn
I want to key the minimum wage to three things.
1 the top total compensation packages. The concentration of wealth in the hands of a very few does really bad things to countries. For one thing it sets up things like the French revolution.
2 the ratio of median house price to median household income. Keep the ratio below 3:1 and you aren't having a housing bubble.
3 total debt as % GDP. I would like to keep upping the minimum wage to keep the total debt below 125% of GDP.
I agree with the vast bulk of what this person has wrote. Good stuff.
Higher wage = better for the people and that's all that matters.. The companies will still make profits by the billions
And to go even further with this example. Based on a 40 hour work week. The US employee would spend their entire paycheck for the week (40 hours) while the Australian employee would still have 17 hours worth of wages to buy other things (An extra $272 dollars)
You don;t understand "median". If you reduced the income of the lowest 49% of the workers to one dollar, and left the top 51% unchanged, the median would stay the same. Since all minimum wage workers are in that lower 49%, reducing their minimum wage to one dollar would have no effect on the median income.
Furthermore, the median wage, as such, says nothing about the aggregate economy. It is only a measure of the distribution of the national wealth, which would not necessarily be influenced by any of the factors described in the OP..
median: the middle value in a frequency distribution, below and above which lie values with equal total frequencies
For example, 5 is the median of 1, 2, 3, 4, 5, 10, 20, 30, 40, 100. The average is 23, but the median is 5. The median is still 5, if you change the numbers to 1, 1, 1, 1, 5, 10, 100, 1000, 10000, even though the average becomes 1235..
You don;t understand "median"...
... Furthermore, the median wage, as such, says nothing about the aggregate economy. It is only a measure of the distribution of the national wealth, which would not necessarily be influenced by any of the factors described in the OP...
JTUR88, actually the median or the mode will usually gives us a number that’s more typical than the average. I generally have more confidence in the median statistic.
Given within a village there’s a poor whistle-stop that boasts a single resident with a 3 million dollars annual income. The average annual income of the whistle-stop’s remaining 199 residents is $5,000 per capita.
In that case the average annual income of that whistle-stop is $19,975 per person.
Considering the $5,000 average income of the remaining 199 residents, it’s likely that the median income of the whistle-stop’s 200 residents is somewhat similar to less than $4,000. An annual median income of $3,000 is more informative than an average income of $19,975.
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The GDP per capita is an indication of the nation’s total production per capita. The median wage gives us a clue as to the extent that GDP per capita is being distributed throughout the nation. I consider these two statistic as among, (if not the) most informative statistics regarding our national economy during the year being reported upon.
JTUR88, actually the median or the mode will usually gives us a number that’s more typical than the average. I generally have more confidence in the median statistic.
Given within a village there’s a poor whistle-stop that boasts a single resident with a 3 million dollars annual income. The average annual income of the whistle-stop’s remaining 199 residents is $5,000 per capita.
In that case the average annual income of that whistle-stop is $19,975 per person.
Considering the $5,000 average income of the remaining 199 residents, it’s likely that the median income of the whistle-stop’s 200 residents is somewhat similar to less than $4,000. An annual median income of $3,000 is more informative than an average income of $19,975.
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The GDP per capita is an indication of the nation’s total production per capita. The median wage gives us a clue as to the extent that GDP per capita is being distributed throughout the nation. I consider these two statistic as among, (if not the) most informative statistics regarding our national economy during the year being reported upon.
Respectfully, Supposn
GDP Per Capita doesn't really show a clear picture of the average wealth of a citizen in the certain country.
USA has a high Per Capita GDP.
But in countries such as Japan & Australia, the people have more disposable incomes
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