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I though this was a balanced piece on the effects of raising the minimum wage. Instead of cherry picking pieces of evidence to support one position or another, it shows both the pros and the cons of raising the minimum wage:
I though this was a balanced piece on the effects of raising the minimum wage. Instead of cherry picking pieces of evidence to support one position or another, it shows both the pros and the cons of raising the minimum wage:
A balanced look is a good Idea but everyone is talking small bumps. To keep the too big to fail banks from failing we need large bumps in the minimum wage. We need enough inflation to make the looses that the banks have had good.
Quote:
Originally Posted by ocean2026
There are already three recent threads on Minimum Wage - why do we need a new one? Same section
A balanced look is a good Idea but everyone is talking small bumps. To keep the too big to fail banks from failing we need large bumps in the minimum wage. We need enough inflation to make the looses that the banks have had good.A different angle on the same subject.
Inflation typically punishes poor people the most. This is what those who are against the minimum wage mention. I can guarantee you, the more you jack up minimum wage, the more inflation you'll get. I saw it in my own city where they raised the minimum wage over a year ago. All the restaurants (especially the locally owned ones) who employ minimum wage employees raised their prices (and I don't go to high end places). All the parking lots in the downtown area of my city raised their rates and these are just a few examples.
I think there needs to be more talk of finding ways to lower the overall cost of living for folks.
A lot of our housing costs are artificially inflated because of zoning laws/regulations. For example, most cities don't allow apartments under a certain size to be built. But San Francisco just allowed apartments of 225 square feet to be built because that makes having your own place more affordable and means you don't have to have roommates. A well designed small place works well for some people. I read recently that some city in Oregon (I forget where) is now allowing "tiny" houses to be built. Previous to this, zoning laws wouldn't allow for them.
Another example, health care costs are insane...yet we know 70% of our health care costs are driven by poor lifestyle choices (obesity, diabetes, heart disease & some cancers are mostly or at least partly preventable--and these diseases are costly to treat). Yet we allow people to buy soda and other junk with food stamps. We have to find ways to discourage unhealthy lifestyle habits without being draconian about it. This will make health care more affordable and those benefits get passed down to everyone.
In short, I think it goes a lot deeper than just raising or not raising the minimum wage. It requires rethinking what we currently consider as our normal standard. We still operate as if most people are going to drive their cars everywhere and live in single family homes in the suburbs. There's nothing wrong with that per se. But it's not an expensive standard and an increasing number of people can't afford it (and believe it or not, not everyone even wants that). But in many/most instances, people are effectively forced into this way of life because that's all our current infrastructure supports. We should set up our infrastructure/zoning laws so that biking, and mass transit are realistic options.
If you make housing (smaller homes/apts), health care (prevention oriented medicine/public health policies), and transportation costs (not needing a car for every trip) more manageable, then people can live on lower wages without going to the taxpayers for subsidies or asking for wages to get artificially propped up (which inevitably creates some inflation and eliminates some jobs).
Inflation typically punishes poor people the most. This is what those who are against the minimum wage mention. I can guarantee you, the more you jack up minimum wage, the more inflation you'll get. I saw it in my own city where they raised the minimum wage over a year ago. All the restaurants (especially the locally owned ones) who employ minimum wage employees raised their prices (and I don't go to high end places).
We currently have higher input costs. In this environment any excuse to up rates will be jumped on. If the cost of labor is 20% of the cost of what you are selling then you double the cost of labor then you only need to increase the prices by 20% to cover the higher costs. This should leave the bottom end far better off than before.
Quote:
Originally Posted by mysticaltyger
All the parking lots in the downtown area of my city raised their rates and these are just a few examples.
I think there needs to be more talk of finding ways to lower the overall cost of living for folks.
A big contributor to the overall cost of living is total debt. The Liquidity Gauge | Richard Duncan Economics that I best looked at in percent of GDP. The cost of servicing that debt needs to be brought down. also foreign central banks are printing money to buy debt in the US with to keep there exchange rates low.
