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[Abstrusity]

She worked hard (although the salary she was making at that time was brief), she did make much more than that. She believed in making much more than that.

I just believe in working your butt off. I mean I do believe that over time, the minimum wage should be increased, but not to $15

Over time, the minimum wage should be increased, even beyond $15. The number is arbitrary -- it's what it's worth that matters.

 

[Illucio]

Problem is always small business owners who can't afford the $15 an hour.

Then people who are stupid and already getting paid $15/hr thinking that with the minimum pay raise that in turn they won't receive a pay raise.

 

[Rentahamster]

"let some states do it and see what happens"

ok, and then? if we see that it helps that doesn't mean increases will be passed elsewhere. republicans control the majority of state legislatures and aren't known for their susceptibility to evidence. they will continue to fight any increase anywhere.

This is completely irrelevant to the point I'm making. I don't give a shit if Republicans want to ignore evidence that might help their own states. If the results are clear, people will vote with their ballots and their feet.

 

[gcubed]

The problem with arguing about state vs federal minimum wage is that people working minimum wage jobs have the least mobility so it's impossible to say "if you don't like it leave your shithole state and go somewhere that respects you" because they don't make enough to move.

I'd be happier with states setting the wage with guidance from national vs a mandate if it weren't for the fact that it screws the people with no mobility

Honestly you shouldn't be able to live while working x amount of hours and still being below poverty level, it just pushes the cost on everyone else anyway by form of taxes

 

[Abstrusity]

Problem is always small business owners who can't afford the $15 an hour.

This is what they think, but it's rather plain to see that increases wages will feed back into communities.

However, this doesn't happen overnight, nor should an increase in wages.If Minimum wage raises to 15, it should be staggered over at minimum 8 years.(+1 dollar every year, finish it off at .75) for the states at the current minimum, with the ability to stagger it further in case it becomes necessary.

 

[Iksenpets]

Minimum wage is a battle not worth fighting imho, rules on labor need to be less srrict and redistributioon ofwealth should be a function of taxing so that you maximize job creation while having a wide social safety net (aka basic income, start from a lower amount first, not necessarily enough for living at first )

I agree with this, but have no idea how we get there politically, at least any time soon. A few centuries of indoctrination around Protestant work ethic and whatnot makes "actually, people should work less and get more welfare while companies should be unshackled to pursue the automation future" a pretty hard sell. You'll get significant right-wing resistance to expanding the welfare state and deempahsizing the value of work, but you'll also get a good amount of left-wing resistance for absolving business of the responsibility to care for their employees and putting it onto taxpayers instead.

Reasonable minimum wage increases seem like a decent short-to-medium-term anti-poverty effort until we get to the point where automation really forces people to start looking at broader welfare expansion.

 

[TheLaughingStock]

I'm arguing that increasing the minimum wage has a logical outcome of making it worse than it already is.

This isn't a question of right or wrong answers, it's a question of what trade-offs we are willing to make.

Yes. The minimum wage has been making things worse for decades since its inception...longer than I'm sure you've even been alive. The trade offs have been unbearable. Uh huh...

 

[Zoe]

A $15 dollar minimum wage is a step in the right direction of fighting wage stagnation.

This would also be the minimum wage for large corporations.

Under 100 employee businesses would likely have a lower min wage in the $10-12 range.

Are there any proposals that actually have that though? I don't recall any.

 

[Abstrusity]

Yes. The minimum wage has been making things worse for decades since its inception...longer than I'm sure you've even been alive. The trade offs have been unbearable. Uh huh...

Well...no, he's right. The minimum wage does decrease the immediate profit on a business. It does dissuade some businesses from being created, from costs alone. These are facts.

But we operate under the idea that, while those are facts, we are willing to take that risk. It also highly dissuades company scrip and the like, the multiplier effect works better, the more money is paid out to workers (especially at the lower ends of the scale).

It is always a trade off, there's always opportunity costs. We have decided as a society that we get more utility out of this -- and, for the most part, we do.

Are there any proposals that actually have that though? I don't recall any.

I believe that'd actually work, but the lobbying against it would increase at an exponential rate.

 

[Cyrano]

Society has been facing the problem of automation since the industrial revolution. Since then, we've also had a huge increase in the available workforce (most women in the 21st century are working). I believe that new forms of automation will have a significant immediate impact on the labor force, but it's by no means a new problem. In the long term, the labor market has shown the ability to adjust to automation.

If you're suggesting that the living wage be subsidized by the government & not the employer, that's a compelling argument to me. The real question is, how? If this money is taken through taxes to the employer, than that cost will manifest itself in other ways - less jobs or higher prices.

