Save Social Security by Rasing the Minimum Wage

[DimitroffVodka]

Study: Minimum-wage hikes boost retail employment
BY CARRIE MASON-DRAFFEN
Newsday Staff Writer

April 3, 2006

A new study has ratcheted up the debate over whether minimum-wage hikes cause job losses in New York State.

According to the Fiscal Policy Institute, a research group in Albany, the state's minimum-wage increases have helped small businesses, not hurt them.

The study takes aim at critics who maintain that minimum-wage hikes cost jobs. That was a reason cited by Gov. George Pataki for vetoing legislation to increase New York State's minimum wage. But the Legislature overrode his veto and the minimum wage rose to $6 last year and to $6.75 this year. It will climb to $7.15 an hour next year, the last in a three-year rise.

By contrast, the federal minimum has remained at $5.15 an hour since 1997. As a result, 18 states and the District of Columbia have raised their minimums above that rate. Companies in those states almost always have to pay employees the higher rate.

The institute's study, an update of a 2004 report with similar findings, again focused primarily on the retail industry, which the researchers considered most likely to employ low-wage workers.

The latest study found that between 2004 and 2005, the year covering the first of the three minimum-wage hikes, retail industry employment in the state rose 1.3 percent, compared with 0.8 percent for nonfarm job growth overall. Employment also rose in other higher-wage states, the study found.

Researchers also concluded that in the same period the work hours for some of the most unskilled workers didn't drop, but instead increased from a mean of 30.7 hours a week to 31.3.

And small businesses may have benefited indirectly from the wage hikes, the researchers said.

"There may be a Henry Ford effect at work here," they write. "If you pay workers more, they can buy more, boosting the overall economy, especially among small retail businesses."

Opponents said the findings are too optimistic.

Mark Freedman, director of labor law policy for the U.S. Chamber of Commerce in Washington, D.C., countered that some states with higher minimums also have unemployment rates above the 4.8 percent national average.

"Their claim that there isn't a relationship between job loss and an increase in the minimum wage doesn't exactly hold up in that comparison," Freedman said.

Bruce D. Phillips, a senior economist with the National Federation of Independent Business, added that some of the higher-wage states have some of the highest job vacancy rates and businesses there focus on increasing workloads rather than hiring.

James Parrot, the institute's chief economist and one of the study's authors, stands by his findings.

"I offered a hypothesis and tested it," he said. "They are dealing in the realm of speculation."

The dispute may be largely moot on Long Island, said Pearl Kamer, chief economist for the Long Island Association.

"I don't think people [on Long Island] are willing to work at the minimum, so you are almost forced to pay above the minimum wage," she said. As a result, "it is very difficult to see how the minimum wage could in any way constrict employment [here]."

Copyright 2006 Newsday Inc.

 

[BaronVonBigmeat]

^^^ The problem with studies like that is they are making a very basic erroneous assumption. Namely, "If A happened before B, then A must have caused B". What they fail to realize specifically are two things:

1) The increase in employment may have been due to something else--a cut in the state income tax, a temporary boom caused by the federal reserve pushing down interest rates, a decrease in regulations, a tax loophole that lets employers affordably hire people, etc.

2) The minimum wage may actually be below the market price for entry level labor. If that's the case, it's a symbolic law and not doing much of anything.

Another thing to remember: The CEO of Walmart has called for a hike in the federal minimum wage. Why would he do that? Is he a bighearted compassionate guy? No, Walmart already pays above the minimum wage. He's hoping that minimum wages will go up so that it will hobble his small competitors. Don't think for a second that big business hates big regulation. They can hire a small army of lawyers and accountants to deal with it. Small businesses can't.

 

[gonegolfin]

Ahh yes! What's that about, indeed. You're definitely headed in the right direction (somewhat), but you haven't quite put your finger on the culprit.

The common answer to all the issues I quoted above is: the federal reserve system.

Excellent summary. I was going to respond earlier in the thread to Mr. Cook but I am glad that I waded through all of the posts and made it to yours. Perhaps we should suggest some reading to Mr. Cook. A good start would be The Creature from Jekyll Island.

And the mainstream financial media wonders why anyone would be invested in commodities, including silver and gold.

Brian

 

[Big Blue Machin]

Plus, you can only pay a person so much to do a job. You can't pay a teenager wearing a paper hat $10 an hour asking people if they want fries with that.

