The Political Fray - Political Forum
Go Back   Political Fray > The Political Fray > Economics

Economics For discussion about economics, financial markets, investing, stock markets, finance, and economic theory


Thanks Tree1Thanks
Reply
 
LinkBack Thread Tools Display Modes
Old December 27th, 2012, 01:41 PM   #1
Intern
 
andrew320's Avatar
 
Joined: Dec 2012
Posts: 30

Should a minimum wage hike happen?

In this economy, it seems like it would be difficult to raise the minimum wage without companies having to resort to layoffs, cancellation of expansion plans and/or cutting hours. On top of Obamacare, companies have to have even higher labor costs.

There are many unintended consequences of such anti-poverty measures, such as higher unemployment, less opportunities for youth and those with no skills and states becoming less competitive.

What do you think? I ask because 10 states will be raising the minimum wage as of Jan. 1, 2013.
andrew320 is offline  
Old December 27th, 2012, 02:41 PM   #2
Secretary of State
 
tecoyah's Avatar
 
Joined: Oct 2012
From: Louisville, Ky
Posts: 3,456

In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
tecoyah is offline  
Old December 27th, 2012, 08:52 PM   #3
Vice President
 
David's Avatar
 
Joined: Jul 2009
From: Opa Locka
Posts: 5,485

Quote:
Originally Posted by tecoyah View Post
In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
Agreed. My company could pay every employee $20/hr and still turn a multi-billion dollar profit... I'm not saying that everyone deserves that kind of pay but the math forces a person to consider how fair the pay scale is.
David is offline  
Old December 28th, 2012, 11:03 PM   #4
Senator
 
Protectionist's Avatar
 
Joined: Dec 2012
From: Florida
Posts: 677

I owned a business for 12 years. I paid my sales people (in commissions) the equivalent of about $150/hour. I still did just fine. My biggest problem wasn't how much money wqs going out. It was how much money was not coming in. Every day I had to listen to prospective customers tell me on the phone that they like the whole idea of my service (a video dating service in the 1980s), BUT they couldn't afford it. When I asked how much they could put up for a down payment, they often answered "Uh 10 bucks". Know why this was happening ? It's because somebody out there was paying them minimum wage, that's why.

SO the less the minimum wage payer companies are paying these people, the less money they have to buy the things YOU are trying to sell. Conversely, if the MW were MUCH higher, they would become able to buy from you, and your sales and income go up.

And let's not forget that there are millions of businesses who don't pay any wages at all. They pay only commissions. For them, a raise in the minimum wage is only a GAIN, with no loss at all (car dealerships, furniture sales, etc). Likewise, for companies who only have skilled workers already making well above what the MW would be raised to (ex. machine shops), they can only GAIN from a raise in the minimum wage. For them, the low minimum wage is the problem.

I remember damn near begging my state legislators to raise the state minimum wage, to get the levels of community disposable income up (and my sales) up.
Protectionist is offline  
Old December 30th, 2012, 09:47 AM   #5
Secretary of State
 
chris7375's Avatar
 
Joined: Jun 2012
From: Stuart
Posts: 740

I do think there should be a minimum wage but no matter how much you raise this wage some of those jobs can be moved to cheaper parts of the world.

The problem is and always will be becoming Global. I myself am against this move and say we need to protect our own. To move to a global economy will destroy many of those industrial countries and we have already seen the effects.

We need to pull out and start making American again and letting others know we are only going to worry about our people and not the world in general.
chris7375 is offline  
Old December 30th, 2012, 12:15 PM   #6
Vice President
 
David's Avatar
 
Joined: Jul 2009
From: Opa Locka
Posts: 5,485

Quote:
Originally Posted by chris7375 View Post
I do think there should be a minimum wage but no matter how much you raise this wage some of those jobs can be moved to cheaper parts of the world.

The problem is and always will be becoming Global. I myself am against this move and say we need to protect our own. To move to a global economy will destroy many of those industrial countries and we have already seen the effects.

