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Actually, according to your link 2.5% of the work force is earning the minimum wage. It's not suprising that with national unemployment at 9% and the combined national unemployment and underemployment at 16% that the percentage of minimum wage workers would rise slightly - the total pool of workers has shrunk.
Also according to your link another 3.5% of the work force earns less than minimum wage. These workers are a combination of restaurant employees (whose wage is supplemented by tips) and farm labor (I'm guessing a lot of H2B employees from south of the border).
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Based on this low percentage, you are correct that government doesn't dictate the employer's labor cost. However, you aren't taking into account the number of low-skilled workers and young people who are simply not hired because of the current minimum wage rate. An example would be odd jobs and entry level positions a teenager could find around the neighborhood in years past.
Right now American teenagers could work the fields for less than minimum wage, how many actually are choosing to do so? Doesn't that punch a big hole in the argument that teenagers would work for $2 an hour?
Again, it wasn't the minimum wage that that caused higher black unemployment, it was racial attitudes among employers that cast black workers as not worthy of "white men's wages".
I believe it was both. My opinion is based on statements given by politicians who actually voted on the Davis Bacon Act, that fact that Black unemployment was lower than whites before the law was passed, and higher afterward.
I agree with your premise about racial attitudes, since black men had to lowball to get jobs. Despite that, it once again makes me proud of my ancestors for doing what it took to make it during times of oppression.
Actually, according to your link 2.5% of the work force is earning the minimum wage. It's not suprising that with national unemployment at 9% and the combined national unemployment and underemployment at 16% that the percentage of minimum wage workers would rise slightly - the total pool of workers has shrunk.
Also according to your link another 3.5% of the work force earns less than minimum wage. These workers are a combination of restaurant employees (whose wage is supplemented by tips) and farm labor (I'm guessing a lot of H2B employees from south of the border).
You are right about the breakdown between at and below minimum wage. I stand corrected.
It does still highlight why the minimum wage is not necessary, as 92% of all workers are making more than $7.25/hr.
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Originally Posted by djmilf
Right now American teenagers could work the fields for less than minimum wage, how many actually are choosing to do so? Doesn't that punch a big hole in the argument that teenagers would work for $2 an hour?
Most Americans do not live near fields, they live in urban areas. It would be quite an effort to leave the city and drive many miles to work the fields unless they quit school. I was referring to urban odd jobs that were historically filled by teenagers, and working class blacks and whites. They are now filled by illegal immigrants where I live, like busboys, lawn services, manual labor, babysitting, and other odd jobs.
I agree with your theory about "choosing" in regards to adults, however. Good or bad, the existence of a comfortable social safety net keeps people from choosing jobs that are "beneath them". It also keeps people from moving where the jobs are, like they used to do in the past.
min wage law does not play a big role in the real guts of construction sector.
however, your color comparison was brilliant now it looks like union people are violating the rights of AA
by unionizing. however as a business person i see your point. unions are more expensive by far than non union. but as you and i know it does not stop there. most people in contruction hire illegals either outfront or thru clever subcontracting. you cant buy a house in san diego county that did not use illegal labor in some stage of work.
and new orleans was rebuilt, post katrina, with illegal mexican labor.
subcontractors r us.
Last edited by Huckleberry3911948; 09-22-2011 at 11:31 AM..
Most Americans do not live near fields, they live in urban areas. It would be quite an effort to leave the city and drive many miles to work the fields unless they quit school.
Here in Michigan it's not such a far distance to the countryside, especially for those teens who live in small towns. There are even attempts to set up urban farming in the city of Detroit.
But my question is that if teens are in high school, why do they need to get jobs that pay $2 an hour? What is with the libertarian obsession to have 100% employment for high school students at $2 an hour?
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I was referring to urban odd jobs that were historically filled by teenagers, and working class blacks and whites. They are now filled by illegal immigrants where I live, like busboys, lawn services, manual labor, babysitting, and other odd jobs.
Where I live, busboys, lawn service jobs and babysitting are still filled by American workers and not by illegal immigrants. And even here in the heart of the rust belt there are help wanted signs popping up at restaurants and big box stores - no-skill-required entry level jobs paying minimum wage that are going unfilled.
