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[Aquamarine]

In my opinion, minimum wage needs to rise as the value of the dollar continues to decrease.


However...I'll try and play devil's advocate. That is, I'll argue along Republican logic:


Wal-Mart decided not to build three new stores in Washington DC due to the passage of a bill that required all department store workers to be paid "a living wage of $12.50." Higher wages do have implications for economic development of large corporations. Think of all those people who aren't employed because those three stores weren't built.

A Wal-Mart spokesperson stated that minimum wage increases would definitely impact the consumer in terms of prices, and theories for little-to-no changes due to minimum wage hikes were made by "people who have limited understanding of how a business operates." A $10 minimum wage hike would add $2.4 billion in annual costs to the company. Given Net Income of $17.2 billion, such an increase would eat into at least 14% of Wal-Mart profits.

Do we really want American companies like Wal-Mart to struggle, cut jobs, and pass along significant costs to the consumer? And not to mention, total equity for shareholders will decrease. Isn't it un-American to stifle company growth?

Also, basic economics will tell you that minimum wage hikes will hurt not just Wal-Mart, but also poor people, because higher price floors are inefficient and cause gluts.

Well-off workers with wages above the minimum wage aren't hurt by these hikes, but for employees that work for companies like McDonalds, significant reduction in their bottom line could have adverse affects.

Do we really want Democrats stifling job creation and leading to even greater unemployment?



Did I do a good job playing devil's advocate? Because these are the thought processes that go through Republican senators' minds as they vote against this bill.

 

[BigDug13]

The idea that it will cause people to actually loose their jobs as companies cut back the number of minimum wage jobs they offer if they have to pay more money.

That's going to happen anyway. You could make minimum wage $1 an hour and those companies are still going to hire just enough people to fulfill the job's requirements per customer.

 

[GaimeGuy]

It's the same song and dance that conservatives and big businesses have been peddling for 30 years: requiring companies to pay more for anything will hurt their profit margins, kill their involvement in the economy, and then ripple out into hurting everyone.

if a business can re-invest into itself for growth, pay all of its employees, and have a safety cushion/buffer(this cushion is what we call "profit"), what's the big deal?

There are so many more ways to measure a business's success than how frugal of a hoarder it is.

 

[PepsimanVsJoe]

What does well-paying even mean?

People should be able to find a job that pays enough so that they can live decently.

-Enough to pay essential bills (Rent, Electric, Water, Car, Internet)
-Enough to feed themselves and at least 1 dependent
-Enough to enjoy some recreational activities (hobbies, the occasional vacation, etc)

The current minimum wage covers hardly any of that. The solution shouldn't be requiring these poor souls to work 70-80 hours a week just to live decently.

 

[Dorygrant]

It seems so unfair you have to suffer for not being 'rich'. What these political people don't have is empathy. The literally hold the power in their hands to help the economy and the working man (who is the one doing all their dirty work).

Sorry for the rant >_>

Spoiler

I'm not even American but still don't feel it's fair for those hustling to be punished for no reason because of the rich getting richer.

 

[GaimeGuy]

In my opinion, minimum wage needs to rise as the value of the dollar continues to decrease.


However...I'll try and play devil's advocate. That is, I'll argue along Republican logic:


Wal-Mart decided not to build three new stores in Washington DC due to the passage of a bill that required all department store workers to be paid "a living wage of $12.50." Higher wages do have implications for economic development of large corporations.

A Wal-Mart spokesperson stated that minimum wage increases would definitely impact the consumer in terms of prices, and theories for little-to-no changes due to minimum wage hikes were made by "people who have limited understanding of how a business operates." A $10 minimum wage hike would add $2.4 billion in annual costs to the company. Given Net Income of $17.2 billion, such an increase would eat into at least 14% of Wal-Mart profits.

Do we really want American companies like Wal-Mart to struggle, cut jobs, and pass along significant costs to the consumer? And not to mention, total equity for shareholders will decrease. Isn't is un-American to prevent company growth?

Also, basic economics will tell you that minimum wage hikes will hurt not just Wal-mart, but also poor people, because higher price floors are inefficient and cause gluts.

Well-off workers with wages above the minimum wage aren't hurt by these hikes, but for employees that work for companies like McDonalds, significant reduction in their bottom line could have adverse affects.

