Raise the minimum wage?

[SoS]

You raise min wage, so people can afford stuff, then stuff costs more so people can't afford it.

 

How do you hope to add to the cost and not add to the price?

 

Min wage is nothing but a shiny object to distract us.

[Grillick]

If you honestly believe that an increase in the minimum wage will result in an equal increase in prices, then there's really know point in arguing with you since you clearly have no concept of scale or reality.

[Benito Mussolini]

The Minimum Wage has to be by far one of the stupidest things the Western World has given us. Try instituting Corporatism you might have a better chance. Let the Companies make their own wages according to the good of their Business and the Survive of the Nation. 

Edited September 14, 2014 by Benito Mussolini

[SoS]

No, I really tried to avoid implying that.

 

But the fact is, they'd have to account for the increased wages somehow. Inflation everywhere, increased productivity with decreased positions.

 

I'm totally in favor of ensuring that a working person can survive with dignity. I just don't believe minimum wage has done much toward that end in the last 40 years. The statistics show inflation has increasingly outpaced minimum wage. Is raising minimum wage (sharply) the solution? Seems like the path to more of the same.

 

More welfare would even be preferable to raising the minimum wage...in terms of actually increasing the buying power of the working poor.

 

Deal with the real problem here which is inflation, unemployment, underemployment. Eliminating the minimum wage would go further toward solving these problems.

[Grillick]

That the minimum wage has failed to keep pace with inflation is neither a compelling argument in favor of leaving it where it is or removing it, nor a piece of evidence that increasing it would significantly affect inflation. Rather, it should be seen as a condemnation of our political process that has allowed inflation to dramatically outpace increasing wages (whether minimum, median, or mean). Indeed, it could even be interpreted as evidence that increasing the minimum wage would have only a slight effect on inflation, if any.

 

You are correct that more welfare would be a more effective means of increasing the buying power of the working poor, but until we can overcome our society's obsession with full employment, more welfare will do little (if anything) to address the growing divide in this country between the upper- and lower-tiers of the economic ladder. And it does nothing to address the fact that 100% of the productivity increase over the last thirty years has been absorbed by the incomes of the top 10% of income-earners.

 

Increased welfare actually encourages inefficient business practices, because it allows companies to pass the cost of their wages onto taxpayers as a whole, rather than forcing them to pass them on to their customers. Any business that cannot afford to pay its lowliest employee a living wage doesn't have a business model that is worth sustaining.

 

Nobody who works full-time for a for-profit company should have to rely on government handouts to sustain a standard of living above the poverty level.

Edited September 15, 2014 by Grillick

[Toxxikation]

SoS, to get an idea of the scale: http://www.forbes.com/sites/beltway/2014/02/11/raising-the-minimum-wage-would-be-good-for-wal-mart-and-america/

 

The real problem here (and thank God it's not the 50's or I'd be prepared to go before a panel) is Capitalism. Companies like Walmart can afford to absorb the cost of a pay rate hike while taking a dent in profit (still making a ton of money, no doubt) without jacking up the prices (at all). Other companies would have to raise their prices to cover the rate hike, but it would likely be less than 1% (not to mention the fact that now more people can afford to purchase that same item, thus increasing the overhead is less necessary than it was to begin with.)

 

The problem is capitalism and greed. Walmarts owners want more money, and they're against giving their workers (who are also most likely customers) higher wages (to spend in their stores...) because it would hurt profits. I get that, I really do, but that only goes to show how evil capitalism can be. Over a million workers for Walmart make less than $12/hr ($24,960/year). 

To cite a snippit of the article I posted: "Fortunately, what some government restrictions prohibit, other government regulations might also enable. Consider the consequences of raising the minimum wage to $12 per hour.

Not only would Wal-Mart and its competitors suddenly be able to do what was best for both shareholders and employees, but the same large hike in wages and disposable income would also go to tens of millions of other low-wage American workers.McDonald's might need to raise the price of its cheeseburgers by a dime and American-grown agricultural products would cost 2% more on the grocery shelves, but some $150 billion of extra income would flow each year to the sort of households that spend every dollar they earn, producing an enormous, ongoing economic stimulus program, a stimulus program funded entirely by the private sector. And a large share of those tens of billions in additional disposable income would go toward boosting the revenues at Wal-Mart, McDonald’s, and the other corporations that employ those same workers."

The idea that raising the minimum wage would cause the cost of goods to rise is a correct assumption, but most are blind to how little the prices would actually increase, and the fact that most Americans would end up paying less in taxes due to the decreasing dependence on welfare.

