Forum Post: What is a Fair Minimum Wage?
Posted 12 years ago on Dec. 25, 2011, 8:03 a.m. EST by toonces
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I saw a post that supported raising the minimum wage. How does raising the minimum wage help anyone? It seems to me that raising minimum wage decreases the amount of low paying, entry jobs employers would use to train and test new employees. It also appears to me that anyone who supports dictating a raise is just helping the banksters and the Fed increase the rate of inflation enabling them to take more from the 99% they say they are trying to help.
What is the minimum wage that should be paid so that we will never have to raise the minimum wage again?
Many companies are started every day by entrepreneurs, why don't the 99% occupying start companies that pay the wages the organizers of OWS support?
@toonces...Reasons for Economic Controversy on the Minimum Wage:
Classical economics argues that the demand for labor increases as the price of labor falls. Each firm must evaluate the potential to make a profit from each worker hired; if the workers cost less, then more profit can be made from hiring more workers at a lower price. Therefore, by setting a lower boundary to wages, a minimum wage law prevents firms from offering jobs below the minimum and increases unemployment.
In Keynesian economics the perspective is very different. Although employers and workers set their wages in nominal terms, they are unable to predict the exact purchasing power of those wages. The value of the real wage can only be known "ex post" -- long after the workers have been paid. Neither unions nor government authorities know the real wage and can only approximate it by regulating the nominal wage. The real wage is the purchasing power of wages when adjusted for inflation, but inflation--the purchasing power of money and therefore of wages--depends on total levels of investment.
Investment, in its turn, depends upon consumption, and consumption depends upon the marginal propensity to consume (savings rate) across all income categories. In an "underconsumption" scenario, the transfer of income from entrepreneurs and rentiers (those with higher incomes) to the working class (via union wage agreements and minimum wages) can actually lead to an increase in total consumption and higher demand for goods--leading to increased employment. However, the resulting higher price levels may spur several forms of political and institutional responses that blunt or negate this tendency. For one, inflation tends to transfer income from bond holders (rentiers) to wage earners. For another, entrepreneurs may, under conditions of oligopoly be able to blunt the effect of rising wages by using their market power to raise prices fast enough to prevent real gains among workers. And finally, the central bank may intervene to defend price levels by increasing interest rates, which will tend to curb investment and decrease the demand for labor.
Without choosing from among these perspectives, it is sufficient to say that minimum wage increases are unlikely to have a simple linear effect on employment. The interconnection of price levels, central bank policy, wage agreements, total aggregate demand creates a situation where the conclusions to be drawn from macroeconomic analysis will be highly influenced by the underlying assumptions.
Minimum wage truthfully I think in a way should be 15 dollars an hour. Anything less than that is semi-slavery. But this is a capitalist country and by increasing the minimum wage companies would increase their costs to make up for the difference. The dollar menu would be non existant at McDonalds for example.
so, it is not the companys fault.
Why don't you start a company and pay the employees $15/hr?
thats what I am saying companies will not do that because they wont make money. I would love to but it would ahve to be a highly profitable company
Minimum wage should be different in every state. It would get messy I can imagine, but the costs of everyday living are different state to state and by that I mean food, rent, mortgage, insurance, education etc. I would like to say it should be different county to county but that would be far too disastrous. Minimum wage should be able to pay for all of these things for a decent living.
I'm indifferent to minimum wage. I think 8.50 would be decent and fair due to the way our US dollar has decreased in value over the years. Making 7.25 an hour is much harder to live on now than it was in 1998. I don't think minimum wage is much of an issue, if we could just get the federal government and the federal reserve to stop devaluing our US dollar, we'd be much better off.
Also here is some info on inflation
http://en.wikipedia.org/wiki/Inflation
For years, a good rule of thumb was, if you can make your rent, or house payment, in one week, you can scrape by. I'm not so sure that is still a good rule of thumb.
At that same time, production or service type facilities that maintained a division of profit as one for the owner, one for the facility and one for the help, typically could maintain and keep good help. I don't know how close or far away from that large businesses are today. It works well for smaller businesses.
