$9 Minimum Wage

[Crixus33]

[QUOTE=Anonymous;1764332]

Originally Posted by Anonymous

Economic theory would state that a worker is paid whatever they are willing to work for. If wages are too low than workers won't work for that wage. As a result the employer is forced to pay a higher price if they want to hire more laborers.

Here's a useful graph that shows how a minimum wage works.

http://thefreeeconomy.com/wp-content...nimum-Wage.jpg

At the point where the demand curve (How many people businesses are willing to hire at each wage rate) and the Supply Curve (How many laborers are willing to work at each wage rate) intersect is where the market will naturally set prices. In the hypothetical graph we see the market equilibrium is 5 workers each working for $5 an hour. When the government sets the minimum wage rate at 7$ an hour, as shown in the hypothetical situation on the graph, less workers are hired because the demand for laborers is only 3. So, in the hypothetical, instead of hiring 5 workers at $5 dollars an hour, the minimum wage causes employers to hire 3 workers at $7 an hour.

That was very helpful and enlightening thanks.

[beholderthedm]

I can't speak to the original intent of lawmakers when the minimum wage was implemented, but stats show that many people earning minimum wage do it to support a family.

a majority of minimum wage earners are adults working many hours and living in low-income households. Of the 4.5 million minimum wage workers who directly benefited from the most recent minimum wage increase, more than half belonged to families with family income less than $35,000 a year.

http://www.epi.org/publication/incre...d_the_economy/


A bit out of date but not so far out of date that it should be completely irrelevant today.

Originally Posted by mac122

The minimum wage is not intended to be a living wage - high enough to cover all living expenses. It sets the floor, the lowest level employers are allowed to pay (with a few exceptions). It's not intended to be the career wage for someone trying to support a family. If someone is trying to support a family off of a single minimum wage job, they will be below the poverty line. However, there is additional assistance available through WIC, food subidies, earned income credit, housing subsidies, education assistance. These help ease the burden on low-wage earners. The key is to get a job, even if it's minimum wage and then work your way up. If the company you work for doesn't have opportunities for advancement, then you must continue to work and keep your eyes open for other opportunities. Take advantage of education money available from the government to better yourself and make yourself better equipped to land a better paying job.

[Einar's puppy]

I don't find it true that no minimum wage corrects itself with time and inflation. You will always find people willing to work for nothing. Yes, $7 is near impossible to live on, but that doesn't mean people don't take it. Especially when they don't have options. Because $7 is better than $0. The Young, the Uneducated, and the underprivileged will be willing to accept less than minumum wage just because its better than no job at all. The minimum wage is there to protect this sector of desperate Americans without the skills or knowledge to perform anything better than the lowest jobs. If you look at it this way, it's really a social program designed to benefit the lowest joneses who are not afraid to sell themselves short.

I know this, because I experience it every time I have a gig. I play bass with a band. We don't exactly gig every week, and we're not the most professional. We write our own music however, and we're tight. We're all 18, but we're not just kids out looking to play for the hell of it, we do intend to put on a great show. We don't get paid much for it though.

The most money I have made to date on a gig, and this is for the entire four piece band, is $56. That comes out, per person, to 14 dollars an hour. Well above minimum wage, but not anything at all considering on the best week ever I can only work 7 hours. The reason the pay is so low is because of non-serious bands who are just looking to play, not make any sort of career out of it. The lowest joneses. They have low levels of skill, seldom write original songs, and simply don't perform to my level. And that's not to say my level is incredible or anything. Hardly. But the fact of the matter is that these guys are willing to accept the gig FOR FREE just to get the exposure or the joy of playing for a crowd. Why would a place pay me $100 when they can get a different band for free? It devalues the entire worth of musicians.

The same idea applies to the minimum wage. There will always be people who are willing to accept less. The minimum wage is there to stop them from screwing themselves over.

[Anonymous]

Originally Posted by Einar's puppy

I don't find it true that no minimum wage corrects itself with time and inflation. You will always find people willing to work for nothing. Yes, $7 is near impossible to live on, but that doesn't mean people don't take it. Especially when they don't have options. Because $7 is better than $0. The Young, the Uneducated, and the underprivileged will be willing to accept less than minumum wage just because its better than no job at all. The minimum wage is there to protect this sector of desperate Americans without the skills or knowledge to perform anything better than the lowest jobs. If you look at it this way, it's really a social program designed to benefit the lowest joneses who are not afraid to sell themselves short.

I know this, because I experience it every time I have a gig. I play bass with a band. We don't exactly gig every week, and we're not the most professional. We write our own music however, and we're tight. We're all 18, but we're not just kids out looking to play for the hell of it, we do intend to put on a great show. We don't get paid much for it though.

