How does the federal minimum wage rate effect all USA wage rates?

[otto105]

The Congressional Budget Office predicted that as many as 3.7 million jobs could be lost if they raise the MW to $15/hr.
So Democrats start calling for it.
Any questions?

The CBO report also stated a change to $15 MW could have no affect on jobs, so ....

Otto105 and Mudwhistle, you guys and Republicans read the Congressional Budget Office' report as indicating increasing the minimum rate to be economically detrimental, I and Democrats read that same report to indicate the increases would be economically advantageous to our nation. The CBO report is not a decisively definitive report.

Respectfully, Supposn

Supposn, I read the CBO Report as a Democrat.

 

[Supposn]

... If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all. If you have proof otherwise, post it. ...

Toddsterpatriot, the economic concept of wage differential is known throughout the world. I'm unaware of any credible economists refuting the concept's validity. If you have such links, I'd be interested to see them.

I'm an old man; throughout my life, I've witnessed corporations generally increase at least their low and medium wage rates in anticipation of the increased federal minimum wage rate's date of enactment. (Employers are only legally required to increase wage rates that are otherwise below the increased minimum rate, and they need not do so prior to the increased rate's date of enactment).​

Corporations are acting in their own best interests. It's preferable to graciously grant, rather than grudgingly surrender what you' cannot retain. An enterprise that fails to generally upgrade all of their low-wage rates immediately, will suffer serious recruiting, retaining, and moral problems among their employees. The problem will spillover among their medium wage rate employees and then to a much lesser extent on to higher-paid employees.

My experiences and observations have been in the NY, NJ, and WI metropolitan areas which include Republican suburbs. I doubt if the wage differential concept doesn't apply throughout the United States.

Respectfully, Supposn

 

[danielpalos]

How does the federal minimum wage rate effect all USA wage rates?

If the theoretical indefinite U.S. markets' determined minimum wage rate is $5/per Hr,
If X = $5/per Hr; ($7.25 -X)/per Hr. = is the difference between the federal and market's minimum rates.
Difference between the federal and market's minimum rates = $2.25
What's now a $20 per Hr rate was increased from $17.75 indefinite market-determined rate.

If X = $2/ per Hr., the indefinite minimum wage rate would be $2/per Hr.
What's now a $20 per Hr rate was increased from $14.75 indefinite market-determined rate.

When the purchasing power of the federal minimum wage rate is increased, employers are not legally required to modify all other wage rates, but in aggregate they actually do so.

Due to the economic concept of wage differential, if an employer fails to update their other wage rates, they will have difficulties recruiting and retaining employees. Employers are generally compelled to react immediately in the cases of their lower-wage rates, and slower in cases of higher wage rates.

Although in reaction to the minimum rate increase, higher wage rates will generally receive greater extents of increases, the increases for lower-rates will actually be proportionally greater, and for higher wage rates proportionally lesser increases of their employees' wage rates.
The purchasing power of the federal minimum wage is of maximum benefit to the working poor, and of some, but extremely lesser benefit to higher wage rates.

The federal minimum wage rate reduces USA's incidences and extents of poverty among USA's working-poor.
Respectfully, Supposn

The Congressional Budget Office predicted that as many as 3.7 million jobs could be lost if they raise the MW to $15/hr.
So Democrats start calling for it.
Any questions?

unemployment compensation for simply being unemployed can correct for that in a market friendly manner.

 

[Crixus]

How does the federal minimum wage rate effect all USA wage rates?

If the theoretical indefinite U.S. markets' determined minimum wage rate is $5/per Hr,
If X = $5/per Hr; ($7.25 -X)/per Hr. = is the difference between the federal and market's minimum rates.
Difference between the federal and market's minimum rates = $2.25
What's now a $20 per Hr rate was increased from $17.75 indefinite market-determined rate.

If X = $2/ per Hr., the indefinite minimum wage rate would be $2/per Hr.
What's now a $20 per Hr rate was increased from $14.75 indefinite market-determined rate.

