You are either not logged in or not registered with our community. Click here to register.
 
December 08, 2016, 12:13:15 AM

Welcome, Guest. Please login or register.
Did you miss your activation email?

Login with username, password and session length

Click here if you are having problems.
Default Wide Screen Beige Lilac Rainbow Black & Blue October Send us your theme!

Hark!  The Herald!
Holiday Issue 2016

Wiki Blogs Dicebot

Author Topic: Economic Discussion of Minimum Wage Laws  (Read 3906 times)

0 Members and 1 Guest are viewing this topic.

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Economic Discussion of Minimum Wage Laws
« on: March 20, 2013, 01:36:28 PM »
One of the most hotly contested topics in Congress right now is the Fair Minimum Wage Act of 2013.  Without getting into the details, its basic premise is to mandate companies to raise the minimum hourly wage that they currently pay employees - with an additional clause to mandate additional minimum wage setting in upcoming years commensurate to the inflationary rate.  At a cursory level, this appears to be a fantastic idea, since a thriving middle class ultimately benefits everyone in an economy.  However, many prominent economists are making the case that raising the minimum wage actually hurts the very people it strives to assist - the poor.

In order to understand this perspective, one has to understand the basics of economics, and how the prices of commodities, salaries for employees, and market prices for industries are set by the free market.  Any economist will explain that no individual company essentially entirely “chooses” the price of its product, nor does any individual company entirely “choose” the wages it pays its employees.  While the company certainly does have choice on these factors, their ultimate determinations are usually slight positive (+) or negative (-) deviations from the market/industry standards for pricing/salaries.  My purpose in stating this fact is to reinforce the idea that wages for workers are set by the free-market - not “entirely” independently chosen by the employer. 

With that fact in mind, let me provide one perspective on this issue.  The idea of the free-market setting the wages of all workers is a phenomenon that actually empowers the worker, since it gives him/her more lobbying power in finding an optimally paying job.  For example, if a worker is unable to find work, he or she can choose to work for less money, rather than being entirely unemployed as it stands today due to minimum wage standards.  Currently, there are millions of Americans who cannot find work - and are unable to look for work in businesses who may offer measly work here and there for $4-5/hour because of minimum wage laws.  As it stands right now, these Americans are forced to use unemployment benefits automatically, simply because businesses are barred from offering small jobs for lower pay.

In addition, the concept of raising the minimum wage actually prompts business to reduce the number of jobs they offer.  If a business owner was facing a new minimum wage law that required him or her to artificially raise the wages of certain employees without a corresponding increase in his/her profits/revenue, he or she would simply slice the number of jobs in his business.  Ultimately, this ends up hurting the very people that minimum wage laws aim to help - entry level workers and the poor, which would result in a rise in the unemployment rate.  Now, the employee unable to find work finds himself back in the first scenario - since he or she cannot seek work for a lower pay either.

I wanted to keep my thoughts relatively broad to get some of your input.  Do you have any perspectives justified by economic theory on the topic of minimum wage?
« Last Edit: October 24, 2014, 06:01:09 PM by Valthazar »

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #1 on: March 20, 2013, 03:49:31 PM »
Well as a disabled person I would say ,with other hard to get employed groups, the minimum wage hurts me at least. Look at it from an employers point of view I'm in a wheelchair and have other issues such as I can't multitask or perform complex work. I'm a risk to hire, now if I could take say in Florida instead of $7.79 for say $5.79 per hour why shouldn't I be able to?

As I see it working gives three things one needs to get better work later:

1. A credible work record I'm self-employed now so to the workplace I have no work history.

2. References again a big issue for me.

3. Gaining meaningful skills to areas of work supported by the first two.

Its getting one foot in the door that is key, for young workers and others you can't even get that foot in the door it seems.

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #2 on: March 20, 2013, 04:05:45 PM »
Ruby, you make some good points.  The main reason I brought this issue up is because I feel a lot of younger workers (college students) seem to overwhelmingly support the minimum wage increases, when in reality, it makes it difficult for them to start off their careers.  I would imagine that for a young college student (21-22) who is anyway staying at home with their parents, it would work for in their favor to have more internships available that pay $3-4/hour - but at least allows them to build up a work history in their field and gain experience when they apply for full time positions.

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #3 on: March 20, 2013, 04:33:51 PM »
Well education does matter say you go to our local county technical school program PTEC and get a credential as a truck driver in the current market they are all being hired at over the minimum wage by a good amount a friend did and walked out getting paid a training wage of $12 an hour plus benefits and after a year will go to $16 an hour at age 22. He wants to earn a hazard cargo commercial credential will allow him to earn ver $20 an hour.

So I would say education and job training is of value.

But I'm disabled a interesting number for Saint Petersburg College a regional accredited school in 2009 they tracked graduates among the disabled people warning a bachelors degree over three years only 16% had any kind of job including part-time. Now I would think that shows an issue if one earns a degree in say banking and you can't get a job in banking. In this case its also one of the few programs in that in the country as well.

But back to the topic if a college graduate can't even get a minimum wage job if disabled its not only the minimum wage but for an average High School graduate its a factor.

Offline DTW

  • Survival Of The Fittest , I ate my twin in the womb.
  • Suspended
  • Enchanter
  • *
  • Join Date: Mar 2010
  • Location: Live From Hell
  • Gender: Male
  • Lions don’t lose sleep over the opinion of sheep
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #4 on: March 20, 2013, 05:14:41 PM »
I see a problem with this on the company side.

If they do raise minimum wage and you cut jobs , the people who would work the jobs you cut are going to have to live off the government which means you'll have to pay higher taxes.

So really by trying to screw others you're just screwing yourself.   I also love that these same people will say others are lazy and don't want to work when they're one who cut their jobs. It's such a foolish endeavor.

Even if we don't raise minimum wage  , people making minimum wage will have to rely on the government to survive because the whole purpose of raising
 minimum wage now is  that people can't survive.


IF you want to get people off the government dole , give them jobs or don't and stop complaining.



Offline Trieste

  • Faerie Queen; Her Imperial Lubemajesty; Willing Victim
  • Dame
  • Carnite
  • *
  • Join Date: Apr 2005
  • Location: In the middle of Happily Ever After with a dark Prince Charming.
  • Gender: Female
  • I am many things - dull is not one of them.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 4
Re: Economic Discussion of Minimum Wage Laws
« Reply #5 on: March 20, 2013, 06:06:58 PM »
Ruby, you make some good points.  The main reason I brought this issue up is because I feel a lot of younger workers (college students) seem to overwhelmingly support the minimum wage increases, when in reality, it makes it difficult for them to start off their careers.  I would imagine that for a young college student (21-22) who is anyway staying at home with their parents, it would work for in their favor to have more internships available that pay $3-4/hour - but at least allows them to build up a work history in their field and gain experience when they apply for full time positions.