If by "adjust" you mean force millions of people out of jobs, then yes, the labor market has "adjusted" very well. A stable economy requires a working force that has money to spend on goods they need and without the spending loop the economy crashes. The government would just be acting as part of that self-reinforcing loop with a minimum income. There are two viable options I can see, the first is by the government mandating work (effectively what the US did during wartime) or, perhaps more reasonably, by taxing a portion of wealth made by the wealthiest and redistributing it. The second is a far more reasonable option and doesn't greatly effect the spending or buying power of the wealthy. Of course without the government mandate there's no way the wealthy will cede to this, so you're at another stalemate. The former as an option only works in wartime and even then it has fundamental problems (including that it functions effectually like the wage slavery we have now, but mandated by force, effectively making it no different from work prisoners might do).

 

[Angelus Errare]

It should be a living wage.

Well the President who signed off on minimum wage himself said it's meant to be a livable wage. It wasn't until recent (Reagan era) did new found belief that a minimum wage wasn't meant for "to live off of" but rather it's for "part time students" became a central conservative argument point.

 

[NervousXtian]

Minimum wage is a battle not worth fighting imho, rules on labor need to be less srrict and redistributioon ofwealth should be a function of taxing so that you maximize job creation while having a wide social safety net (aka basic income, start from a lower amount first, not necessarily enough for living at first )

Honestly this is how I feel.

Not all corporations and business owners are evil money hoarders, some the reality is they can only afford to pay so much and make ends meet. A lot of these business are good for the greater good of society as well, providing services that are needed. The minimum wage debate is missing the the point of providing for our poorest.. it doesn't really end up helping people as much as it looks like it would on paper.

I'd rather us expand the safety net and provide universal healthcare and assistance.

 

[Staf]

Hmm, here in Sweden we don't actually have any minimum wage. The government let's the people/unions negotiate with the employers themselves.

 

[CLaddyOnFire]

"Meaningless in a few years" is a very strong statement. Is there any reason to think that the prices of most goods would increase more-or-less proportionally with the minimum wage? You don't provide an argument for this and I'm unaware of an economist who would agree with it. But this weird theory seems to be the whole basis of your objection. As far as I can tell it only makes sense if you're supposing something like that virtually every company is basically a monopoly. I mean, think about what you're saying here. You're saying that if we legislate that businesses must pay their lowest-paid workers more they will somehow pull off some economic jujitsu that results in them making even more money than they were before.

Surely it's more likely that a minimum wage increase would at most result in a complete pass-through of the costs of the increased minimum wage to consumers. This still only increases prices by a pretty small amount - minimum wage labor is not a huge cost for most companies. They spend a lot on above-minimum wage labor, on rents, and on imports. You're not taking much of a hit. Even for a fast food restaurant probably less than 1/3 of its costs are minimum wage labor. And it's pretty unrealistic to suppose that consumers would eat 100% of the increased cost.

Maybe I was extreme in saying "meaningless," but it's a given that prices in general will inflate to correlate with the increase in earnings. Most (if not all) corporations, businesses, etc. employ workers that make minimum wage. Across the board, if a minimum wage increase is mandated, they will be losing a portion of their current profit to "extra" pay to these employees. As a result, they may raise the price of their goods/services to recooperate their lost profit. They would be justified (in their own minds at least) in doing this because "well people can afford it since they're making more now." Monopoly isn't a requirement for this, since all competitors would be in a similar boat, and the whole point of a company is to make as big a profit as possible.

Ideally, along with a minimum wage increase, companies would see their CEOs and upper management allow their lose in profits to eat out of their own salaries, and the wage gap would diminish. However, knowing the inherent greed in the economic structure of most (again, if not all) corporations, they would find a way to make back their lose in profit, whether it be eliminating jobs or inflating their prices.

I'm not an economist, but I do know that if I was the CEO of the company I work for (and I know the guy, he's nice but his goal is profit), I would mark up my pharmaceutical products due to an increase in how much I pay my lowest-level employees. And I would feel confident that competitors (Bayer, etc.) would be doing the same.

 

[kirblar]

Hmm, here in Sweden we don't actually have any minimum wage. The government let's the people/unions negotiate with the employers themselves.

Once you get a strong enough social safety net and abandon the concept that employers should be responsible for their workers' basic well-being outside the workplace (instead, the government should be) you don't have much of a need for one anymore.

Getting people (and not just conservatives) in the states to wrap their heads around embracing the fact that companies don't care about their employees instead of fighting it is very difficult though.

 

[AP90]

More for the idea of a liveable wage,
as the cost of living varies from state to state and differs in urban vs rural areas, which is in turn ties into housing and cost of goods.

Making it a livable wage would require addressing the above.. There is a fine line/balance that would have to be maintained as too sharp of an increase could potentially result in the loss of jobs as well as added sharp increase in cost to the consumer due to the increased cost of goods vs a gradual one.

IMO, I think a cap on housing/rents would be a great place to start as rents tend to be a great burden on the low income population and even middle class population amd small businesses who do not own home/location or cannot afford one.

 

[soul creator]

If we start at 1968, inflation adjusted wages should be somewhere just south of $12/hr.

Productivity is a meme. Technology, work flow, efficiency, whatever you want to call it, has people producing more for less labor than they otherwise would be using. It's safer then, to simply scale it by currency inflation. However, it would need to be $12 immediately, and that's directly harmful to the economy -- an increase of over 50% pretty much immediately.