 

[G Edward Cook]

Sorry I've been away; however, I have read all your replies and need a bit to digest it all. I do want to thank you all for your interest even if I don't agree with a lot of you but you do have many good points. There has been so much interest in this topic that we must continue.

I would like to leave you with this point: If a Young American, perhaps a student, works, is his pay not as important as any other American's? Doesn't his pay help support his family? Isn't every dollar he makes one less dollar his or her family has to give him? Is he not as important as any other American?
Why should we not give EVERY AMERICAN a reason to work? When we allow companies to pay slave labor, we are telling our youth that they are only worth slave labor wages. NOT ME!!!!! They are the future of AMERICA and they deserve to be treated as such. My problem is with a CEO of an HMO thinking he is worth $1,600,000,000.00. For those that haven't yet seen a pay check like this, this is 1.6 Billion dollars or sixteen hundred million dollars.

Let's get REAL!!!

Sincerely,
G Edward Cook

 

[Hobbit]

Sorry I've been away; however, I have read all your replies and need a bit to digest it all. I do want to thank you all for your interest even if I don't agree with a lot of you but you do have many good points. There has been so much interest in this topic that we must continue.

I would like to leave you with this point: If a Young American, perhaps a student, works, is his pay not as important as any other American's? Doesn't his pay help support his family? Isn't every dollar he makes one less dollar his or her family has to give him? Is he not as important as any other American?
Why should we not give EVERY AMERICAN a reason to work? When we allow companies to pay slave labor, we are telling our youth that they are only worth slave labor wages. NOT ME!!!!! They are the future of AMERICA and they deserve to be treated as such. My problem is with a CEO of an HMO thinking he is worth $1,600,000,000.00. For those that haven't yet seen a pay check like this, this is 1.6 Billion dollars or sixteen hundred million dollars.

Let's get REAL!!!

Sincerely,
G Edward Cook

Raising the minimum wage above the current average starting wage will only drive up unemployment. In a free market economy, someobdy is worth whatever somebody else is willing to pay for his services, and crying about how it isn't 'fair' that I, as an aspiring student, make less than $10/hour while this CEO makes millions. His services generate more revenue for more people than mine, so his services are worth more. If you really want to raise the price of unskilled labor, drive out the illegals who don't pay taxes and artifically drive down the cost of labor.

 

[G Edward Cook]

You want to tell me, if an employer needs help (and he would not be looking for help if he didn't need it) he will not hire anyone if we raise the minimum wage? What will he do? Close shop? Will the Million Dollar CEO go do the work himself? GET REAL!!! If the minimum wage is $5.15 he will pay $5.15 and if the minimum wage is $8 he will pay $8 and if he can't afford to pay his employees a living wage he should close shop and let someone that can. It is NOT AMERICA'S job to supply companies with SLAVE LABOR. It is the governments job to see that ALL AMERICANS are protected from people and companies that mean to harm them.
Companies that pay SLAVE LABOR are UN AMERICAN!!!
Americans that feel some Americans should work for SLAVE LABOR are UN AMERICAN!!!

America is a country Of the People, By the People and For the PEOPLE, NOT THE CORPORATIONS!

Sincerely,
G Edward Cook

 

[Hobbit]

You want to tell me, if an employer needs help (and he would not be looking for help if he didn't need it) he will not hire anyone if we raise the minimum wage? What will he do? Close shop? Will the Million Dollar CEO go do the work himself? GET REAL!!! If the minimum wage is $5.15 he will pay $5.15 and if the minimum wage is $8 he will pay $8 and if he can't afford to pay his employees a living wage he should close shop and let someone that can. It is NOT AMERICA'S job to supply companies with SLAVE LABOR. It is the governments job to see that ALL AMERICANS are protected from people and companies that mean to harm them.
Companies that pay SLAVE LABOR are UN AMERICAN!!!
Americans that feel some Americans should work for SLAVE LABOR are UN AMERICAN!!!

America is a country Of the People, By the People and For the PEOPLE, NOT THE CORPORATIONS!

Sincerely,
G Edward Cook

Rhetorical bullcrap. If the businesses can't afford to pay $8/hour, they won't pay it, they'll just go out of business or they'll figure out how to do the job with less workers. Right now, the price of gas is up, so we buy less gas and use public transit or more fuel efficient cars. If the price of apples goes up, people switch to pears. According to the free market, if prices are allowed to flucuate naturally, a price for goods and services will naturally approach a level where every bit that is made is sold. If you drive the price below this natural price, like the gas maximum in the 1970s, there's a surplus, as there's more people wanting to buy than stuff to sell. If you drive the price artificially high, like a, I don't know, minimum price of labor, or minimum wage, then you have more being produced than bought, also known as a surplus. Surplus labor is called unemployment.