Quote:
Originally Posted by mysticaltyger
A lot of our housing costs are artificially inflated because of zoning laws/regulations. For example, most cities don't allow apartments under a certain size to be built. But San Francisco just allowed apartments of 225 square feet to be built because that makes having your own place more affordable and means you don't have to have roommates. A well designed small place works well for some people. I read recently that some city in Oregon (I forget where) is now allowing "tiny" houses to be built. Previous to this, zoning laws wouldn't allow for them.
That is fed in part by too much liquidity. That drives asset bubbles and the zoning laws are written to facilitate this.
Quote:
Originally Posted by mysticaltyger
Another example, health care costs are insane...yet we know 70% of our health care costs are driven by poor lifestyle choices (obesity, diabetes, heart disease & some cancers are mostly or at least partly preventable--and these diseases are costly to treat). Yet we allow people to buy soda and other junk with food stamps. We have to find ways to discourage unhealthy lifestyle habits without being draconian about it. This will make health care more affordable and those benefits get passed down to everyone.
cutting the ratio of worker pay to doctor pay would do a lot too. I'm all for eating better. But junk food is cheaper than good food.
Quote:
Originally Posted by mysticaltyger
In short, I think it goes a lot deeper than just raising or not raising the minimum wage. It requires rethinking what we currently consider as our normal standard. We still operate as if most people are going to drive their cars everywhere and live in single family homes in the suburbs. There's nothing wrong with that per se. But it's not an expensive standard and an increasing number of people can't afford it (and believe it or not, not everyone even wants that). But in many/most instances, people are effectively forced into this way of life because that's all our current infrastructure supports. We should set up our infrastructure/zoning laws so that biking, and mass transit are realistic options.
I read someone that was spouting about it being a conspiracy to get us into cars. my counter was that Ford got the cost of cars down to where we could afford them and everyone wanted them. We are printing money world wide and the minimum wage needs to go up to keep up with the inflation that will result.
Quote:
Originally Posted by mysticaltyger
If you make housing (smaller homes/apts), health care (prevention oriented medicine/public health policies), and transportation costs (not needing a car for every trip) more manageable, then people can live on lower wages without going to the taxpayers for subsidies or asking for wages to get artificially propped up (which inevitably creates some inflation and eliminates some jobs).
My take is up the minimum wage and then set public assistance below that.
My take is that we need to bring home all the troops, close the bases, disband 90% of the military do away with income tax and SS, all foreign aid, all subsidies and welfare, get rid of 90% of gov't. Hong Kong is the model we need to be following. No safety net, produce or perish.
Inflation typically punishes poor people the most.
The link I posted yesterday has some very interesting reading about the world's monetary base. It has done way more than a 4x from 2000 until now. We should really be thinking about pushing wages higher to compensate for this.
I though this was a balanced piece on the effects of raising the minimum wage. Instead of cherry picking pieces of evidence to support one position or another, it shows both the pros and the cons of raising the minimum wage:
That's amusing considering he cherry-picked his data.
The Center for Economic and Policy Research is a Left-Wing think-tank. Being Left-Wing does not automatically impugn their data, however this particular organization has a long history of suppressing evidence and skewing data. On the other hand, the CBO has a long and distinguished history of being repeatedly debunked by me (right here on CD). With respect to the CBO, they are not allowed to do free research....they are given data, and only allowed to use the data they are given...so if the data they are given is bad from the start, then so will be their conclusions.
On Jobs: Right away you can see that the two areas selected -- San Fransisco and Santa Fe -- are suspect. Both economies skew the results in favor of their predetermined conclusion. It's also very narrow-minded.
There are 1,539 separate economies within the united States and each of those has its own Labor Market. There are 800+ Skill-sets (you can find them on the DOL web-site). Wages and salaries are determined by the Laws of Economics through Supply & Demand.
Armed with that knowledge, I'll show you how these groups suppress evidence and slant their findings.