At any given time, TPTB are subject to raise my property taxes to more than 10% of my purchase price (well advertised public auction hammer price after a year of listing failed to sell, in one case) while the electric coop continually raises my rates despite TVA having continually lowered the rates of the product to them which has added up to nearly 65% in the last 5 years, well anyhow......
Insurance continues to be ridiculously out of control and I've never filed a single claim in all the years I've paid in, so now I self insure my property with electronic surveillance, artillery, cuddly puppies and DIY repairs.
I can look back through 10 years of receipts and bills, almost EVERYTHING has dramatically increased in price EXCEPT the wages of all non-2%er clients with the net result being I have very few 98%er clients who can even afford to pay a few ticks below wholesale.
I've offered qualified help a percentage of both gross or net to run up the flag pole and it's really a tough nut to crack without farming out production to China, which I will never do, which means my widgets will never be on Walmart's shelves.
I'm hoping one day the good guys will win, if not, my world is paid for and never closed to motivated help who can execute.
What jobs start at minimum wage? I doubt many.
A fair minimum wage is one where you don't go to work if the pay is too low. That sends feedback to the employer to raise the wage to attract workers. It's the best way.
Central planning of the economy doesn't work. Never has, never will.
Liberals like to cry and whine about a "livable wage", but then ignore our old friends supply and demand. They think that through the sheer force of their tears and government price controls on labor, they can over-rule supply and demand. They can't.
If you want higher wages for low/no-skill labor, you need to dry up the oversupply of labor. The easiest way to do that is to control reduce immigration of drop-outs. We could also enforce our immigration laws and deport existing illegal aliens.
Just wondering question for liberals. If the price of car washes double because they've legislated higher wage, will you force people to get the same number of car washes as before? If restaurants charge more because of higher labor, will there be a law making people go out to dinner? If not, what customers will these now higher paid workers serve? Is crying and hand wringing an answer?
Supply and demand, has been obsolete for quite some time now.
One would have thought someone as learned as yourself would realize that.
Sure, price controls are the new thing. Supply and demand, mystically, have evaporated. LOL. It would be very entertaining to read why you think supply and demand has been "obsolete for some time now".
Go ahead, continue mass immigration of unskilled labor. We can just mandate the market clearing price for labor; don't worry about a thing.
You might be interested in this, I found it to be absolutely fascinating:
http://occupywallst.org/forum/where-is-the-incentive-to-work-at-low-paying-jobs/#comment-536095
I get the impression that there must be a meme circulating and reinforcing itself in an Occupy echo chamber, about rejecting the economic model of supply and demand, despite evidence. Which is exactly like a creationist rejecting the fossil record because it conflicts with his belief system that says that the Earth is 6,000 years old.
I will admit that supply and demand is more reality based than the illusion of "free markets".
I will also tell you that supply and demand is highly controlled, by those with the ability to do so.
It is this artificial control, the control leveraged only to preserve profit, that necessitates the need for intervention.
What entity would you advise us to use for the control?
That's a separate question that's partly based on a presumption that I wouldn't necessarily agree is a valid stipulation.
But as long as you're not rejecting the economic model of supply and demand purely on faith, you're way ahead of a lot of other Occupiers.
Will you answer the question?
I grow so tired of the non responses.
So tired of the circle dance.
Weary of avoidance.
Your question presumes that "control" is necessary. I didn't agree to that stipulation.
I'm not presuming anything at all.
I'm stating fact.
You still didn't answer the question.
I can't answer the question because I don't necessarily agree with the question's presumption. You state as "fact" that somebody needs to "control" supply and demand. You can't control supply and demand, you can only influence it by influencing supply, and/or demand. But you CAN artificially control prices. It's just not necessarily a good idea.
I said, someone controls it in the first place.
I know this to be true, because I've met them.
I've heard them speak of doing exactly that.
Reread the post I asked the question in.
They do, control supply and demand.
A simpler question, might ask, how do we control the controllers?
How do you think that cops should manage the threat to national security posed by the Occupy movement?
That question includes a presumption that probably is more than you would be willing to stipulate. Do you understand yet why I can't answer your question? Can you comprehend the concept of having a conversation with a person who doesn't necessarily agree with you?