We need to pull out and start making American again and letting others know we are only going to worry about our people and not the world in general.
We don't need to start making American 'again'. We never stopped making American, indeed the manufacturing sector has never been bigger. The issue isn't that jobs are being outsourced (India actually outsources their jobs to America ), it's that human labor is obsolete. It's cheaper to hire 3 engineers to do IT work in an automated factory then it is to hire, train and retain 1,000 human workers. When you hear of a factory closing odds are (unless the company that owns it has gone under) that an automated factory is taking over it's production. The idea that jobs are being 'stolen' is due to politicians having an easier time getting votes blaming dirty foreigners then telling their constituents that they're no longer useful as labors.
David is offline  
Old December 30th, 2012, 06:29 PM   #7
Secretary of State
 
chris7375's Avatar
 
Joined: Jun 2012
From: Stuart
Posts: 740

Quote:
Originally Posted by David View Post
We don't need to start making American 'again'. We never stopped making American, indeed the manufacturing sector has never been bigger. The issue isn't that jobs are being outsourced (India actually outsources their jobs to America ), it's that human labor is obsolete. It's cheaper to hire 3 engineers to do IT work in an automated factory then it is to hire, train and retain 1,000 human workers. When you hear of a factory closing odds are (unless the company that owns it has gone under) that an automated factory is taking over it's production. The idea that jobs are being 'stolen' is due to politicians having an easier time getting votes blaming dirty foreigners then telling their constituents that they're no longer useful as labors.
Yet statistics say otherwise. I read a report that states otherwise and will try and find the link for you and post it so you can read it at you leisure.

The other thing i have is these site s that also say differently.
http://intellectualyst.com/10-5-mill...utsourced-643/
Follow the links the site provides to gain a list of companies that have out sourced work.

Also this link that states otherwise.
http://thinkprogress.org/economy/201...ans/?mobile=nc

When you go to a store the products you buy are not made in America for the most part. They are produced in China, Korea, Thailand Why? They are produced there because labor is far cheaper there then it is producing in the U.S..

We are reinventing ourselves maybe we are but is it for the better I don't think so, I feel globalism will destroy many nations. We conform to much to what is asked of us and we shouldn't.

I would have to disagree with you on this. Those jobs outsourced that were once in the U.S. are only partially automated. Automobiles that were once produced in the U.S. are now produced in Mexico, among other places.

I wish I could see what you see but I don't sorry.
chris7375 is offline  
Old December 30th, 2012, 06:34 PM   #8
myp
Founding Father
 
myp's Avatar
 
Joined: Jan 2009
From: us
Posts: 5,841

While David raises some valid points, we aren't quite there as you said Chris. Automation is only part of the story, but will likely be a bigger and bigger part moving forward. David is a very enthusiastic futurist, so he likes to think we are years ahead of where we actually are sometimes

As for the question at hand- the literature was long in favor against a minimum wage at all, but some newer studies are suggesting certain conditions in which it might be a good thing. I am still of the general persuasion that a minimum wage is generally, but not always harmful, especially when it leads to increased unemployment and possibly greater employment discrimination.
myp is offline  
Old December 30th, 2012, 06:42 PM   #9
Secretary of State
 
chris7375's Avatar
 
Joined: Jun 2012
From: Stuart
Posts: 740

Quote:
Originally Posted by myp View Post
While David raises some valid points, we aren't quite there as you said Chris. Automation is only part of the story, but will likely be a bigger and bigger part moving forward. David is a very enthusiastic futurist, so he likes to think we are years ahead of where we actually are sometimes

As for the question at hand- the literature was long in favor against a minimum wage at all, but some newer studies are suggesting certain conditions in which it might be a good thing. I am still of the general persuasion that a minimum wage is generally, but not always harmful, especially when it leads to increased unemployment and possibly greater employment discrimination.
Everyone is allowed their opinion . I just may not agree with it all the time.
chris7375 is offline  
Old January 3rd, 2013, 10:49 AM   #10
myp
Founding Father
 
myp's Avatar
 
Joined: Jan 2009
From: us
Posts: 5,841

2 reasons to not raise the minimum wage: http://www.bloomberg.com/news/2013-0...imum-wage.html

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure )
myp is offline  
Old January 3rd, 2013, 10:57 AM   #11
Secretary of State
 
tecoyah's Avatar
 
Joined: Oct 2012
From: Louisville, Ky
Posts: 3,456

Excellent synopsis of a complex issue...particularly the way a labor market functions.