The most money I have made to date on a gig, and this is for the entire four piece band, is $56. That comes out, per person, to 14 dollars an hour. Well above minimum wage, but not anything at all considering on the best week ever I can only work 7 hours. The reason the pay is so low is because of non-serious bands who are just looking to play, not make any sort of career out of it. The lowest joneses. They have low levels of skill, seldom write original songs, and simply don't perform to my level. And that's not to say my level is incredible or anything. Hardly. But the fact of the matter is that these guys are willing to accept the gig FOR FREE just to get the exposure or the joy of playing for a crowd. Why would a place pay me $100 when they can get a different band for free? It devalues the entire worth of musicians.

The same idea applies to the minimum wage. There will always be people who are willing to accept less. The minimum wage is there to stop them from screwing themselves over.

I think the problem you run into with that example is that most people don't work minimum wage jobs for fun. Some do, I'm sure, but most don't.

The argument that people will work a low-wage job because they have to work to survive is a valid one. Some notable economic theorists (Smith, Marx) argued that naturally the market will move to paying subsistence wages to those with little marketable skills.

It sounds harsh but the market will allocate resources based on the value of various goods and services. People won't pay as much for lower quality goods. People pay more for a Ferrari then they do for a beat-up 1995 Ford Taurus. In the same way, people with little marketable skills will command lower wages than people with marketable skills.

One can make the argument that government should pass a minimum wage law as a way of providing a means of social support for those with little marketable skills. I do think there is room for debate about whether that is the best course of action. Minimum wage laws increase unemployment. Should we take jobs away from those with few marketable skills in order to give some of them higher wages? I think it's definitely an area of debate and that there is a large gray area there.

[Balantai]

I read this article the other day and thought it might fit in here.

HERE

[Anonymous]

Originally Posted by Balantai

I read this article the other day and thought it might fit in here.

HERE

I think the response to the productivity issue is that most of the increase in productivity has come from technology, which is itself usually an investment on the part of the firm. The costs for the increase in worker productivity are being paid by businesses. They just are being paid toward what is actually increasing worker productivity, which is mostly technology and capital investment, not the workers themselves.

[The_X_Marker]

There is low correlation between minimum wage and cost of living. This is artificially set up by most states.
_______________________________________
Example:

The minimum wage in Vermont is $8.60/hour.

The minimum wage in New York is $7.25/hour.

The cost of living in New York is much higher than Vermont, despite Vermont having a much higher minimum wage.
________________________________________

As long as we don't place minimum wage above inflation, the price of goods generally will not increase, and many increases will be so small that they wont make a difference.

Originally Posted by mac122

Before I respond directly to your post, let me say this. The minimum wage was not put in place to guarantee people a good living. It's there to set the low end of the pay scale. It's not intended to be a living wage. It sets the starting point. If you want to make more money than minimum wage, then keep working to improve yourself and make yourself more valuable to an employer.

When I started my current job, I started at $7.50/hour, which is above minimum wage. I've been there for over 3 years, and now make $7.85/hour. I'd expect to be a little more valuable when I scored 5/5 on my reviews. The problem isn't actually that minimum wage is too low, it's just that employers don't give raises that are actually worth anything to minimum wage employees in the long run.

http://www.bestplaces.net/cost_of_living/state/new_york
http://www.bestplaces.net/cost_of_living/state/vermont
http://www.golocalprov.com/politics/...-minimum-wage/
http://www.ehow.com/how_4570302_mini...t-economy.html

*I don't want to overload people with links.

[Anonymous]

Originally Posted by The_X_Marker

There is low correlation between minimum wage and cost of living. This is artificially set up by most states.
_______________________________________
Example:

The minimum wage in Vermont is $8.60/hour.

The minimum wage in New York is $7.25/hour.

The cost of living in New York is much higher than Vermont, despite Vermont having a much higher minimum wage.
________________________________________

As long as we don't place minimum wage above inflation, the price of goods generally will not increase, and many increases will be so small that they wont make a difference.

When I started my current job, I started at $7.50/hour, which is above minimum wage. I've been there for over 3 years, and now make $7.85/hour. I'd expect to be a little more valuable when I scored 5/5 on my reviews. The problem isn't actually that minimum wage is too low, it's just that employers don't give raises that are actually worth anything to minimum wage employees in the long run.

http://www.bestplaces.net/cost_of_living/state/new_york
http://www.bestplaces.net/cost_of_living/state/vermont
http://www.golocalprov.com/politics/...-minimum-wage/
http://www.ehow.com/how_4570302_mini...t-economy.html

*I don't want to overload people with links.

