If minimum wage were raised ...

[Amelia]

If minimum wage were raised, presumably many people's wages would be bumped at least a little. Even though only a small percentage of workers earn minimum wage, the people who started out at minimum wage and got raises would get upset if brand new employees suddenly got as much as they did, so lots of wages would go up.

So how many jobs would be created or saved by this move -- for instance because of the increase in spending money available for local spending?

And how many jobs would be lost -- for instance because the increase in American wages would make offshore labor look more appealing, or because business owners' profit margin wouldn't support a 20% hike in labor costs so they would let a small portion of their workforce go and hope for more productivity from the rest?

 

[Publius1787]

If minimum wage were raised, presumably many people's wages would be bumped at least a little. Even though only a small percentage of workers earn minimum wage, the people who started out at minimum wage and got raises would get upset if brand new employees suddenly got as much as they did, so lots of wages would go up.

So how many jobs would be created or saved by this move -- for instance because of the increase in spending money available for local spending?

And how many jobs would be lost -- for instance because the increase in American wages would make offshore labor look more appealing, or because business owners' profit margin wouldn't support a 20% hike in labor costs so they would let a small portion of their workforce go and hope for more productivity from the rest?

Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

If you mandated a living wage you would only create a new poverty line with the same amount of poverty as you started off with, if not more, after the market settles down. There is indeed a reason why service stations no longer hire teenagers to service the cars of travelers.

 

[Katzndogz]

If the minimum wage was raised in a year the effect would be non existent.

 

[Amelia]

If the minimum wage was raised in a year the effect would be non existent.

So no jobs would go overseas because of the raise?

Or would the job loss and the job creation balance out?

 

[Indeependent]

Career opportunities are real, minimum wage is artificial.

 

[Amelia]

If minimum wage were raised, presumably many people's wages would be bumped at least a little. Even though only a small percentage of workers earn minimum wage, the people who started out at minimum wage and got raises would get upset if brand new employees suddenly got as much as they did, so lots of wages would go up.

So how many jobs would be created or saved by this move -- for instance because of the increase in spending money available for local spending?

And how many jobs would be lost -- for instance because the increase in American wages would make offshore labor look more appealing, or because business owners' profit margin wouldn't support a 20% hike in labor costs so they would let a small portion of their workforce go and hope for more productivity from the rest?

Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

If you mandated a living wage you would only create a new poverty line with the same amount of poverty after the market settles down.

Yes, I'm assuming that wages for skilled labor would also rise.

With millions being paid more, there would be more tax revenue.



I am curious about what the new standards would be for public assistance -- would the poverty line just be arbitrarily bumped up in accordance with the rise in minimum wage? As you say, it seems likely it would.


But more taxes would be going into the coffer, so there would be more money for public projects. That could mean more jobs.

 

[Publius1787]

If the minimum wage was raised in a year the effect would be non existent.

So no jobs would go overseas because of the raise?

Or would the job loss and the job creation balance out?

This would happen if you mandated a "Living Wage"


1) Normal Goods
a. Businesses dealing in normal goods will see an increased demand in sales. In the short term there will be a limited number of these goods, and thus, the increased demand will create a sharp increase of prices.

b. Businesses dealing in normal goods will need to buy more supplies/raw materials to keep up with the demand for their finished goods. The increased demand in supplies/raw materials will likewise raise sharply the prices of supplies/raw materials.

c. Businesses dealing in normal goods will need to hire more workers to keep up with the increased demand. They will do so hesitantly, as the cost of labor has likewise increased. A higher amount of scrutiny will be applied to job applicants as the applicants work experience must justify the new wage.

Ever wonder why we no longer have high school students gaining work experience servicing cars and filling tanks at service stations for small wages and tips? Blame the minimum wage. And fuel is a necessity good.

a. In the short run, the increased demand for normal goods cannot be supplied by U.S. firms. Therefore, we will rely more heavily on imports. This will skew the balance of trade further out of our favor, and therefore, increase the national debt. See section 5 for further analysis on imports.

2) Inferior Goods
a. Businesses dealing in inferior goods will see an immediate decline in demand combined with their shareholders selling their stock. Millions would lose their jobs. The vast majority of employees will not gain employment until the pricing adjustments in the markets settle.

3) Small Businesses
a. Small businesses will not be able to afford the increased price of labor, combined with the increased price of raw materials/supplies. They will simply shut their doors. Small corporations will likewise see their stock plummet and millions will lose their jobs. Large corporations with a lot of reserve capital and large amounts of credit will be able to run deficits in the short run, filling and expanding in the vacuum left by small businesses and small corporations in the long run.

4) Wages
a. Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

5) Imports

a. In the short run the new demand for goods and services cannot possibly keep up with the increased demand for normal goods. Those goods will need to be imported if consumer demand is to be met. Thereby, the balance of trade will push the United States further into debt.

b. The increased demand for imports will likewise increase the price for imported goods. Poorer countries would not be able to compete with the United States, and therefore, the result would be more world poverty. Indeed, overseas firms that can make a higher dollar from the increase in U.S. demand will gladly sell to us as opposed to poorer countries that pay less.