So it'd have to be staggered over several years, each of those years compounding further inflation. Luckily enough, inflation is rather low right now....because of the deflationary effects of the recession. An increase of wages would counteract that pretty quickly.

If we're talking about staggering these out, though, it'd be a minimum of four years, by which time it'd have already fallen behind. However, it wouldn't be nearly as bad as it used to be, and if we peg it to inflation, we could drastically reduce the problems at the lower end of the spectrum. Normal CPI would work better here than C-CPI because of C-CPI's propensity to underestimate -- for instance, the poor tend to have higher costs of living changes, and not just because many elderly are poor -- they invariably pay more for goods and services because they pay for them more often. Healthcare costs, mechanic costs, food? Because of that, a chained-CPI scale would average those increases downward from month to month.

In essence, even C-CPI cost of living wage increases are better than NO wage increases, and we'll NEED to increase wages to around 12 anyway.

It's worth noting though, that my math is based on yearly inflation from 1968 (inclusive) to 2015(inclusive) and includes the inflation outliers of 1980 and 81.

No, not at all:

Blue line is the conversion to today's dollars. It maxed out at a little over 10 bucks.

ahh, thanks for the info

 

[kirblar]

More for the idea of a liveable wage,
as the cost of living varies from state to state and differs in urban vs rural areas, which is in turn ties into housing and cost of goods.

Making it a livable wage would require addressing the above.. There is a fine line/balance that would have to be maintained as too sharp of an increase could potentially result in the loss of jobs as well as added sharp increase in cost to consumer due to the increased cost of goods vs a gradual one.

IMO, I think a cap on housing/rents would be a great place to start as rents tend to be a great burden on the low income population who do not own home or cannot afford them.

Caps on rent/housing are one of the worst ideas possible. Rent Control doesn't work- and this is one of the areas of economics where you'll find almost every economist (regardless of ideology) on the same page. It completely screws up incentives for housing builders and owners to create, invest in, and maintain the properties.

http://www.economist.com/blogs/economist-explains/2015/08/economist-explains-19

https://www.planetizen.com/node/81150/economics-rent-control

Economists oppose rent control almost as unanimously as climate scientists oppose attempts to deny the reality of client change. 93 percent of economists (including liberals like Paul Krugman) agree that ceilings on rents reduce the quantity and quality of housing. And economists' views seem borne out by experience: most major cities with rent control (such as New York and San Francisco) tend to have very high rents, indicating that rent control is perhaps not functioning as effectively as its creators had wished. And yet urban planners and citizen activists are much more closely divided. What do they not understand?

 

[Abstrusity]

Caps on rent/housing are one of the worst ideas possible. Rent Control doesn't work- and this is one of the areas of economics where you'll find almost every economist (regardless of ideology) on the same page. It completely screws up incentives for housing builders and owners to create, invest in, and maintain the properties.

http://www.economist.com/blogs/economist-explains/2015/08/economist-explains-19

https://www.planetizen.com/node/81150/economics-rent-control

Just as a follow-up example to this, people don't purchase property to rent just to collect rent: they're stable investments because everyone needs a place to stay. But as time goes on, the costs to keep the property in good order continue to accrue and rise, so rent also needs to rise. But if you lock rent at a certain point, you also keep people from being able to profit. Without that profit motive, people will not purchase properties to rent them out. In addition, they'll cut corners further and further. Take more risks with garbage contractors and cheaper fixes.

 

[Gotchaye]

Maybe I was extreme in saying "meaningless," but it's a given that prices in general will inflate to correlate with the increase in earnings. Most (if not all) corporations, businesses, etc. employ workers that make minimum wage. Across the board, if a minimum wage increase is mandated, they will be losing a portion of their current profit to "extra" pay to these employees. As a result, they may raise the price of their goods/services to recooperate their lost profit. They would be justified (in their own minds at least) in doing this because "well people can afford it since they're making more now." Monopoly isn't a requirement for this, since all competitors would be in a similar boat, and the whole point of a company is to make as big a profit as possible.

Ideally, along with a minimum wage increase, companies would see their CEOs and upper management allow their lose in profits to eat out of their own salaries, and the wage gap would diminish. However, knowing the inherent greed in the economic structure of most (again, if not all) corporations, they would find a way to make back their lose in profit, whether it be eliminating jobs or inflating their prices.

I'm not an economist, but I do know that if I was the CEO of the company I work for (and I know the guy, he's nice but his goal is profit), I would mark up my pharmaceutical products due to an increase in how much I pay my lowest-level employees. And I would feel confident that competitors (Bayer, etc.) would be doing the same.

I feel like I pre-addressed this with the second paragraph of the post you're responding to, so I'm going to repeat some of what I said there. It seems like we agree now that prices aren't going to rise proportionally with the minimum wage but would at most increase by the added cost of the increased minimum wage. And I had two things to say about that. First, this is not a huge price increase because the minimum wage is not a huge factor in costs. Second, not all (or likely even most) of this increase in cost due to the minimum wage will be passed on to consumers. You suggest here that basically all of it will be, but I note again that your claim is essentially that companies all operate as monopolies - your theory is that they effectively collude to avoid competing with each other on price and can increase profits at will by raising prices.