In the Cincinnati Market, fast-food workers have been paid over the minimum wage due to a shortage of fast-food workers for the past 20+ years. When the "federal" minimum wage was $5.15/hour, fast-food workers here were getting paid $7.50-$8.50/hour. Now they get paid $8.50-$10.00/hour.
However there is a surplus of warehouse workers, so they start at minimum wage.
If minimum wage increases, will fast-food workers lose their jobs? No, since they are already getting paid in excess of minimum wage.
By focusing inordinately on a particular Skill-set -- like fast-food worker --- you can skew the data.
Jul 18, 2013 - Ohio lost 12500 jobs in June. Only Tennessee shed more jobs. Ohio's second to last place finish comes a month after the state lead the nation ...
Dec 21, 2013 - Ohio lost more jobs than any other state last month and is on track this year to post its weakest job growth since the recession ended in 2009.
Aug 16, 2013 - Offshoring continues to impact Ohio with companies cutting at least 1800 jobs in the state since January, according to petitions for federal ...
buckeyeinstitute.org/.../ohio-private-sector-job-gro...The Buckeye Institute
Dec 31, 2013 - The November 2013 Ohio By the Numbers report (now available on the Buckeye Institute website) shows a rough month for the private sector ...
ohiodems.org/under-gov-kasich-ohio-plummets-t...Ohio Democratic Party
Dec 23, 2013 - Today's disastrous economic news closely follows reports that during November, Ohio lost 12,000 jobs – the worst job loss of any state in the ...
Oct 27, 2013 - First of three parts A stillness fills the air at Buckeye Silicon's headquarters. The machinery in the company's nearly empty South Toledo ...
Ohio under a Democrat governor enacted a minimum wage law greater than the "federal" minimum wage. The minimum wage increase -- now in effect under a Republican governor -- is causing the loss of thousands and thousands of jobs.
Minimum wage does cause jobs losses.....but you won't see that in a "national" labor report.
Why? Because many thousands of those jobs fled across the border to the State of Indiana or the Commonwealth of Kentucky (or further south).
So those jobs gains in other States masks the job losses in Ohio, showing a net loss of "0."
That's the danger in thinking nationally instead of federally.
If you live in Arizona, you probably don't give a damn; if you live in Indiana or Kentucky or one of the other States that the are beneficiaries of Ohio's job losses, you're probably thrilled; but if you live in Ohio...sucks to be you.
Why? Because government services are not free -- property taxes, fees, sales taxes and the State income tax will have to increased to offset the taxes lost through lost jobs.
The last minimum wage increase 2007-2009 to $7.25/hour cost you several million jobs.
At $5.15/hour, an American is competitive against a Romanian earning $1.40-$2.65/hour.
When you increased the minimum wage to $7.25/hour, Americans were no longer competitive. Look at the number of call-centers and customer-service centers that were shut down and re-opened in India and other English-speaking States.
On Poverty: This is a bust. The purpose of raising the minimum wage to $7.25/hour was to lift people out of poverty. The purpose of raising the minimum wage to $5.15/hour was to lift people out of poverty.
That is a tired excuse that is not supported or validated by any evidence.
If you want to bring 900,000 people "above the poverty" line, the easiest and cheapest thing to do is help those people share living accommodations with other households, right? There is no good reason why those people should not be sharing rental houses or apartments with others. If rent is $500/month, then reducing it to $250/month by sharing increases disposable income by $3,000/year, while increasing minimum wage in the first step to $8.10/hour only increases their income $1,700/year.
Note that welfare benefits are predicated on formulated percentages, such as 135% of poverty level.
The number of people on welfare will not change, and there is nothing to prevent the government from lowering the bar, which is exactly what the government does every time the "federal" minimum wage has been increased.
On Prices: There are many variables here, but there is more pressure on prices in less populated areas than in highly populated areas. Going back to slanting the outcomes, rural and semi-rural areas are ignored in these studies on minimum wage. Mom & Pop shops go under....smaller scale manufacturers close up shop and so on. You cannot treat a small town of 10,000 people the same as an urban area with 500,000 to 1 Million (or more) people.