When the purchasing power of the federal minimum wage rate is increased, employers are not legally required to modify all other wage rates, but in aggregate they actually do so.

Due to the economic concept of wage differential, if an employer fails to update their other wage rates, they will have difficulties recruiting and retaining employees. Employers are generally compelled to react immediately in the cases of their lower-wage rates, and slower in cases of higher wage rates.

Although in reaction to the minimum rate increase, higher wage rates will generally receive greater extents of increases, the increases for lower-rates will actually be proportionally greater, and for higher wage rates proportionally lesser increases of their employees' wage rates.
The purchasing power of the federal minimum wage is of maximum benefit to the working poor, and of some, but extremely lesser benefit to higher wage rates.

The federal minimum wage rate reduces USA's incidences and extents of poverty among USA's working-poor.
Respectfully, Supposn

Until the government supplied wetbacks start flooding the labor market. Then the new $20.00 an hour minimum wage stays the same for 40 years.

 

[danielpalos]

Cut hours and cut jobs, raise prices, or some combination thereof. All raising the minimum wage does is devalue the currency and take downward pressure off prices in the end. There is an upside to that, but we shouldn't pretend that THIS time, it will make a difference on poverty..

no, it doesn't. only the right wing implies that.

higher paid labor pays more in taxes and creates more in demand in Any long rung equilibrium.

 

[Toddsterpatriot]

... If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all. If you have proof otherwise, post it. ...

Toddsterpatriot, the economic concept of wage differential is known throughout the world. I'm unaware of any credible economists refuting the concept's validity. If you have such links, I'd be interested to see them.

I'm an old man; throughout my life, I've witnessed corporations generally increase at least their low and medium wage rates in anticipation of the increased federal minimum wage rate's date of enactment. (Employers are only legally required to increase wage rates that are otherwise below the increased minimum rate, and they need not do so prior to the increased rate's date of enactment).​

Corporations are acting in their own best interests. It's preferable to graciously grant, rather than grudgingly surrender what you' cannot retain. An enterprise that fails to generally upgrade all of their low-wage rates immediately, will suffer serious recruiting, retaining, and moral problems among their employees. The problem will spillover among their medium wage rate employees and then to a much lesser extent on to higher-paid employees.

My experiences and observations have been in the NY, NJ, and WI metropolitan areas which include Republican suburbs. I doubt if the wage differential concept doesn't apply throughout the United States.

Respectfully, Supposn

the economic concept of wage differential is known throughout the world.

If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all.

I noticed you failed to post proof.

Just as you posted no proof that the elimination of the Federal minimum wage would be noticed, let alone be a disaster, for the top 98% of workers.

 

[danielpalos]

How does the federal minimum wage rate effect all USA wage rates?

If the theoretical indefinite U.S. markets' determined minimum wage rate is $5/per Hr,
If X = $5/per Hr; ($7.25 -X)/per Hr. = is the difference between the federal and market's minimum rates.
Difference between the federal and market's minimum rates = $2.25
What's now a $20 per Hr rate was increased from $17.75 indefinite market-determined rate.

If X = $2/ per Hr., the indefinite minimum wage rate would be $2/per Hr.
What's now a $20 per Hr rate was increased from $14.75 indefinite market-determined rate.

When the purchasing power of the federal minimum wage rate is increased, employers are not legally required to modify all other wage rates, but in aggregate they actually do so.

Due to the economic concept of wage differential, if an employer fails to update their other wage rates, they will have difficulties recruiting and retaining employees. Employers are generally compelled to react immediately in the cases of their lower-wage rates, and slower in cases of higher wage rates.

Although in reaction to the minimum rate increase, higher wage rates will generally receive greater extents of increases, the increases for lower-rates will actually be proportionally greater, and for higher wage rates proportionally lesser increases of their employees' wage rates.
The purchasing power of the federal minimum wage is of maximum benefit to the working poor, and of some, but extremely lesser benefit to higher wage rates.

