Consequences of repealing minimum wage rates.

[expat_panama]

...you know anyone who is not greedy and wants more money?

Greed and wanting more money are two very different things. Generally, businesses fail when the managers are greedy, but succeed when they only want money.

 

[Supposn]

Over the past generation, increases in the minimum wage have cost increasingly many low-pay workers their jobs. Evidently, US employers are decreasingly willing, to "carry people" when their minimum wage is increased. So, for the same increase in minimum wage, businesses now retain fewer, and fire more, of their low-pay employees. Heeding the advice, of Reverend Jesse Jackson, and increasing the minimum wage, to $10 per hour, would likely cost 25 million jobs -- the entire bottom quintile of US income earners -- based on extrapolating past trends:

..............................................

Widdekind, to some of our members, government’s concern for the amounts of revenues necessary to sustain human existence is politically sacrilegious.

The COLA employed by the Social Security Administration is based upon thee Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It cannot be denied that COLA is amiable to human existence but it doesn’t directly consider the amount of revenue necessary to do so.
The CPI-W is determined by the Bureau of Labor Statistics statisticians, The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and service.

COLA does not enable Social Security benefits to purchase the particular basket of goods and services but it enables the individual’s benefit amounts to keep pace with the variable purchasing power of the U.S. dollar. Similarly a COLA’d minimum wage would not necessarily be a “living wage” but it would at least keep pace with the variable value of the U.S. dollar.

Respectfully, Supposn

 

[The Rabbi]

I dont believe that getting rid of minimum wages lower prices. I went to the movies the other day and their were automated movie ticket machines and did prices go down? Nope still 15 dollars a piece. So in my opinion businesses aren't going to cut prices ever, they don't want to leave money on the table. They are greedy and want more money. They won't stop trying to make money and they will screw their workers into making more and they don't care. So why should I care?

Do you know anyone who is not greedy and wants more money?

That's why we have things like overtime pay and minimum wages. Some people are rich, but to compromise the standard of living in America is ridiculous.

Every business wants to pass the buck, cut employees and pay yet who actually buys the freaking products? Lots of people with jobs.

Less money equals less purchasing power.

Less purchasing power mean less stuff is bought.

Less stuff bought means profits go down.

See everything has a consequence in an economy.

Plus you want to know why crime happens in the ghetto? Not because they are black but because you have a generation of kids growing up seeing their parents or parent work 2 minimum wage jobs and barely scraping by. So they see the neighborhood drug dealer and he is making bank, driving mercedes and living the good life. And the reality is with the quality of education they get, drug dealing is about the best bet for most of them.

Now they could have gotten a good factory union job but that got shipped out because hey gotta defend businesses. Now we talking about eliminating minimum wage? Crime will then turn to the suburbs as they either try to move product or get some stuff to sell.

Eventually we have to stop doing whats best for businesses when it becomes detrimental to society. When it begins to destroy it.

Your fantasies of inner city black life are fantasies. I'd suggest spending some time there.

 

[The Rabbi]

...you know anyone who is not greedy and wants more money?

Greed and wanting more money are two very different things. Generally, businesses fail when the managers are greedy, but succeed when they only want money.

Depends on the definition of greed. I'd define it as wanting something that doesnt belong to you. Working hard means you earned it.

 

[jack113]

Do you know anyone who is not greedy and wants more money?

That's why we have things like overtime pay and minimum wages. Some people are rich, but to compromise the standard of living in America is ridiculous.

Every business wants to pass the buck, cut employees and pay yet who actually buys the freaking products? Lots of people with jobs.

Less money equals less purchasing power.

Less purchasing power mean less stuff is bought.

Less stuff bought means profits go down.

See everything has a consequence in an economy.

Plus you want to know why crime happens in the ghetto? Not because they are black but because you have a generation of kids growing up seeing their parents or parent work 2 minimum wage jobs and barely scraping by. So they see the neighborhood drug dealer and he is making bank, driving mercedes and living the good life. And the reality is with the quality of education they get, drug dealing is about the best bet for most of them.