Do we really want Democrats stifling job creation and leading to even greater unemployment?



Did I do a good job playing devil's advocate? Because these are the thought processes that go through Republican senators' minds as they vote against this bill.

I know you're playing devil's advocate, but this line of thinking really irks me. It's like saying that because we learn arithmetic, how 1 + 1 = 2, 2 + 2 = 4, and 53 - 8 = 45, algebra, and statements like x + 1 = y, and x + 3 = 4, are nonsensical.

 

[Aaron]

So if I don't get full from a single McGriddle, should they increase their portions to meet my needs? I'll probably just order two or three McGriddles instead.

You should probably just stop eating shit like that all together. Maybe you wouldn't make unrelated analogies.

It sounds like the main point of contention is disagreement over whether a well-paying job is basic human right or not.

Here's how it works. Person works at job, job pays person, person spends pay on things they need. This circulates the money, grows the economy, and also grows the business, making better long term profits for everyone. If you pay people less, they buy less, the economy shrinks, businesses suffer, and everything is in the toilet thanks to the very few at the top that make out like bandits even when their businesses fail.

It's not about basic human rights. Who gives a shit about the moral argument? The economics of the United States would benefit directly from a higher minimum wage. Businesses in general would prosper. But instead unprincipled people chase after the short term gains, and everyone else suffers. Even those not on minimum wage.

 

[The Technomancer]

This is definitely a good argument as to why "aiming low" on the national wage is a positive idea - that high variance in cost of living is real.

Yes, but $10 is still pretty low. $7 is already low no matter where you are

 

[Five]

Because people have bills to pay and need to eat. So they'll take those shit jobs so they won't die.

It sounds fine in a vacuum but once we take it out of there and expose it to reality it falls apart.

Being able to live is a pretty basic human right.

Saying "well-paying" is a huge exaggeration in this case; the current minimum-wage is borderline unlivable. Which leads in to your last point: We have already agreed that being paid enough to live is a human right, which is why welfare exists. The problem is that right now the cost is being shifted to the taxpayers instead of the actual employers like it should.

But why is that the businesses' responsibility? (as Coins said above)

Is a wage what you earn for doing your work or an allowance for being a human?

 

[KingK]

"It will actually hurt more donors people than it helps," Sen. John Cornyn (R-Texas) said."

.

 

[everyday math]

Im just done. Just done.

Tired of this country's politics and corruption.

 

[Fun Factor]

Could someone fluent on this explain me this bit:

"It will actually hurt more people than it helps,"

How?

Can't you read, people will be getting free money for absolutely nothing! (other than working).
IT'S A WELFARE STATE.

 

[GaimeGuy]

But why is that the businesses' responsibility? (as Coins said above)

Get rid of all the workers at a business and see how well the business functions when there's literally 0 employees, 0 operations, 0 economic activity.

Then maybe you'll see why the business should be responsible for taking care of the workers, just as the workers are the engine driving the business.

 

[Five]

Get rid of all the workers at a business and see how well the business functions when there's literally 0 employees, 0 operations, 0 economic activity.

Then maybe you'll see why the business should be responsible for taking care of the workers, just as the workers are the engine driving the business.

Thanks for bringing this full circle, since that was my initial point. When employees leave, the employer raises the wage and they come back. This continues until a balance is found. Supply and demand.

 

[Cyan]

But why is that the businesses' responsibility? (as Coins said above)

Is a wage what you earn for doing your work or an allowance for being a human?

We have a weird obsession in the US with work as a moral good. We might well be better off with a small national income given to all citizens rather than a minimum wage, but it's not something that would ever fly here.

 

[Veezy]

Thanks for bringing this full circle, since that was my initial point. When employees leave, the employer raises the wage and they come back. This continues until a balance is found. Supply and demand.

We do not live in a perfect labor market with an incredibly low unemployment and in an environment where people can just pick up and quit jobs. Supply and demand does not work in the real American economy when it comes to getting a job.

EDIT: Or, should I say, it exists in the way described below by Tech not in the matter which you believe it does.

 

[The Technomancer]

Thanks for bringing this full circle, since that was my initial point. When employees leave, the employer raises the wage and they come back. This continues until a balance is found. Supply and demand.