I gather from this that you are under the impression that internships are generally paid. Nearly every internship I've come across personally is unpaid - the benefit for the student or the worker is given entirely in 'work experience'. In fact, it's considered a huge deal at both the universities I've attended to be offered paid internships. I managed to land one of these coveted positions myself after a very competitive hiring process - my pay works out to about $6/hour if I work only the minimum number of hours (20 hours) I'm asked to work for my internship. Most weeks, I work at least 1.5 times that (which means my pay per hour drops to just over $4/hour at best, for 30 hours) and on weeks when there are school holidays or no class, the expectation is that I will spend more than twice that at my internship (45 hours - or about $2.75 an hour). These positions are available, and probably will continue to be available despite any minimum wage laws, because they are not subject to minimum wage laws.

When the POTUS brought up the minimum wage hike in his SOTU, he mentioned the poverty line. I'm curious about your position on that. President Obama's stance was that one should not be under the national poverty line if one is working a full time job. Am I understanding correctly that your position is along the lines of, "Well, you might be under the poverty line but at least you're not at zero income"?

And, while you're approaching this from the perspective of economics, what does the federal poverty line mean in terms of pure economics as far as you can tell?

Offline OutoftheDust

Re: Economic Discussion of Minimum Wage Laws
« Reply #6 on: March 20, 2013, 06:09:36 PM »
Well as a disabled person I would say ,with other hard to get employed groups, the minimum wage hurts me at least. Look at it from an employers point of view I'm in a wheelchair and have other issues such as I can't multitask or perform complex work. I'm a risk to hire, now if I could take say in Florida instead of $7.79 for say $5.79 per hour why shouldn't I be able to?

As I see it working gives three things one needs to get better work later:

1. A credible work record I'm self-employed now so to the workplace I have no work history.

2. References again a big issue for me.

3. Gaining meaningful skills to areas of work supported by the first two.

Its getting one foot in the door that is key, for young workers and others you can't even get that foot in the door it seems.

That sets a fairly bad precedent for persons with almost any disability. There is a reason employers should not be allowed to discriminate in certain fields, and that reason is because when you let them, they will.

Offline RubySlippers

Re: Economic Discussion of Minimum Wage Laws
« Reply #7 on: March 20, 2013, 06:30:46 PM »
That sets a fairly bad precedent for persons with almost any disability. There is a reason employers should not be allowed to discriminate in certain fields, and that reason is because when you let them, they will.

And if you can't get a job?

Its odd as a Busker I earn decent money but sometimes all I get is for an hour, two gigs, is $5.00 but that is okay I can make a good deal over that to.  But to me and a lot of others getting a work history and the things I noted and a reliable $5.79 would be great do that say 20 hours and Busk I would have it pretty good.

Your idea of fairness is nice but doesn't fix the issues if your disabled your far less likely to have any decent job.

Offline Caehlim

Re: Economic Discussion of Minimum Wage Laws
« Reply #8 on: March 20, 2013, 07:06:57 PM »
I'll jump in on this conversation later. I'd hoped to have time to write a post this morning, but it's time for me to go work.

I'll provide one thought for now. Your arguments are based on theory when practical evidence is readily available. Have you looked at Australia's situation?

Will discuss further tonight. This looks like a very interesting discussion.

Offline OutoftheDust

Re: Economic Discussion of Minimum Wage Laws
« Reply #9 on: March 20, 2013, 08:51:59 PM »
And if you can't get a job?

Its odd as a Busker I earn decent money but sometimes all I get is for an hour, two gigs, is $5.00 but that is okay I can make a good deal over that to.  But to me and a lot of others getting a work history and the things I noted and a reliable $5.79 would be great do that say 20 hours and Busk I would have it pretty good.

Your idea of fairness is nice but doesn't fix the issues if your disabled your far less likely to have any decent job.

There are many disabled folks with many different problems. They're not lepers to the job market: the job market just sucks, period. It's kind of like the situation with pre-existing conditions for insurance companies. Is it worse for an insurance company to offer a policy to someone with a pre-existing condition that will almost certainly result in a claim? Yes. But we should make them do it, because the alternative is nightmarishly Ayn Randian. Imagine a society that punished people for being differently-abled, and was unapologetic due to some half-ass economic justification.

Seriously though. Getting a job as a young person sucks. I won't argue that much.
« Last Edit: March 21, 2013, 07:40:10 AM by OutoftheDust »

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #10 on: March 20, 2013, 08:58:28 PM »
I gather from this that you are under the impression that internships are generally paid. Nearly every internship I've come across personally is unpaid - the benefit for the student or the worker is given entirely in 'work experience'. In fact, it's considered a huge deal at both the universities I've attended to be offered paid internships. I managed to land one of these coveted positions myself after a very competitive hiring process - my pay works out to about $6/hour if I work only the minimum number of hours (20 hours) I'm asked to work for my internship. Most weeks, I work at least 1.5 times that (which means my pay per hour drops to just over $4/hour at best, for 30 hours) and on weeks when there are school holidays or no class, the expectation is that I will spend more than twice that at my internship (45 hours - or about $2.75 an hour). These positions are available, and probably will continue to be available despite any minimum wage laws, because they are not subject to minimum wage laws.

Trieste, thank you for your input - and congratulations on getting the competitive internship.  Because this discussion involves wages, I was referring specifically to paid, waged internships.  I am assuming that the internship you are involved with is not paid hourly as a wage, but is actually paid as a contract - irrelevant of the actual hours worked.

Also, I could be wrong, but based on your description, it appears that these internships are taking place within the university itself?  I work at a university, and am very familiar with these types of internships that operate on a yearly contract.  Again, I could be mistaken about your situation.  From my experience, the majority of paid internships that take place with private businesses go through their standard payroll, and as a result, the worker is generally assigned the lowest minimum hourly wage permitted by law.  Many colleges and universities can avoid this loophole because they market their internships as educational and learning opportunities or work studies, whereas private businesses are under a lot more scrutiny since work is still work.  Again, I apologize if this was an incorrect assumption about your situation.

When the POTUS brought up the minimum wage hike in his SOTU, he mentioned the poverty line. I'm curious about your position on that. President Obama's stance was that one should not be under the national poverty line if one is working a full time job. Am I understanding correctly that your position is along the lines of, "Well, you might be under the poverty line but at least you're not at zero income"?