What teen wants to earn $2 an hour when Wendy's can pay him $7.25 and still turn a tidy profit?
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I agree with your theory about "choosing" in regards to adults, however. Good or bad, the existence of a comfortable social safety net keeps people from choosing jobs that are "beneath them". It also keeps people from moving where the jobs are, like they used to do in the past.
I can tell from this last paragraph that you have no experience with the current unemployment situation.
There's a lot of people who WOULD take those jobs that are "beneath them". However, a worker with a college degree applying for a minimum wage job is very likely to be rejected. The reason given is that the applicant is 'over-qualified' and the hiring manager fears that the applicant will quit as soon as a better offer comes along. It's the current irony of the times that we live in: that the long-term unemployed college-educated workers can't get hired at all.
Here in Michigan it's not such a far distance to the countryside, especially for those teens who live in small towns. There are even attempts to set up urban farming in the city of Detroit.
Good afternoon,
I'm glad that's possible in your area, but that is not the reality of everyone everywhere. I certainly hope Detroit is able to make a successful comeback.
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Originally Posted by djmilf
But my question is that if teens are in high school, why do they need to get jobs that pay $2 an hour? What is with the libertarian obsession to have 100% employment for high school students at $2 an hour?
You're assigning viewpoints to me that I do not have. If they have parents who can support them, they should focus on their studies instead. My point is that teens (including 18/19 year olds out of high school) who want to obtain their own income because they are from a poor family should be able to compete in the labor market without being priced out by illegals. Also, they shouldn't be priced out by a minimum wage that is higher than their skills for the job at hand. We should let people make their own decisions about how much is too little for them to accept. All a minimum wage does is allows positions to be removed from the market completely, at least on the lower end of the scale.
I'd much rather see a poor teen make their own money legally instead of selling drugs.
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Originally Posted by djmilf
Where I live, busboys, lawn service jobs and babysitting are still filled by American workers and not by illegal immigrants. And even here in the heart of the rust belt there are help wanted signs popping up at restaurants and big box stores - no-skill-required entry level jobs paying minimum wage that are going unfilled.
I'm glad the illegal problem hasn't reached your area. If all of those jobs are going unfilled, why is the unemployment rate so high in the rust belt? Why does everyone complain about jobs leaving the area? It highlights my point that people don't want to accept jobs "beneath them", the point you spoke about below.
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Originally Posted by djmilf
What teen wants to earn $2 an hour when Wendy's can pay him $7.25 and still turn a tidy profit?
If they are hiring teens where you're living, then I'm happy for them. No need for them to take less. Come down to the South or the West Coast, and you'll see those same jobs are universally filled by adult immigrants.
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Originally Posted by djmilf
I can tell from this last paragraph that you have no experience with the current unemployment situation.
No, you are simply in a different part of the country and feel that I am wrong because our economy is different from yours.
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Originally Posted by djmilf
There's a lot of people who WOULD take those jobs that are "beneath them". However, a worker with a college degree applying for a minimum wage job is very likely to be rejected. The reason given is that the applicant is 'over-qualified' and the hiring manager fears that the applicant will quit as soon as a better offer comes along. It's the current irony of the times that we live in: that the long-term unemployed college-educated workers can't get hired at all.
This is an often repeated yet unfounded excuse to justify laziness. The unemployment rate for college-degree holders is much lower even in these uncertain times. Sure, it may be higher in certain areas than it was historically, but if people would move where the jobs are they'd be employed quickly.
Simple solution, don't put your college degree on your resume. Or, go after jobs that don't care about a resume, period. I've known many people who overcame this issue and are working. There are many other methods to finding a job in this current situation. I worked as an employment counselor, finding jobs for people who had been on welfare for decades all the way up to unemployed masters degree holders. My success rate was the highest in that office, almost 100% placement. I have enough experience in this area to know how to find a job in a bad situation. Most people don't find jobs because they simply aren't willing to go above and beyond to seek employment. I don't blame them, they have enough methods in our society to avoid doing so.
Last edited by Freedom123; 09-22-2011 at 01:20 PM..
It seems that your issue isn't with employing teenagers but rather the fact that illegal immigrants are taking all such jobs. How does removing the minimum wage address such an issue? Wouldn't the illegal immigrants simply take the hit to their wages? In that case, the only person who benefits isn't the teenager but the employer.