But supply currently exceeds demand. More specifically there is not as much demand for skilled labor as there is supply. There is more demand for unskilled labor, and since the "unskilled labor pool" also includes people who are skilled but unable to find work the unskilled labor pool is enormous and therefore the bargaining power lies almost entirely with the employers. It would be basically impossible to form a union of fast food workers

I've been trying to track down this article that was posted a few months back. It was primarily about the ACA but it included a story of a woman who lost her job of 20+ years doing something specific, I think in a hospital, and when she hit the job market again she was only able to find a work that paid like a third of what she previously made. People don't always find jobs that match their qualifications.

 

[Enron]

In theory, it's "always" been the case, but it's only been really used on every single bill in the past few years. In all of recent political history, filibusters were only used on civil rights issues and very hot button issues one or twice a year.

Before, almost everybody would vote to close "debate" on an issue, then you'd go to the regular vote, where 50 votes + the VP wins. However, thanks to conservative groups dinging Senator's for voting for even closing debate, even previously semi-sane Republican Senator's have started to vote against everything.

http://talkingpointsmemo.com/Images/filibuster-reform-chart.jpg

We aren't talking about cloture, though. We are talking about even opening the debate on the bill, not invoking cloture.

 

[IAmRandom31]

I'm so glad most of you in this thread are not in charge of anything besides your own bowel movements.

Raising minimum wage does jack diddly for the economy.

Hey, I am all for making huge money for almost nothing. But we need to deal with reality here.

 

[Shard]

Im just done. Just done.

Tired of this country's politics and corruption.

Are you moving?

 

[Aquamarine]

I know you're playing devil's advocate, but this line of thinking really irks me. It's like saying that because we learn arithmetic, how 1 + 1 = 2, 2 + 2 = 4, and 53 - 8 = 45, algebra, and statements like x + 1 = y, and x + 3 = 4, are nonsensical.

"Oh yeah? Well according to the NON-PARTISAN CONGRESSIONAL BUDGET OFFICE, these are the effects of a raised minimum wage:

Now tell me that minimum wage increases will actually help the economy. With this much job loss? As if!

Just another loony liberal who doesn't understand basic economics!"

/sarcasm

 

[kirblar]

Benefit costs are also something that's important to keep in mind here as well. Currently they really warp many discussions as the cost ends up being seen on the bushiness's end but are invisible when you look at a pay stub (beyond the deductions.) Moving towards a "car insurance" model on that front would do a lot of good in terms of making real incomes more transparent.

 

[Ourobolus]

Thanks for bringing this full circle, since that was my initial point. When employees leave, the employer raises the wage and they come back. This continues until a balance is found. Supply and demand.

No, when employees leave, they simply hire someone else who decides that getting paid shit is better than getting paid nothing. Nothing changes on the company's side, because there's no incentive for them to do so.
Not only that, if they aren't paid a living wage, the money that goes towards their welfare comes out of YOUR pocket. You want to pay them that way? Or do you want a service or a good as well, in return for your money?

 

[GaimeGuy]

Thanks for bringing this full circle, since that was my initial point. When employees leave, the employer raises the wage and they come back. This continues until a balance is found. Supply and demand.

Except we live in a society where we "expect" people to sustain their livelihoods through labor (which thye use to acquire money, which they exchange for things used for sustenance). You can not get welfare if you can not show that you're actively looking for a job. You can not just quit a job, then go to the government and ask for unemployment.

Furthermore, businesses are artificial constructs that are chartered by the government. They CAN exist in perpetuity without any resources, economic activity, or sustenance. They are naturally inert. Unlike people.

So no, it doesn't work this way.

 

[everyday math]

Are you moving?

Nope. Not like it's really different anywhere else. Corruption happens everywhere. It just really bother me. Feels like this country isn't moving forward to help our citizens.

 

[Ludicrous Speed]

If they increase the minimum wage won't companies have less money to hire and thus fewer people will hired? They'll just force the current employees to pick up more of the work?

 

[Protein]

54-42 = LOSS


For one, Walmart helps their workers sign up for government assistance..quite helpful, and theres no need to increase wages!

Reminds me of how Walmart was doing this

 

[GaimeGuy]

If they increase the minimum wage won't companies have less money to hire and thus fewer people will hired? They'll just force the current employees to pick up more of the work?

