itfitzme
Silver Member
Who said that?
If minimum wage were raised ...
- Thread starter Amelia
- Start date
Who said that?
OnePercenter
Gold Member
- Apr 10, 2013
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Post #249. Read it.
itfitzme
Silver Member
Why? Prices aren't capped. So I really don't care.
OnePercenter
Gold Member
- Apr 10, 2013
- 23,667
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You don't want to know how to fix the economy?
itfitzme
Silver Member
Here we go, elasticity of minimum wage.
Basically, little if any effect on employment or prices.
Schmitt, John (February 2013). "Why Does the Minimum Wage Have No Discernible Effect on Employment?". Center for Economic and Policy Research. Retrieved 2013-10-06.
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Minimum wage in the United States - Wikipedia, the free encyclopedia
Basically, little if any effect on employment or prices.
Schmitt, John (February 2013). "Why Does the Minimum Wage Have No Discernible Effect on Employment?". Center for Economic and Policy Research. Retrieved 2013-10-06.
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Minimum wage in the United States - Wikipedia, the free encyclopedia
asterism
Congress != Progress
Here we go, elasticity of minimum wage.
Basically, little if any effect on employment or prices.
Schmitt, John (February 2013). "Why Does the Minimum Wage Have No Discernible Effect on Employment?". Center for Economic and Policy Research. Retrieved 2013-10-06.
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Minimum wage in the United States - Wikipedia, the free encyclopedia
Union propaganda:
Our Funders
Now why would unions want an increase in the minimum wage?
Richard Berman: Why Unions Want a Higher Minimum Wage - WSJ.com
itfitzme
Silver Member
Here we go, elasticity of minimum wage.
Basically, little if any effect on employment or prices.
Schmitt, John (February 2013). "Why Does the Minimum Wage Have No Discernible Effect on Employment?". Center for Economic and Policy Research. Retrieved 2013-10-06.
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Minimum wage in the United States - Wikipedia, the free encyclopedia
Union propaganda:
Our Funders
Now why would unions want an increase in the minimum wage?
Richard Berman: Why Unions Want a Higher Minimum Wage - WSJ.com
Everyone understands that you are not capable of objective scientific reasoning but that doesn't mean anyone else isn't. Empirical evidence is empirical evidence whether you like tbe answers or not. And so far, all I've seen is a complete lack of any remote reasoning to support the idea that raising min wage necessarily causes increases in price or declines in employment. And, empirical evidence fails to support it as well.
Your opinion about the motives behimd the study mean nothing except as testimony to your own biases.
Why, for instance, would a drug company bother studying a drug that they didn't believe worked. Why would compamy bother marketing a product it didn't expect to sell?
You're point is meaningless.
oldfart
Older than dirt
Your links make no effort to provide any evidence against the study. This usually means that your sources have no evidence or reasoning to support their position and so they resort to attacks on the source. Please give a full citation to any actual economic studies you are relying upon. I'm pretty sure you have none.
asterism
Congress != Progress
Here we go, elasticity of minimum wage.
Basically, little if any effect on employment or prices.
Schmitt, John (February 2013). "Why Does the Minimum Wage Have No Discernible Effect on Employment?". Center for Economic and Policy Research. Retrieved 2013-10-06.
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
Minimum wage in the United States - Wikipedia, the free encyclopedia
Union propaganda:
Our Funders
Now why would unions want an increase in the minimum wage?
Richard Berman: Why Unions Want a Higher Minimum Wage - WSJ.com
Everyone understands that you are not capable of objective scientific reasoning but that doesn't mean anyone else isn't. Empirical evidence is empirical evidence whether you like tbe answers or not. And so far, all I've seen is a complete lack of any remote reasoning to support the idea that raising min wage necessarily causes increases in price or declines in employment. And, empirical evidence fails to support it as well.
Your opinion about the motives behimd the study mean nothing except as testimony to your own biases.