Either way, wages need to increase at the same pace as inflation in order to close the gap between the upper and middle class before we get rid of the middle class all together.

There's my two cents. But since I was born in 1990, that now costs four cents.

[SoS]

yeah Grillick, what increased productivity represents is fewer employees having more work responsibilities for the same (less) pay...almost always without renegotiation. Increased productivity (8% last time I checked) represents "stolen" wages.

 

Toxx, dumping more money into the hands of the working poor sounds good. It's true they'd spend every dime. The problem becomes supply and demand. And that they'd spend every dime is the other problem. While the cost of production would be a small consideration, the volume of money in the hands of consumers would become a major concern. We would see shortages in certain products. Then a dramatic increase in the price of those products. You ever see a great sale price...the shelf is cleared out in a day. With an additional (estimated) $18 billion in the hands of consumers, everything would essentially be on a great sale...until massive inflation quickly takes effect. You just can't win with inflation.

[Grillick]

$18 billion sounds like a lot of money when you say it in dollar terms, but it represents only 0.4% of consumer spending on domestic services. So I guess I'll have to return to my conclusion that you lack any real concept of scale or reality.

[SoS]

lol...$18 billion per week!

[Grillick]

Oh, are you just making up numbers? I thought "estimate" meant you were actually using an estimate that had been provided by a reputable source.

 

Here, let's use some actual numbers. Increasing the minimum wage from $7.25 to $10.10 will result in $31 billion in additional wages annually by 2016. That's 0.72% of consumer spending on domestic services. When is the last time you saw a sale that reduced prices by 0.72% cause shelves to empty and result in huge shortages? Don't trust the Congressional Budget Office? Fine, why don't we use a different study? This one shows that the same increase described before would lead to $35 billion in additional wages, so now we're up to 0.81% of consumer spending on domestic services.

 

Yowza. I hope prices don't get out of control as people snap up all those "discounted" goods!

[Karl Marx]

I think it's funny that there are people who think raising the minimum wage will make things "fair". If a business is still in operation after the minimum wage is raised, then that means they can still extract surplus value from their workers. Hardly fair... The minimum wage is nothing more than a concession to the workers designed to preserve the capitalist system by placating those who can only sell their labor for whatever they can get.

 

Raising the minimum wage would certainly hurt small businesses, as well as increase competition for jobs. This would allow large corporations to more easily dominate their competitors and have access to an industrial reserve army of former minimum wage workers whose employers couldn't afford to continue paying them. Nothing but another step toward the collapse of the system...

 

Given these two thoughts, I don't know whether to oppose the minimum wage or support it.

[SoS]

I just multiplied the labor force by the wage increase. I forgot to factor in the resulting massive layoffs and unemployment the increased wages would cause

 

Are Marxists still waiting for the collapse? It's collapsed a few times already and been put back together by the taxpayers.

[Toxxikation]

Look at all these massive layoffs in Seatac, WA, where they just increased the minimum wage to $15.

 

http://www.addictinginfo.org/2014/09/14/15-now-seatac/

 

Hotel owner that said he was going to have to lay people off is expanding the hotel and creating more jobs to bring in more revenue to cover the expenses...

Restaurant owner that thought he would have to close a quarter of his stores is opening up 5 more.

 

Some companies are coping by adding a $.99 cent surcharge to the fee of a parking spot.

 

Here's a little less biased article: http://www.washingtonpost.com/opinions/dana-milbank-no-calamity-yet-as-seatac-wash-adjusts-to-15-minimum-wage/2014/09/05/d12ba922-3503-11e4-9e92-0899b306bbea_story.html

 

While the immediate hike to $15 might be bad, I'd be willing to pay $1 extra for a movie so my neighbor can afford rent.

Where I live, rent is $785 base, $850 after water/gas/trash is factored in. I'd have to work 117 hours a month at minimum wage to make rent. Considering I work 160 hours a month, this isn't a big deal. Electricity is over $100/mo (it's summertime in Texas.) Now I'm up to 130 hours just for rent and electricity. That leaves me $217.50 for groceries ($200/mo), gas ($140/mo), insurance ($160/mo), Cable/internet ($100/mo), credit card bills ($250/mo), car payment ($400/mo), for a total of $2200/mo. If I was making minimum wage, I'd be 1032.5 in the hole right now. I could cut out cable/internet, and sell my car, freeing up 800, but including a monthly bus pass, that still puts me 312.5 in the hole. Just for basic necessities. I would need to work and extra 10 hours a week, bringing my total to 170 worked hours in a month. Assuming a 30 day month, 20 days working, 8 hours sleeping, hour commute (30min to work 30min home) I would only have 300 hours per month to go grocery shopping, go to the gym, take care of the things I need to take care of. But most part time jobs aren't going to give you 2.5 hours per week, most are going to require 20 hours per week, which is another 80 hours per month, which takes me from 300 hours per week free to 230 hours per week free.