Yes, that is partially what I am asserting, but it is not as simple as that.  First of all, we need to realize that the concept of an externally-defined 'poverty line' (meaning, by an agency outside of the free market - aka government), is a largely arbitrary demarcation of income.  President Obama's stance that  one should not be under the national poverty line if one is working a full time job is one of noble intentions - and one that from a purely philosophical perspective, many people would agree with.  However, I make the case that elevating the minimum wage to accomplish this will actually serve a counterproductive purpose, and result in more unemployed Americans, rather than impoverished Americans.  Before I explain my reasoning further, ask yourself which is a more ideal situation - to be entirely unemployed and reliant on government aid, or to make very minimal income, and use government aid sparingly?

The reality is that by elevating the minimum wage, many business owners are responding by cutting jobs - since there is no corresponding increase in revenue to support this sudden 'forced' increase in wages.  As a result, many of the current group of Americans who are living "below the poverty line" according to President Obama, will suddenly see lay-offs.  As a result, no longer will they be impoverished, they will be flat out unemployed. 

What we are seeing in this decade is rampant expansion of government welfare programs.  47 million Americans are now completely reliant on food stamps, and that number will continue to increase if the minimum wage continues to increase.

And, while you're approaching this from the perspective of economics, what does the federal poverty line mean in terms of pure economics as far as you can tell?

As a pure definition, the "absolute poverty line" is the "threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health."

It is important to realize that the 'poverty line' is largely a subjective measure arbitrarily created by the Department of Health and Human Services.  After all, the international poverty line is only $1 a day, so already we see that the poverty line is largely a subjective measure of lifestyle that is not influenced by free-market forces.
« Last Edit: March 20, 2013, 09:04:12 PM by ValthazarElite »

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #11 on: March 20, 2013, 09:18:43 PM »
I see a problem with this on the company side.

If they do raise minimum wage and you cut jobs , the people who would work the jobs you cut are going to have to live off the government which means you'll have to pay higher taxes.

So really by trying to screw others you're just screwing yourself.   I also love that these same people will say others are lazy and don't want to work when they're one who cut their jobs. It's such a foolish endeavor.

Even if we don't raise minimum wage  , people making minimum wage will have to rely on the government to survive because the whole purpose of raising
 minimum wage now is  that people can't survive.


IF you want to get people off the government dole , give them jobs or don't and stop complaining.

Hi DTW - thanks for your input.

I think the statement that I bolded in your post is the point I'm trying to make.  I have many friends who are very passionate about 'empowering the 99%,' support Occupy Wallstreet, and believe that that it is the top 1% who are out to get us.  The reality is that these initiatives to raise the minimum wage are targeting that exact type of audience who don't have a fundamental understanding of how an economy creates jobs, and how wages are set in the free-market. 

I certainly agree with you that many of the unemployed people today are not at all lazy.  Many of them are merely the victims of circumstance, and it is unfortunate that so many people are unable to find work and be independent.


Online ReijiTabibito

  • Gatecrasher
  • Lord
  • Addict
  • *
  • Join Date: Jun 2009
  • Location: Titanian Autonomous University, Gate Studies Dept.
  • Gender: Male
  • There cannot be another Fall.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 2
Re: Economic Discussion of Minimum Wage Laws
« Reply #12 on: March 20, 2013, 09:53:17 PM »
Throwing my hat in here...hopefully this doesn't bite me in the ass.  Valz, your points are well-spoken and understood, but there's an undercurrent that's running through them that fails to rise to the surface.  That undercurrent is, at the end, the profit of the company.  You noted, quite correctly, that a raise in the minimum wage would cause a ripple effect in the economy, even in companies that might not have minimum wage positions - regardless of current pay, the MW raise will cause required pay to go up pretty much everywhere.  Because of the increased cost of payroll, companies will be willing to, at the very least, hire fewer people, or like some after Obama's reelection, fire people because of supposed 'reduced economy' and 'another recession' - which I haven't heard about beyond the talk about next years sequester-enforced budget cuts (which is a joke, but this isn't the thread for it).

There is, however, a critical piece of the puzzle that you are ignoring...or perhaps rightly dismissing.  That piece is company net profit, and high-rank pay.  Yes, the national poverty line, or any poverty line, is a vaguely defined thing put out by a government agency.  But you can't tell me that someone living in this country to the tune of over a few hundred thousand dollars a year is impoverished.  I should know, I grew up for eighteen years in one such house.  There were school years where I begged my parents to not buy me new shoes so I could fit in better.

Now, I understand - a company's primary responsibility is to its shareholders, and that responsibility isn't very well fulfilled if the company goes under.  But you're telling me that, in a company I just pulled out of my ass for this point, ValueCo Inc - which has a net profit of $5 billion a year - isn't going to be able to afford the cost of hiring a dozen new people at, say, $60k a year (someone on this board noted that the average family of four can live comfortably on around $70k/year).  I call bull.

Or maybe you don't want to pay that much out of the gate.  Okay, no problem.  Give them $40k/year to start with and then boost it up to $60k in little bits over the next...let's say decade to ease the math.  That's $2k in raises per year per person.

The ultimate problem isn't anything economical.  It's a question of values and ethics.  And the people making the big money have decided that they're going with the 'more money for me' path.  It seems to be all they ever talk about anymore these days - Obama is punishing the rich, he's declaring war on success, (and to quote Yahtzee) blahdeblahdeblah.

Aleksandr Solzhenitsyn, writer of the famous Gulag Archipelago, likened nations and corporations to people (not in the Citizens United sense, thankfully).  Each man, he explains, is born with two lungs.  So it is with nations - one is rights.  But there is another lung, and it is called duty.  And the problems we are seeing with our nation today largely derives from the fact that those who have the responsibility at the top don't want to do their duty, they want to have their cake and eat it too, and f**k all the rest of us plebeians.

A lot of society is going this way - the me-first attitude, the lack of vision, the worries about 'what will this look like next quarter?'  Anyone and everyone who knows me IRL knows I'm an enormous fan of the Daily Show.  There was a woman on the other week, promoting a book about the personal finance industry - name currently escapes me.  She said two things, one of which I'll state directly here, and the other which I gleaned from her conversation w/Jon.  The direct one is that the stock market has recalibrated itself to operate on the short term - stocks and bonds and all those wonderful things traded by the Gorden Gekkos of the world are now evaluated based on their performance now, rather than how it will be doing in ten years.

The thing that I gleaned from her speech, a common thing, is that fifty percent of all American households are living in and around the poverty line as currently stands.  Now, I'm not a mathematician, but I know half of America is 150 million people.  But what I'm hearing from the personal finance industry is that the problem isn't money, it's that people don't know how to handle it.

Now, I can believe three families of that 150 million don't take good care of their finances.  I can believe a hundred families.  I can believe a few thousand.

