Minimum wage’s affect upon median wage.

Aug 7, 2010
211
40
Cliffside Park, NJ
#1
Minimum wage’s affect upon median wage.

An eliminated federal minimum wage, (FMW) is naturally replaced by an indefinite market determined minimum rate without a “bottom”.

Regardless of whatever serves as the minimum “bench mark” rate, it more or less affects ALL wage and salary rates in a similar manner. (The affect upon a job’s rate is the inverse of the difference between the job and the minimum effective rate)
(I.e. although all wages are affected, lesser earners are proportionately more affected by whatever serves as the effective minimum rate).

The FMW’s purpose is to provide a “bottom” for the lowest income earners and by so doing, to some extent supports all wages and salaries.

The only purpose for eliminating the FMW is to legally permit offering or paying less than the FMW and thus reducing the purchasing power of the median wage. This in turn creates additional jobs that may be performed by those incapable of earning the FMW rate.
Those incapable people are now supported by public assistance or they are dependents of taxpayers.

There are some that contend the FMW is inflationary. The FMW is much more a victim rather than a cause of inflation. The FMW has never, (and whatever serves as the effective minimum rate will never) be among primary causes for dollars’ reductions of purchasing power].

The purchasing powers of the overwhelming majority of additional jobs created due to elimination of the FMW will be extremely less than that of the replaced FMW.

Due to elimination of the FMW, additional jobs with purchsasing powers extremely less than the FMW will be created. The overwhelming majority of those additional extremely sub-minimum wage jobs will be performed by those incapable of work that justify paying the eliminated FMW rate. These people are now supported by public assistance or are taxpayers’ dependents.

FMW opponents argue employing the previously unemployable economically justifies the elimination of the FMW; proponents argue eliminating the FMW to enable employment of the least capable is economically net detrimental.

Employing the least capable would not significantly increase individual enterprises’ or our nation’s production.
Due to the effective minimum bench mark rate more or less affecting ALL wages and salaries, eliminating the FMW would reduce the median wage’s purchasing power far beyond that attributable only to the additional extremely lesser purchasing powered jobs. Those now employed and earning the lowest quarter of wage rates will suffer the greatest losses of purchasing powers.

Due to the elimination of the FMW, ALL working poor not dependent upon other taxpayers would require full public assistance.

Justifying elimination of the FMW because the cost of living would be reduced is absolute nonsense. In the absence of labor shortages, the loss of wages’ and salaries, (i.e. the median wages’) purchasing powers would exceed the extent the cost of living reductions.

Failure to keep the FMW abreast to the U.S. dollar’s purchasing power is an effective method to promote our poverty. That’s why I’m a proponent of annually updating the FMW.

Respectfully, Supposn
 
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myp

Site Founder
Jan 14, 2009
5,841
50
#4
Due to the elimination of the FMW, ALL working poor not dependent upon other taxpayers would require full public assistance.
Where are you getting this claim from? Source? Those jobs wouldn't just disappear you know :p The marginal product would stay the same and those jobs could still be justified. Maybe an increase in supply in some areas might put some downward pressure, but that only means a net increase in jobs as marginal products remain constant.

Failure to keep the FMW abreast to the U.S. dollar’s purchasing power is an effective method to promote our poverty. That’s why I’m a proponent of annually updating the FMW.
You can't have your cake and eat it too. Increasing the minimum wage means a less jobs in the market, all other things held constant. Also, sometimes downward pressure on wages might be a good thing- wages are [nominally] quite sticky downwards to begin with.
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#6
MYP, unless there’s a labor shortage, repealing the federal minimum wage, (FMW) laws would significantly reduce the purchasing powers of our median wage and the lowest quarter segment of our wage earners’ population.
The extent of reduction’s inversely related to the difference between the minimum wage and the jobs wage. The lowest paid wage earners suffer the most extreme loss of purchasing power.