Now they could have gotten a good factory union job but that got shipped out because hey gotta defend businesses. Now we talking about eliminating minimum wage? Crime will then turn to the suburbs as they either try to move product or get some stuff to sell.

Eventually we have to stop doing whats best for businesses when it becomes detrimental to society. When it begins to destroy it.

Your fantasies of inner city black life are fantasies. I'd suggest spending some time there.

Stuck on stupid vote fascist Romney 2012.

 

[Widdekind]

you are advocating for more corporate welfare, that's what it amounts to when the taxpayer is subsidizing the worker

"under-employment insurance" is no more corporate welfare, than unemployment insurance. Persons would receive support, not businesses

people can't support themselves on 7.25 an hour and now you want them to live on 5.00 an hour.

nobody "wants" anybody to work for only $5 / hr. But $5 / hr. is much better, than $0 / hr. Can we please recognize, that the alternative to low-pay jobs, is no jobs & no pay ? Something is better than nothing, yes?

Again, historically, the lowest wages ever offered-and-accepted, in the US economy, have been about $5 / hr. At full time, that's $200 / wk. A solid supplementary income, for persons living in households, with others. In some areas, persons could probably even eke by on that amount ($10K / yr.). And, if nothing else, $10K / yr. would soften the damage to their savings, giving them more time, to find other jobs, before their bank accounts were empty.

Some income > no income

Perhaps some people fear, that the elimination of the minimum wage, would yield the way, to "attacks" on Unions and labor, more generally. If so, then they are demanding "somebody else's apple" (minimum wages, which only affect 1% of the workforce), for fear for "their own orange" (Union wages). Inexpertly, there is no real relation, between "that guy there mopping hallways for $5/hr.", and "somebody else way over yonder making cars for $20/hr." Perhaps minimum wage could be "disentangled" from other people's own personal concerns? If so, then hundreds of thousands of (low-pay) jobs could be created, employing hundreds of thousands of now-jobless Americans.

 

[Widdekind]

Wages lag behind increasing prices...

Increasing wages (minumum or otherwise) seldom initiate inflation since increasing wages DO NOT INCREASE the amount of specie in circulation.

Are you certain? Prices reflect the willingness & ability of persons to pay, the "demand" with "money in hand". When workers earn more money, more of the money in circulation is in their pockets. They typically buy the same old suite of products, and so typically only bid up the prices on those products. Hypothetically, if workers earned more money, and "saved" all of their extra earnings -- buying stock, say -- then perhaps Prices would rise less than Wages.

 

[Supposn]

......................Perhaps some people fear, that the elimination of the minimum wage, would yield the way, to "attacks" on Unions and labor, more generally. If so, then they are demanding "somebody else's apple" (minimum wages, which only affect 1% of the workforce), for fear for "their own orange" (Union wages). Inexpertly, there is no real relation, between "that guy there mopping hallways for $5/hr.", and "somebody else way over yonder making cars for $20/hr." Perhaps minimum wage could be "disentangled" from other people's own personal concerns? If so, then hundreds of thousands of (low-pay) jobs could be created, employing hundreds of thousands of now-jobless Americans.

Widdekind, the legal minimum wage rate is a specific minimum bench mark.
An unspecific market driven minimum bench mark can always possibly exist.
It always exists whenever a legal and effectively enforced legal minimum does not exist, or when there’s a labor shortage for any reason that induces the market to pay a minimum that’s greater than the legal minimum.

A market’s minimum is limited to the extent that labor is available and/or the legal minimum can be enforced. An otherwise unlimited market driven minimum could be less than what’s necessary to sustain human existence. Such a minimum has almost no “net bottom” and is then the proverbial “race to the bottom”.
[I use the term “net bottom” because it’s not only possible, but probable in the poorest of economies laborers would be economically extorted to pay to for their jobs. Due only to the market driven minimum unmitigated by a legal bottom or anything else, the economy is induced to be poorer].

You continue to write of the minimum bench mark as if it affects only the minimum pay rate. The minimum bench mark’s more or less affects ALL wages and salary rates. The extent of its effect is inversely related to the difference between the purchasing power of the minimum bench mark and the jobs’ affected wage rates.