But you can't look me in the eye and say with a straight face that all 150 million Americans can't write up a budget (something CONGRESS can't certainly do, and I think your average Americans have more political fortitude and brains than a Congressman), save a little extra for emergencies, and responsibly handle money.

...okay, you can, but then you're obviously a psychopath so why should I be listening to you?

I'm married.  My wife and I have been so for almost five wonderful years.  For almost four of those, we've shared an apartment.  We do easy financial-saving things like: set a food budget, every week, and stick to it (after a couple of months of experimenting where to draw the lines); the gas savings we get from shopping at the local chain supermarket - we go and fill up at the same time so we both save on gas; if we go out on a Friday night, we sit down and see if we've got any gift cards for a restaurant we like (and find one from Mrs. Reiji's third uncle Jeffrey who gave it to us three Christmases ago until a pile of books).

You could solve the problem by not raising the minimum wage.  But that would leave a lot of people still unemployed, and quite a few impoverished.

Or you could solve the problem by telling the guys that can throw down $50k for a plate dinner to hear The Mormon speak about how he hates poor people that they can live without their double-digit million income, and stop acting like you're three and your favorite toy was taken away!


PS.  You may fire away, Gridley.

Offline Trieste

  • Faerie Queen; Her Imperial Lubemajesty; Willing Victim
  • Dame
  • Carnite
  • *
  • Join Date: Apr 2005
  • Location: In the middle of Happily Ever After with a dark Prince Charming.
  • Gender: Female
  • I am many things - dull is not one of them.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 4
Re: Economic Discussion of Minimum Wage Laws
« Reply #13 on: March 20, 2013, 10:04:29 PM »
First, straight-up, formal economic theory is not my strong point. I took this thread as an opportunity to ask questions and try to learn more about it, so when I ask questions, here, they're not meant to be leading or didactic. I hope that has been clear and will remain clear. ::)

Trieste, thank you for your input - and congratulations on getting the competitive internship.  Because this discussion involves wages, I was referring specifically to paid, waged internships.  I am assuming that the internship you are involved with is not paid hourly as a wage, but is actually paid as a contract - irrelevant of the actual hours worked.

Also, I could be wrong, but based on your description, it appears that these internships are taking place within the university itself?  I work at a university, and am very familiar with these types of internships that operate on a yearly contract.  Again, I could be mistaken about your situation.  From my experience, the majority of paid internships that take place with private businesses go through their standard payroll, and as a result, the worker is generally assigned the lowest minimum hourly wage permitted by law.  Many colleges and universities can avoid this loophole because they market their internships as educational and learning opportunities or work studies, whereas private businesses are under a lot more scrutiny since work is still work.  Again, I apologize if this was an incorrect assumption about your situation.

Thanks. I was very proud to land it, although the learning experience has been... *grunts* Let's just say I'm not learning as much about a working forensics lab as I had hoped, and leave at that. I call the department where I work, "Where ambition goes to die." However, that aside, the work takes place in a functioning forensic biology lab, rather than on campus. I'm a master's student, and my actual paycheck comes from the university itself. I do know that the university contracts with the lab, but to what extent I'm not sure. And I bow to your knowledge regarding how private businesses handle paid internships, as I have no experience there.

I do know that without significant support from others (i.e. my husband's pay most of all), I would not be able to maintain a domicile without at least two other roomies - probably three would be more realistic.

Yes, that is partially what I am asserting, but it is not as simple as that.  First of all, we need to realize that the concept of an externally-defined 'poverty line' (meaning, by an agency outside of the free market - aka government), is a largely arbitrary demarcation of income.  President Obama's stance that  one should not be under the national poverty line if one is working a full time job is one of noble intentions - and one that from a purely philosophical perspective, many people would agree with.  However, I make the case that elevating the minimum wage to accomplish this will actually serve a counterproductive purpose, and result in more unemployed Americans, rather than impoverished Americans.  Before I explain my reasoning further, ask yourself which is a more ideal situation - to be entirely unemployed and reliant on government aid, or to make very minimal income, and use government aid sparingly?

This seems like, for lack of a better term, a false choice, especially in the current economic climate. Since we're touching on my personal situation - and I don't mind doing so with the caveat that I acknowledge I'm not necessarily everyman - I am making minimal income and I am still not using government aid very sparingly. In fact, I would be making more use of government aid if I qualified, because currently I'm having to pay for several things out of my student loans. My student loans are low-interest Department of Education loans, and it makes very little fiscal sense for me as an individual to continue to pay for things like food out of those loans if I qualified for, for instance, food stamps. In the current MassHealth system (a.k.a. RomneyCare), full-time students are exempt from state health insurance subsidies no matter how low their income is, so when my student loans come due, I will then be paying interest on the health insurance costs I had to pay out of student loans.

In short, the only difference between being minimally employed and being completely unemployed, for me, is not how much I make use of government assistance but which way I'm going to make use of government assistance. I still use it fairly heavily, and tbh I would use it more if I could, if it meant I could squirrel some of my wages away for the harder times that I know will come along, when I know that there will be no more aid forthcoming. I would use it for a safety net if I could manage it... and while that's smart for me as an individual, it doesn't seem very efficient as a use for government funds.

The reality is that by elevating the minimum wage, many business owners are responding by cutting jobs - since there is no corresponding increase in revenue to support this sudden 'forced' increase in wages.  As a result, many of the current group of Americans who are living "below the poverty line" according to President Obama, will suddenly see lay-offs.  As a result, no longer will they be impoverished, they will be flat out unemployed. 

The theory with which I'm familiar, and the script that is followed by liberal politicians in general (I identify politically as an independent, but you can't grow up in Massachusetts without picking up some serious liberalese) is that there will be an increase in revenue, because more people will be able to afford more stuff. The logic pans out for me as follows:

* Minimum wage increases, and employers will need to pay their employees more.
* Because the wage has just increased, employers do not yet see a bump in revenues. They lay people off to keep their cost of labor at the same percentage of revenues.
* But, since those who are still employed have more money at their disposal, they spend their money (the middle and lower classes are not necessarily well-known for their large savings, for instance).
* Revenue increases, allowing employers to rehire those laid off, or new hires.
* New hires continue to spend more money due to higher wages, revenue continues to increase, more employees can be hired who then spend more... etc.

I tried looking up historical data as a quick test to this theory, and I was interested to come across this chart on Fox News. I went with Fox because they have a well-publicized, strong bias against raising the minimum wage - in fact, the article containing that chart specifically makes points against raising the minimum wage. I don't think this chart is a very good chart, since firstly it doesn't go back very far at all, and secondly it's comparing minimum wage to unemployment during a time period that is notorious for its high unemployment that had little-to-nothing to do with minimum wage and a whole lot to do with economy-go-'splodey. What I did find interesting was the first part of that chart - from '03 to '07, minimum wage remains flat and unemployment sorta zig-zags in a generally downward trend. The zig-zags look too small to be statistically significant, so I'm willing to call it a downward trend. Hard to call it a correlative relationship, hard to say it isn't correlative. I need more power data!