This would not be unlike when the U.S. incentivized the production of ethanol, making the production of corn more popular to U.S. based rice farmers. As we filled the gap by importing rice from foreign countries, other countries such as the Philippines had food riots.

Note: increasing tariffs on imports in an attempt to punish foreign competitors will have a reverse effect of further increasing the prices of our limited domestic goods and services.

c. Having established that the increased demand for raw materials will be met from imports, investors will invest heavily in the expansion of overseas firms to produce those imports. With the new minimum wage at 14.50 combined with the highest corporate tax rate in the world, corporations dealing in raw materials are incentivized more than ever before to outsource jobs where the taxes are low, the labor is cheap, and the regulatory environment is more advantageous.

d. There is good news. Some foreign overseas workers will see an increase in jobs and a decrease in unemployment. If the decrease in unemployment is enough, the demand for labor will increase wages and befits for their workers.

It would not be unlike Taiwan, Singapore, Hong Kong, or South Korea during the 70’s 80’s and 90’s whereas they experienced rapid economic growth and became “Tiger Economies.”

6) Assuming that the “living” minimum wage were to work.

a. You would see a decline in college graduates. The largest motivating factor to become educated is so that a future worker can increase his/her marketability in the job market. If a person could make a reasonable living simply by graduating high school, or even dropping out of high school, he or she has lost much of the incentive to seek higher education or become more skilled. This would pollute the workforce with low skilled labor creating an environment of which the U.S. economy falls behind the rest of the world.


Important Note: I did not truly go into the effects of doubling the labor costs of all minimum wage businesses, and the contributions of $2,307.24 in addition to the full time minimum wage salary of $30,160 per year. (The employer must match your 6.2% Social Security Tax and your 1.45% Medicare tax). So one employee on a “living” minimum wage at $14.5/hr. comes to roughly $32,467.64 per annum. Then the business needs to worry about federal and state taxes, rent, electricity, advertising, legal fees, water, supplies/materials, training, maintenance/repair, interest on loans, insurance, perhaps franchise fees, & etcetera. If you want to take it a step further think about 401K, paid vacation, healthcare, education benefits, and maternity leave, among other perks. The cost of all of this will skyrocket.

Conclusion: The disparity of wealth will still be there, the prices of goods and service will
increase, and in the long run we still have the same, probably more, amount of poverty we started off with. In the interim, however, we accomplished the following:

1) The new poverty line (100% poverty level) is $22,980 per year as opposed to the original $11,490 for a single person.
2) The Consumer Price Index has perhaps doubled if not more.
3) The national debt skyrocketed due to a disadvantageous balance of trade.
4) The rate of overseas investment and outsourced jobs dramatically increased.
5) High unemployment.
6) An increased market share for large corporations at the expense of small corporations and small businesses.

If you can get around all these problems then go ahead, institute a “living minimum wage.”

 

[Publius1787]

If minimum wage were raised, presumably many people's wages would be bumped at least a little. Even though only a small percentage of workers earn minimum wage, the people who started out at minimum wage and got raises would get upset if brand new employees suddenly got as much as they did, so lots of wages would go up.

So how many jobs would be created or saved by this move -- for instance because of the increase in spending money available for local spending?

And how many jobs would be lost -- for instance because the increase in American wages would make offshore labor look more appealing, or because business owners' profit margin wouldn't support a 20% hike in labor costs so they would let a small portion of their workforce go and hope for more productivity from the rest?

Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

If you mandated a living wage you would only create a new poverty line with the same amount of poverty after the market settles down.

Yes, I'm assuming that wages for skilled labor would also rise.

With millions being paid more, there would be more tax revenue.



I am curious about what the new standards would be for public assistance -- would the poverty line just be arbitrarily bumped up in accordance with the rise in minimum wage? As you say, it seems likely it would.


But more taxes would be going into the coffer, so there would be more money for public projects. That could mean more jobs.

you not taking into account price changes due to new wages and new demand. Not to mention the balance of trade. look at my post above.

 

[Amelia]

If minimum wage were raised, presumably many people's wages would be bumped at least a little. Even though only a small percentage of workers earn minimum wage, the people who started out at minimum wage and got raises would get upset if brand new employees suddenly got as much as they did, so lots of wages would go up.

So how many jobs would be created or saved by this move -- for instance because of the increase in spending money available for local spending?

And how many jobs would be lost -- for instance because the increase in American wages would make offshore labor look more appealing, or because business owners' profit margin wouldn't support a 20% hike in labor costs so they would let a small portion of their workforce go and hope for more productivity from the rest?

Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

If you mandated a living wage you would only create a new poverty line with the same amount of poverty after the market settles down.

Yes, I'm assuming that wages for skilled labor would also rise.

With millions being paid more, there would be more tax revenue.



I am curious about what the new standards would be for public assistance -- would the poverty line just be arbitrarily bumped up in accordance with the rise in minimum wage? As you say, it seems likely it would.


But more taxes would be going into the coffer, so there would be more money for public projects. That could mean more jobs.

I just realized the extra taxes might not go to new jobs. A lot of it could go to the raises that public employees would get in response to the increase in the minimum wage.