Also, your theory seems to imply that there's basically no way to reduce inequality. Like, suppose we start taxing very high incomes (including capital gains) at very high rates. Doesn't this look to the owners of capital like they're "losing a portion of their current profit to 'extra'" taxes? So since they're all seeing this happen don't they all decide to raise prices or cut jobs to make back what they're losing in additional taxes? This seems kind of ridiculous, right? I mean, there's a reason they lobby so hard for lower taxes - they think that lets them make more money.

I want to gently suggest that you're looking for a story to tell to justify opposition to a minimum wage increase rather than getting a position on increasing the minimum wage out of a consistent and informed theory of economics.

 

[Condom]

Problem is always small business owners who can't afford the $15 an hour.

Then people who are stupid and already getting paid $15/hr thinking that with the minimum pay raise that in turn they won't receive a pay raise.

You can compensate small businesses.

 

[tearsintherain]

Haven't a few cities already passed $15 minimum wage like Seattle, San Francisco, etc? If some uni is studying the effects on the local economy in 1-3 years we should have plenty of evidence on what impact it has had on jobs, businesses, costs, automation, etc.

Its imo a bit of a crazy thing to do nationwide because places like NYC or LA are way more expensive than Texas and having the same minimum wage in both places is weird.

 

[ChouGoku]

Things will get pricier due to the increase of Minimum wage. So it'll even out again

But its not even now. Many people make below the cost of living. Even if it evens out to the cost of living its still better than what what we have today. If prices are too high in a situation where more people have more money the companies who do that will most likely loose to capitalism.

 

[unhealthy_skeptic]

Haven't a few cities already passed $15 minimum wage like Seattle, San Francisco, etc? If some uni is studying the effects on the local economy in 1-3 years we should have plenty of evidence on what impact it has had on jobs, businesses, costs, automation, etc.

Its imo a bit of a crazy thing to do nationwide because places like NYC or LA are way more expensive than Texas and having the same minimum wage in both places is weird.

I believe it's hard to draw any strong conclusions out of those cities because a lot of the minimum wage debate is about the long term effects of a minimum wage increase. But maybe I'm being a little unfair about this, since it's pretty hard to draw any conclusions out of anything these days.

 

[AP90]

Caps on rent/housing are one of the worst ideas possible. Rent Control doesn't work- and this is one of the areas of economics where you'll find almost every economist (regardless of ideology) on the same page. It completely screws up incentives for housing builders and owners to create, invest in, and maintain the properties.

http://www.economist.com/blogs/economist-explains/2015/08/economist-explains-19

https://www.planetizen.com/node/81150/economics-rent-control

I do agree that the current rent control system is not working. I wouldnt even know where/how to begin to overhaul it either but in the cities, at least with my experience, rent was the biggest cost to me, second came food, third came transportation.

But, the apartment builders and owners are already benefiting from the system (at least in NYC), renting companies/owners get tax cuts and other benefits as long as they provide x amount of low income housing. Unless it is high end apartments/housing or market housing, a lot of these companies do the minimum to maintain there buildings.

From what I have seen im NYC it pretty much benefits the renting companies who own the properties.

When I was living in nyc, my rent for a studio (276sqft) in a 3 story walkup was more than half my monthly income-living paycheck to paycheck and I hated it. Low income and project housing I was inspecting from roof down to the basements a couple times a week were in far better condition to what I was paying even though my apt was "rent controlled" and not "market value"), they did no real maintenance and were going to be increasing my rent for the new year by 50-60/month and took an act of god to have them fix anything.

One of the systems set up there consists of weight lists to get into income bracketed housing or project housing, which can be done through the citys Housing Preservation and Development agency.

https://a806-housingconnect.nyc.gov/nyclottery/lottery.html#home

 

[Abstrusity]

Second, not all (or likely even most) of this increase in cost due to the minimum wage will be passed on to consumers. You suggest here that basically all of it will be, but I note again that your claim is essentially that companies all operate as monopolies -

It's worth mentioning here, as another follow up, that even if the full cost of raising the minimum wage were to be passed on top the consumer, the king's share of people will still come up ahead. Before we even begin to talk about competition, we need to talk about costs as a percentage of gross. Even a 100% increase in wages will only double the costs of wages alone(plus taxes). This is, of course, assuming EVERYONE makes the minimum exactly, and thus everyone gets the same increase.

So if wages and taxes paid are 30% of your costs, passing 30% onto your consumers may cause an immediate drop in business (according to elasticity) but increase it over time, since people are being paid more. This is yet another reason we like to stagger wage increases rather than do them all immediately.

And that's before we get into competition driving prices down (and thus costs for supply down through market forces).

It gets pretty convoluted there.