... which is, unfortunately, hard to come by, at least as far as I can tell. My Googling and Google Scholar-ing turned up with nothing that gave overall unemployment rates as compared to minimum wages over the last 50ish years that I felt I could decipher and interpret appropriately. There was this chart that compared teenage unemployment to minimum wage - and there doesn't seem to be a strong correlation there, especially when you look at the wage raise in the late 90s that is accompanied by a continued downward trend in unemployment. However, the figure is not well-sourced, and I'm extremely hesitant to base any conclusions off of it.

So, in short, I don't know. I can't support or reject my hypothesis based on what I have.

What we are seeing in this decade is rampant expansion of government welfare programs.  47 million Americans are now completely reliant on food stamps, and that number will continue to increase if the minimum wage continues to increase.

As a pure definition, the "absolute poverty line" is the "threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health."

It is important to realize that the 'poverty line' is largely a subjective measure arbitrarily created by the Department of Health and Human Services.  After all, the international poverty line is only $1 a day, so already we see that the poverty line is largely a subjective measure of lifestyle that is not influenced by free-market forces.

I think I would put forth the idea that a national poverty line in the US is not quite so much subjective as just local. While the international poverty line is much lower, it functionally must be much lower to cover countries where the population lives in conditions that would get a US domicile condemned. I don't know that I would hold up the international poverty line as an example of free market forces, due to the market being interfered with by international governments, wars, etc. My definition of free market might be different than yours - actually, it probably is, come to think of it. I would, as an example, not consider something like a famine to be part of the free market, but an interfering agency that disrupts the market.

It's late and I've run out of replying steam but hopefully I've given some food for thought.

Offline Kythia

  • Noooo-one Fights like Kythia no-one bites like Kythia
  • Dame
  • Enchanter
  • *
  • Join Date: Oct 2012
  • Gender: Female
  • No one chain smokes Marlboro lights like Kythia
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 1
Re: Economic Discussion of Minimum Wage Laws
« Reply #14 on: March 20, 2013, 10:29:57 PM »
I think a point that you're missing is that, even in the USs at will employment, jobs aren't 100% fungible.  I've never worked fast food so this specific example may fail.  But lets imagine "Kythia's Burger" requires two people on the till, one on the griddle and one to fan me and feed me peeled grapes.  I currently pay them $1 per hour (well, less expenses.  And its actually scrip redeemable in the company store rather than real money.  But you get the point.) 

Minimum wage comes in, I'm aghast, but I suck it up and pay them $7 or whatever it is.  So that's an extra $24/hour staffing costs.  But I can't make any of them unemployed, Kythia's burgers needs four employees because thats the number of people needed to do all the jobs that need doing.  The raise in staffing costs comes out of my profits, I can't recoup it by unemployment.  Sure, not everyone makes the kind of eleven digit profits I do so some companies will end up going under, not every company has a fixed staffing requirement so some will be able to lay off.  But if a company CAN lay off then that just means it was overstaffed in the first place.  Inefficient.  And the companies that go under will be replaced.

There's no general consensus, AFAIK, about whether minimum wage does increase unemployment (I seem to remember reading an interesting study comparing two US states that bordered and had different minimum wages but I cant remember enough details to Google it) for precisely those reasons.  Jobs aren't simply a function of profits, they're also a function of workload.

Offline Serephino

Re: Economic Discussion of Minimum Wage Laws
« Reply #15 on: March 20, 2013, 10:49:01 PM »
I can understand why this would be bad for a small business.  My mom works for a small business that already has trouble paying bills.  Although, I do remember from the last raise her saying something about filing to be exempt from it.  It is my understanding that there is a limit that if a business nets less than, the minimum wage laws don't apply.  The owners just have to fill out the paperwork and get approved.

Larger businesses can afford it, but as it has been pointed out, they just don't want to.  The essence of the problem was best shown by something I saw on the Tonight Show.  Jay Leno was doing his Headlines thing, and one of them was a newspaper page with two articles.  One of them was about a company laying off a few thousand workers.  Just under it was an article about that very same company giving its executives very large bonuses.  Gee, I wonder where the money they saved on payroll went....

My boyfriend and I are among those just barely scraping by.  I'm disabled, but he works in fast food.  We rely on my food stamps more than I'd like to.  We have no savings.  We rely on heating assistance to stay warm in the winter.  When the oil we have runs out, we are so screwed if it hasn't warmed up, because we have nothing to buy more oil with.  The month isn't over, and I have $3.89 in my bank account.  My boyfriend has cobwebs in his wallet.  This means the gas in the car has to last until his next paycheck, or I have to ask my mom for money, which I really hate.

The sequester, a rant for another thread, is making huge cuts to the very programs we depend so much on.  The walls are closing in, and really, what are we supposed to do?  It's getting to the point where it will be better to have no job at all than a low paying one because income limits on government programs are going to drop because of the cuts.  What we want is for it to be better to have a job that pays enough for people to not need government assistance.

Offline Callie Del Noire

Re: Economic Discussion of Minimum Wage Laws
« Reply #16 on: March 20, 2013, 11:44:48 PM »
The problem is.. there is a TRUE problem with wealth inequity.

Wealth Inequality in America

I don't think that raising the minimum wage law will fix it. I do think there is an intrinsic disconnect with some of the corporate leadership of our country. There is this awesome rush for lower production costs.. yet I've yet to see goods, services and materials go down in any tangible amount.

I don't think the minimum wage law will fix the problem. I think however that instead of corporate kick backs, tax loopholes and laws that endorse outsourcing need to be fixed. You can't tell me that if we fixed the laws that make it easy to dodge the corporate tax breaks and made it so that if they want these breaks back.. invest in the country. In the end.. it will bring development, growth and yes.. if planned out right.. profit for the companies.

Example: We are the creators of the internet and developed a massive amount the foundation technology behind it. Yet our infrastructure for the internet is literally falling apart in some areas within our country and we don't even rank in the top 10 countries anymore.  Why? Because every penny you put into expanding your infrastructure is a penny that can be written off as profit. Profit is good.. failure to do your proper due diligence and upkeep is going to ultimately bite us in the ass. That is where we are at.

We are being led by a group of planners, CEOs and boards who follow one credo. 'Greed is good'.