 

[Publius1787]

Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

If you mandated a living wage you would only create a new poverty line with the same amount of poverty after the market settles down.

Yes, I'm assuming that wages for skilled labor would also rise.

With millions being paid more, there would be more tax revenue.



I am curious about what the new standards would be for public assistance -- would the poverty line just be arbitrarily bumped up in accordance with the rise in minimum wage? As you say, it seems likely it would.


But more taxes would be going into the coffer, so there would be more money for public projects. That could mean more jobs.

I just realized the extra taxes might not go to new jobs. A lot of it could go to the raises that public employees would get in response to the increase in the minimum wage.

Not to mention the increased price of running the government due to the increase in demand for goods and services and the national debt incurred from imports and outsourcing.

 

[Rozman]

Doesn't Nancy Pelosi believe that more people collecting UE benefits is better for the economy.

 

[Katzndogz]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

 

[Amelia]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

But if rents and gas and food go up and wages stay the same, then people will be poorer.

 

[Sunni Man]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

Exactly.......

Even if the minimum wage went to $100 per hour.

Then a gallon of milk would cost $50 and a loaf of bread would be $25 at the grocery store.

Like Katzndogz said......it's all relative. ..

 

[AquaAthena]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

Exactly.......

Even if the minimum wage went to $100 per hour.

Then a gallon of milk would cost $50 and a loaf of bread would be $25 at the grocery store.

Like Katzndogz said......it's all relative. ..

Haven't we all seen that???

 

[Amelia]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

Exactly.......

Even if the minimum wage went to $100 per hour.

Then a gallon of milk would cost $50 and a loaf of bread would be $25 at the grocery store.

Like Katzndogz said......it's all relative. ..

So if the minimum wage stays at $7.25, the price of milk and bread won't go up? The price of cars won't go up?

The situation is not cut-and-dried.

 

[Katzndogz]

If raising the minimum wage would end poverty, poverty would have been eradicated when the MW went from 75 cents an hour to $1.25 an hour.

Poverty is relative. Pay people $100.00 an hour and they will still be poor.

Exactly.......

Even if the minimum wage went to $100 per hour.

Then a gallon of milk would cost $50 and a loaf of bread would be $25 at the grocery store.

Like Katzndogz said......it's all relative. ..

So if the minimum wage stays at $7.25, the price of milk and bread won't go up? The price of cars won't go up?

The situation is not cut-and-dried.

Did raising the minimum wage help anyone?

Right now the minimum wage is too high. It isn't low enough to attract first time workers. Make the minimum wage high enough to support a family and be a career then no one will be able to enter the work force. We'll be like parts of Europe with 30% youth unemployment.

 

[Amelia]

Exactly.......

Even if the minimum wage went to $100 per hour.

Then a gallon of milk would cost $50 and a loaf of bread would be $25 at the grocery store.

Like Katzndogz said......it's all relative. ..

So if the minimum wage stays at $7.25, the price of milk and bread won't go up? The price of cars won't go up?

The situation is not cut-and-dried.

Did raising the minimum wage help anyone?

Right now the minimum wage is too high. It isn't low enough to attract first time workers. Make the minimum wage high enough to support a family and be a career then no one will be able to enter the work force. We'll be like parts of Europe with 30% youth unemployment.

Raising the minimum wage provides at least a burst of help. Not raising the minimum wage while prices are rising around everyone means standard of living lessens.

So yes, raising the minimum wage helps in some ways (and staves off hurt in some ways).

But it hurts in others.

There are trade-offs.

My question today is about the net effect -- specifically in numbers of jobs.

 

[Katzndogz]

When France tried to raise the retirement age two years there were massive riots in the streets by young people in protest. Why? Why would young people care about a situation that won't matter to them for 50 years?

Because it doesn't hit them in 50 years but this year. Imagine if you were waiting for that career burger flipper to retire before you have a chance at that job. Would you want to wait two more years? Even for someone with a tiny bit of motivation, they depend on the advancement of others before they can move up themselves. A minimum wage high enough to be a family breadwinner wage turns a dynamic country stale. It gets static.

I would suggest a categorized minimum wage structure that provides for training wages with no taxes taken out. If you want more money you must move to a different category. Other countries have done this and they have far more upward mobility than we do.

 

[Katzndogz]

So if the minimum wage stays at $7.25, the price of milk and bread won't go up? The price of cars won't go up?

The situation is not cut-and-dried.

Did raising the minimum wage help anyone?

Right now the minimum wage is too high. It isn't low enough to attract first time workers. Make the minimum wage high enough to support a family and be a career then no one will be able to enter the work force. We'll be like parts of Europe with 30% youth unemployment.

Raising the minimum wage provides at least a burst of help. Not raising the minimum wage while prices are rising around everyone means standard of living lessens.

So yes, raising the minimum wage helps in some ways (and staves off hurt in some ways).

But it hurts in others.

There are trade-offs.

My question today is about the net effect -- specifically in numbers of jobs.

All you are saying really is that prices need to come down. Lower taxes and reduce strangling regulation.