Obfuscate much?
You're only confused by the truth. It's not a question of agreement.
One can't disagree with facts.
I've spoken to people who's job it is, to control supply and demand.
How do we control them?
How do you think that we should deal with the red menace? If you're not getting it from the presumptions in my example questions then there is just no hope and I'm giving up now.
You changed the subject.
You gave up at the first words of truth.
You became tongue tied and obfuscated.
Libertarianism is as big a lie as Mr. P.
A " living wage", must contain an element of upwards mobility.
To remain stagnant, is a death sentence, in capitalist economy.
Correct, you can largely control the price. But then markets won't clear and you'll either have too much demand/too little supply or the reverse. You can also get a blackmarket as buyers and sellers attempt to come together despite government interference.
Yes, it's fascinating how some people can so badly misunderstand even the simplest ideas. One of those dopes even thought supply and demand was broken because so many people are demanding jobs. Heh, it's nothing a first course in economics at a community college can't fix, but then again, they'd need to take that class. LOL.
It's obviously the people who don't have much education and who lack marketable job skills who want to reject the system, since they have dim prospects under a system that values those things. But that example of faith-based thinking, just like a fundamentalist, was just amazing.
This is not "faith-based"; I'm definitely not a Fundamentalist, in fact, I'm not even sure what a Fundamentalist is, in the sense that I think it's a very poorly chosen identifier.
What I am is an historian in search of the perfect vision which serves to explain why we think and feel the way we do. And it will not be a perfect vision if I approach it with bias of any form.
Your bias is obvious and it has no place in historical research.
The faith-based thinking comment referred to the guy who wrote this post:
http://occupywallst.org/forum/where-is-the-incentive-to-work-at-low-paying-jobs/#comment-536095
By "fundamentalist", I was comparing him to people who believe that the literal words in the King James Bible, or in the Koran, are the final word of God, and no further interpretation is necessary. Which really means that they're the ones doing the interpretation. I'm referring to the people who post the text of the First Amendment, pretending that it's the last word and not the first word.
More on that: http://occupywallst.org/forum/government-does-have-the-authority-to-restrict-spe/
Ohhh... ok. I'm so confused.
But even liberals that should know better can't seem to cope with the obvious. The little pets they treasure that have been streaming over our border have crushed wages for no-skill people, another group they claim to care about. Their answer: price controls.
If millions of people enter the country without skills, they'll have low wage jobs. Low wages means a low income. But low income people are evidence of the unjustness of our society, so say liberals. So, shutting down the border seems like an obvious solution for limiting the expansion of poverty, raising no-skill wages, and therefore making our society more just. But rather than refute the obvious math of it, libtards merely smear you as a racist and move on.
Three or four hundred years ago, the English were very busy selling their poor and unemployable to anyone who would take them; the Muslims alone took some 2.5 million of the white poor, and promptly turned them into Eunuchs; some fifty percent either bled to death or died of infection.
Just one of those little archeological facts from the fossil record of our history that few in America are willing to acknowledge.
[[And they cry because they don't have enough spending money, as if to suggest we are intolerant (?) ]]
Hey, don't forget that early Christian self castration which stems from an earlier pagan religion. After Origen castrated himself, he came to the conclusion that the bible should not be interpreted literally. Let's not neglect the Castrati singers beloved by the Catholic church. Ot leave out that through out history people were enslaved after wars and castrated (long before Christianity).
Does everybody feel luckier now?
Of all the bullshit correlations to make......
Imagine the arrogance of this guy "betuadollar" to single any society out for having an abusive past or history. There are horror stories that apply to every corner of the world.
The only thing to take from these stories/histories is that they happen and proliferate when good people do nothing to stop them.
And it would be even more arrogant to make demands of society without an evaluation of that which has brought us to the here and now. What I hear in your words is absolute ignorance.
You want to talk about brutality, we can talk about the Spanish in Mexico... or their invasion of California in the 1740s (as a minor moment).