However, as an aside, there are worst case scenarios to consider: What if their suppliers also have to pass on costs of increased wages, and they're all paid minimum wage, and the suppliers' suppliers? Outside of being highly impractical and absolutely an ass-pull rhetorical, it would further streamline costs across every stratification and wind up increasing automation drastically as a result. There is no reason to believe that is explicitly the case currently, but there IS reason to believe that it will come to that eventually.

 

[The Albatross]

"let some states do it and see what happens"

ok, and then? if we see that it helps that doesn't mean increases will be passed elsewhere. republicans control the majority of state legislatures and aren't known for their susceptibility to evidence. they will continue to fight any increase anywhere.

Well, the bolded is kind of the foundation of how a Republic works. Especially with something like economic policy, letting states implement minimum wages is pretty much exactly how you want it to be implemented.

 

[aeolist]

Well, the bolded is kind of the foundation of how a Republic works. Especially with something like economic policy, letting states implement minimum wages is pretty much exactly how you want it to be implemented.

our republic is fundamentally broken. things like this will be done at the federal level or they will forever be piecemeal and half-assed.

 

[unhealthy_skeptic]

our republic is fundamentally broken. things like this will be done at the federal level or they will forever be piecemeal and half-assed.

Is this discussion about the minimum wage or about Congress?

 

[Gotdatmoney]

I'm in agreement that economic mobility is very stagnant and poor in America. You're ignoring a key point though - increasing the minimum wage will make economic mobility even worse for the poorest and least skilled individuals of the country. They now won't even be able to take an initial step towards employment because they simply don't meet the skill expectations of an employer.

What is the basis of that argument? Companies that can't form a business model that adapts to this will die and others will fill the void. Anyone making minimum wage is not the person on average who are going to gain the skills to transition to middle class. Not just by doing a wirking class job. Be real here. If you don't have any education its going to be nearly impossible to climb out of that hole and the working class by design can't all suddenly move upwards economically through education or experience.

 

[dLMN8R]

The most important part of an increased minimum wage that most people completely miss:

If you pay people more, then more jobs will open up

If someone can survive working one job at 40hrs/week instead of working two or three jobs at 80hrs/week, it means that those 1-2 extra jobs taken by one person can open up to be taken by other people.


It's shocking to me that opponents to an increased minimum wage who spout the "reduced hours" bullshit don't realize that most people working 2-3 jobs want reduced hours, if they can earn as much or close to it by working fewer hours.

 

[Abstrusity]

Is this discussion about the minimum wage or about Congress?

Unfortunately, any talk about increasing the minimum wage is going to have to take into account the governmental systems that would enforce such a measure.

The most important part of an increased minimum wage that most people completely miss:

If you pay people more, then more jobs will open up

If someone can survive working one job at 40hrs/week instead of working two or three jobs at 80hrs/week, it means that those 1-2 extra jobs taken by one person can open up to be taken by other people.


It's shocking to me that opponents to an increased minimum wage who spout the "reduced hours" bullshit don't realize that most people working 2-3 jobs want reduced hours, if they can earn as much or close to it by working fewer hours.

And this is before we get into the multiplier effect that makes one dollar spread the more it's capable of being spent -- velocity of money tends to be highest at the lower ends of the wage spectrum, simply because there's fewer opportunities to save (this is why, for instance, one dollar paid in SNAP benefits will typically bring about somewhere approaching twice its worth in economic activity).

And yes, while people work multiple jobs, these will tend to be reduced to working only a single job when it's all they need, anymore. For example, the ACA resulted in people leaving their jobs because they were only working for the health insurance alone.

 

[dLMN8R]

Problem is always small business owners who can't afford the $15 an hour.

Then people who are stupid and already getting paid $15/hr thinking that with the minimum pay raise that in turn they won't receive a pay raise.

Too much of this conversation puts the burden on employees instead of businesses.

Frankly, if your business simply cannot afford to survive without paying your employees poverty wages, then your business is not necessarily entitled to exist.


The current privilege for a business to pay employees poverty wages is basically a hand-out entitlement from the government, because who do you think pays for assistance to the poor?

 

[ZOONAMI]

Are there any proposals that actually have that though? I don't recall any.

I believe the existing federal minimum wage has different levels for small and large businesses, or at least my state of Minnesota does.

I don't know why this wouldn't be part of actual legislation.

 

[The Albatross]

our republic is fundamentally broken. things like this will be done at the federal level or they will forever be piecemeal and half-assed.

Right, I forgot congress's tremendous record in the last 10 years of actually passing laws.

There's nothing half assed about Massachusetts and California's minimum wage law (and other states who have pushed it up). Let's not forget that Obamacare was crafted based on this model as well, with Massachusetts implementing health care reform that would end up being the model for the Affordable Care Act.