You seem to have a rather twisted view on companies. Here's two blatant facts you seem to be completely oblivious to.

1) It is in the best interests of an employer to keep its employees happy. There are lots of companies with lots of jobs across the country. If the company does not compete for your labor, you will get a job elsewhere. That's why a minimum wage hike is unneeded, because if nobody was willing to work for this low price, then it would go up as businesses competed for labor resources.

2) Companies do NOT have infinite resources. If the cost of doing business begins to exceed their revenue, they go out of business. Artifically driving up the cost of labor is a really good way to do that.

Artificially created prices for any good or service is a detriment to the economy. Let the free market work.

Oh, and all these people living in 'poverty' have good food on the table every day, at least 1 TV, a computer with internet access, a multi-room house/apartment, two cars, etc. etc. This is not poverty. When my mom's family lived 5 in 2 bedroom home (eventually 3 after an add-on), they had one TV, no AC, one car, and my grandma cooked almost every night. 'Poverty' in this country is a lifestyle that is far better than the middle class used to get and continues to get in other countries. Saying they need even more because the wife needs to work to pay for that third car is stupid.

 

[GotZoom]

You want to tell me, if an employer needs help (and he would not be looking for help if he didn't need it) he will not hire anyone if we raise the minimum wage? What will he do? Close shop? Will the Million Dollar CEO go do the work himself? GET REAL!!! If the minimum wage is $5.15 he will pay $5.15 and if the minimum wage is $8 he will pay $8 and if he can't afford to pay his employees a living wage he should close shop and let someone that can. It is NOT AMERICA'S job to supply companies with SLAVE LABOR. It is the governments job to see that ALL AMERICANS are protected from people and companies that mean to harm them.
Companies that pay SLAVE LABOR are UN AMERICAN!!!
Americans that feel some Americans should work for SLAVE LABOR are UN AMERICAN!!!

America is a country Of the People, By the People and For the PEOPLE, NOT THE CORPORATIONS!

Sincerely,
G Edward Cook

Not all companies will pay. A perfect example is the Hardee's fast food chain here in Memphis. I know one of the franchise owners. He used to have 6 of the restaurants around town. He said as the years went by it was more and more difficult to find people to work for minimum wage (and up to $6.00 per hour). He would have people come in to interview and when the question of money came up, the people applying for the job said they wouldn't work for less than $7.00 or $7.50 an hour. They reminded him that they could get it other places. Many of them accused him of "trying to hold black people down" by not paying them more than minimum wage. He refused to pay them that much to start - but did say that they had the potential to work their way up to that rate of course, but not just starting out. He said he wasn't going to be held hostage by their demands of "pay me or I will leave" and told them to go somewhere else then.

Eventually he had to close all his restaurant because he couldn't find help.

I am also a business owner. I pay a fair rate for the work that is performed. When an employee becomes more valuable, I will pay them more money. It benefits me to take care of my employees (in all ways, not just money) as long as they take care of me by being dependable and doing a good job. There have been countless times someone has come in for an interview and asked for more money than I was prepared to pay. When that happens, I tell them what the salary is and if they want to continue the interview, so be it. If not, I wish they a good day and press on.

I would like to know what your definition of "Slave Labor" is. What is the dollar amount that determines the line of "Slave Labor" and not "Slave Labor?"

 

[Huckleburry]

Zoom,
It seems to me that your friend at Hardees learned a tough lesson in economics. If he was unwilling or unable to pay the market wage then he should not be in buisness. It is not the employees responsibility to keep an inefficient buisness going. If people were unwilling to take a job at his resturant for that wage and were in fact able to obtain higher wages elsewhere than he should have raised his starting wages. After all it is pretty simple, if I can 8 dollars or 10 dollars for similar work I am almost always going to choose 10. Especially when the work is flipping burgers.