The federal minimum wage rate reduces USA's incidences and extents of poverty among USA's working-poor.
Respectfully, Supposn

It's complicated as hell, because the effects of low-end wage increases are not linear. It's mostly an industry-specific issue, because wages represent significantly different percentages of overall business expense, based on the type of business we're talking about.

PLUS, minimum wage increases would also necessarily increase the wages and associated costs of those above minimum wage job descriptions, so the domino effect would be most likely be another significant piece of this puzzle.

At the same time, we have forces pushing in the opposite direction: It's impossible to (honestly) justify paying government benefits to someone who also has a full time job. That's effectively a government subsidy to employers, incentivizing them to keep wages low. And more critical and timely is the increasing wealth disparities in this country, which are only making the job easier for those who want higher and higher minimum wages. And their constituents vote.

As usual, both ends of this issue are keeping their arguments at about a third-grade level because they absolutely refuse to acknowledge the complexities inherent in it. Until we can -- if we can, at this point -- demonstrate that we fully understand the big picture, we'll just keep flopping around like we are.
.

the more labor costs the more business gets to expense.

 

[Supposn]

Your first post was full of gibberish. ... If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all. If you have proof otherwise, post it.

If you have proof that dropping the $7.25 FMW to $6.25 will reduce the $10/hr wage I saw, post it.
If you post your proof, I'll be happy to point out any flaws I spot.

Toddsterpatriot,
We're not discussing an individual low-skilled worker or only wage earners that are earning one specific wage rate, but rather a bracket of wage rates that includes of all of the nation's workers earning the lowest wage rates.

The federal minimum wage rate has never been legally reduced, but it's purchasing power reduction has been tolerated.

Respectfully, Supposn

 

[Toddsterpatriot]

Your first post was full of gibberish. ... If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all. If you have proof otherwise, post it.

If you have proof that dropping the $7.25 FMW to $6.25 will reduce the $10/hr wage I saw, post it.
If you post your proof, I'll be happy to point out any flaws I spot.

Toddsterpatriot,
We're not discussing an individual low-skilled worker or only wage earners that are earning one specific wage rate, but rather a bracket of wage rates that includes of all of the nation's workers earning the lowest wage rates.

The federal minimum wage rate has never been legally reduced, but it's purchasing power reduction has been tolerated.

Respectfully, Supposn

You can't show me proof that eliminating the Federal minimum wage would be a disaster for all US workers or for an individual making $10 at my local McD's.

Correct?

 

[Mr Natural]

And, of course, top executive multi million dollar compensation packages have absolutely no affect on prices.

 

[Mac1958]

How does the federal minimum wage rate effect all USA wage rates?

If the theoretical indefinite U.S. markets' determined minimum wage rate is $5/per Hr,
If X = $5/per Hr; ($7.25 -X)/per Hr. = is the difference between the federal and market's minimum rates.
Difference between the federal and market's minimum rates = $2.25
What's now a $20 per Hr rate was increased from $17.75 indefinite market-determined rate.

If X = $2/ per Hr., the indefinite minimum wage rate would be $2/per Hr.
What's now a $20 per Hr rate was increased from $14.75 indefinite market-determined rate.

When the purchasing power of the federal minimum wage rate is increased, employers are not legally required to modify all other wage rates, but in aggregate they actually do so.

Due to the economic concept of wage differential, if an employer fails to update their other wage rates, they will have difficulties recruiting and retaining employees. Employers are generally compelled to react immediately in the cases of their lower-wage rates, and slower in cases of higher wage rates.

Although in reaction to the minimum rate increase, higher wage rates will generally receive greater extents of increases, the increases for lower-rates will actually be proportionally greater, and for higher wage rates proportionally lesser increases of their employees' wage rates.
The purchasing power of the federal minimum wage is of maximum benefit to the working poor, and of some, but extremely lesser benefit to higher wage rates.