Likely, the net benefit to economic activity would be helpful. And the chick flippin' burgers would buy more sexy pants.

Reason Enough.
tecoyah is offline  
Old January 3rd, 2013, 03:41 PM   #12
Secretary of State
 
chris7375's Avatar
 
Joined: Jun 2012
From: Stuart
Posts: 740

Quote:
Originally Posted by myp View Post
2 reasons to not raise the minimum wage: http://www.bloomberg.com/news/2013-0...imum-wage.html

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure )
I bookmarked the page I will read it tomorrow.
chris7375 is offline  
Old January 21st, 2013, 08:45 PM   #13
Intern
 
artistry's Avatar
 
Joined: Jan 2013
From: New Jersey
Posts: 16

It is good that those states are raising the minimum wage. Companies made a lot of money in 2012, but they do not want to increase wages, as it lowers their bottom line.
artistry is offline  
Old January 22nd, 2013, 05:40 PM   #14
myp
Founding Father
 
myp's Avatar
 
Joined: Jan 2009
From: us
Posts: 5,841

Quote:
Originally Posted by artistry View Post
It is good that those states are raising the minimum wage. Companies made a lot of money in 2012, but they do not want to increase wages, as it lowers their bottom line.
It isn't that simple...
myp is offline  
Old January 31st, 2013, 06:46 AM   #15
Representative
 
a777pilot's Avatar
 
Joined: Oct 2012
From: Flower Mound, TX (In the basement.)
Posts: 255

Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
a777pilot is offline  
Old January 31st, 2013, 06:48 AM   #16
myp
Founding Father
 
myp's Avatar
 
Joined: Jan 2009
From: us
Posts: 5,841

Quote:
Originally Posted by a777pilot View Post
Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
Depends on what the goal of government and society is, I suppose.
myp is offline  
Old January 31st, 2013, 07:29 AM   #17
Banned
 
Joined: Jan 2012
From: Texas
Posts: 1,975

Quote:
Originally Posted by a777pilot View Post
Why is government in the wage control business anyway? Wages should be the sole purview of private industry.....that's management and labor, no government dictates.
I could type out something really clever, but sometime beat me to the punch, might as well just quote him

Quote:
Originally Posted by tecoyah View Post
In my opinion, wage control should be in the best interest of a company...happy workers and all that. Unfortunately, our society has created a new form of Capitalism that dismisses the long term in favor of short term interest.
The last sentence is very eloquent.
clax is offline  
Old April 18th, 2013, 09:04 PM   #18
Senator
 
Protectionist's Avatar
 
Joined: Dec 2012
From: Florida
Posts: 677

Quote:
Originally Posted by myp View Post
2 reasons to not raise the minimum wage: Two Reasons Not to Raise the Minimum Wage - Bloomberg

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure )
The Evan Soltas article in Bloomberg View is flawed in at least one respect. It is in the last sentence of this paragraph.

"It is less clear, though, that a higher minimum wage would do anything to boost economic activity. A study by the Federal Reserve Bank of Chicago did find that it would increase consumption: For every $1 increase in the minimum wage, households with minimum-wage workers increased spending by $800 per year. Almost all of these gains, however, come from the interaction of income redistribution with savings rates. Since high-income households save more of their income than low-income households, income redistribution tends to shift savings into consumption. That has ambiguous effects on economic growth."

When there is less savings than consumption (ie. folks buying things in the stores), that is not an ambiguous effect on economic growth at all. It is a clear-cut, very, POSITIVE effect on economic growth. It IS economic growth. >> ie. more sales$$$ in the stores (AKA the economy).
Protectionist is offline  
Old April 19th, 2013, 11:50 AM   #19
Vice President
 
David's Avatar
 
Joined: Jul 2009
From: Opa Locka
Posts: 5,485

Quote:
Originally Posted by Protectionist View Post
The Evan Soltas article in Bloomberg View is flawed in at least one respect. It is in the last sentence of this paragraph.