Wouldn't the real solution to such an issue be better enforcement of currently existing laws that ban the hiring of illegal aliens?
As for teenagers making $2 or $5 or $7.25 an hour legally rather than selling drugs - don't you think that selling drugs pays a little bit better than minimum wage? A quick tour of news articles on the web shows that a street dealer can make $20K or $40K a year just for starters.
The minimum wage is just a bottom wage floor (for reasons that I've already mentioned) - eliminating it won't reduce unemployment. The nation didn't have a minimum wage law until 1938 - it seems to me that there was still unemployment before then. In the early 1930's you might even call it massive unemployment.
If 19 year old high school graduates don't have any marketable skills, then isn't that more a shortcoming of the educational system rather than a fault of the minimum wage? Maybe we need to realign our educational system so that it's more like Germany's - there's a thread over in the History forum that, among other things, discusses just such a concept.
I understand that there are people who game the system, who treat the social net more like a hammock. I just don't see how killing off the minimum wage solves the problem.
It seems that your issue isn't with employing teenagers but rather the fact that illegal immigrants are taking all such jobs. How does removing the minimum wage address such an issue? Wouldn't the illegal immigrants simply take the hit to their wages? In that case, the only person who benefits isn't the teenager but the employer.
Wouldn't the real solution to such an issue be better enforcement of currently existing laws that ban the hiring of illegal aliens?
Dj,
It's coming across that way because I'm discussing interlocking aspects of the minimum wage issue. I brought illegals into the conversation because they do affect teen and black employment in my part of the country. It doesn't affect your region, yet for some reason unemployment is still high there despite your statements about unfilled jobs.
My overall opinion is that the free market should determine wages, and that unemployment would go down if the minimum wage would be removed.
I don't mind immigrants competing in a truly free market, but we don't have one. As an alternative to the illegal issue is civil and criminal penalties for employers who hire illegals should be enforced aggressively. We should also give incentives for investment in Mexico (and any other countries with high illegal populations here) so people don't feel the need to leave their homeland to work in America.
In regards to who benefits: in a free market, an employment agreement does not occur unless both employer and employee feel they benefit from it. If most employees felt they didn't benefit, they would quit and find another job as soon as possible. That would force employers to either raise the salaries, do the work themselves, or go out of business. Why do you think employers pay more than $7.25 now if they are the held all the power? Think about it, the amount paid per hour doesn't matter if we follow your logic. Everyone would be at $7.25.
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Originally Posted by djmilf
As for teenagers making $2 or $5 or $7.25 an hour legally rather than selling drugs - don't you think that selling drugs pays a little bit better than minimum wage? A quick tour of news articles on the web shows that a street dealer can make $20K or $40K a year just for starters.
I grew up in the projects and was a teenager when minimum wage was at $5.15. Many kids my age did make the legal choice because they were the only game in town for that wage rate. There weren't any illegals at that time, and we had less drug dealers today because it was easy to find a job in one day.
For today's society, I do believe the War on Drugs should be ended and the pharmaceutical industry should compete to make safer, cleaner versions of the drugs these dealers profit from. I believe in putting them out of business by selling it cheaper at the drug store.
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Originally Posted by djmilf
The minimum wage is just a bottom wage floor (for reasons that I've already mentioned) - eliminating it won't reduce unemployment. The nation didn't have a minimum wage law until 1938 - it seems to me that there was still unemployment before then. In the early 1930's you might even call it massive unemployment.
If you're going to use the Great Depression as your example, look at the unemployment rates during the period between the crash of 1929 and when the Hoover (and then Roosevelt) Administrations got involved. Unemployment was going back down, government involvement pushed it back up, including the Davis-Bacon Act I spoke of previously.
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Originally Posted by djmilf
If 19 year old high school graduates don't have any marketable skills, then isn't that more a shortcoming of the educational system rather than a fault of the minimum wage? Maybe we need to realign our educational system so that it's more like Germany's - there's a thread over in the History forum that, among other things, discusses just such a concept.
I agree that it is a failure of the educational system. I am speaking about solutions for today's reality, and advocating for a truly free market. If you want to reform the educational system and wait it out for another generation to enter the job market, I support you 100%.