The federal minimum wage rate reduces USA's incidences and extents of poverty among USA's working-poor.
Respectfully, Supposn

It's complicated as hell, because the effects of low-end wage increases are not linear. It's mostly an industry-specific issue, because wages represent significantly different percentages of overall business expense, based on the type of business we're talking about.

PLUS, minimum wage increases would also necessarily increase the wages and associated costs of those above minimum wage job descriptions, so the domino effect would be most likely be another significant piece of this puzzle.

At the same time, we have forces pushing in the opposite direction: It's impossible to (honestly) justify paying government benefits to someone who also has a full time job. That's effectively a government subsidy to employers, incentivizing them to keep wages low. And more critical and timely is the increasing wealth disparities in this country, which are only making the job easier for those who want higher and higher minimum wages. And their constituents vote.

As usual, both ends of this issue are keeping their arguments at about a third-grade level because they absolutely refuse to acknowledge the complexities inherent in it. Until we can -- if we can, at this point -- demonstrate that we fully understand the big picture, we'll just keep flopping around like we are.
.

the more labor costs the more business gets to expense.

That's true, but the business has to have the cash flow or easy access to short term loans in the first place.

Plus, depending on the industry, the business may well have overseas competition with much lower labor costs.

This is all a balancing act.
.

 

[Supposn]

the economic concept of wage differential is known throughout the world.

If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all.
I noticed you failed to post proof.
Just as you posted no proof that the elimination of the Federal minimum wage would be noticed, let alone be a disaster, for the top 98% of workers.

Toddsterpatriot, economics is a philosophy dealing with the management of resources. Individual resources and their management are often interrelated.
Philosophy is a system of reasoning.

Wage differentiation is an economic concept; (I.e an economic idea). It works, it's commonly accepted and applied, and no credible economist is refuting the concept.

Mathematics is another philosophy; 1 + 1 = 2 is a mathematical concept. It works, it's commonly accepted and applied, and no credible mathematician is refuting the concept.

You or I, cannot prove or disprove that 1 + 1 = 2, and you and I are not refuting it.
You or I cannot prove or disprove the validity of the wage differential concept. Your refuting the concept is of no consequence. Respectfully, Supposn

 

[Supposn]

Toddsterpatriot, an interesting point regarding wage differentials. If the owner of a McDonald's franchise overpays his location manager, it has no effect upon the manger's crews.

If the crews are receiving $10 per/Hr. and the manager is dissatisfied with $12/per Hr., (and the manager doesn't leave), that McDonald location will be profiting a great deal less for one reason or another. Employers practice wage differential because they put themselves in peril if they do otherwise.

Respectfully, Supposn

 

[Toddsterpatriot]

the economic concept of wage differential is known throughout the world.

If the FMW ($7.25) goes up to $8.25 that doesn't mean the $10 workers at my local McD's will suddenly get a $1/hr raise, or any raise at all.
I noticed you failed to post proof.
Just as you posted no proof that the elimination of the Federal minimum wage would be noticed, let alone be a disaster, for the top 98% of workers.

Toddsterpatriot, economics is a philosophy dealing with the management of resources. Individual resources and their management are often interrelated.
Philosophy is a system of reasoning.

Wage differentiation is an economic concept; (I.e an economic idea). It works, it's commonly accepted and applied, and no credible economist is refuting the concept.

Mathematics is another philosophy; 1 + 1 = 2 is a mathematical concept. It works, it's commonly accepted and applied, and no credible mathematician is refuting the concept.

You or I, cannot prove or disprove that 1 + 1 = 2, and you and I are not refuting it.
You or I cannot prove or disprove the validity of the wage differential concept. Your refuting the concept is of no consequence. Respectfully, Supposn

You or I cannot prove or disprove the validity of the wage differential concept.

So you can't prove your claim that all wages are impacted by the minimum wage.
You can't prove that eliminating the minimum wage would be a disaster for all US workers.

