Minimum Wage

MirandaJuly · January 2014

Can someone explain to me how the minimum wage can be raised without raising prices on everything and negating the purpose? Seems like setting maximums for CEOs or something would be more likely to cause the desired effect. Higher taxation on high incomes routed to services for lower income people?

Just seems like you raise the minimum wage, then lots of employers have to raise the prices on their goods to pay their employees' wages, then we're back where we started and people can't afford stuff.

1234 · January 2014

Most companies, like Voodoo Doughnuts, make FUCK TONS of money so if you raise the min wage they still make SHIT TONS of money.

zin · January 2014

Also, not that many people make minimum wage. Only 4.7% of hourly workers make the minimum or less.

ManInTheIvoryTower · January 2014

In order for a business that uses labor to be a sustainable capital enterprise it must provide enough income to keep the employee from needing to turn to taxpayer-funded assistance. Or else it's not a business, it's a charity. A perverse charity for rich people.

MirandaJuly · January 2014

Very interesting and helpful fact, zin. The macro economy is fucking confusing for me.

zin · January 2014

Thanks to http://www.bls.gov/opub/ted/2013/ted_20130325.htm

swamp_knobbler_mahan · January 2014

I found this to be a good explanation:
http://backtofullemployment.org/2013/01/18/minimum-wage-hikes-do-not-cause-inflation/

distant_shoe · January 2014

im no republican and i fully endorse and support government assistance to any and all in need but its a shit world of total bureaucracy, waste and we all know that a lot of people don't even use the government assistance programs that they could, because of a variety of reasons including pride, shitty promotion of said services, etc http://www.whittierdailynews.com/general-news/20130220/study-californians-leave-billions-in-federal-food-stamp-funds-unclaimed

the concept of a government enforced min wage takes a different approach to government assistance of the poorest

it creates a lower class with more purchasing power and financial stability while hardly gouging the bottom lines of the rich owners (see above article on average impact on cost of products when wages go up)

seems to me that putting the onus on actual business private sector to fucking not have to have donation drives for their own under-paid employees (http://www.msnbc.com/all/walmart-collecting-food-donations-workers) is a pretty good call no matter where u sit on the conservative/liberal spectrum

forcing jobs over-seas is not a good excuse for low minimum wage
like steve jobs said to obama: those jobs are already gone and they are not coming back
now people are being asked to do middle-class level jobs for absolute shit money, and no one is working full-time
no one can afford to buy anything, creating a huge economic problem as well as a debt problem, predatory penalty systems of loan sharks (banks, credit cards, pay-day loans, utilities companies, police/city income machinery) bleeding the already poor of the few dollars they do make. the fed has discouraged saving by lowering interest rates to next to nothing and still people don't have the cash purchasing power/incentive to spend to really get our economy booming.

its a shitty system
raising minimum wage is another approach to making shit pop:
give people more cash and they borrow less and spend more at businesses that will make as much if not more profit for their greedy ass top dogs
if much of our nation is shit poor, at least give them enough actual cash for time working for the owners so that they can keep consuming like good ants and shit keeps chugging along ok

small businesses, lil small business just starting out....the little guy...the bespoke leather belt and wallet company, the independent grocer/hardware/clothing/coffee store.. i say u have to have stuff in place to help those out, like huge tax breaks for places with less than say 10 employees or some shit like that, to make it all work without just making all tiny independent businesses suffer and disappear and we are all working at walmart mcdonalds 20 hrs a week

anyway i dont know shit

ask rich, he's the one closest to the socialist lady up in seattle who won a city seat on this concept

YoursTruly · January 2014

PREACH

flossy_log_lady · January 2014

But if wages go up and prices go up, no one has "more cash." They have the same amount of cash, right?

But I guess Alex's link argues that increased wages do not trigger inflation, which is something I would have to read more about to really understand. (Love this line: "In fact, this potential impact on inflation is smaller than the margin of error for the Department of Labor’s estimate of inflation.").

In a very simplistic sense, raising wages only seems like half of the solution. If you're raising wages without assuring that prices won't go up, you're just chasing your tail.

"Most companies, like Voodoo Doughnuts, make FUCK TONS of money so if you raise the min wage they still make SHIT TONS of money." --> They'll only go from "fuck tons" to "shit tons" if they choose to take a hit instead of passing on to the consumer, right? Which of course is a complicated decision based on all sorts of calculations, but the bottom line is always going to be "how can we make the fuckest of tons?" It's not like the top dogs are just gonna be all, "Oh, darn. Minimum wage just went up. I guess that means we take a little hit. Shucks." They're gonna be like, "Sigh. What a hassle. Now we have to figure out how to make up that xx% that we're gonna lose by using some other strategy." But maybe that's what all government regulations do, and that's okay, because while the top dogs are figuring out their next move some people are making a little more moolah at the bottom of the food chain, at least for a while.

