Minimum Wage Too Minimal

Discussion in 'Economy' started by PoliticalChic, Jan 6, 2012.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    1."Workers in the U.S. earning the minimum wage are worse off now than they were four decades ago.

    2. The CHART OF THE DAY shows that after adjusting for inflation, the federal minimum wage dropped 20 percent from 1967 to 2010, even as the nominal figure climbed to $7.25 an hour from $1.40, a 418 percent gain.

    3. The decline would have been worse if not for increases that took place from 2008 through 2010 in how much employers were legally obligated to pay.

    4. “Hardship is increasing for lower-income levels, and the minimum wage reflects those at the lower end of the payroll spectrum,” said Ellen Zentner, a senior economist at Nomura Securities International Inc. in New York. “With those meager wages in place, it makes it hard to imagine families doing with even less.”

    5. A jobless rate that has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948, is one reason why workers have little leeway to press for higher wages.

    6. The loss of better-paying manufacturing jobs in the last three decades and the growth of service industries may be another reason why wages have failed to keep up with inflation, Zentner said.

    7. Eighteen states and the District of Columbia have minimum wages above the federal level of $7.25 an hour, which is just over $15,000 per year for a full-time worker. Eight states -- Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington -- will increase their minimum wage by between 28 cents and 37 cents an hour on Jan. 1, according to the National Employment Law Project, a non-partisan, not-for-profit organization that conducts research on unemployment. "
    Minimum Wage in U.S. Fails to Beat Inflation: Chart of the Day - Bloomberg

    According to Bloomberg TV this morn, 70% of those on minimum wage are adults in full-time positions...only some 12% are 16-20 year olds.
     
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  2. Dragon
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    Dragon Senior Member

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    What's this? Is PC calling for an increase in the minimum wage?

    :eek:

    :D

    This doesn't happen often so I should say it: I agree.
     
  3. DSGE
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    DSGE VIP Member

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    Get rid of it altogether. It's a terrible way to fight poverty. Solely use the Earned Income Tax Credit instead.
     
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  4. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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  5. PoliticalChic
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    PoliticalChic Diamond Member

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    1. Actually, while I appreciate your shock, I'm not yet "calling for an increase in the minimum wage."

    I always post what interests....and surprises... me. The OP serves as data to inform a position.

    Prior to the article and report by a source I trust, Bloomberg, I viewed minimum wage positions as entry level, temporary jobs, part time....

    Further, the principle of private property makes me loath to order private businesses to pay mandated wages...

    The two aspect of the OP that have made me reconsider my outlook are 1) 70% of said workers are adults in full-time positions, and 2) the difficult economy which deprives these folks of a chance to turn down a low-paying job.


    2. That being said, I still have to find out the degree to which economic tranfers, i.e., housing, food stamps, EITC rebates, etc. add to the incomes of the 1-2 million at minimum wage, before I would support mandated wages.

    3. There is still the question of whether or not wage mandates decrease the number of positions available, as this could be dispositive to the debate.

    4. Finally...if folks who show up for gainful employment cannot live at a certain level based on being 'trapped' in a low paying job...I would whole-heartedly support government intervention.
     
    Last edited: Jan 6, 2012
  6. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    LOL! The EITC requires you HAVE earned income. If your wage drops to 10 cents an hour - even if the EITC matches your income 100%, you only make 20 cents an hour.
     
  7. Dragon
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    Dragon Senior Member

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    I'm going to suggest reconsidering this position. All of these aid-for-the-poor programs are means-tested, which implies that if wages go up, they go down. In effect, right now (assuming min-wage workers receive such aid), part of the labor cost of the businesses that hire them is socialized at taxpayer expense. Would you not agree that where possible, it's better that such costs be borne by the employer rather than the government?
     
  8. DSGE
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    DSGE VIP Member

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    You know the rate can be set at more that 100% right? You don't even have to set rates, you can set quantities. Like "if your taxable income is between 0 and $3000 you're entitled to tax credits up to $5000". I don't understand what criticism you're making.
     
  9. PoliticalChic
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    PoliticalChic Diamond Member

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    As for the income transfers from various government programs: benefits are substantial and the recipients pay nothing. Those in the bottom 20% of income recipients receive over 70% of their income in such transfers.

    a. In 2001 cash and in-kind transfers accounted for 77.8% of said recipients’ income. This means that it is far from reality to state that their income is actually 22.2% of what it actually is.
    Reynolds, “Income and Wealth,” p. 28

    b. This tends to explain how Americans living below the poverty level spend $1.75 for every $1 of income. The Myth of Widespread American Poverty
     
    Last edited: Jan 6, 2012
  10. High_Gravity
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    High_Gravity Belligerent Drunk Supporting Member

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    I don't know how adults can even live off minimum wage, minimum wage is ok for high school kids working to earn money to have fun on the weekends, but not much else.
     

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