You just have a feeling.

 

[danielpalos]

How does the federal minimum wage rate effect all USA wage rates?

If the theoretical indefinite U.S. markets' determined minimum wage rate is $5/per Hr,
If X = $5/per Hr; ($7.25 -X)/per Hr. = is the difference between the federal and market's minimum rates.
Difference between the federal and market's minimum rates = $2.25
What's now a $20 per Hr rate was increased from $17.75 indefinite market-determined rate.

If X = $2/ per Hr., the indefinite minimum wage rate would be $2/per Hr.
What's now a $20 per Hr rate was increased from $14.75 indefinite market-determined rate.

When the purchasing power of the federal minimum wage rate is increased, employers are not legally required to modify all other wage rates, but in aggregate they actually do so.

Due to the economic concept of wage differential, if an employer fails to update their other wage rates, they will have difficulties recruiting and retaining employees. Employers are generally compelled to react immediately in the cases of their lower-wage rates, and slower in cases of higher wage rates.

Although in reaction to the minimum rate increase, higher wage rates will generally receive greater extents of increases, the increases for lower-rates will actually be proportionally greater, and for higher wage rates proportionally lesser increases of their employees' wage rates.
The purchasing power of the federal minimum wage is of maximum benefit to the working poor, and of some, but extremely lesser benefit to higher wage rates.

The federal minimum wage rate reduces USA's incidences and extents of poverty among USA's working-poor.
Respectfully, Supposn

It's complicated as hell, because the effects of low-end wage increases are not linear. It's mostly an industry-specific issue, because wages represent significantly different percentages of overall business expense, based on the type of business we're talking about.

PLUS, minimum wage increases would also necessarily increase the wages and associated costs of those above minimum wage job descriptions, so the domino effect would be most likely be another significant piece of this puzzle.

At the same time, we have forces pushing in the opposite direction: It's impossible to (honestly) justify paying government benefits to someone who also has a full time job. That's effectively a government subsidy to employers, incentivizing them to keep wages low. And more critical and timely is the increasing wealth disparities in this country, which are only making the job easier for those who want higher and higher minimum wages. And their constituents vote.

As usual, both ends of this issue are keeping their arguments at about a third-grade level because they absolutely refuse to acknowledge the complexities inherent in it. Until we can -- if we can, at this point -- demonstrate that we fully understand the big picture, we'll just keep flopping around like we are.
.

the more labor costs the more business gets to expense.

That's true, but the business has to have the cash flow or easy access to short term loans in the first place.

Plus, depending on the industry, the business may well have overseas competition with much lower labor costs.

This is all a balancing act.
.

so are tax incentives which the other parties may not have access to.

 

[Supposn]

You or I cannot prove or disprove the validity of the wage differential concept.

So you can't prove your claim that all wages are impacted by the minimum wage.
You can't prove that eliminating the minimum wage would be a disaster for all US workers.

You just have a feeling.

Toddsterpatriot, yes, the same feeling that economists have with regard to wage differentials. Have you found a link to ANY economist stating that the concept of wage differentiation is not valid? I also have the same feeling about the concept of 1 + 1 = 2.

I believe that even socialist governments, (maybe especially socialist governments) experiences have led them to better compensate the foreman. That's the concept of wage differentiation. All boats rise when the tide comes in.

Respectfully, Supposn

 

[Toddsterpatriot]

You or I cannot prove or disprove the validity of the wage differential concept.

So you can't prove your claim that all wages are impacted by the minimum wage.
You can't prove that eliminating the minimum wage would be a disaster for all US workers.

You just have a feeling.

Toddsterpatriot, yes, the same feeling that economists have with regard to wage differentials. Have you found a link to ANY economist stating that the concept of wage differentiation is not valid? I also have the same feeling about the concept of 1 + 1 = 2.

I believe that even socialist governments, (maybe especially socialist governments) experiences have led them to better compensate the foreman. That's the concept of wage differentiation. All boats rise when the tide comes in.