The lesser fifth of all wage rates are extremely affected by the minimum bench mark. All other wage rates at or below the nation’s median wage rate are greatly affected by the minimum bench mark. But ALL wages and salaries are more or less affected by the minimum bench mark.

Your contending the minimum bench mark only affects entry level jobs of teenagers or “1% of the workforce” is nonsense.

Respectfully, Supposn

 

[Supposn]

Transcribed from message #58 within the thread of
http://www.usmessageboard.com/economy/231176-disadvantages-of-minimum-wage-laws-4.html
///////////////////////////////////////////////
Quote: Originally Posted by Wry Catcher
...,
... Henry Ford had a different idea, pay those who made his cars a wage allowing them to buy the product they made. Seems to make more sense and why I believe we must elect officials able to save Capitalism from the Capitalists.
Rabbi and Wiseacre, you’re both correct. Henry Ford’s labor problem and his solution were motivated by self interest rather than altruism. Certainly self interest and profit are not indecent or unusual goals.

Wry Catcher correctly described the consequences of the example that Ford set. Regardless of Ford’s motivation, greater purchasing power of the median wage is the defining characteristic of a robust middle income population segment.

I’m among those that believed the exorbitant concentration of wealth of the extremely fortunate few and the extremely slim segment of middle income earners of the 1920s’ heralded the poorer economic conditions that followed. I shudder when I consider that the NY Stock market is at historic high while the purchasing power of the median wage hardly increases and too often it has actually decreased.

The difference between the “roaring twenties” economy and that of today is the “New Deal” policies that were enacted during the great 1930’s depression. The excesses and the deliberate financial frauds of the “Roaring Twenties” that was rampant then is very similar to the saving and loan fiasco and the credit crunch that we’ve have witnessed. A major difference between then and now is the “New Deal” policies that were enacted during the great 1930’s depression. Due to those laws our economy is much better than otherwise.

It’s been 68 years since FDR was buried and the Republican Party is still trying to reverse history. There are always those confusing their own best interests and that of our nation’s economy. Consider if Wall Street political donors had succeeded to induce the privatization of Social Security system. Within normal cycles of commerce there are recessions. What if your retirement occurred simultaneously with a depression of stock market prices?

Wry Catcher, what do you mean by saving "Capitalism from the Capitalists"?

Respectfully, Supposn

 

[Supposn]

Consequences of eliminating the minimum wage rate.

Regarding he federal minimum wage rate’s definite amount compared to an indefinite theoretical market determined minimum rate:
Within any labor market, in the absence of a definite and enforced minimum wage rate (generally applied to all rather than to particular tasks or jobs), theoretically an indefinite market determined minimum rate will always naturally emerge as the effective minimum rate.
Within any labor market, if the definite enforced minimum wage rate were set or permitted to fall below the market’s theoretical indefinite market rate, it is that higher indefinite rather than the definite rate that would be that market’s effective minimum rate.

[Excluding markets with a scarcity of unskilled or otherwise minimally qualified labor, indefinite market determined labor rates’ characters are generally that of “races to the bottom”. The U.S. Congress has often permitted the purchasing power of the federal minimum wage rate to decrease].

The federal minimum wage rate’s effect upon all other wage rates is proportionally and inversely related to the differences between the FMW’s rate and that of the wage rate for each individual job; lesser wage workers gain proportionally more and higher wage workers gain proportionally less. No wage scale’s purchasing power has ever and will never suffer reduction due to the federal minimum wage rate.

When the U.S. Congress fails to retain the federal minimum wage’s purchasing power, the purchasing power of USA’s median wage is also reduced. To the extent that the purchasing power of USA’s median wage is decreased, our incidences and rates of poverty increase. (Eliminating the federal minimum wage or permitting its amount to plunge to or below the indefinite theoretical market rate effectively (more than otherwise) increases poverty within the United States.