Currently the unemployed are dependents of other taxpayers or they’re supported by unemployment insurance or other public assistance.
Currently among those earning at or near the FMW, a small proportion qualify for public assistance other than unemployment insurance.

Eliminating the FMW will open up extremely low paying jobs for many people presently un-hirable. They can perform some commercially useful tasks but due to legal or physical or mental disability their contributions to an enterprise wouldn’t justify payment of the FMW rate.

Because the minimum bench mark more or less affects ALL wages and salaries, the purchasing powers of the lowest earners will be reduced to the point that they will require public assistance subsidies. The median wage’s purchasing power will be reduced far below what is attributable to the additional extremes.

Respectfully, Supposn
 
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Jul 26, 2009
5,666
406
Opa Locka
#7
MYP, unless there’s a labor shortage, repealing the federal minimum wage, (FMW) laws would significantly reduce the purchasing powers of our median wage and the lowest quarter segment of our wage earners’ population.
The extent of reduction’s inversely related to the difference between the minimum wage and the jobs wage. The lowest paid wage earners suffer the most extreme loss of purchasing power.

Currently the unemployed are dependents of other taxpayers or they’re supported by unemployment insurance or other public assistance.
Currently among those earning at or near the FMW, a small proportion qualify for public assistance other than unemployment insurance.

Eliminating the FMW will open up extremely low paying jobs for many people presently un-hirable. They can perform some commercially useful tasks but due to legal or physical or mental disability their contributions to an enterprise wouldn’t justify payment of the FMW rate.

Because the minimum bench mark more or less affects ALL wages and salaries, the purchasing powers of the lowest earners will be reduced to the point that they will require public assistance subsidies. The median wage’s purchasing power will be reduced far below what is attributable to the additional extremes.

Respectfully, Supposn
I always find it funny to see people make myp's argument when countries with high min wages have low unemployment (Australia has 5.1% unemployment at AUD$15.96, Norway is at 2.4% and while they don't have a min wage, it's only because the unions have managed to keep wages higher then a min wage would ever be). Now compare that to the US, min. wage is only $7.25 and unemployment is at 8.2% and only that low because the DoL only counts unemployed workers collecting welfare checks. Removing the min wage might drive up employment but everyone will be working on farms and mines for slave wages.
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#8
David, I lack people skills.
I don't get why so few others don't understand our viewpoints. our nation wasn't built on cheap labor and that's not the answer to a better future.

Respectfully, Supposn
 

myp

Site Founder
Jan 14, 2009
5,841
50
#9
MYP, unless there’s a labor shortage, repealing the federal minimum wage, (FMW) laws would significantly reduce the purchasing powers of our median wage and the lowest quarter segment of our wage earners’ population.
I don't think if would be that significant, but the median might go down only because MORE people would have jobs. I don't see how that is a bad thing.

The extent of reduction’s inversely related to the difference between the minimum wage and the jobs wage. The lowest paid wage earners suffer the most extreme loss of purchasing power.
Yes, but earning something is still more than earning nothing in terms of purchasing power :p

I think I covered the rest of your points in these two responses.
 

myp

Site Founder
Jan 14, 2009
5,841
50
#10
I always find it funny to see people make myp's argument when countries with high min wages have low unemployment (Australia has 5.1% unemployment at AUD$15.96, Norway is at 2.4% and while they don't have a min wage, it's only because the unions have managed to keep wages higher then a min wage would ever be). Now compare that to the US, min. wage is only $7.25 and unemployment is at 8.2% and only that low because the DoL only counts unemployed workers collecting welfare checks. Removing the min wage might drive up employment but everyone will be working on farms and mines for slave wages.
Correlation does not equal causation. If that were the case every country would want a minimum wage that is infinity dollars per hour so we could all live like kings. Australia and Norway have other factors in their economies that lead to such high employment rates. Australia is in the midst of a huge mining boom. The US does not have something like that right now.

