Minimum Wage Increases, Manufacturing and INFLATION!!!

GHook93

Aristotle
Apr 22, 2007
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I actually heard someone say a minimum wage increase is going cause problems for manufacturing. That is laughable, since pretty much all manufacturing, R & D and assembly jobs pay more than minimum wage (and more than $15 a hour). It is a fallacy to say it will effect these jobs or cause more manufacturing jobs to be outsource. There are many call center jobs that will be outsourced, but then again most of those job have already been outsourced. Best way to find out what the weather is like in India is to call your customer service line.

The real issue is inflation. The minimum wage jobs that are out there are in agriculture (yep not all are illegals - in fact most aren't illegals), fast food, super-markets, restaurants (not really chiefs or servers, but bus boys, dish washers), retail, clothing etc. All these are consumer driven industries that have small margins. When you increase the cost on these industries, they will have to charge more. It's a fact of life.

If we are hell-bent on increasing minimum wage (which I do not think is a bad idea), then we need to start eliminating some of the other costs to doing business in the US. Regulatory costs, compliance cost (and this is coming from a lawyer in a global corporation), licensing fees, accounting costs, taxation burdens etc.

One thing for sure is that minimum wage jobs should pay more than welfare!
 
...minimum wage jobs should pay more than welfare!!
That sounds good for a mindless bumpersticker but it's worthless for policy. Nobody thinks a high school kid bagging groceries on Saturday mornings should get more money than a heavy equipment operator with a family of six who's out of work because of a work injury.
 
...minimum wage jobs should pay more than welfare!!
That sounds good for a mindless bumpersticker but it's worthless for policy. Nobody thinks a high school kid bagging groceries on Saturday mornings should get more money than a heavy equipment operator with a family of six who's out of work because of a work injury.

Who said they should? I am not saying $15 is reasonable or necessary, but an increase might be warranted.

FYI: I had a PT job as a rigger (forklift), I made a ton more than minimum wage, heck I made a ton more than $15 a hour, esp on the weekends.
 
...minimum wage jobs should pay more than welfare!!
That sounds good for a mindless bumpersticker but it's worthless for policy. Nobody thinks a high school kid bagging groceries on Saturday mornings should get more money than a heavy equipment operator with a family of six who's out of work because of a work injury.

Here are the ramification I see that happen.
(1) Inflation increases 10 fold: Everything that is fueled by minimum wage workers will increase ton, from food, clothing, retail etc. Heck even going to the movies with be more expensive (have to pay for those minimum workers.

(2) Technology and Outsourcing will Start to Replace workers:
Workers will always be needed but their will be less required. Take fast food for instance. Soon ordering will be outsourced to India. Think about it a person can order from a microphone or a touch screen and then just pay via CC (which most people do) or insert the cash and or change into the machine. There will be the cooks, janitors, helps and food servicers, but there will be a lot less actual people required to run the store.
 
I actually heard someone say a minimum wage increase is going cause problems for manufacturing. That is laughable, since pretty much all manufacturing, R & D and assembly jobs pay more than minimum wage (and more than $15 a hour). It is a fallacy to say it will effect these jobs or cause more manufacturing jobs to be outsource. There are many call center jobs that will be outsourced, but then again most of those job have already been outsourced. Best way to find out what the weather is like in India is to call your customer service line.

The real issue is inflation. The minimum wage jobs that are out there are in agriculture (yep not all are illegals - in fact most aren't illegals), fast food, super-markets, restaurants (not really chiefs or servers, but bus boys, dish washers), retail, clothing etc. All these are consumer driven industries that have small margins. When you increase the cost on these industries, they will have to charge more. It's a fact of life.

If we are hell-bent on increasing minimum wage (which I do not think is a bad idea), then we need to start eliminating some of the other costs to doing business in the US. Regulatory costs, compliance cost (and this is coming from a lawyer in a global corporation), licensing fees, accounting costs, taxation burdens etc.

One thing for sure is that minimum wage jobs should pay more than welfare!

Good idea. Except that if you reduce salaries/wages enough, the economy collapses because of reduced consumption.

Remember, the economy is a SYSTEM . . . it isn't a toy to mess with.
 

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