Beyond your idea that the republic is broken, there are real, non-theoretical differences in cost of living. New York, Massachusetts, California, Washington DC., etc, are states where the average cost of living is almost 50% higher than some states in the midwest and South. In those states, $7.25/hr doesn't go far enough, but in a state like Iowa, $15/hr could be too much for businesses to employ people legally. Economic policy is not something that you take shit, throw it at the wall, and see which pieces stick. Bad economic policy can result in widespread unemployment, illegal hiring, fewer benefits, and a dramatic cut in tax revenue for the state.

Are there any proposals that actually have that though? I don't recall any.

As a state, Minnesota has it broken down by "Large" (9.50/hr) and "Small" ($7.75/hr), but I don't see what designates a "large" business vs. a "small" one for the state.

The city of Emeryville CA does this where small businesses of 55 employees or less have a $12.25/hr and larger companies over 55 are $14.44/hr.

 

[CLaddyOnFire]

I feel like I pre-addressed this with the second paragraph of the post you're responding to, so I'm going to repeat some of what I said there. It seems like we agree now that prices aren't going to rise proportionally with the minimum wage but would at most increase by the added cost of the increased minimum wage. And I had two things to say about that. First, this is not a huge price increase because the minimum wage is not a huge factor in costs. Second, not all (or likely even most) of this increase in cost due to the minimum wage will be passed on to consumers. You suggest here that basically all of it will be, but I note again that your claim is essentially that companies all operate as monopolies - your theory is that they effectively collude to avoid competing with each other on price and can increase profits at will by raising prices.

Also, your theory seems to imply that there's basically no way to reduce inequality. Like, suppose we start taxing very high incomes (including capital gains) at very high rates. Doesn't this look to the owners of capital like they're "losing a portion of their current profit to 'extra'" taxes? So since they're all seeing this happen don't they all decide to raise prices or cut jobs to make back what they're losing in additional taxes? This seems kind of ridiculous, right? I mean, there's a reason they lobby so hard for lower taxes - they think that lets them make more money.

I want to gently suggest that you're looking for a story to tell to justify opposition to a minimum wage increase rather than getting a position on increasing the minimum wage out of a consistent and informed theory of economics.

The reason I'm trying to argue using a story is that I can give first-hand opinion on it, rather than 100% speculation on what may happen at the top and bottom of the payscale (although we're all definitely offering some speculation). We agree that prices will, whatever the magnitude, rise across the board. I believe that rather than all acting as pseudo-monopolies, corporations are simply acting towards the best interest of their profit. If there is, in general, "more money" out there in the populace, why wouldn't a company raise prices? If their supply remains the same, and the ability for consumers to purchase that supply increases (due to more income), it would just make sense for them to raise prices, and people would be willing to pay it because "I'm making more now, so I can afford an extra $xx.xx for this."

Bringing this (which we agree on, just seemingly not to the same absolute amount of price inflation) back to apply it to my story, would hurt me financially. If my $24/hour right now is sufficient at the moment according to a market that sells a 2-L bottle of soda for $1, it would be less sufficient in a market that has adjusted to a higher minimum wage, selling a 2-L bottle of soda for $1.25.

I guess what I'm trying to argue is that raising minimum wage 100% positively for sure helps the workers earning minimum wage. It will make it much easier for them to live a less stressful life, with more breathing room in their finances. And I do think it will reduce inequality. However, it's going to harm the middle-class much more than the upper class. For instance, a change from $8 to $16 minimum wage (as an example), would be like going from 0.001% of the CEO's salary to 0.002% of it. For somebody making, say, $32/hour, it's like going from 25% to 50% of their wages. That is a huge relative hit to a mid-level employee's wages while not even draining a drop from the CEO's bucket.

Your example of higher taxations is exactly what I think needs to be implemented (along with whatever else actual economists think will help, I don't know crap about in depth economics). There's a big difference in the company itself losing money, and the consumer-base gaining money. A company can't just raise prices because it is making less money, because demand isn't going up. A company is totally capable of raising prices and succeeding with the new prices if demand does go up, which is exactly the case with a larger pool of expendable income.

I'm sure a lot of what I'm saying isn't being well-explained and I'm rambling. But I 100% stand by the fact that just raising minimum wage won't magically solve all of the country's current financial problems without creating others. And I know you specifically aren't advocating that, I just know that a very vocal group of people demand higher minimum wages and refuse to address the "but then what?" question that it requires.

And I'm probably sounding very selfish or close-minded with this, and I apologize for it! But it is a selfish issue. From my point of view I would say "yay I'm happy for those employees that are finally making a living wage, but now I'm living paycheck to paycheck rather than having some savings every month." Again, some hyperbole but the point still stands. In order to not harm the middle class while still helping the lower class, there would have to be wage bumps across the board (up to $100k/year, or $150k/year, or whatever people deem the "middle class"). And if that is the case, all we're doing is artificially inflating the dollar.

Edit: That was a really long reply, sorry

 

[unhealthy_skeptic]

Unfortunately, any talk about increasing the minimum wage is going to have to take into account the governmental systems that would enforce such a measure.

I just can't see it as anything but derailing when it's just whining about how government is screwed up and won't get anything that we say done. Most of us are painfully aware of that, and if there's no more substance to the argument, I don't see a point in repeating it.