Under this economic theory you're pushing, shouldn't companies already use the fewest amount of people necessary for the amount of work they have? If they can afford to lay people off now, why wouldn't they?

And if they can't now, then why would they after a raise in minimum wage, if they have too much work for any fewer # of workers? Would they actually deny new business opportunities? Doesn't that go against the whole incentive of running a business?

Your theory doesn't add up

 

[Epsilon-delta]

We have a weird obsession in the US with work as a moral good. We might well be better off with a small national income given to all citizens rather than a minimum wage, but it's not something that would ever fly here.

It's funny how Congress during Nixon's presidency, were talking about GAI (guaranteed annual income) during that time than it was dropped.

http://www.remappingdebate.org/article/guaranteed-income%E2%80%99s-moment-sun?page=0,0

 

[mattiewheels]

I love how the sentiment is that businesses should take care of the poor. It's not the businesses responsibility. It's the government's job. Slash the defense budget and funnel money into helping the poor.

And the government is beholden to businesses. So who do we turn to now?

 

[Aquamarine]

Under this economic theory you're pushing, shouldn't companies already use the fewest amount of people necessary for the amount of work they have? If they can afford to lay people off now, why wouldn't they?

And if they can't now, then why would they after a raise in minimum wage?

Well, in terms of optimization, wouldn't they hire as many employees to the point where the wage intersects the value of the marginal product of labor?

 

[SenorArdilla]

I don't know enough about economics to talk about this, but why is it a problem to raise the minimum wage for workers? Inflation?

 

[Coins]

And the government is beholden to businesses. So who do we turn to now?

That's another problem all together. The government shouldn't put the screws to the people.

 

[Brakke]

It's basic supply and demand as far as I see. What (probably obvious) thing am I missing?

This is basically fair, but sits on top of an assumption about a perfectly competitive market. What makes me uncomfortable about this low-wage labor market, is that the market is far from fair or competitive. Just think how everyone always uses Walmart and McDonald's as examples: minimum-wage employers broadly speaking exercise monopsony (or oligopsony?) power in the low-wage labor market. There's also a horrendous power imbalance: people considering taking the jobs are generally not very well-off, and would take a job at anything-more-than-zero wage to survive; employers that run tight margins at high levels of capitol and economize on labor are often extremely sophisticated national or multinational operations.

So you have desperate, generally less-educated people entering a market where there are very few options for employment. I think the claim that the market for minimum wage labor is competitive or fair or free is dubious.

Did I do a good job playing devil's advocate? Because these are the thought processes that go through Republican senators' minds as they vote against this bill.

This is a good post and a solid tutorial on the underlying theory. There are two major ways we can add some nuance to it: introduce elasticity and discuss full employment.

The elasticity argument is a point about those graphs: the curves are drawn as lines at 45 degrees to cleanly illustrate the "glut" as you call it. Play around with the slopes a bit. What if the supply of labor is highly inelastic? That is, there are some number of people in our society who aren't really qualified to do much (disabled, undereducated, whatever) who will take a job at whatever wage. What if those employers have an inelastic demand for labor, so they're nearly vertical too? Then raising the price in the market would leave a very small glut. I don't think this is the case--that they're both highly inelastic--but it is an empirical question that ought to be answered. In either case, it leads us to our next point, about full employment and endogeneity.

Where do the curves on that graph come from? What determines their shape and their location? Well, the demand for labor is a function of a bunch of factors, including income. Let's say you increase minimum wage and a bunch of people lose their jobs in the first period. That may or may not be a good trade-off. However. What if those people who are now earning more now find they can afford to say get their hair cut by a professional instead of just buzzing at home. Now the demand curve for low-skilled employees bumps out, increasing employment in that field. If new hair salons open and hire all the people who were laid off by McDonalds, then everyone is better off. This whole story is where things like the stimulus package come from, but only really works if the economy isn't at full employment (that is, there are people who could be hairdressers but are wasting their skills at McDonalds because nobody will hire them) and is baffling by other markets such as the credit market.

 

[kirblar]

I don't know enough about economics to talk about this, but why is it a problem to raise the minimum wage for workers? Inflation?

Thought experiment- raise it to $50, what happens next?

 

[gutter_trash]

They convinced poor Americans that they are not actually poor.

people deserve the government they get

 

[Brakke]

Thought experiment- raise it to $50, what happens next?

