Minimum Wage

[Dan_Theman]

I can't speak for everyone out there, but from my own experience there was a significant desire to not make minimum wage as I moved on from one job to the next. Just wanting something, of course, doesn't get you anything.

The minimum wage is one of several "safety nets" in our society. It comes from the concept that it is an inherently good thing to provide that for the people who need it, and that the government should be there as the provider of such relief because it would otherwise be against the interests of the employer to care and therefore susceptible to being ignored.

As of 2011, 5.2% of the workforce was making minimum wage. This percentage had an interesting history:

2002: 3.0% of overall hourly earners, 1.8% of workers age 25 and over ($5.15)
2003: 2.9% of overall hourly earners, 1.7% of workers age 25 and over ($5.15)
2004: 2.7% of overall hourly earners, 1.7% of workers age 25 and over ($5.15)
2005: 2.5% of overall hourly earners, 1.5% of workers age 25 and over ($5.15)
2006: 2.2% of overall hourly earners, 1.4% of workers age 25 and over ($5.15)
2007: 2.3% of overall hourly earners, 1.5% of workers age 25 and over ($5.85)
2008: 3.0% of overall hourly earners, 1.8% of workers age 25 and over ($6.55)
2009: 4.9% of overall hourly earners, 3.1% of workers age 25 and over ($7.25)
2010: 6.0% of overall hourly earners, 3.8% of workers age 25 and over ($7.25)
2011: 5.2% of overall hourly earners, 3.2% of workers age 25 and over ($7.25)

The explosion of minimum wage jobs for "career-age" individuals in the recent economic troubles sticks out like a sore thumb. Of course, there are a couple of factors that come to mind:
1) An elevated minimum wage in 2009 from $6.55 to $7.25 likely raised up a significant portion of individuals who were making a little over the old minimum wage. When the percentage of people in this status went up by a rather large amount in 2010 without a corresponding increase in the wage, that pretty much screams out that alot of peole had to take low wage jobs because of the economy.
2) The reduction in 2011 is also illuminating - as the recovery progressed, we saw more people move out of that bracket.

[ineffablebob]

It would be more efficient for the government to provide the needs of the low income directly, or at least via a very flat system, rather than giving them money which they might spend poorly. Have government-run housing, food, health care, education, protection services, military.

Don't we already do that to a great extent?

Ah, I was hoping someone might say that. Indeed, we do have government-direct provision in pre-adult education, protection services, and the military. But in housing, food, health care, and adult-level education, the government rarely directly provides. Instead we have government "encouragement" in the form of tax breaks, tuition assistance, Medicare/aid, etc.

So what's the difference? In all of those areas, it's possible to make the argument that people can't live freely without those things. Yet you hear a lot of argument that it's an infringement on freedom to provide them. I don't really have the answer. All I can say is that people have some very deeply held beliefs on both sides of the argument, and both sides have merit. It's a rough balancing act.

[Scuzz]

But in housing, food, health care, and adult-level education, the government rarely directly provides.

I don't know how :universal" it is but here in California there is Section 8 housing paid for by the government. My office is surrounded by it. Apartments and single family homes. I would wager most of those people also qualify for food stamps and have access to local ER's should they need it.

[blah!]

If being poor is so bad, why don't they just stop being poor? Great argument there, blah. So my dear son of a sharecropper, tell us about this "nothing" from whence you came. Were you raised by wolves?

Actually, my sister and I have a saying that we would have been better off raised by wolves.

The Cliffs notes version, I've had no job, no money, and no place to live multiple times in my life so I know what it's like having nothing. Any adult working a minimum wage job is doing so because of minimum effort, end of story. Stop being poor?...worked for me, more than once. If you're really interested in the full story, and not just being flippant, I'll tell you.

[ineffablebob]

I don't know how :universal" it is but here in California there is Section 8 housing paid for by the government. My office is surrounded by it. Apartments and single family homes. I would wager most of those people also qualify for food stamps and have access to local ER's should they need it.