Respectfully, Supposn

 

[Political Junky]

How Low Wages Cost Taxpayers A Quarter-Trillion Dollars Every Year

Low Wages Cost Taxpayers A Quarter-Trillion Dollars Every Year

From 2007 to 2011, the biggest public benefits programs spent $243 billion each year on working families who live in poverty or on the brink of it because their jobs pay so poorly, according to a study published Tuesday by researchers at the University of California, Berkeley. The research focuses on fast food workers as exemplifying the plight of low-wage workers and the costs that low wages pass along to taxpayers.

 

[PoliticalEye]

Min wage is fine how it is the free market determines how much someone is worth and min wage workers are only worth min wage. If they want more money they need to get more skills or an education.

 

[Supposn]

Min wage is fine how it is the free market determines how much someone is worth and min wage workers are only worth min wage. If they want more money they need to get more skills or an education.

Political Eye, the federal minimum wage rate and educational issues have some relationship. No doubt a significant improvement of a populations’ knowledge and/or vocational skills increases their labors’ contributions to their nations’ social and economic well being.

But those are not mutually exclusive issues; regardless of the population’s aggregate quality a labor, an enforced effective federal minim wage rate will be of some net economic benefit to our nation.

Respectfully, Supposn

 

[PoliticalEye]

Min wage is fine how it is the free market determines how much someone is worth and min wage workers are only worth min wage. If they want more money they need to get more skills or an education.

Political Eye, the federal minimum wage rate and educational issues have some relationship. No doubt a significant improvement of a populations’ knowledge and/or vocational skills increases their labors’ contributions to their nations’ social and economic well being.

But those are not mutually exclusive issues; regardless of the population’s aggregate quality a labor, an enforced effective federal minim wage rate will be of some net economic benefit to our nation.

Respectfully, Supposn

What benefits when min wage is raised you get higher prices and more unemployment. It is not an employers responsibility to pay a living wage they are just in it to make a profit.

 

[Supposn]

What benefits when min wage is raised you get higher prices and more unemployment. It is not an employers responsibility to pay a living wage they are just in it to make a profit.

Political Eye, although the federal minimum wage, (FMW) rate’s support of the lowest half of USA employees’ incomes is significant and regarding our lowest fifth of all full time employees it is of critical significance.

The FMW rate is not among the primary drivers of the U.S. dollar’s inflation. Our dollar continues to lose purchasing power even when the FMW rate is not increased.

When congress permits the purchasing power of the FMW rate to lag behind that of the U.S. dollar, the purchasing power of all other USA wages and salaries are also in general decline as indicated by the median wage rate’s loss of purchasing power.


The FMW rate is less a cause and much more a victim of the U.S. dollar’s reduced purchasing power.


The FMW rate contributes to all USA job rates but it does not proportionally contribute to them all in a proportionally equal manner. It has a greater effect upon lower and a lesser effect upon higher wage rates; thus the FMW rate is not proportionally equally reflected within all labor costs.


Labor is a significant component of USA goods and service products but those costs are proportionally not equally reflected within prices of all USA production. Due to these variables, the FMW rate is not among the primary drivers of U.S. dollar’s inflation rate.


Respectfully, Supposn

 

[Supposn]

CATO is a self described libertarian “think tank” opposed to our federal minimum wage laws. They published a policy analysis paper #701, (The negative effects of minimum wage laws), written by Mark Wilson. and dated June 21, 2012.

Refer to The Negative Effects of Minimum Wage Laws .


Mark Wilson wrote “ … There is no “free lunch” when the government mandates a minimum wage. If the government requires that certain workers be paid higher wages, then businesses make adjustments to pay for the added costs, such as reducing hiring, cutting employee work hours, reducing benefits, and charging higher prices. Some policymakers may believe that companies simply absorb the costs of minimum wage increases through reduced profits, but that’s rarely the case. Instead, businesses rationally respond to such mandates by cutting employment and making other decisions to maintain their net earnings. These behavioral responses usually offset the positive labor market results that policymakers are hoping for”.
//////////////////////////////////////////////////////////////////////

The federal minimum wage, (FMW) rate does not apply only to a “certain (few) workers; it applies to the predominant majority of all USA employees.