What might happen at the extreme doesn't necessarily tell you anything about the margin, and in fact almost certainly does not. Income effect dominates under some conditions, substitution effect dominates under others. There's a good chance none of these curves are monotonic and may not even be contiguous.

 

[Arksy]

Ah, you have such faith that even if people got past fifty years of anti-union propaganda that a bunch of Red States wouldn't pass anti-union laws making it even more impossible to unionize that would be declared Constitutional in a bunch of 5-4 decisions.

You guys haven't even given it a shot yet. Republicans aren't the real barrier here, it's the impotency of unions to advocate that union membership is beneficial, and the general apathy of the populace.

 

[kirblar]

What might happen at the extreme doesn't necessarily tell you anything about the margin, and in fact almost certainly does not. Income effect dominates under some conditions, substitution effect dominates under others. There's a good chance none of these curves are monotonic and may not even be contiguous.

No, but he's trying to grasp the problem in general, hence the extreme example- it makes the potential negative effects more obvious, and helps illustrate what problems that this tool is not good at solving.

 

[GaimeGuy]

Thought experiment- raise it to $50, what happens next?

A whole lot of inflation followed by a ton of proportional increases in current expenses, while the value of existing debt, both public and private, plummets. A giant reset button, to be honest.


But that's at the extremes, not the margins.

 

[Sol..]

Bootstraps.

they are filled with way more nutrients than people think.

 

[Ludicrous Speed]

Under this economic theory you're pushing, shouldn't companies already use the fewest amount of people necessary for the amount of work they have? If they can afford to lay people off now, why wouldn't they?

And if they can't now, then why would they after a raise in minimum wage, if they have too much work for any fewer # of workers? Would they actually deny new business opportunities? Doesn't that go against the whole incentive of running a business?

Your theory doesn't add up

No, they are currently optimized with the appropriate minimum wage workers to maximize their profits. Once you increase their costs it pushes expenses higher and thus the point where profits are maximized has shifted as well. Now in order to maximize profits with these higher expenses per head you need to hire less heads.

 

[Brawndo Addict]

Regardless of your economic beliefs on the minimum wage, I think we can all agree that the filibuster/super majority becoming the new normal in terms of passing legislation is ridiculous. Plus if all these supposedly 'horrible laws' were so bad, the smart move would be to let the democrats pass them all, let the economy tank, and reap the benefits in the next election.

 

[Arksy]

Regardless of your economic beliefs on the minimum wage, I think we can all agree that the filibuster/super majority becoming the new normal in terms of passing legislation is ridiculous. Plus if all these supposedly 'horrible laws' were so bad, the smart move would be to let the democrats pass them all, let the economy tank, and reap the benefits in the next election.

I'm in two minds, it's frankly a bit ridiculous that you need a super majority just to get the vote onto the floor, but it's a good way to ensure that the HoR remains the dominant law making body of the land.

 

[Fenderputty]

No, they are currently optimized with the appropriate minimum wage workers to maximize their profits. Once you increase their costs it pushes expenses higher and thus the point where profits are maximized has shifted as well. Now in order to maximize profits with these higher expenses per head you need to hire less heads.

You missed his entire point.

 

[-COOLIO-]

Reminds me of how Walmart was doing this

*hard cringe*

 

[entremet]

What is the incentive to hire when employees eat into your bottom line? I disagree with what the Republicans did, but as of now, in the US, you really don't have climate for decreasing employment via the private sector.

It's almost as the Republican think businesses will start hiring tons if you just offer tax incentives. This does not happen en masse. Businesses, healthy business are stingy.

Public spending seems to be the best way to improve the unemployment situation.

 

[TheRagnCajun]

Reduced workforce is a totally empty threat coming from retail and fast food chains. The work cannot be outsourced, or reduced, or automated.

It really only affects manufacturing and service (call centers). In respect to those industries, you can't win the wage battle anyways, compared to India, China and Mexico. At this point, what's left in the US more or less has to be done in the US.

 

[Ferrio]

What is the incentive to hire when employees eat into your bottom line?

Someone has to do the work? Businesses already run at minimum work force as is.

 

[highoffcoffee496]

A fairly common entry level position for a college graduate pays about 35k.

I wish I was making that much...