I don't know about the section 8 housing, but the food stamps and ER access are private entities (possibly non-profit) being paid by the government to provide service, not the government directly providing the service. In my area, housing is the same. I don't honestly know if this is better or worse. My gut reaction is to say that government should provide all these things directly because cutting out the middle-man would be more efficient (given proper oversight), but I've heard too many horror stories of inefficiency to think that's reality.

[CLWheeljack]

Any adult working a minimum wage job is doing so because of minimum effort, end of story.

Citation needed.

[Flowers]

Calm down, Nancy. There is nothing trashy about what I said. Sorry you can't handle the fact that the only people making minimum wage are either kids that will grow out of it or adults that probably aren't worth paying what they already make.

Viewing yourself as better than people who have less money than you is low class.

Only in this country, in this time period, could someone who's actually made something with his life, FROM NOTHING, you fuckwit, be considered trash for saying the truth. Of course it's not surprising, there is an epidemic of people these days who think success is evil and failure should be coddled.

You and Ayn Rand can eat cold shit. Tell me again how success is punished with lower tax rates, and how the children of the rich are lead to the stocks and pilloried with estate tax credits and preferential treatment for capital gains. When you came here from nothing, which public road did you use? No man makes it on his own. Recognizing that you rely on your fellow man each moment of each day is part of being a member of the tribe.

Edit: And by "wheelhouse" I was referring to the fact that it would make the far left fucking giddy to take more of my money and give it to someone else. So yes, it's right in their "wheelhouse" to come up with the idea that those of us who have managed to make something of ourselves should have to support the other half of the country who haven't.

You're an idiot. Nobody cares about your money, you aren't a victim, you're just a stupid dick who sees his paycheck and doesn't understand the trillions of dollars of government infrastructure and hundreds of thousands of years of group effort picking mankind up from the mud and building skyscrapers and markets and spaceships and hospitals and universities involved in making the mid-market luxury car that you covet even possible.

[Houngan]

Actually, my sister and I have a saying that we would have been better off raised by wolves.

The Cliffs notes version, I've had no job, no money, and no place to live multiple times in my life so I know what it's like having nothing. Any adult working a minimum wage job is doing so because of minimum effort, end of story. Stop being poor?...worked for me, more than once. If you're really interested in the full story, and not just being flippant, I'll tell you.

The point is that despite having no money you survived, and presumably it wasn't by raising your own food and hunting. The minimum wage is there to help people, just like food stamps. There are a lot of people suffering from mental issues, addiction issues, etc. that are incapable of lifting themselves up yet can be useful in a job. A fair minimum wage keeps those people contributing rather than giving up and going completely on the dole, and occasionally needs to be adjusted so that it continues to provide that motivation.

[blah!]

Viewing yourself as better than people who have less money than you is low class.



You and Ayn Rand can eat cold shit. Tell me again how success is punished with lower tax rates, and how the children of the rich are lead to the stocks and pilloried with estate tax credits and preferential treatment for capital gains. When you came here from nothing, which public road did you use? No man makes it on his own. Recognizing that you rely on your fellow man each moment of each day is part of being a member of the tribe.



You're an idiot. Nobody cares about your money, you aren't a victim, you're just a stupid dick who sees his paycheck and doesn't understand the trillions of dollars of government infrastructure and hundreds of thousands of years of group effort picking mankind up from the mud and building skyscrapers and markets and spaceships and hospitals and universities involved in making the mid-market luxury car that you covet even possible.

Wow, you're a clown. You don't know the first thing about me or my life, so to assume I"m some rich prick who doesn't care about the poor is ridiculous. People like you make me fucking sick. You're judgmental pricks who think they have everyone all figured out when in actuality you know exactly dick!