If you're going to use Germany, then you should also look at their decision to cut pay across the board in lieu of layoffs or losing jobs to China and India. Are you willing to support that decision too, since it would meet a similar goal of increasing employment as reducing the minimum wage would?
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Originally Posted by djmilf
I understand that there are people who game the system, who treat the social net more like a hammock. I just don't see how killing off the minimum wage solves the problem.
It wouldn't solve the problem, because the safety net would still be there. Many people will choose the lazy route over a job "beneath them" if it's available. I prefer a workfare-only safety net for able-bodied people. Basically, people would walk in, choose a job from a list of what's available, and walk out hired. We did it on a smaller scale after Hurricane Katrina and it worked very well.
My minimum wage arguments are mostly in regards to wanting a truly free market where workers and employers are free to negotiate their wages, while having a workfare safety net as a backup.
If I have a basic construction project, I can either hire skilled union labor or unskilled non-union labor.
Without minimum wages, the unskilled can offer services at $15/hr while skilled union labor proposes $40/hr. I can choose to hire one union laborer over three unskilled laborers and save $5/hr.
After a time, the union laborer now wants a raise to $55/hr. Now, it's cheaper to hire three unskilled laborers to do the same job, and the union guy is out of work.
But, the labor union presses the legislators to pass a minimum wage law for construction work. They proclaim, "Who can live and support a family on $15/hr?" So they propose a $20/hr minimum wage.
Now it doesn't matter whether or not the new proposed minimum wage could support a family, because that's not the goal. However, the new wage would make my cost to hire three workers at $60/hr instead of $45/hr. And now the union guy who wants the raise to $55/hr has priced himself favorably to keep his job while getting a nice raise.
This same method was used to hire whites over blacks back in the mid 20th century. They would use equal pay for equal work laws to increase minimum wages so blacks could not low-ball their way into jobs.
I just finished reading a very good book on this issue. The name is 'Race and Economics".
It does give a historical background on how unions came to be and how the minimimum wage got started.
It covers what you said about how whites got hired over blacks at the mid 20th century. Before that blacks actually have higher employment rates but once whites pushed for minimum wages and unions blacks lost opportunities. There are a lot of sources that show how politicians and other groups openly and bluntly pushed for such laws to oust the blacks out of jobs. It is well documented.
Minimum wage laws do hurt people in the lower income brackets, close initial entry job opportunity for groups of lower education that would get those jobs if there was not minimum wage. At the same time in shuts down their chances to climb up as they get more experience.
People tend to explain the reasons of why minimum wage laws are good by saying is to help those in the low income brackets but in the end it hurts them more. They are the very same reasons, almost verbatim, given by groups in the past as a disguise to keep other groups marginalized. I used to believe minimum wage was good but the more I read and study history of economics the more I see why many of those laws were instituted not to help the majority but to help a special groups agenda, take care.
Government doesn't dictate an employer's labor cost. It only dictates the wage floor. And I've already given the reason why a wage floor is a good thing.
People who make minimum wage or less comprise less than 2% of the work force. When you say that the minimum wage dictates labor costs, it really only affects a small fraction of the labor pool. Claims that a minimum wage affect prices are true, but only to an incredibly small degree. Plug in the actual numbers and it will come out to much less than 2% of the total cost of goods and services currently available are affected by the minimum wage. After all, when you purchase a product or service, you're not just purchasing the labor but also the overhead and the business profit.
Yes, a rise in the minimum wage can lead to layoffs, and the most inefficient businesses will lay off some of their minimum wage workers. But if these businesses can't afford a small increase in labor costs, then they are operating on razor thin margins and were probably not solid businesses to begin with. IMO such businesses can fail for any number of reasons, not just because of minimum wage increases.
Regarding the minimum wage leading to layoffs and starvation, well they don't. That's why we have things like unemployment insurance. The minimum wage isn't the only part of the social safety net, but it's an important part.
Regarding the razor thin margins and not solid to begin with - those are opinions. People operate businesses differently for the most part.
I understand that the majority of the workforce doesn't deal with minimum wage issue - but there are people that do deal with this. They don't have much as it is, and every little bit they can get is important. So if less of them are able to get a job - they likely have nothing to fall back on.
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