The very concept of long term planning, investment and profit planned for long term growth and expansion. Today if you want to grow.. you buy out your rivals (Like AT&Ts efforts to buy out Version last year)

Offline TaintedAndDelish

Re: Economic Discussion of Minimum Wage Laws
« Reply #17 on: March 21, 2013, 12:04:24 AM »
Funny, more money doesn't make you rich just like how a longer staff doesn't make you a better lover. I think that most folks, myself included are just not very good at investing and managing money as compared to those who run huge, successful businesses. For this reason, I don't think that higher minimum wage will make those who are in need any less broke. (In the long run)

I would rather see the government offer classes in investing, managing money and running businesses than raising minimum wage.

Also, I think education is only one factor. Abilities, motivation, health and so on are among others.

Not to get off topic, but I've often wondered if it is even possible for everyone in a country to be well off, or if a percentage needs to be poor. ( my reasoning here is that the rich are wealthy at the expense of the poor - I'm not certain if this is truth or a fallacy )
« Last Edit: March 21, 2013, 12:07:36 AM by TaintedAndDelish »

Offline Kythia

  • Noooo-one Fights like Kythia no-one bites like Kythia
  • Dame
  • Enchanter
  • *
  • Join Date: Oct 2012
  • Gender: Female
  • No one chain smokes Marlboro lights like Kythia
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 1
Re: Economic Discussion of Minimum Wage Laws
« Reply #18 on: March 21, 2013, 01:02:18 AM »
Not to get off topic, but I've often wondered if it is even possible for everyone in a country to be well off, or if a percentage needs to be poor. ( my reasoning here is that the rich are wealthy at the expense of the poor - I'm not certain if this is truth or a fallacy )

"Poor" isn't a well defined term.  With no disrespect meant to anyone who's worried about money, the fact you're on this site shows you have access to a computer, electricity, etc and so, in vast swathes of the world, would be considered "rich".  Yes, its possible for everyone in a country to be relatively rich in world terms.  In terms of the country?  Well, the question doesn't make much sense.  50% of the population are going to be in the bottom half of the population and the top 1% will have more money than anyone else.

Offline TaintedAndDelish

Re: Economic Discussion of Minimum Wage Laws
« Reply #19 on: March 21, 2013, 03:08:33 AM »
"Poor" isn't a well defined term.  With no disrespect meant to anyone who's worried about money, the fact you're on this site shows you have access to a computer, electricity, etc and so, in vast swathes of the world, would be considered "rich".  Yes, its possible for everyone in a country to be relatively rich in world terms.  In terms of the country?  Well, the question doesn't make much sense.  50% of the population are going to be in the bottom half of the population and the top 1% will have more money than anyone else.

Obviously, there will always be some with more resources than others - unless you live in a society where resources are distributed evenly. My question was about whether its possible for everyone to be well off. Let me try to define well off objectively: having a nice sturdy, secure home, ample food, good health care, enough money and resources to really enjoy life and live easy. ( if you argue that these are subjective, then you are missing the point that I'm trying to make. )

It seems that in order to make a profit, one person needs to win the deal, and the other needs to loose - resulting in inequality.

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #20 on: March 21, 2013, 05:34:08 AM »
I think a point that you're missing is that, even in the USs at will employment, jobs aren't 100% fungible.  I've never worked fast food so this specific example may fail.  But lets imagine "Kythia's Burger" requires two people on the till, one on the griddle and one to fan me and feed me peeled grapes.  I currently pay them $1 per hour (well, less expenses.  And its actually scrip redeemable in the company store rather than real money.  But you get the point.) 

Minimum wage comes in, I'm aghast, but I suck it up and pay them $7 or whatever it is.  So that's an extra $24/hour staffing costs.  But I can't make any of them unemployed, Kythia's burgers needs four employees because thats the number of people needed to do all the jobs that need doing.  The raise in staffing costs comes out of my profits, I can't recoup it by unemployment.  Sure, not everyone makes the kind of eleven digit profits I do so some companies will end up going under, not every company has a fixed staffing requirement so some will be able to lay off.  But if a company CAN lay off then that just means it was overstaffed in the first place.  Inefficient.  And the companies that go under will be replaced.

There's no general consensus, AFAIK, about whether minimum wage does increase unemployment (I seem to remember reading an interesting study comparing two US states that bordered and had different minimum wages but I cant remember enough details to Google it) for precisely those reasons.  Jobs aren't simply a function of profits, they're also a function of workload.

Kythia, I see the point you are trying to make, and if we are talking about efficiency, then I would be the first proponent of it - but what you are describing is not a drive to greater efficiency.  You are correct that laying off employees in some businesses as a response to a rise in the minimum wage is an effort to increase "efficiency" from a profits perspective. 

Let me give you an example:  If I am running an auto repair shop, and I currently am employing 10 entry-level mechanics at $5.50/hour.  A minimum wage law is passed, and I am now required to pay $8/hour.  You may say that it "increases efficiency" for my "overstaffed" company to lay off 4 of my mechanics.  Now I've got 6 entry-level mechanics earning $8/hour.  Not only do I have a reduction in the number of employees (10 --> 6) with the same cost-loss for their salary, but now my productivity decreases as a company as well, since obviously 6 mechanics can accomplish less than 10 mechanics.

Of course, you can make the case that those 6 mechanics can work more - but again, is that truly increased productivity or efficiency?  You'd just be having fewer mechanics working longer hours, which brings with it many pros as well as cons.  This also goes back to my earlier point that minimum wage increases help out individuals with strong work experience and stable positions, and hurt entry-level workers and people with very little work experience. 
« Last Edit: March 21, 2013, 06:34:12 AM by ValthazarElite »

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #21 on: March 21, 2013, 06:25:44 AM »
Thanks. I was very proud to land it, although the learning experience has been... *grunts* Let's just say I'm not learning as much about a working forensics lab as I had hoped, and leave at that. I call the department where I work, "Where ambition goes to die." However, that aside, the work takes place in a functioning forensic biology lab, rather than on campus. I'm a master's student, and my actual paycheck comes from the university itself. I do know that the university contracts with the lab, but to what extent I'm not sure. And I bow to your knowledge regarding how private businesses handle paid internships, as I have no experience there.

I do know that without significant support from others (i.e. my husband's pay most of all), I would not be able to maintain a domicile without at least two other roomies - probably three would be more realistic.

This seems like, for lack of a better term, a false choice, especially in the current economic climate. Since we're touching on my personal situation - and I don't mind doing so with the caveat that I acknowledge I'm not necessarily everyman - I am making minimal income and I am still not using government aid very sparingly. In fact, I would be making more use of government aid if I qualified, because currently I'm having to pay for several things out of my student loans. My student loans are low-interest Department of Education loans, and it makes very little fiscal sense for me as an individual to continue to pay for things like food out of those loans if I qualified for, for instance, food stamps. In the current MassHealth system (a.k.a. RomneyCare), full-time students are exempt from state health insurance subsidies no matter how low their income is, so when my student loans come due, I will then be paying interest on the health insurance costs I had to pay out of student loans.