distant_shoe · January 2014

its true, the above article doesn't show many examples of how the costs of labor get absorbed in lots of other ways besides the prices of goods going up, so if you wanted to not believe it, you could. but i would argue that -though it seems logical that the prices of goods would directly and intrinsically go up with the increase in minimum wage (the wage paid to the lowest of the lowest rung of people working), (and its an easy jump to make), we are making it with even less hard examples of this direct co-relation than we have to the contrary (again see above link). it is a logical jump that needs to be supported by evidence, just like the other way around. so why choose one logical jump over another?
cultural bias.

even if there was a mountain of evidence supporting the claim that there is no direct co-relation between min wage increase and raise in cost of product to consumers, we will believe it so because it seems logical enough, and all information outlets to the contrary will not be in line with "what they want u to think" and will be therefor indirectly suppressed or seem not as loud.

im fully confident that businesses will always find a way to keep their products at attractive prices, or at least at prices people will tolerate.
price of products/services is a calculation with many many factors. focusing on cost of labor to employers in a given city/state/the US is focusing on one factor at the complete and totally convenient expense of all other factors. usual #1 factor is "what the market will bear". and it would be logical to think that the market could bear the tiny increase in what shit costs that raising the minimum wage would incur without spiraling into some sort of inflation spike. i think its not too big of a logical jump to see that the benefit$ greatly outweigh the lo$$e$. i dont have data to prove it, because im not a professional. i am biased: i wish it to be true and see evidence when i poke around the web and hear people with much more objective knowledge with no clear ties to the Owner class and i'd vote for it because it seems compassionate and righteous at why the fuck not?

i agree that you must ensure that the poor Owners who will suffer so greatly with loss of profits should definitely be compensated with tons of back-end tax loop holes and other incentives to keep product prices stable. maybe the government can subsidize key industries like corn and soy and wheat and livestock and fuel and also have huge funds for employer funded health insurance and

OH WAIT

flossy_log_lady · January 2014

To clarify my statement: "But I guess Alex's link argues that increased wages do not trigger inflation, which is something I would have to read more about to really understand." --> I meant I need to read more about the whole relationship between wages/inflation, not that I believe wages do trigger inflation and I would need to read more to be proven wrong. I have absolutely no idea how that relationship works. Although my post does make it seem like I'm arguing that position and you're probably right - I just hear that argument so much in the media it's probably just stuck in my brain.

And, given the above, "i'd vote for it because it seems compassionate and righteous and why the fuck not?" -- yep.

ManInTheIvoryTower · January 2014

> The macro economy is fucking confusing for me.

Occam's Razor applies here. If people aren't making enough money for basic needs, then pay them enough for their basic needs and shit will sort itself out. The businesses that fail due to living-wage standards should be allowed to fail.

Why stop at min wage?!

Investment houses make dumb decisions? Let them fail, problem solved. (Instead: Bankrupt US treasury to make rich people stay rich. TOO DUMB TO FAIL.)

Health-care ins. industry can't make a profit? Let it fail, problem solved. (Instead: Worst-of-both-worlds health care reform that caterers to an obsolete industry. TOO EMBEDDED TO FAIL.)

Ugh. So sick of these pearl-clutching fence sitters who tell us in somber tones from the teevee that we need to take baby steps toward an eventual solution when shit needs to be fixed ASAP.

We are digging a hole here people, the longer we wait the longer the ladder is going to have to be when we are done with our pissing contest.

YoursTruly · January 2014

PREAAAAACH

ManInTheIvoryTower · January 2014

Also: get off my lawn.

/grumpyoldman

MirandaJuly · January 2014

Killer thread, thanks to all. I used to read a lot more political / economic articles, but got super bummed out and cut way back.

kdawg · January 2014

I have to disagree. "let them fail" is another example of libertarian claptrap being pushed mostly to distract and neuter the left. sounds good until you think through the consequences.

http://krugman.blogs.nytimes.com/2010/04/12/failure-is-a-failed-strategy/

Or maybe you are just being swiftian, in which case, kudos!

ManInTheIvoryTower · January 2014

Bank failures are a different animal than investment house failures.

As The Krug states in that very article;
"What has to be protected in a crisis are bank deposits and things like bank deposits — basically, bank-created money. ... On the other hand, bank shareholders and long-term bondholders can be made to pay a price without collapsing the system."

YoursTruly · January 2014

I JUST WANT MCDONALDS TO FAIL

1234 · January 2014

Save the banks, kill the bankers.

PROBLEM SOLVED.

ManInTheIvoryTower · January 2014

Warren 2016!

Dr_William_Hayward · January 2014

Jail the bankers. The financial industry has deep tentacles into the executive, judicial and legislative branches. But jailing execs and board could start to rein transgressions.

On the original topic - raising the minimum wage to a near living wage and simultaneously minimizing the sub wage underground economy which drags down the above ground economy minimum wage would go a long way.

Inequality is bad for everyone...

Leland · January 2014

The State should provide a dignified minimum to everyone. Once that is covered, people could organize themselves to do interesting and productive work of their own design and choice. What if people's days were animated mostly by joy and service instead of terror and retribution?