I'm growing very tired of the compassionate welfare state mentality. All it does is sacrifice the middle class to appease the lower classes for the sake of the rich.
It is the comparison: You should feel lucky because if you were poor then you could have been castrated. WTF is that?
Little known story that all men who wish to scare their daughters boyfriends with: Abelard and Heloise? Heloise's father had Abelard castrated after he impregnated his daughter. 11th Century love story.
I'm not familiar with the story. I feel bad for Abelard. I hope that they at least got to keep their child.
Nope. he became a monk, was persecuted for his teachings and eventually died of (allegedly) scurvy and she was sent to a convent and hated it. She gave up the child. Numerous love letters have been attributed to them but were fakes. It is a horrifying love story.
Yes not something to be promoted as proper social behavior. As some might have it. But perhaps a good social commentary of what can and will go wrong when good people stand by.
Actually it's not a bullshit correlation. Total African slavery worldwide from 1453 (Portuguese/ African coast) forward has been estimated by several historians to be between 10 & 1/2 - 11 million.
As a result of the Civil War, our historical view of slavery has been somewhat skewed, particularly in the US; it is not even a consideration - there is no discussion - in today's Europe.
Castration was never the norm in Christianity but it was common practice amongst the Muslims as a means of ensuring both the chastity of the Harem and the perfect sterilization of the enslaved Christian white bloodlines.
Unemployment is rising, the ratio of those that provide care to those that demand care is shrinking; people need to wake up...
That only works if you believe in illusions.
A fair wage is one that allows for upward mobility.
Fair minimum wage whould be $1.00/HR
That would definitely allow for upward mobility. Personally, I think there should be no minimum. If employee and the employer agree to a wage, they should be allowed to exchange services for the wage they agree to.
Let me call my union rep, and we can talk about it.
I think he may want your conversation to include a couple other "representatives" and a baseball bat.
OIC, you actually believe what FLAKESnews and LImbaugh tell you.
No, I believe what Andy Stern, leader of SEIU says...
"We try to use the power of persuasion, and if that doesn't work, we will use the persuasion of power."
http://www.youtube.com/watch?v=xSllsTLkBsw
I managed a small restaurant for a while one thing I learned is you don’t have anybody on the clock you don’t need. If there are employers out there who hire someone just because the wage is low, not because they need that person’s work then that employer won’t be in business long. So it reasons that the number of jobs created is resident to changes in required pay, as a matter of fact unemployment has gone down each time we raise minimum wage.
As far the “correct” wage would that work for CEO’s as well?
"unemployment has gone down each time we raise minimum wage. "
Huh? You should try earth sometime.
Let's see the last big raise in minmum wage was in the 90's and what was unemployment?
The last big increase was in 2007, then 2008 and then 2009.
What is the teenage unemployment rate today (aka, all the fast food workers)?
But we did have an even larger raise in the 90’s followed by lower unemployment, so perhaps you have prove the point that unemployment and minimum wage are not dependent on one another which I believe was my underlying point.
Who is in charge of dictating the approved wage?
The Government, the Bureau of Labor Statistics, the Department of Labor, etc.
The same guys who continually LIE about the unemployment numbers for political gain with the "Birth-Death model", not counting the unemployed after a convenient period, hiring and firing census workers again and again to make employment numbers look better than they really are, etc.
I guess the question I should have asked was, who will be in charge of dictating the approved wage.
I think I may have posted this to a comment added above that has now separated the two replies.
No one. We don't need an edict by big brother. Let the market work it out.
The government should stay out of it and it should stay out of a lot more things that it has it's fingers in.
Well right now as far as I can tell it's mostly the Royal Walmart family, but of course a few others have some influence. I just suggest that the people exercise their inalienable rights and demand that if you want to employ an American you have to pay a living wage, I’d let the boards of directors of the Fortune 500 companies determine that amount. Say we take what it is now then raise it each year by the average amount of the increase in the Fortune 500 CEO compensation, after all these are the real money people who really know how well the economy has done and they fairly reward on average each CEO in turn so let them decide not some government committee.
Of course if you don’t want to pay that wage no one should have the right to make you, you can always make the widgets yourself.