 

[Iksenpets]

Once you get a strong enough social safety net and abandon the concept that employers should be responsible for their workers' basic well-being outside the workplace (instead, the government should be) you don't have much of a need for one anymore.

Getting people (and not just conservatives) in the states to wrap their heads around embracing the fact that companies don't care about their employees instead of fighting it is very difficult though.

Yep. Business is designed to make profits, government is designed to help people, and they both would do what they're good at better if people didn't blur that line so much.

Also, since the example of Sweden was used, it's ironic how much that model of high welfare spending but also relatively low regulation defines the Scandinavian countries, given how the American left talks about them. I feel like people over here don't really understand how corporation-friendly those places really are. They're not really the models of socialism people expect.

Right, I forgot congress's tremendous record in the last 10 years of actually passing laws.

There's nothing half assed about Massachusetts and California's minimum wage law (and other states who have pushed it up). Let's not forget that Obamacare was crafted based on this model as well, with Massachusetts implementing health care reform that would end up being the model for the Affordable Care Act.

Beyond your idea that the republic is broken, there are real differences in cost of living. New York, Massachusetts, California, Washington DC., etc, are states where the average cost of living is almost 50% higher than states in the midwest and South. In those states, $7.25/hr doesn't go far enough, but in a state like Iowa, $15/hr could be too much for businesses to employ people legally.



As a state, Minnesota has it broken down by "Large" (9.50/hr) and "Small" ($7.75/hr), but I don't see what designates a "large" business vs. a "small" one for the state.

The city of Emeryville CA does this where small businesses of 55 employees or less have a $12.25/hr and larger companies over 55 are $14.44/hr.

Doesn't this just create a huge disincentive to hiring employee #56 though? Minimum wage really feels like it needs to apply to everyone, or else you're going to create these scenarios where you don't want to grow your company because of the costs of being in a new classification, or where you pass over older people because teens have a lower minimum wage.

 

[FunkyMunkey]

the issue is thats it is too high on a federal level. 15 an hour in san francisco california is not the same as 15 an hour in podunk wisconsin. there should be a national floor that gets raised and it is much too low now, but 15 an hour nationwide would be devasting to some areas unless it's a very very gradual increase. a gradual increase to 11-12 would be much more safe in the long run while expensive areas can of course go higher

 

[aeolist]

I just can't see it as anything but derailing when it's just whining about how government is screwed up and won't get anything that we say done. Most of us are painfully aware of that, and if there's no more substance to the argument, I don't see a point in repeating it.

people are debating whether this should be done at a federal or state level. i am trying to make the point that in the near term the most likely way a widespread minimum wage increase is passed will be democrats taking control of congress and the presidency in 2020 after campaigning on $15. i don't see any way they can take enough state houses and governor seats to substantially improve the situation between now and then, and the states republicans control will never ever ever pass increases on their own no matter what happens.

it has to be federal.

 

[Zoe]

I believe the existing federal minimum wage has different levels for small and large businesses, or at least my state of Minnesota does.

I don't know why this wouldn't be part of actual legislation.

Federal appears to have it based on sales--must have under $500,000 in annual sales to be exempt.

 

[ZOONAMI]

Yep. Business is designed to make profits, government is designed to help people, and they both would do what they're good at better if people didn't blur that line so much.

Also, since the example of Sweden was used, it's ironic how much that model of high welfare spending but also relatively low regulation defines the Scandinavian countries, given how the American left talks about them. I feel like people over here don't really understand how corporation-friendly those places really are. They're not really the models of socialism people expect.



Doesn't this just create a huge disincentive to hiring employee #56 though? Minimum wage really feels like it needs to apply to everyone, or else you're going to create these scenarios where you don't want to grow your company because of the costs of being in a new classification, or where you pass over older people because teens have a lower minimum wage.

Federal appears to have it based on sales--must have under $500,000 in annual sales to be exempt.

That's why you base it on revenue and not employee count.

Large in MN is more than $500,000 in revenue.

No sane company is going to halt their growth just to stay below a certain revenue threshold so they don't have to pay their employees more.

I guess theoretically a way to do it would be profits instead of revenue, but then I think you'd have private companies trying to hide profits so they can just pocket them quietly and not have to pay their employees more.

http://www.dli.mn.gov/LS/Pdf/minwage_er_size.pdf

The more a company has succcess the more it should pay its employees. Instead of just paying everyone shit and making the owners more and more wealthy and further increasing income inequality.

 

[The Albatross]

Yep. Business is designed to make profits, government is designed to help people, and they both would do what they're good at better if people didn't blur that line so much.

Also, since the example of Sweden was used, it's ironic how much that model of high welfare spending but also relatively low regulation defines the Scandinavian countries, given how the American left talks about them. I feel like people over here don't really understand how corporation-friendly those places really are. They're not really the models of socialism people expect.