In short, the only difference between being minimally employed and being completely unemployed, for me, is not how much I make use of government assistance but which way I'm going to make use of government assistance. I still use it fairly heavily, and tbh I would use it more if I could, if it meant I could squirrel some of my wages away for the harder times that I know will come along, when I know that there will be no more aid forthcoming. I would use it for a safety net if I could manage it... and while that's smart for me as an individual, it doesn't seem very efficient as a use for government funds.

I think in your case, based on your career path, chances are very strong that you will one day find a steady job in your field.  Student loans are an unfortunate, but necessary, part of our lives nowadays. 

You make a good point when you say how it is only human nature to want to maximize use of the government funds, and avoid using your own money until it is absolutely necessary.  I know I am not speaking for everyone obviously, but many people on unemployment benefits develop a sense of complacency when they receive a steady check coming in from the government.  This actually relates to the point that I make just below.  While I believe (hope) most people who are unemployed are motivated to be self-sufficient, there is unfortunately a sizable segment of that population who become apathetic towards the system, and no longer take an active role to seek employment wherever it may exist.  As a result, I think it is very risky to assume that all people have a natural desire to seek out work.  The unfortunate reality is that once some people see how 'good' they have it on government benefits, they become a slave to that system simply due to a lack of desire to advance themselves.

Also, I think that your personal situation is not exactly the same, since you are receiving a specialized education, and will have tangible skills to offer an employer.  Even though you may be in tough times financially now, you are putting yourself in a good position for the future.

The theory with which I'm familiar, and the script that is followed by liberal politicians in general (I identify politically as an independent, but you can't grow up in Massachusetts without picking up some serious liberalese) is that there will be an increase in revenue, because more people will be able to afford more stuff. The logic pans out for me as follows:

* Minimum wage increases, and employers will need to pay their employees more.
* Because the wage has just increased, employers do not yet see a bump in revenues. They lay people off to keep their cost of labor at the same percentage of revenues.
* But, since those who are still employed have more money at their disposal, they spend their money (the middle and lower classes are not necessarily well-known for their large savings, for instance).
* Revenue increases, allowing employers to rehire those laid off, or new hires.
* New hires continue to spend more money due to higher wages, revenue continues to increase, more employees can be hired who then spend more... etc.

I think it's interesting that you mentioned this, and I understand your logic.  This is the same rationale that many conservatives use to justify middle-class tax cuts - the concept that it will increase the flow of money into businesses because of more spending.  I can't say I disagree with that line of reasoning, but I have some thoughts on this minimum wage proposal: 

First of all, try to put yourself in the position of the business owner when thinking about this - because contrary to what politicians say, it is private business owners who create jobs - not the government.  The business owner is trying to maximize his or her efficiency - meaning hire the LEAST number of people to comply with minimum wage increases, while at the same time, making sure that revenues don't take too much of a hit.  It is really a sweet/ideal balance based on the economic climate that a business is facing. 

It is indeed true that the people still employed by that company, who now receive a higher wage due to minimum wage increases, will receive more money, and thus put more money back into businesses through their spending.  And it is also true that this will correspondingly increase the company's profits.  Where I disagree with you is the idea that employers will naturally choose to rehire all of those laid off, or hire new workers.  The reality is, minimum wage increases cause businesses to enter 'safe mode,' and if they somehow manage to maintain profits with minimal workers, they are very reluctant to take a risk and hire again.  Just put yourself in an owner's shoes - if you faced really tough economic times (and minimum wage increases), and you were forced to lay off many employees, wouldn't you count your blessings if you still managed to turn a profit despite that?  It is very risky for the owner to be extra ambitious and seek even greater profits by taking a huge risk of shelling out more money to hire new employees.

The reality is that most "good" jobs today are remnants of a time before this recession hit.  Very few of these are created during tough times.
« Last Edit: March 21, 2013, 06:29:29 AM by ValthazarElite »

Offline Ack Arg

Re: Economic Discussion of Minimum Wage Laws
« Reply #22 on: March 21, 2013, 07:51:38 AM »

I spent six years at university, mainly studying econ.

Short version? Citizens, usually starving ones, get together and insist on being able to eat. Citizens decide to create a minimum wage. That wage should be the one you can live on. It's not, but that's the idea.

Being poor? Well that's you being hungry, ignorant or sick and the food, knowledge and medicine being there but you're not allowed to have it. We put lots of work into making sure people stay hungry, sick and stupid. Advertising isn't there so you make informed choices in a market, just the opposite. My ancestors turned up in North America because someone took their crops from them and sold them elsewhere. Pick you own example for medicine.

Economics is just about how you want to organize your society.

Most wealth (read money, it's okay, we can say the word money) is just a power relationship. So why is it that Blank person gets to decide he's getting a private jet with a solid gold bathroom? Well it has a lot to do with lots of other people not getting to make those decisions. That's power.



So what about VE's question about economic perspectives about the what and if of minimum wage laws? Well it's all about what you think economics is. You can take other angles inside "mainstream" economics and bring up the ultimatum game or something. You can go find something crazy. Mostly though you can just play magic tricks with the arguments:


"Because a great number of overqualified people find the jobs offered to be demeaning, they need incentives like wage increases just to consider applying for them. Companies from walmart to jim's apple stand can't seem to leave the race to the bottom mentality, meaning they consistantly recruit people that don't just to the "minimum" but can't be said to be doing their job at all."

"If we continue to allow minimum wage to be an unlivable wage and let it get worse over time as it falls behind inflation, we're going to see some of the most important jobs in our nation fall into the hands of the least motivated, least qualified, least ethical and least productive."

Then you make up a graph to go with it.



Fun Trick: Ask an economics class if watching a video on your computer is production or consumption. Keeps them busy long enough for the aspirin to kick in and take the edge off the previous night's recreation.

Spoiler: Click to Show/Hide
I think in your case, based on your career path, chances are very strong that you will one day find a steady job in your field.  Student loans are an unfortunate, but necessary, part of our lives nowadays. 

You make a good point when you say how it is only human nature to want to maximize use of the government funds, and avoid using your own money until it is absolutely necessary.  I know I am not speaking for everyone obviously, but many people on unemployment benefits develop a sense of complacency when they receive a steady check coming in from the government.  This actually relates to the point that I make just below.  While I believe (hope) most people who are unemployed are motivated to be self-sufficient, there is unfortunately a sizable segment of that population who become apathetic towards the system, and no longer take an active role to seek employment wherever it may exist.  As a result, I think it is very risky to assume that all people have a natural desire to seek out work.  The unfortunate reality is that once some people see how 'good' they have it on government benefits, they become a slave to that system simply due to a lack of desire to advance themselves.