"It is less clear, though, that a higher minimum wage would do anything to boost economic activity. A study by the Federal Reserve Bank of Chicago did find that it would increase consumption: For every $1 increase in the minimum wage, households with minimum-wage workers increased spending by $800 per year. Almost all of these gains, however, come from the interaction of income redistribution with savings rates. Since high-income households save more of their income than low-income households, income redistribution tends to shift savings into consumption. That has ambiguous effects on economic growth."

When there is less savings than consumption (ie. folks buying things in the stores), that is not an ambiguous effect on economic growth at all. It is a clear-cut, very, POSITIVE effect on economic growth. It IS economic growth. >> ie. more sales$$$ in the stores (AKA the economy).
I agree. It seems he was equating personal wealth with economic growth rather then actual economic activity.
David is offline  
Old June 6th, 2013, 09:33 PM   #20
Representative
 
Joined: Aug 2010
From: Cliffside Park, NJ
Posts: 201

Quote:
Originally Posted by myp View Post
2 reasons to not raise the minimum wage: Two Reasons Not to Raise the Minimum Wage - Bloomberg

(and unemployment is NOT one of them) - this is a good read that considers the literature and shows why the political arguments of the Dems and GOP are both flawed (go figure )
MYP & A777 Pilot, opponents of the federal minimum wage, (FMW) believe the federal minim wage rate is a primary or particular driver of the U.S. dollar’s inflation; that falsehood is one of their rationalizations to support their predisposition to oppose the FMW rate.

Modifications of the minimum rate is determined by U.S. Congressional acts and due to politics those updates of the rates are usually, (if not always) lag behind the inflation rate of the U.S. dollar. Thus minimum rate’s contribution to inflation is generally less than that of enterprise’s other price increases due to the fact that their reaction to market forces can be, (and often is) immediately enacted.

Opponents pretend that minimum wage only affects the very poorest of the working poor. Except in the cases of jobs requiring labor that’s in short supply, all wage scales are related to each other; (i.e. the tide raises all boats). The minimum wage’s relationship of ALL wage and salary rates (but excluding jobs with labor shortages), is inversely related to the differences between the minimum and the jobs’ rates. Thus the minimum rate has significant affect upon USA’s lowest quarter of our entire employee population.

Opponents object to the minimum rate intervening between employee- employer negotiations. There’s no intervention, there’s the same legal minimum for all tasks but no maximum upon any pay scales.

Opponents believe that the absolute poorest of the working poor’s wages should, (similar to other goods and product services), be subject to the free competitive market.
There are fewer employers and more unskilled job applicants. There is rarely if ever a shortage of unskilled labor. Employers can delay some tasks until they can be performed at lesser cost.

It’s contended that the unskilled labor markets’ are less than flat equitable market; the FMW rate is justified and its elimination would be detrimental to our economy.

It’s further contended that to the extent our FMW rate does not keep pace with the U.S. dollar’s inflation, it is adverse to our economy. The minimum rate should be annually updated in the same manner as we now update social security retirement s. Those benefits remain subject to our three federal branches government but rather non-partisan statisticians annually apply explicitly drafted formulas to determine their updates.

The FMW in 1968 was $1.60/Hr. Applying the cost- price urban index to that, it was equivalent to $10.69 in 2013 dollars. The minim rate should be increased gradually but $9/Hr is a low ball rate. I advocate for five years a dollar be added to the minimum rate and prior to the index being applied. After five years, only the index will be applied to the minimum rate.

Respectfully, Supposn
Thanks from David
Supposn is offline  
Reply

  Political Fray > The Political Fray > Economics

Tags
happen , hike , minimum , wage



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
Reduce the trade deficit; increase GDP & median wage Supposn Economics 81 February 13th, 2013 03:26 PM
Minimum wage’s affect upon median wage. Supposn Economics 13 September 10th, 2012 02:49 PM
What will happen to the Euro? myp Economics 22 June 18th, 2012 09:00 AM
Minimum wage. Supposn Economics 27 July 1st, 2011 07:30 PM
Democrats propose $1.9 trillion hike in debt limit myp Current Events 4 January 22nd, 2010 12:42 AM


Facebook Twitter RSS Feed



Copyright © 2009-2013 Political Fray. All rights reserved.