Respectfully, Supposn

yes, the same feeling that economists have with regard to wage differentials.

They don't have any proof, just feelings?

That's disappointing.

Do they use any of the formulas you used in the OP?

Any links to those?

Or to your claim that eliminating the $7.25 minimum wage would be a disaster?

That's the concept of wage differentiation. All boats rise when the tide comes in.

The $10 workers at the local McD's are too far inland to notice your $7.25 tide.

 

[Supposn]

yes, the same feeling that economists have with regard to wage differentials.

They don't have any proof, just feelings?
That's disappointing. Do they use any of the formulas you used in the OP?
Any links to those? Or to your claim that eliminating the $7.25 minimum wage would be a disaster?

That's the concept of wage differentiation. All boats rise when the tide comes in.
The $10 workers at the local McD's are too far inland to notice your $7.25 tide.

Toddsterpatriot, if denying the concept of supervisors earning higher wage rates than their crew members, doctors are better compensated than the hospital's janitors, (i.e. the concept of wage differentials), grants you more comfort, that's your choice; you can own it.

The $10/Hr McDonald employee you refer to is is closer, and Donald Trump is further away from our federal minimum wage rate of $7.25/Hr.

Respectfully, Supposn

 

[Supposn]

It's complicated as hell, because the effects of low-end wage increases are not linear. It's mostly an industry-specific issue, because wages represent significantly different percentages of overall business expense, based on the type of business we're talking about.

PLUS, minimum wage increases would also necessarily increase the wages and associated costs of those above minimum wage job descriptions, so the domino effect would be most likely be another significant piece of this puzzle.

At the same time, we have forces pushing in the opposite direction: It's impossible to (honestly) justify paying government benefits to someone who also has a full time job. That's effectively a government subsidy to employers, incentivizing them to keep wages low. And more critical and timely is the increasing wealth disparities in this country, which are only making the job easier for those who want higher and higher minimum wages. And their constituents vote.

As usual, both ends of this issue are keeping their arguments at about a third-grade level because they absolutely refuse to acknowledge the complexities inherent in it. Until we can -- if we can, at this point -- demonstrate that we fully understand the big picture, we'll just keep flopping around like we are.
.

Mac1958, how the concept of wage differentials can be applied in as complicated or as simple a manner as individual employers wish to apply it.
The concept of wage differentials is not a particular industry-specific, or government expenditures, or government subsidies, or wealth disparity, issues.

Yes, the concept is particularly related to job descriptions, and it's itself primarily an example of “domino effect” as applied in conjunction with the minimum wage rate. The minimum wage rate is a political issue.
Until I read ToddsterPatriot's post, I wasn't aware of wage differential concept being an issue to anyone. I greatly doubt if it's an issue among economists.

Respectfully, Supposn

 

[Toddsterpatriot]

yes, the same feeling that economists have with regard to wage differentials.

They don't have any proof, just feelings?
That's disappointing. Do they use any of the formulas you used in the OP?
Any links to those? Or to your claim that eliminating the $7.25 minimum wage would be a disaster?

That's the concept of wage differentiation. All boats rise when the tide comes in.
The $10 workers at the local McD's are too far inland to notice your $7.25 tide.

Toddsterpatriot, if denying the concept of supervisors earning higher wage rates than their crew members, doctors are better compensated than the hospital's janitors, (i.e. the concept of wage differentials), grants you more comfort, that's your choice; you can own it.

The $10/Hr McDonald employee you refer to is is closer, and Donald Trump is further away from our federal minimum wage rate of $7.25/Hr.

Respectfully, Supposn

Toddsterpatriot, if denying the concept of supervisors earning higher wage rates than their crew members, doctors are better compensated than the hospital's janitors, (i.e. the concept of wage differentials), grants you more comfort, that's your choice; you can own it.

Hey, that's a heck of a strawman you built there.

Now, back to your unproven claim.....wait.....don't run away, again.