Also, I think that your personal situation is not exactly the same, since you are receiving a specialized education, and will have tangible skills to offer an employer.  Even though you may be in tough times financially now, you are putting yourself in a good position for the future.

I think it's interesting that you mentioned this, and I understand your logic.  This is the same rationale that many conservatives use to justify middle-class tax cuts - the concept that it will increase the flow of money into businesses because of more spending.  I can't say I disagree with that line of reasoning, but I have some thoughts on this minimum wage proposal: 

First of all, try to put yourself in the position of the business owner when thinking about this - because contrary to what politicians say, it is private business owners who create jobs - not the government.  The business owner is trying to maximize his or her efficiency - meaning hire the LEAST number of people to comply with minimum wage increases, while at the same time, making sure that revenues don't take too much of a hit.  It is really a sweet/ideal balance based on the economic climate that a business is facing. 

It is indeed true that the people still employed by that company, who now receive a higher wage due to minimum wage increases, will receive more money, and thus put more money back into businesses through their spending.  And it is also true that this will correspondingly increase the company's profits.  Where I disagree with you is the idea that employers will naturally choose to rehire all of those laid off, or hire new workers.  The reality is, minimum wage increases cause businesses to enter 'safe mode,' and if they somehow manage to maintain profits with minimal workers, they are very reluctant to take a risk and hire again.  Just put yourself in an owner's shoes - if you faced really tough economic times (and minimum wage increases), and you were forced to lay off many employees, wouldn't you count your blessings if you still managed to turn a profit despite that?  It is very risky for the owner to be extra ambitious and seek even greater profits by taking a huge risk of shelling out more money to hire new employees.

The reality is that most "good" jobs today are remnants of a time before this recession hit.  Very few of these are created during tough times.


Oh, I ought to take some time later and respond to this but the short version:

VE started by saying he wanted to keep this as an economics discussion but his post seems to take a lot of... not conservative... I think you call it right ring assumptions. Especially the bits about people on the social welfare tit. If it's an economic argument and not a moral and political one then the question is how much does it cost and what is the effect? Like, single mothers raising their childrens in slightly less terrible condition... which as someone that has to live in the same world as thems childrens I prefer.

I'm not saying you have to have hard data to make a speculative point but it just seems like you're edging into another territory there.

And private business creating jobs not the government... Come on, we all took a twentieth century history course at some point in highschool. We've got no excuse to play that game. Even if we took it at face value we'd have to mention the government creating the market, the currency, the infrastructure and lots of people walking around wanting to do jobs in the first place.

If you want to take the position of the people that do the work, they might tell you they want to fix machines, build houses and bake bread except for some reason there are bunch of people that have to say "okay, you're allowed to do your job now, but only on my schedule and in the way I want you to.

Let's not go putting labour or private business or anyone up as The person that built the highway. Lots of people built the highway.
\

Offline ValthazarTopic starter

  • Writer ͏͏● Educator ● Gamer ● Roleplayer ● Debater ● Tech Connoisseur ● Gym Rat ● Procrastinator ● As they say, "A simple PM may lead to lifelong friendship" ▬▬▬▬
  • Suspended
  • Seducer
  • *
  • Join Date: Mar 2013
  • Location: United States
  • Gender: Male
  • Proceed and be bold. Embrace your insecurities.
  • My Role Play Preferences
  • View My Rolls
  • Referrals: 0
Re: Economic Discussion of Minimum Wage Laws
« Reply #23 on: March 21, 2013, 08:31:19 AM »
Oh, I ought to take some time later and respond to this but the short version:

VE started by saying he wanted to keep this as an economics discussion but his post seems to take a lot of... not conservative... I think you call it right ring assumptions. Especially the bits about people on the social welfare tit. If it's an economic argument and not a moral and political one then the question is how much does it cost and what is the effect? Like, single mothers raising their childrens in slightly less terrible condition... which as someone that has to live in the same world as thems childrens I prefer.


Ack Arg, how is what I said regarding the recent expansion of social welfare not an economics issue?  If we are committed to maintaining the United States as a free-market, capitalist economy, then there certainly is a major economics problem with an increasing demographic reliant on a 3rd party (government) that is outside the realm of private business.  I imagine that regardless of one's political orientation, we all as Americans can say that it is undesirable to be reliant on the government for support, and the ideal is to be self-sufficient with a job, correct?  The US operates on the assumption that all commodities and services are produced by the free-market, thus, it is problematic to our economy when an increasing amount of wealth is funneled away from private enterprise - and more and more Americans are losing their independence.

Regarding your comment about single mothers:  Wouldn't you agree with me, that regardless if someone is a parent or not, the ideal is to live a country with maximal opportunities for employment?  The reason the US is the wealthiest country in the world is because we embrace the principles of capitalism, and wealth generation through private enterprise.  If we are suggesting that it is desirable for single mothers to be dependent on the government for support, we are deviating from the economic principles that made this country so powerful.

I'm not saying you have to have hard data to make a speculative point but it just seems like you're edging into another territory there.

And private business creating jobs not the government... Come on, we all took a twentieth century history course at some point in highschool. We've got no excuse to play that game. Even if we took it at face value we'd have to mention the government creating the market, the currency, the infrastructure and lots of people walking around wanting to do jobs in the first place.

I'm not sure what hard data you are looking for.  Nothing I have said so far regarding all-time highs for government program use is controversial.  I get the impression that you are trying to bring politics into this, and that is not at all what I am trying to do.  No one is saying that government is irrelevant.  I am simply making the point that while the government plays an important role in setting the climate for optimal job growth, it is still ultimately the private businesses themselves that choose whether to hire, or not hire.  The government cannot intervene and force employers to hire. 
« Last Edit: March 21, 2013, 08:36:08 AM by ValthazarElite »

Offline Caehlim

Re: Economic Discussion of Minimum Wage Laws
« Reply #24 on: March 21, 2013, 08:34:50 AM »
Firstly let me get this out of the way before discussing some of the other points from this thread.



Australian minimum wage: AUD$15.96 or US$16.59 (source)
U.S. minimum wage: US$7.25 (source)

Australian unemployment rate: 5.4% (source)
U.S. unemployment rate: 7.7% (source)



So yes, I do find it strange hearing Americans talking about higher minimum wages like no one knows what will happen and we have to use advanced economic theory and thought experiments to predict it.
« Last Edit: March 21, 2013, 08:36:47 AM by Caehlim »