Also, I am pretty sure the labor participation rate in the US is a lot higher than in those two countries.
 

myp

Site Founder
Jan 14, 2009
5,841
50
#11
David, I lack people skills.
I don't get why so few others don't understand our viewpoints. our nation wasn't built on cheap labor and that's not the answer to a better future.

Respectfully, Supposn
What does that even mean? This isn't even about one particular nation. Also, $6-7 per hour might not be considered "cheap" depending on what scale you are looking at.

And we did have a period of low wages vs. working conditions, but again it isn't really relevant.
 
Jul 26, 2009
5,666
406
Opa Locka
#12
Correlation does not equal causation. If that were the case every country would want a minimum wage that is infinity dollars per hour so we could all live like kings. Australia and Norway have other factors in their economies that lead to such high employment rates. Australia is in the midst of a huge mining boom. The US does not have something like that right now.

Also, I am pretty sure the labor participation rate in the US is a lot higher than in those two countries.
It's not like those are the only 2 examples, myp. Higher wages means more buying power which in turn drives spending and fuels the economy. Your argument focuses on the short term issues of a min. wage higher then the worth of labor while ignoring the long term effects that increase spending has. So while it's true that a min wage might keep that janitor from getting hired, it's also true that the increase need for labor fueled by the buying power of the working poor may vary well have that same person hired on at a cleaning business. History and the numbers are on my side on this.
 

myp

Site Founder
Jan 14, 2009
5,841
50
#13
It's not like those are the only 2 examples, myp. Higher wages means more buying power which in turn drives spending and fuels the economy. Your argument focuses on the short term issues of a min. wage higher then the worth of labor while ignoring the long term effects that increase spending has. So while it's true that a min wage might keep that janitor from getting hired, it's also true that the increase need for labor fueled by the buying power of the working poor may vary well have that same person hired on at a cleaning business. History and the numbers are on my side on this.
How are you saying that there will be increased spending with a minimum wage? Are you arguing that marginal products will change directly as a result of the minimum wage and in turn will yield greater production?

Because without a minimum wage, you are not removing production and labor at that price floor, but instead just adding more below it. In other words, you get more net production which means more net spending.

What history, etc. do you have on your side? And again, loose correlation can't drive strong conclusions unless you have more to add to those arguments (all loose correlations do is show possibilities).
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#14
MYP, it’s contended that the purpose of a legally mandated and enforced minimum wage rate is to put a “floor” beyond which wages cannot go.

Unless there’s a shortage of labor, an adequate and enforced minimum wage law is one of the very few factors to limit employers’ advantages over lower wage earning applicants and workers.

I’m a proponent of the federal minimum wage, (FMW). I’m further a proponent of the FMW being annually cost of living adjusted, (COLA’d) similar to the manner that we now annually adjust social security benefits.

IF we adopt COLAing, I’ve not come to any definite opinion as to how we should determine the initial FMW rate. After the initial enactment, the FMW is statically determined each year.

Opponents of the minimum wage point out that it prevents the creation of lesser paying jobs and is a particular hardship upon high school age children.

The contrary view is youth is outgrown; the FMW inversely more or less affects ALL wages and salaries; all those with wages at or below the lowest quarter wage rates particularly benefit from the FMW; unless there’s a Labor shortage, repeal of the FMW would increase national poverty.

Opponents of the FMW contend that increasing the minimum wage increases the U.S. dollars inflation. The timing and extent of FMW updates is determine by the U.S. Congress.
(I doubt if any president has ever vetoed one of those decisions). On July 24, 2007, after a duration in excess of 118 months, the FMW was increased from $5.15 to $5.85/Hr.

The FMW doesn’t cause inflation; it’s a victim of inflation. It generally follows way behind rather than leading the purchasing power of the U.S. dollar. That’s why I’m a proponent of annual cost of living adjustment for the FMW in the same manner as we update social security retirement benefits.

Respectfully, Supposn
 

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