I don't know how long you've been working there or what job you are in, but I started working a part-time minimum wage summer job in eighth grade (2008 ) (7.50/hr). It was like for 3 weeks of work. I received about a 50 cent/hr raise each year I came back. Now I am a Freshman in College and I make about 10.50/hr there working all year. Plus the business gave a 50 cent per hour bonus each week if you were there for all the hours they asked you to work. So, essentially there were people working there for 8.00/hr at their first job in eighth grade with no experience, and subsequently making 8.50 in ninth grade.

I'm not saying this is proof that we shouldn't raise the minimum wage. I'm just saying that anecdotally their are examples of businesses that will raise your wages and those that won't.

Full disclaimer: I live in a part of the country with a strong economy and a very low unemployment rate. The city I live in has a 3.2% non-seasonally adjusted unemployment rate so I live in a pretty good labor market.

[caps]

Originally Posted by Balantai

I read this article the other day and thought it might fit in here.

HERE

Can't say I care much for HuffPost any day of the week, and that study summary seemed really short.

But this is the disconnect for me. Their proposed minimum wage is roughly what I make right now at my entry level part-time software development job (their proposed wage is just slightly higher). So a 15 year old working at Sonic is supposed to make that much an hour? Anyone who does any kind of job should be able to make $40k? To compensate, my income would also increase drastically.

How is that NOT going to cause inflation?

[IAmBatman]

Originally Posted by capsocrates

Can't say I care much for HuffPost any day of the week, and that study summary seemed really short.

But this is the disconnect for me. Their proposed minimum wage is roughly what I make right now at my entry level part-time software development job (their proposed wage is just slightly higher). So a 15 year old working at Sonic is supposed to make that much an hour? Anyone who does any kind of job should be able to make $40k? To compensate, my income would also increase drastically.

How is that NOT going to cause inflation?

Where are you getting $40k from? $9/hour over a 40 hour work week is $360 a week, over 50 weeks (assuming 2 weeks off a year for vacations, holidays, etc. on average) = $18k

So ... no on the $40k front. If that's what you're currently making, you're safely in a much higher bracket than minimum wagers.

[IAmBatman]

To add, philosophically I'm in favor of keeping wages across the board up with raises in inflation, though that might be a self-defeating cycle to an extent.

The problem, though, to borrow the band analogy from earlier, is that you're not just competing for gigs with other bands in your neighborhood, these days you can stream music from anywhere, and some of it is damn cheap.

Minimum wage in just the US means that jobs in just the US will be harder to find. Other than at places such as restaurants where we can't outsource things (so it'll have an actual impact there) jobs are just too easy to send overseas these days, where folks will work for much less than the minimum wage and not care about health care benefits, avoiding doing hard labor, etc.

And a lot of those jobs that still do require people to be in the physical location are being filled by illegal immigrant labor. So until we truly make an impact on the overall global standard of living with an international minimum wage (no idea how you'd even begin to approach such a thing) and close all of the loopholes with undocumented workers, there are enough end arounds on things to prevent skilled American workers from pricing themselves out of the market with their wage/benefit/condition demands (all of which are reasonable, but not something the businesses will concede to if they don't have to - and they don't).

[The_X_Marker]

Originally Posted by IAmBatman

Minimum wage in just the US means that jobs in just the US will be harder to find. Other than at places such as restaurants where we can't outsource things (so it'll have an actual impact there) jobs are just too easy to send overseas these days, where folks will work for much less than the minimum wage and not care about health care benefits, avoiding doing hard labor, etc.

And a lot of those jobs that still do require people to be in the physical location are being filled by illegal immigrant labor.

There is still the physical service sector that is nearly impossible to get illegal immigrants into. Things such as my job, as a sales associate at a Party City.

With all of the trouble that companies like Apple get in though, through child labor in their foreign plants, a global work standard might just be coming. One can only hope.

Despite losing hundreds of thousands of manufacturing jobs, since 2010, over 500,000 have been created in the US. This number is slowly rising, and seems to be rising about 100,000 jobs per year, although I'd expect it to slow within two or three years.

As for your thoughts on illegal immigrants, without illegal immigrants to the US and EU, the populations would be falling. Due to the baby boomer generation being too large, without illegal immigrants, there would not be enough workers to pay for the retirees that will start retiring in 2016 (the last baby boomer will theoretically retire in 2032). They are completely necessary if we want our country to stand strong.

http://www.votefacts.org/more-than-5...acturing-jobs/