On Skills: Very harmful and damaging to low-skilled workers. People want value for their money, and that includes employers. For higher wages, employers want people who are better educated -- read some college and drop-outs, GEDs and high school grads need not apply.
On History: Not relevant.
On Free Markets: Free Markets work best with no government interference.
One reason that data is heavily slanted is due to suppressed evidence. The "federal" poverty level is a weighted average. The average poverty level is $11,000+ for one person, but that is merely an average. In some of the 1,539 economies in the US, the real poverty level is just over $4,000, so $5/hour is more than enough to live. In other economies in the US, the real poverty level is over $22,000, so you'd need $11 to live.
Quote:
Originally Posted by mysticaltyger
I think there needs to be more talk of finding ways to lower the overall cost of living for folks.
You can't do that until you understand what kind of "Inflation" you're dealing with.
That's amusing considering he cherry-picked his data.
The Center for Economic and Policy Research is a Left-Wing think-tank. Being Left-Wing does not automatically impugn their data, however this particular organization has a long history of suppressing evidence and skewing data. On the other hand, the CBO has a long and distinguished history of being repeatedly debunked by me (right here on CD). With respect to the CBO, they are not allowed to do free research....they are given data, and only allowed to use the data they are given...so if the data they are given is bad from the start, then so will be their conclusions.
On Jobs: Right away you can see that the two areas selected -- San Fransisco and Santa Fe -- are suspect. Both economies skew the results in favor of their predetermined conclusion. It's also very narrow-minded.
There are 1,539 separate economies within the united States and each of those has its own Labor Market. There are 800+ Skill-sets (you can find them on the DOL web-site). Wages and salaries are determined by the Laws of Economics through Supply & Demand.
Armed with that knowledge, I'll show you how these groups suppress evidence and slant their findings.
In the Cincinnati Market, fast-food workers have been paid over the minimum wage due to a shortage of fast-food workers for the past 20+ years. When the "federal" minimum wage was $5.15/hour, fast-food workers here were getting paid $7.50-$8.50/hour. Now they get paid $8.50-$10.00/hour.
However there is a surplus of warehouse workers, so they start at minimum wage.
If minimum wage increases, will fast-food workers lose their jobs? No, since they are already getting paid in excess of minimum wage.
By focusing inordinately on a particular Skill-set -- like fast-food worker --- you can skew the data.
Jul 18, 2013 - Ohio lost 12500 jobs in June. Only Tennessee shed more jobs. Ohio's second to last place finish comes a month after the state lead the nation ...
Dec 21, 2013 - Ohio lost more jobs than any other state last month and is on track this year to post its weakest job growth since the recession ended in 2009.
Aug 16, 2013 - Offshoring continues to impact Ohio with companies cutting at least 1800 jobs in the state since January, according to petitions for federal ...
buckeyeinstitute.org/.../ohio-private-sector-job-gro...The Buckeye Institute
Dec 31, 2013 - The November 2013 Ohio By the Numbers report (now available on the Buckeye Institute website) shows a rough month for the private sector ...
ohiodems.org/under-gov-kasich-ohio-plummets-t...Ohio Democratic Party
Dec 23, 2013 - Today's disastrous economic news closely follows reports that during November, Ohio lost 12,000 jobs – the worst job loss of any state in the ...
Oct 27, 2013 - First of three parts A stillness fills the air at Buckeye Silicon's headquarters. The machinery in the company's nearly empty South Toledo ...
Ohio under a Democrat governor enacted a minimum wage law greater than the "federal" minimum wage. The minimum wage increase -- now in effect under a Republican governor -- is causing the loss of thousands and thousands of jobs.
Minimum wage does cause jobs losses.....but you won't see that in a "national" labor report.
Why? Because many thousands of those jobs fled across the border to the State of Indiana or the Commonwealth of Kentucky (or further south).
So those jobs gains in other States masks the job losses in Ohio, showing a net loss of "0."
