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Minimum wage is what's called a price floor. All it does is create dead weight loss in the market, while preventing skilled workers from earning an actual livable wage.
Ideally, a construction worker should earn $25 per hour while the kid that flips his burgers makes $5 dollars an hour.
Instead, some would rather have a construction worker earn $15 per hour while another grown man or woman flips his burgers for the same wage.
That is what's wrong with this country. MR. Trump is just pointing out the VERY obvious to anyone with an ounce of business sense.
Why would the construction worker be making less in your scenario?
Minimum wage is what's called a price floor. All it does is create dead weight loss in the market, while preventing skilled workers from earning an actual livable wage.
Ideally, a construction worker should earn $25 per hour while the kid that flips his burgers makes $5 dollars an hour.
Instead, some would rather have a construction worker earn $15 per hour while another grown man or woman flips his burgers for the same wage.
That is what's wrong with this country. MR. Trump is just pointing out the VERY obvious to anyone with an ounce of business sense.
You can see if your theory is correct by calculating whether skilled workers in states with higher minimum wages make less than skilled workers in states with minimum wages that are set at the federal level. Good luck!
Upon what basis do you claim that historically, American wages were "Artificially deflated" ?
Well, the United States government has been subsidizing corporations since before Abraham Lincoln. And, the reason we began to allow such large-scale immigration in the mid-1800's, is because we wanted "cheap labor" to feed industrial growth. The Irish were the original Mexicans, so-to-say.
The British, under their Malthusian social theory, basically wanted the Irish to die off. But made a deal with the United States to provide low-cost(but very unsafe) travel of Irish labor migrants to the United States.
Before that, America was using slaves to keep down labor costs.
Regardless, if you subsidize corporations, you are artificially deflating their costs, which allow them to reduce wages, thus providing them competitive advantage. The United States was built on this kind of protectionism/corporate subsidization/economic nationalism, practically since its inception.
We were never a free-market, regardless of what crazy libertarians/constitutionalists like to imagine.
Here is a snippet of the Georgia article of secession of 1861....
"The material prosperity of the North was greatly dependent on the Federal Government; that of the the South not at all. In the first years of the Republic the navigating, commercial, and manufacturing interests of the North began to seek profit and aggrandizement at the expense of the agricultural interests. Even the owners of fishing smacks sought and obtained bounties for pursuing their own business (which yet continue), and $500,000 is now paid them annually out of the Treasury. The navigating interests begged for protection against foreign shipbuilders and against competition in the coasting trade. Congress granted both requests, and by prohibitory acts gave an absolute monopoly of this business to each of their interests, which they enjoy without diminution to this day. Not content with these great and unjust advantages, they have sought to throw the legitimate burden of their business as much as possible upon the public; they have succeeded in throwing the cost of light-houses, buoys, and the maintenance of their seamen upon the Treasury, and the Government now pays above $2,000,000 annually for the support of these objects. Theses interests, in connection with the commercial and manufacturing classes, have also succeeded, by means of subventions to mail steamers and the reduction in postage, in relieving their business from the payment of about $7,000,000 annually, throwing it upon the public Treasury under the name of postal deficiency. The manufacturing interests entered into the same struggle early, and has clamored steadily for Government bounties and special favors. This interest was confined mainly to the Eastern and Middle non-slave-holding States. Wielding these great States it held great power and influence, and its demands were in full proportion to its power. The manufacturers and miners wisely based their demands upon special facts and reasons rather than upon general principles, and thereby mollified much of the opposition of the opposing interest. They pleaded in their favor the infancy of their business in this country, the scarcity of labor and capital, the hostile legislation of other countries toward them, the great necessity of their fabrics in the time of war, and the necessity of high duties to pay the debt incurred in our war for independence. These reasons prevailed, and they received for many years enormous bounties by the general acquiescence of the whole country."
Sound familiar?
American industry was built on protectionism, corporate subsidies, and cheap labor from the most backwards and unstable European countries.
Its why the ethnic make-up of America, is mostly Irish, German, and Italian(those countries were economic backwaters of the time). And not English/French(who were the economic superpowers of the time). The Englishmen and Frenchmen who came to America, were generally the wealthy businessmen, who came here for their fortunes(or were here before independence). A lot of them were "planters"(IE plantation-owners), many were bankers, and other professionals(think, H1B VISA).
For that matter, the reason we brought in all the Chinese to build the railroads, was to keep down costs(they would work for next-to-nothing). We also used immigrants to build the Panama canal(because it was so dangerous, Malaria and what-not, immigrant lives didn't matter).
Our immigration policy was never about being benevolent towards anyone. It has always been used ruthlessly for the benefit of American corporations. The same goes for our economic/monetary policy.
Um, thank for a Wikipedia link that doesn't answer my question. Show me where someone in a completely different field will need to be paid less so that someone working fast food can be paid more? They are two separate businesses. Maybe you should go back and learn some economics because it doesn't sound like you understand what you are trying to talk about.
You can see if your theory is correct by calculating whether skilled workers in states with higher minimum wages make less than skilled workers in states with minimum wages that are set at the federal level. Good luck!
Nothing I said is a theory. It's what is known as a positive statement. You would know that if you had a real education.
yes, Skilled workers in states or areas with a higher minimum wage earn less when adjusted for cost of living than skilled workers in areas with lower a lower minimum wage as a collective whole. That's what happens when you rob Peter to pay Paul by not allowing a free market to control itself. Raising minimum wage only creates a surplus of workers.
Why would the construction worker be making less in your scenario?
say a construction worker with 10 years of experience makes $25 an hour, whereas green workers are paid $10 an hour to start. if the minimum wage is increased to $15 an hour for green employees, that employee making $25 an hour would most likely have to take a pay cut to offset the wage hike. that's probably what he was trying to say.
Um, thank for a Wikipedia link that doesn't answer my question. Show me where someone in a completely different field will need to be paid less so that someone working fast food can be paid more? They are two separate businesses. Maybe you should go back and learn some economics because it doesn't sound like you understand what you are trying to talk about.
I'll give you the short short short and easy to comprehend versions since you're new to this.
The price of minimum wage goes up, so "Burger-land" has to charge more for there burgers, due to the profit margin on low skilled labor being extremely small. Consumer demand goes down for "Burger-land's" burgers because of the price increase. Now less beef needs to be shipped to Burger-land, which cuts into some shipping companies profit. This results in having to raise the price of shipping, which cuts into some unrelated business's profits......ans so on and so on
Obviously my example is very hypothetical and not meant to be what would really happen. Even the best economists in the world can't really tell you what exactly will happen every time the minimum wage goes up; however, what they can tell you is that it creates inefficiencies in the market, which results in a weaker economy with less money being made and lower overall wages on the whole. Most economists will tell you flat out that minimum wage hurts the middle class more than anybody. Those evil rich people that you want to stick with the bill aren't the ones that get hit.
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