As for the minnimum wage debate, I have not decided where I stand on the issue. I have lived on both sides of the coin and understand the plight of the working man better than most. I think there is case to be made for a living wage on the basis that it keeps the American economy competitive in the long run. Consider this quote from David Brooks, "the rich no longer take advantage of the poor, rather, they out compete them". The top American Universites have reverted to being the province of the well to do. Not because poor kids are not smart enough to be here but because their parents do not have enough time/money to help them build their resume. If working parents were paid enough to support their family then this disparity may start to disapear. Thus increasing the talent pool from which we draw tommorow's leaders. I think there is value in diversifying tommorows qualified leadership. To do this parents need to earn enough to be able to provide for thier children in non-financial ways.

Comments?

Huck

 

[GotZoom]

Zoom,
It seems to me that your friend at Hardees learned a tough lesson in economics. If he was unwilling or unable to pay the market wage then he should not be in buisness. It is not the employees responsibility to keep an inefficient buisness going. If people were unwilling to take a job at his resturant for that wage and were in fact able to obtain higher wages elsewhere than he should have raised his starting wages. After all it is pretty simple, if I can 8 dollars or 10 dollars for similar work I am almost always going to choose 10. Especially when the work is flipping burgers.

As for the minnimum wage debate, I have not decided where I stand on the issue. I have lived on both sides of the coin and understand the plight of the working man better than most. I think there is case to be made for a living wage on the basis that it keeps the American economy competitive in the long run. Consider this quote from David Brooks, "the rich no longer take advantage of the poor, rather, they out compete them". The top American Universites have reverted to being the province of the well to do. Not because poor kids are not smart enough to be here but because their parents do not have enough time/money to help them build their resume. If working parents were paid enough to support their family then this disparity may start to disapear. Thus increasing the talent pool from which we draw tommorow's leaders. I think there is value in diversifying tommorows qualified leadership. To do this parents need to earn enough to be able to provide for thier children in non-financial ways.

Comments?

Huck

I understand what you are saying. And you are right; if that was only the case.

The thing was...other places weren't paying it. Not fast food places. They were talking about manufacturing jobs that paid that much for experienced people.

One person even said they could make more money on welfare and child support then if he paid her $8.00 per hour; she was just there applying so she could turn her "I've been looking for a job" paperwork into the welfare office.

You state that "parents need to earn enough to be able to provide for thier children in non-financial ways." You mean things like impressing upon their children the importance of doing well in school? Or instilling a work ethic; show up on time, do your best, work hard?

Parents don't need to make any money to teach their children these things.

They just need to do it. Problem is; they don't.

 

[Huckleburry]

I am not talking about either. What I am saying is that parents need to have enough time to get thier kids to chello practice, and their volunteer work with lepers at the third world center, and then whisk them off to the Board of Directors meeting for thier fourth start up. This year my school accepted 13% of the more than 17,000 people who applied. Undoutedly these kids are very bright and accomplished students but they have also had the support along the way. From private College Counselers to expensive SAT prep Courses, tutors, and myraid of other advantages. I am more likely to run into a kid whose parents are in the top 3% of earners in the country than I am to find one whose parents are in the bottom 50% of earners. If we are going to continue to reserve top positions for students graduating from top universities (the top five I banks draw from about ten schools) then we should try to ensure that the game is not fixed from the start. A living wage may be one way to do that.

As for your friend...some people are just dead beats....

 

[GotZoom]

I am not talking about either. What I am saying is that parents need to have enough time to get thier kids to chello practice, and their volunteer work with lepers at the third world center, and then whisk them off to the Board of Directors meeting for thier fourth start up. This year my school accepted 13% of the more than 17,000 people who applied. Undoutedly these kids are very bright and accomplished students but they have also had the support along the way. From private College Counselers to expensive SAT prep Courses, tutors, and myraid of other advantages. I am more likely to run into a kid whose parents are in the top 3% of earners in the country than I am to find one whose parents are in the bottom 50% of earners. If we are going to continue to reserve top positions for students graduating from top universities (the top five I banks draw from about ten schools) then we should try to ensure that the game is not fixed from the start. A living wage may be one way to do that.

As for your friend...some people are just dead beats....

A little cynical aren't we?

Every one of the 2,210 students your school accepted come from wealthy families? Are you sure?

Did you have private college counselors, expensive SAT prep Courses, tutors, and all the other advantages?

And having a wealthy background and extensive preparation for college entrance exams do not guarantee that once the student gets into college he/she can perform well. Basics like spelling, etc., could be a major problem for him/her and still keep them from a well-paying job upon graduation.

For example, if your resume has simple spelling errors, it doesn't matter how rich your family is, you won't get hired.