That's the danger in thinking nationally instead of federally.
If you live in Arizona, you probably don't give a damn; if you live in Indiana or Kentucky or one of the other States that the are beneficiaries of Ohio's job losses, you're probably thrilled; but if you live in Ohio...sucks to be you.
Why? Because government services are not free -- property taxes, fees, sales taxes and the State income tax will have to increased to offset the taxes lost through lost jobs.
The last minimum wage increase 2007-2009 to $7.25/hour cost you several million jobs.
At $5.15/hour, an American is competitive against a Romanian earning $1.40-$2.65/hour.
When you increased the minimum wage to $7.25/hour, Americans were no longer competitive. Look at the number of call-centers and customer-service centers that were shut down and re-opened in India and other English-speaking States.
On Poverty: This is a bust. The purpose of raising the minimum wage to $7.25/hour was to lift people out of poverty. The purpose of raising the minimum wage to $5.15/hour was to lift people out of poverty.
That is a tired excuse that is not supported or validated by any evidence.
If you want to bring 900,000 people "above the poverty" line, the easiest and cheapest thing to do is help those people share living accommodations with other households, right? There is no good reason why those people should not be sharing rental houses or apartments with others. If rent is $500/month, then reducing it to $250/month by sharing increases disposable income by $3,000/year, while increasing minimum wage in the first step to $8.10/hour only increases their income $1,700/year.
Note that welfare benefits are predicated on formulated percentages, such as 135% of poverty level.
The number of people on welfare will not change, and there is nothing to prevent the government from lowering the bar, which is exactly what the government does every time the "federal" minimum wage has been increased.
On Prices: There are many variables here, but there is more pressure on prices in less populated areas than in highly populated areas. Going back to slanting the outcomes, rural and semi-rural areas are ignored in these studies on minimum wage. Mom & Pop shops go under....smaller scale manufacturers close up shop and so on. You cannot treat a small town of 10,000 people the same as an urban area with 500,000 to 1 Million (or more) people.
On Skills: Very harmful and damaging to low-skilled workers. People want value for their money, and that includes employers. For higher wages, employers want people who are better educated -- read some college and drop-outs, GEDs and high school grads need not apply.
On History: Not relevant.
On Free Markets: Free Markets work best with no government interference.
One reason that data is heavily slanted is due to suppressed evidence. The "federal" poverty level is a weighted average. The average poverty level is $11,000+ for one person, but that is merely an average. In some of the 1,539 economies in the US, the real poverty level is just over $4,000, so $5/hour is more than enough to live. In other economies in the US, the real poverty level is over $22,000, so you'd need $11 to live.
You can't do that until you understand what kind of "Inflation" you're dealing with.
Economically...
Mircea
Your argument about the dead weight loss of raising the minimum wage is not without merit.
But what of the cost of the dead weight loss of servicing a debt load in excess of 300% of GDP? What kinds of jobs are pushed out of the economy by that dead weight?
Upping the minimum wage far enough to push the median hourly wage 200% higher or more should put a dent in the dead weight imposed by the excessive total debt we as a nation have taken on. The Fed is hell bent on loaning out enough money to get the economy moving all 1,539 of them. But...
Here is a peace of anecdotal evidence for you. My friend is maxed out on debt. His payments are more than his income. He is making $20 an hr. Upping the minimum wage to $30 an hr would give him a $10 an hr pay bump. or a 50% raise in wages. He wont have a loss of employment as his is a government job of the kind that wont be cut. He would then be in a position to take on more debt as well as make the payments on his current debt. (The data that you have cherry picked "The last minimum wage increase 2007-2009 to $7.25/hour cost you several million jobs." was when the availability of consumer credit on a per capita basis was at an all time low, or more correctly was as low as any time from the start of WWII until now.) The bump in the minimum wage would have a short term increase in the dead weight loss. The inflation from the bump in minimum wage would reduce the dead weight loss of the very high total debt in our country, that dead weight loss is long term.
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