 

Adjust that for $15.hr wages.

 

I could have all of the luxuries I have now (which generate jobs, such as insurance agent, gas station attendant, cable/internet providers, bankers for car loans as well as car manufacturing) and STILL have $195 to put back into the economy.)

 

If I didn't have those luxuries, I'd have over $1000 per month to put back into the economy spending money in the service industry, instead of being a slave to it.

Something like this would require Walmart and MacDonalds to start treating their employees better. Many people who are employed by Walmart (near minimum wage) do so because it's the only option they have. It's the only thing keeping them from sleeping on the streets. Walmart knows this, so they can treat them shitty and they HAVE to keep showing up. Someone who was making $15/hr wouldn't settle for that. They'd find something that treated them better and Walmart would either treat their employees better or lose them to their new rival who will.

 

This is also why I'm for the institution of a Basic Income.

[WISD0MTREE]

There's another simple rule of business that often is neglected: you can't sell something if the people can't afford to buy it.

 You are arguing against your point. More money going out of a business means that you have to have more coming in, making them increase the price.

 

There's a simple rule in business. You can't sell something for less than it costs you to make it (if you want to stay in business long).

Which is why price caps won't work.

[Grillick]

If you honestly believe that an increase in the minimum wage will result in an equal increase in prices, then there's really know point in arguing with you since you clearly have no concept of scale or reality.

[Toxxikation]

Wisd0m, more money is going out of the business into the hands of the employees, who can, in turn, shop at said business. Also, they can spend their new fancy extra money at other businesses (who have also put out more money) which brings in more money.

 

Right now, at $7.25 an hour, working at Sears, I couldn't afford to buy a luxury item, let's say video games. Video games are $60 each. At $7.25/hr I can afford to live (let's just assume, with basic necessities, I can afford rent, a car, gas, groceries, and electricity). At $15/hr, I can now afford all of that, PLUS one video game a day. This results in increased revenue for GameStop, whose employees can now afford to buy deodorant from Walmart, whose employees can now afford to buy dinner at Applebee's, whose employees can now afford to buy alcohol from the liquor store, whose employees can now save money to go back to school as well as buy new tires for their car at Discount Tire, whose employees can now afford to buy tools from Sears, whose employees can now afford to buy games from Gamestop.

 

Do you see how the increased wages increase revenue across the board? Sure, these stores may have to raise prices slightly but with the millions of people making minimum wage now being able to afford things they couldn't before, businesses will see more customers, which increases revenue, which covers the increase in wages (and then some.)

[WISD0MTREE]

Wisd0m, more money is going out of the business into the hands of the employees, who can, in turn, shop at said business. Also, they can spend their new fancy extra money at other businesses (who have also put out more money) which brings in more money.

 

Right now, at $7.25 an hour, working at Sears, I couldn't afford to buy a luxury item, let's say video games. Video games are $60 each. At $7.25/hr I can afford to live (let's just assume, with basic necessities, I can afford rent, a car, gas, groceries, and electricity). At $15/hr, I can now afford all of that, PLUS one video game a day. This results in increased revenue for GameStop, whose employees can now afford to buy deodorant from Walmart, whose employees can now afford to buy dinner at Applebee's, whose employees can now afford to buy alcohol from the liquor store, whose employees can now save money to go back to school as well as buy new tires for their car at Discount Tire, whose employees can now afford to buy tools from Sears, whose employees can now afford to buy games from Gamestop.

 

Do you see how the increased wages increase revenue across the board? Sure, these stores may have to raise prices slightly but with the millions of people making minimum wage now being able to afford things they couldn't before, businesses will see more customers, which increases revenue, which covers the increase in wages (and then some.)

Yes, but you are forgetting that they will have to increase their wages, too, making their products more expensive. 

 

Forbes: http://www.forbes.com/sites/clareoconnor/2013/07/30/how-much-would-a-big-mac-cost-if-mcdonalds-workers-were-paid-15-per-hour/?utm_campaign=forbesfbsf&utm_source=facebook&utm_medium=social

 

Morelix’s take: If McDonald’s workers were paid the $15 they’re demanding, the cost of a Big Mac would go up 68 cents, from its current price of $3.99 to $4.67.