 

[Bonnie]

Mr P...You don't have my support, G Edward Cook.

I can't support anyone that wants to FORCE an employer to pay X per hr.
I can't support anyone that thinks the government should provide for me.
I can't support anyone who thinks that it's okay for the government to take my money with the promise they will provide for me.
I can'support anyone that thinks there really is a Social Security Trust Fund.

dmp....Abolish Social Security or reduce the 'mandatory' contribution to about 1% of income; let "ME" decide how to invest "my" earnings.

That'll fix social security.

Mntbiker...8 dollars an hour is immoral lets raise the rate to $25 dollars an hour.

Bravo gentlemen!!!!

 

[BaronVonBigmeat]

You want to tell me, if an employer needs help (and he would not be looking for help if he didn't need it) he will not hire anyone if we raise the minimum wage? What will he do? Close shop? Will the Million Dollar CEO go do the work himself? GET REAL!!! If the minimum wage is $5.15 he will pay $5.15 and if the minimum wage is $8 he will pay $8 and if he can't afford to pay his employees a living wage he should close shop and let someone that can.

Unless there isn't someone else that can, which leaves you with perpetual double-digit unemployment. That's the situation in most of europe.

It is NOT AMERICA'S job to supply companies with SLAVE LABOR. It is the governments job to see that ALL AMERICANS are protected from people and companies that mean to harm them.
Companies that pay SLAVE LABOR are UN AMERICAN!!!
Americans that feel some Americans should work for SLAVE LABOR are UN AMERICAN!!!

"Slave" implies coercion. No one forces anyone to work somewhere, so there is no slave labor. Using the strong hand of The State to tell two consenting adults what they may charge for labor is unamerican.

Instead of asking why wages aren't higher, you ought to be asking why prices keep going up.

 

[LOki]

If a Young American, perhaps a student, works, is his pay not as important as any other American's?

Not necessarily, and most probably not.

Doesn't his pay help support his family?

Irrelevent.

Isn't every dollar he makes one less dollar his or her family has to give him?

Irrelevent.

Is he not as important as any other American?

Not necessarily, and most probably not.

Why should we not give EVERY AMERICAN a reason to work?

We do.

When we allow companies to pay slave labor, we are telling our youth that they are only worth slave labor wages.

Companies do not pay slave labor because a) slaves don't get paid, and b) most everyone, with the exception of welfare recipients and minimum wage advocates, prefer to not be paid in slaves, but rather cash.

They are the future of AMERICA and they deserve to be treated as such.

That's a nice sentiment.

My problem is with a CEO of an HMO thinking he is worth $1,600,000,000.00.

I'm not as sure this CEO thinks he's worth $1.6billion as I am that the people paying him think he's worth $1.6billion.

You want to tell me, if an employer needs help (and he would not be looking for help if he didn't need it) he will not hire anyone if we raise the minimum wage?

Yes. Most certainly yes, (providing we're still talking about legal markets) if the work being performed is not worth $5.15/hr.

What will he do? Close shop?

Yes. Most notably in this country he will close shop--as they have been.

Will the Million Dollar CEO go do the work himself?

Maybe. And if he does, those who could have been getting paid are getting $ZERO (the REAL minimum wage).

If the minimum wage is $5.15 he will pay $5.15 and if the minimum wage is $8 he will pay $8 and if he can't afford to pay his employees a living wage he should close shop and let someone that can.

If an employee cannot produce enough value to earn a living wage he should starve.

It is NOT AMERICA'S job to supply companies with SLAVE LABOR.

And they don't--that's China's job.

It is the governments job to see that ALL AMERICANS are protected from people and companies that mean to harm them.

Yes it is. It is also the governments obligation to not harm people by making their work illegal because they are willing to be paid less than $5.15/hr.

Companies that pay SLAVE LABOR are UN AMERICAN!!!

Companies that pay slave labor are freeing slaves from slavery which pays nothing.

Americans that feel some Americans should work for SLAVE LABOR are UN AMERICAN!!!

Yes. Of course. However, the slaves would be those whose wages are garnished at gunpoint to provide no cost healthcare, pensions, educations, housing, and meals to those who earn nothing. The un-American would be those who are the recipients of value gathered at gunpoint, and are the ones who benefit from being paid in slave labor.

America is a country Of the People, By the People and For the PEOPLE, NOT THE CORPORATIONS!

Yes. Of course.