Why, for instance, would a drug company bother studying a drug that they didn't believe worked. Why would compamy bother marketing a product it didn't expect to sell?
You're point is meaningless.
Show me evidence that either of you have given oil company studies on CO2 any consideration at all.
- Banned
- #270
Show me evidence that either of you have given oil company studies on CO2 any consideration at all.
What does that have to do with anything?
The fact is that we can actually look at you know history and use the figures to see that reasonable minimum wage increases have little impact on employment numbers OR prices.
Shouldn't a clean debate section mean not allowing people to ignore facts?
Dragonlady
Designing Woman
I've seen it posted here that if minimum wages were raised 20%, then fast food prices would have to be raised by 20% to pay for the increase, and prices on other goods and services would also have to rise by 20% and the minimum wage workers would be no better off. Posters further said that liberals were too stupid to understand this basic premise.
Well, I'm a liberal and the idea that raising minimum wages by 20% would cause fast food prices, or prices on anything would have to rise by 20% is so completely inaccurate, I question the intelligence of anyone who believes this and I can explaiin why. The cost of the labour to make the burger is not the ONLY cost which is factored into the price of the burger. In fact, it's only a small fraction of the price of the burger. There's the cost of the ingredients, the capital costs of the equipment, furniture and fixtures in the store, the costs of mortgage/rent and utilities for the store, franchise fees and profit - none of which is affected by the wage increase given to the staff cooking and serving the burgers.
This is not just true of the fast food industry, but of any business which employs people at minimum wage. Wages are just one component of the costs of goods and services sold, so that raises in wages may increase the cost of producing the item, but they're not the ONLY cost involved. This is a detailed study which says that raising the minimum wage to $10.50 per hour would lead to a price increase of only 2.7%, which is a far more realistic figure than 20%.
http://www.peri.umass.edu/fileadmin/pdf/research_brief/PERI_fast_food_wages.pdf
MacDonalds and Walmart are two of the most profitable corporations in the world. Both do business in countries where the minimum wage is much higher than in the US, and both are very profitable in those jurisdictions. If Walmart can be very profitable in Canada, where minimum wages are over $10 an hour, taxes are higher, and costs generally are higher, why can't they pay decent wages in the US? Why are American taxpayers subsidizing Walmart employees with food stamps, and Medicaid while Walmart is the 2nd most profitable company in the US, and why do right wingers think this is a GOOD thing?
Shouldn't Walmart and MacDonalds (another of the most profitable corporations in the US whose employees heavily rely on government programs) be required to pay their employees enough in wages to keep their employees off public assistance?
Well, I'm a liberal and the idea that raising minimum wages by 20% would cause fast food prices, or prices on anything would have to rise by 20% is so completely inaccurate, I question the intelligence of anyone who believes this and I can explaiin why. The cost of the labour to make the burger is not the ONLY cost which is factored into the price of the burger. In fact, it's only a small fraction of the price of the burger. There's the cost of the ingredients, the capital costs of the equipment, furniture and fixtures in the store, the costs of mortgage/rent and utilities for the store, franchise fees and profit - none of which is affected by the wage increase given to the staff cooking and serving the burgers.
This is not just true of the fast food industry, but of any business which employs people at minimum wage. Wages are just one component of the costs of goods and services sold, so that raises in wages may increase the cost of producing the item, but they're not the ONLY cost involved. This is a detailed study which says that raising the minimum wage to $10.50 per hour would lead to a price increase of only 2.7%, which is a far more realistic figure than 20%.
http://www.peri.umass.edu/fileadmin/pdf/research_brief/PERI_fast_food_wages.pdf
MacDonalds and Walmart are two of the most profitable corporations in the world. Both do business in countries where the minimum wage is much higher than in the US, and both are very profitable in those jurisdictions. If Walmart can be very profitable in Canada, where minimum wages are over $10 an hour, taxes are higher, and costs generally are higher, why can't they pay decent wages in the US? Why are American taxpayers subsidizing Walmart employees with food stamps, and Medicaid while Walmart is the 2nd most profitable company in the US, and why do right wingers think this is a GOOD thing?