By his estimates, A Big Mac meal would cost $6.66 rather than $5.69, and the chain’s famous Dollar Menu would go for $1.17. Morelix said that his number crunching assumes profits and other expenses are kept at the same absolute number. The research assistant said his math is based on increases in salaries and benefits for every McDonald’s worker, from minimum wage line cooks paid $7.25 an hour to CEO Donald Thompson, who made $8.75 million in 2012.

(Update: Unfortunately, Morelix did not, as Forbes’ Morgan Brennan first pointed out after publication, factor the company’s franchisee model into his calculations. And that, as CJR.org’s Ryan Chittum rightly points out, makes a big difference–as do a number of other factors excluded by Morelix. What a Big Mac would cost if McDonald’s workers were paid $15 an hour remains an unanswered question, but it would almost certainly not be what Morelix says.)

(Update, 2: Forbes contributor Tim Worstall argues that the answer to the question is simple: The cost of a Big Mac–at least to consumers–probably wouldn’t go up at all. Why? In order to remain compeditive with rivals on price, the company, as economist Adam Ozimek pointed out earlier this week, would probably find a way to keep overall labor costs in check, most likely by reducing the number of workers and introducing more automation–think ATMs in the banking industry.)

[Grillick]

Unemployment shouldn't concern us overmuch if we have an adequate social safety net for those displaced by a higher-wage economy.

 

That being said, peer-reviewed studies like those I posted before (I'm mobile, so no links in this post - look up a page) predict 500,000 fewer jobs created by 2016 with a $10.10 minimum wage, while 9,500,000 people would be lifted out of poverty. 95% of those seriously affected by then change would see a positive change. With that added spending, society as a whole would be able to afford to support the half-million workers who are replaced by automation.

[WISD0MTREE]

Unemployment shouldn't concern us overmuch if we have an adequate social safety net for those displaced by a higher-wage economy.

 

That being said, peer-reviewed studies like those I posted before (I'm mobile, so no links in this post - look up a page) predict 500,000 fewer jobs created by 2016 with a $10.10 minimum wage, while 9,500,000 people would be lifted out of poverty. 95% of those seriously affected by then change would see a positive change. With that added spending, society as a whole would be able to afford to support the half-million workers who are replaced by automation.

Where exactly would that money come from? A tax increase. 

 

http://www.usdebtclock.org/

It is only $17,746,897,600,000 when I check this. 

[Grillick]

Actually, increased GDP leads to increased tax revenues without an increase in tax rates. That being said, I believe our tax rates are too low.

[Toxxikation]

Wisd0m, there would be no need to increase taxes. People making more would pay more in income taxes (with the majority of people now paying income tax instead of getting it all back in a refund) as well as through sales tax on the larger amount of items they are purchasing.

 

Unless you live in Oregon, and then you can go away.

[WISD0MTREE]

Wisd0m, there would be no need to increase taxes. People making more would pay more in income taxes (with the majority of people now paying income tax instead of getting it all back in a refund) as well as through sales tax on the larger amount of items they are purchasing.

 

Unless you live in Oregon, and then you can go away.

>give people more money

>tax that money right back

[Grillick]

If you honestly believe that an increase in the minimum wage will result in an equal increase in taxes, then there's really no point in arguing with you since you clearly have no concept of scale or reality.

[Toxxikation]

Oy vey.

 

Wisd0m, it wouldn't be "taxing them right back," it would be paying them less on their tax returns now that they will have to pay income tax rather than get it all back in the form of a refund. The people wouldn't be losing any extra money, they already pay it in taxes. They'd just be making more, thus they would get less back at the end of the year because not all of it would be returned.

 

This is my last attempt to get this point across to you, so I really hope it sticks.

[WISD0MTREE]

No links to backup that stuff? I'm disappointed in you. Surely there will be sources, since so many people think the same way as me. 

 

EDIT: 

 

Republics are considered by most people a form of democracy, WISD0MTREE. France (Hollande), Russia (Putin), and the USA (Obama) are examples of presidential democracies. Spain (Filipe/Rajoy), and the UK (Elizabeth/Cameron) are examples of constitutional monarchies. Portugal (Passos Coelho/Cavaco Silva) and Italy (Renzi/Napolitano) are semi-presidential. All of them are generally considered democracies because to a greater or lesser extent, the electorate can choose who represents them.

How come laws are passed when the majority of us oppose them, then? 

much republic 

such wow

Edited September 22, 2014 by WISD0MTREE