Doesn't this just create a huge disincentive to hiring employee #56 though? Minimum wage really feels like it needs to apply to everyone, or else you're going to create these scenarios where you don't want to grow your company because of the costs of being in a new classification, or where you pass over older people because teens have a lower minimum wage.

Yeah, it absolutely would. This is probably why Minnesota has this "big" vs. "Small," while Emmeryville, a town of only 10,000 people, can make a designation between 55 employees and more (it's likely that there are only a handful of employers in the "Large" area, and I'd bet one of them is a major company HQ'ed there). I'd wager that Minnesota's big v. small designation would also carry with it tax incentives once you're a "big" company.

That said, minimum wage law already applies selectively, as does most employment law. Rules around overtime, how many hours you can work, who is eligible to work specific jobs or specific shifts, and so on, are core components of employment law, and I don't think that minimum wage is a unique third rail that has to be applied identically in all cases.

people are debating whether this should be done at a federal or state level. i am trying to make the point that in the near term the most likely way a widespread minimum wage increase is passed will be democrats taking control of congress and the presidency in 2020 after campaigning on $15. i don't see any way they can take enough state houses and governor seats to substantially improve the situation between now and then, and the states republicans control will never ever ever pass increases on their own no matter what happens.

it has to be federal.

So, if we take the logical conclusion of your argument then, you don't think that states should be allowed -- today -- to have minimum wages above $7.25/hr? So, like the 40 or so states that have a higher minimum wage than $7.25 should be forced to drop those down do $7.25? And what about cities that have a higher minimum wage than the state wage, they should have to drop those down to $7.25 as well?

It has to be federal?

 

[Deepwater]

I don't think anyone can provide an argument against increasing the minimum wage to a livable standard (on a state by state basis) that is not rooted in:

• "I make slightly above minimum wage and I (erroneously) think that my wages will stay the same
• Fast Food workers shouldn't be making that much
• Bootstraps argument
• Prices will go up significantly (they won't) and everything will eventually be the same again

All of this just really is rooted in that it's normal and accepted in America to hate poor people. That's it.

 

[ant_]

I don't think anyone can provide an argument against increasing the minimum wage to a livable standard (on a state by state basis) that is not rooted in:

• "I make slightly above minimum wage and I (erroneously) think that my wages will stay the same
• Fast Food workers shouldn't be making that much
• Bootstraps argument
• Prices will go up significantly (they won't) and everything will eventually be the same again

All of this just really is rooted in that it's normal and accepted in America to hate poor people. That's it.

You should read the OP that I spent some time to specifically get rid of these misconceptions about arguments against a minimum wage. You can disagree; but you should realize that there are good-intentioned people and arguments on both sides.

 

[milanbaros]

Where does this belief that prices will rise proportionally with an increase in minimum wage come from?

People think that an increase in minimum wage of 50% would increase the price of oil by 50%? The tv you import from China by 50%?

Or to use a previous posters' example, the price of drugs, (after spending billions of dollars of research with the most technologically advanced med labs in the world using the most highly educated doctors, pharmacists and research scientists) is going to increase by 50% because the cleaner now earns 50% more than last year?

 

[unhealthy_skeptic]

Where does this belief that prices will rise proportionally with an increase in minimum wage come from?

People think that an increase in minimum wage of 50% would increase the price of oil by 50%? The tv you import from China by 50%?

I don't know if anyone that has spent more than one minute thinking about it actually thinks that.

 

[Walter White Walker]

I think rather than seeing the minimum wage increased all the way to $15 I'd rather there was a large increase in the Earned Income Tax Credit. That will keep jobs in place and reduce the burden on small businesses while people still (eventually, at tax time) earn more.

 

[Abstrusity]

Bringing this (which we agree on, just seemingly not to the same absolute amount of price inflation) back to apply it to my story, would hurt me financially. If my $24/hour right now is sufficient at the moment according to a market that sells a 2-L bottle of soda for $1, it would be less sufficient in a market that has adjusted to a higher minimum wage, selling a 2-L bottle of soda for $1.25.

I guess what I'm trying to argue is that raising minimum wage 100% positively for sure helps the workers earning minimum wage. It will make it much easier for them to live a less stressful life, with more breathing room in their finances. And I do think it will reduce inequality. However, it's going to harm the middle-class much more than the upper class.

For what it's worth, the dollar already inflates -- its worth, per arbitrary currency unit, rises and falls, generally falling. This devalues debts and necessitates increases in wages.

Now, if we raise wages to 15/hr immediately, you would be put out(immediately) as you fear. However, if we do so slowly, increased velocity of money may also give you more opportunities to move up(or move to a different company), or demand higher wages due to more work being required (and thus, more jobs needing to be filled). Where it appears to be a negative for you on its surface, the truth is that you'll have leverage. Leverage to demand more money, leverage to demand better benefits. Costs will rise regardless, and refusing to raise wages causes more harm to the overarching economy than raising them will.

 

[KarneeKarnay]

It should be a living wage.

+1

It will drive a push to automation, but in the end that should even out the amount of jobs lost, by the increased amount of money in the economy and more people starting businesses.