I am not opposed to technological advancements that reduce the labor and thus the costs of goods and service products. A nation’s utilizing human powered rickshaws because human labor is cheaper than the capital investment for trucks, buses and taxicabs is a poorer nation.

If an enterprises are able to maintain their production of goods and services and reduce their labor costs by reducing their labor force or their numbers of paid hours or their employees’ benefits, they would do so; if they could retain their revenues while reducing their products and services, they would do so; but competitive markets punish enterprises that fail in their attempts to employ such methods to reduce their labor costs.

Dirty toilets within a retail establishment or other similar reductions of quality and/or services more often fail rather than succeed. In practice there a very few jobs lost due to any increase of the FMW rate’s purchasing power and due to its beneficial effect upon all wage scales, each such increase has been of net economic benefit to our economy.


Respectfully, Supposn

 

[EdwardBaiamonte]

In practice there a very few jobs lost due to any increase of the FMW

of course thats stupid, the demand goes down as the price goes up. This is called the law of supply and demand. Did you even wonder why a Rolls Royce sells fewer vehicles than VW?????????????

 

[Supposn]

There are many tasks that are not performed due to the federal minimum wage rate or they are performed by altruistic volunteers and/or family members and/or for motives other than wages or salaries.

If the purchasing power of the federal minimum wage rate were less demanding, many lesser qualified workers would be employed to accomplish those undone tasks and our rate of unemployment would be reduced, but consequentially our numbers of poverty incidences and the extent of those poverty incidences would be increased. That would be of net detriment to our economy.


Reducing the purchasing power of the FMW rate would increase the numbers and extents of poverty in the USA unless we increase our public assistance budgets to support their increased numbers of beneficiaries that would be in need their low wages being government subsidized.

Libertarians advocate eliminating the FMW laws to increase the proportion of our population dependent upon government subsidies or permitting incidences and extents of poverty to increase?


Respectfully, Supposn

 

[Supposn]

[Refer to “Fact Sheet #32: Youth Minimum Wage - Fair Labor Standards Act”,
http://www.dol.gov/whd/regs/compliance/whdfs32.pdf ].

The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment.


This provision of law encourages age preference for youth and thus indirectly is of some disadvantage to many others.
The law’s explicitly drafted to prohibit displacement of any or all others while enable hiring youths at cheaper wage rates; but I think it will be difficult to enforce those safe guards.

I don’t believe that the application of the $4.25 rate is applicable for each individual but affiliated employers of the same worker. If that’s not the case, I foresee youths working directly for a series of employers but performing tasks at sub-minimum wage rates for the same group of affiliated enterprises.




Eliminating the federal minimum wage rate to reduce youths' high rate of unemployment would

To some extent reduce the purchasing power of all wages and salary earners and increase poverty among THEIR families.

Thus far I suspect this enabling of sub-minimum rates for youths will to some extent undermine all wages and it will particularly reduce median wage rates for youths but I doubt if has or will significantly increased unemployment rates of youths.


Respectfully, Supposn

 

[Supposn]

In practice there a very few jobs lost due to any increase of the FMW

of course thats stupid, the demand goes down as the price goes up. This is called the law of supply and demand. Did you even wonder why a Rolls Royce sells fewer vehicles than VW?????????????

Edward Baiam, jobs creations were generally not due to altruistic motives; enterprises speculated that there would be a favorable cost-benefit to justify those jobs. After each of the FMW rate increases, employers continued to perceive favorable cost-benefits for almost all of their jobs.


Each increase of the FMW rate to some extent induced increased the purchasing powers for ALL USA wages and salaries thus to some extent our economy was consequently better than otherwise; (otherwise being if the FMW rate had not been increased).

Due to our better than otherwise economy, USA’s economy had supported more than otherwise numbers jobs with rates that were more than otherwise.

That’s why libertarians predicted increases of unemployment due to each proposed FMW rate increase did not occur due to FMW rate increases but rather the increases have always been to our net economic benefit.

Your analogy to Rolls-Royces and Volkswagens is not germane to this discussion.

Respectfully, Supposn