Shouldn't Walmart and MacDonalds (another of the most profitable corporations in the US whose employees heavily rely on government programs) be required to pay their employees enough in wages to keep their employees off public assistance?
itfitzme
Silver Member
Yeah, the problem with their reasoning is that they forget that spending also increases by 20% when wages and prices increase by 20%.
They do only a partial analysis because their predisposition allows them to only recognize info that supports their bias and ignores everything else.
I can guarantee that as soon as they say "liberal", it is an admission that they are biased. By accusing everyone else of what they are obviously guilty of, they justify their inability at objective thought.
Actually, your recognition of the feedback that occurs between public assistance and falling wages tells me you have a clean objective view, "liberal" or not. Something has to give. Do we stop providing assistance to people working at Walmart for poverty level income or do we raise minimum wage? Little honest and objective though it required to figure that one out.
Tresha91203
Platinum Member
I need another employee but wont have the revenue without more enrolls. Fyi, none of my staff make min wage but starting salary is $10 per hour and requires a degree. We are a secondary job for the record, their primary jobs are as teachers (and one accountant). Same job in Seattle would be closer to $15. It is the same business franchise, just different costs of living in those areas.
Here, you can buy a mobile home brand new for under 50k, insurance runs under $100 per month, and utilities will be low. It is cheaper here than an apartment by far, and you own it so rent it out when you are able to build your dream home. Most places here, you can set it up behind your parents house (not if they live in a subdivision obviously). Cant do that in Seattle.
My salaries have changed by as much as 50% between south louisiana, pacific nw and vancouver bc. Same me, same resume, different town. Mobile homes are for farms there and everyone moves to apartments. They also keep roommates. Roommates are not common here at all outside of dorms. Places are just different. We arent going to be able to make these kinds of decisions for the nation as a whole. People in Seattle are closer in culture to those in vancouver than new orleans. Cost of living is impacted by that culture.
- Banned
- #274
then sir, you currently do not NEED another employee. You don't need another employee until AFTER the revenue justifies it, although there are cases where hiring an employee before the need is there makes sense to.
Likewise , if you're running efficiently, you aren't going to be able to get rid of an employee just because the minimum wage goes up, because then you would be understaffed
candycorn
Diamond Member
Can you give me an example? You're stating that if wages go up X, prices increase by X too, right?
If the FMW went up $0.05 at McDonalds, you'd see a $0.05 raise in what exactly? The Big Mac, Quarter-Pounder, McNuggets? On all drinks?
What exactly?
itfitzme
Silver Member
I can't figure out what you are talking about. General wage increases and general price increases aren't specific to anything. What a minimum wage increase does, in general, is simply wage compression. It raises the standard of living for minimum wage workers by reducing the income spread.
The simplest view is to consider an economy where income is all identical. Everyone works for X per hour, producing Q goods. Everyone spends their X dollars per hour on Q goods. Simply increasing the X per hour isn't going to impact the Q goods produced as the increased income all gets spent on the Q goods. Everyone makes more money, everyone spends more money, everyone still works the same amount of hours producing the same amount of goods that the same amount of people consume.
Now, consider an economy with an income spread. Everyone works so many hours producing so many goods. The lower end of income is minimum wage. When minimum wage is raised, the average wage increases. The lower end increases, the upper end remains the same. The average price increases. Still, same amount of people producing and consuming the same amount of goods. The only difference is that the income spread is smaller. Minimum wage workers are now a bit closer to the average and now afford a bit more of the goods.
That is pretty much the basic conclusion that the empirical evidence supports.
The effect that is a bit harder to factor in is the fact that increasing the money supply tends to increase production ahead of prices. And decreasing the money supply tends to decrease production ahead of decreasing prices. The money supply has a mechanical aspect to it.
I suspect that this same effect is at play with minimum wage because the economy isn't homogeneous. Minimum wage and lower income workers buy products at businesses that pay minimum wage and lower incomes. Walmart, Walgreen's, Target, McDonalds, Taco Bell, FoodMax, etc, tend to make up a "sub economy" within which the monies used by lower income workers flows. As inflation reduces the effective value of minimum wage, the amount of monies flowing in the lower income economy gets smaller relative to the whole. Or, we might say that it fails to grow as effectively as it should. I suspect that this tends to cause the lower income economy to wind down.
This last part is just my sense of it. The fact of the general effect of increasing and decreasing money supply is well established, though I can't say "well understood". That Target workers tend to purchase at Target, McDonalds, Walgreen's and Foodmax isn't to much of a leap. So I don't believe I am to far off on declining real value of minimum wage having a real effect in kind of "winding down" the economy. The opposite would be that increasing the minimum wage would tend to increase output. Maintaining a real dollar value of minimum wage (COLA) would tend to keep standard of living steady.
What appears to be NOT TRUE is the idea that increasing minimum wage increases unemployment.
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candycorn
Diamond Member
Okay.
What I had heard more than few times is that if you were to start paying Nancy $0.50 more per hour on Monday, on Tuesday you'd have to raise your prices. As if you have one sales unit and sell only one of them per day. I mis-understood what you had wrote.
itfitzme
Silver Member
And that seems right. Assuming the company just meets costs, as a free market firm should, then if Nancy earns $0.50 more per hour on Monday then you'd certainly have to raise prices on Tuesday, or however long it takes to get goods from production to the store shelf. By the time the next Monday comes around, or however long a pay period is, Nancy would see it is her paycheck and be able to pay that $0.50 more.
It is interesting to note the little details like we get paid three weeks after we do the work. Paychecks come every two weeks after a one week lag time. So the work we do on the week of the 1st through the 7th has better than a week on the store shelves before the revenues find their way into out paycheck on the third week. So it really is the $0.50 Nancy gets paid per hour in the first week of the Month means prices go up that week and Nancy actually sees her paycheck go up by the third week. By the time the fourth week comes around, she can afford the increased prices that showed up two weeks prior.
Seems to me you've got it spot on. For simplicity sake, we can think of it as being one sales unit per day. For practical purposes, I think of it as being a "standard basket of goods", as if Nancy produced a grocery cart full of stuff. She doesn't, of course, but unless we are concerned with how efficient production is, it doesn't matter.
Of course, in reality, every company doesn't necessarily have all or any minimum wage employees. The trick which thinking economics is being able to find the simpler model that answers the question without over complicating things. For many practical analysis, we can think of the economy as one big company producing one big basket of goods for one huge household of 300 million people (big mansion). As money flowed back and forth between business and household, paycheck, purchases, paycheck, purchases, it has to be the same total amount. For many practical purposes, the time period is irrelevant. It can be Monday, Tuesday, or this week, the next week.
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itfitzme
Silver Member
Alternatively, what may easily happen is simply that the profit margin on soft drinks goes down. Apparently, everyone knows that the big profit margin is on the soft drinks.
Turns out to be a good search term;
Google Search: Profit Margin On Soft Drinks
Top 5 food mark-ups where restaurants make huge profits - DailyFinance
"
It is almost as if the hamburger and fries is complementary, just to get you to buy the soft drink.
- Banned
- #280
Same thing with movie theaters. They actually lose money on every movie they show if you don't count concessions. But that $40 for 2 drinks a popcorn and a candy sure makes them money.
Ever used a SodaStream? Machine costs like 100 bucks. Then a refill of CO2 is $15 and a refill of syrup is around $6.
The CO2 cartridge can produce 60 liters of soda. So that is $.25 per liter.
The syrup can produce 12 liters . So that's $.20 per liter.
Total cost of $.45 per liter, which is CONSIDERABLY less than what you pay when you go out to eat or what have you.
No one should feel sorry for these places when discussing a minimum wage increase, they are making PLENTY of money.
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