I never said I was better, but can guarangoddamntee you that I've worked harder NOT making minimum wage than the people who ARE working minimum wage. I also never said I was the victim, douche, which is the exact point I was making. If I could go through my life and end up where I am today, there is no reason others can't do the same. It's the fact that I've not played the victim that is the reason I don't feel sorry for people who have had a rough go of it and use it as a crutch for not doing better in life.

Like I said, only in modern day America do hard working people, who go from nothing to something, get characterized the way you are portraying me. Basically, eat a dick. I'll not be made to feel guilty for busting my ass and achieving what I have up to this point. You'd probably be balled up in the fetal position crying to mommy if you had to deal with some of the shit I've gone through to get where I am today.

[Telefrog]

I told you all that this thread would be a treat.

[bishop]

Extreme fiscal conservatives, like blah, don't understand variance. They don't understand that people can bust their ass and still fail. They don't understand that people can make good decisions and find themselves in bad situations. They extrapolate from anecdote, their own personal story, and assume poor people exist only from lack of trying.

I know people who are smarter than me and are poor. I know people who work harder then me and are poor and either unemployed or underemployed. This is one of the reasons, besides basic human compassion, I'm okay with personally paying higher tax rates than anyone working in the US to fund things like a 40% higher minimum wage (than the US), subsidized university, and universal health care.

[Soapyfrog]

You're judgmental pricks who think they have everyone all figured out when in actuality you know exactly dick!

This after you've been passing judgement on all those lazy folks who haven't worked as hard as you to get above minimum wage? Delicious.

[Universal Leader]

The hardest, most difficult, and least secure jobs I ever had were the ones I did for minimum wage. Anybody who thinks that people making minimum wage are slackers ought to work a restaurant, retail or menial labor job sometime.

[Rightbug]

Like I said, only in modern day America do hard working people, who go from nothing to something, get characterized the way you are portraying me. Basically, eat a dick. I'll not be made to feel guilty for busting my ass and achieving what I have up to this point.

So basically what you are saying is that you don't like people who don't know you making sweeping generalizations and moral judgments that tie your worth as a human being to your earnings?

Got it.

[Telefrog]

The hardest, most difficult, and least secure jobs I ever had were the ones I did for minimum wage. Anybody who thinks that people making minimum wage are slackers ought to work a restaurant, retail or menial labor job sometime.

Cannot agree enough. My current career is exponentially easier, safer, and I get paid a lot more on top.

To be fair, I'm sure blah! is more referring to people working minimum wage not putting in the effort to better their situation by getting more education, hitting the pavement in search of new opportunities, or doing whatever they can to "pull themselves up" so to speak. He does it in the most confrontational and repulsive way possible, but I think I get what he's trying to express.

Anecdotally, it didn't take hard work for me to get here at all since I already had my degree when I was working in a crappy job. I literally lucked into it by quitting on a whim and having a headhunter call me two days later - before I'd even put out a resume - because she'd done a pull of recent Army vets in the area. Sometimes it really is just dumb luck.

[Houngan]

Cannot agree enough. My current career is exponentially easier, safer, and I get paid a lot more on top.

To be fair, I'm sure blah! is more referring to people working minimum wage not putting in the effort to better their situation by getting more education, hitting the pavement in search of new opportunities, or doing whatever they can to "pull themselves up" so to speak. He does it in the most confrontational and repulsive way possible, but I think I get what he's trying to express.

Anecdotally, it didn't take hard work for me to get here at all since I already had my degree when I was working in a crappy job. I literally lucked into it by quitting on a whim and having a headhunter call me two days later - before I'd even put out a resume - because she'd done a pull of recent Army vets in the area. Sometimes it really is just dumb luck.

I worked a couple of dozen minimum wage jobs before I finally decided to get into IT. As you and others have said they were very hard, many were dangerous, and none had any sort of security. I was usually getting some form of healthcare through a temp agency. "Upward mobility" meant that of the ten guys under a supervisor, one might stay around for several years and take over that supervisory role while the others continued to work for minimum wage or wage + 3% annual. I managed to get out of the cycle because I was smart enough to recognize it for what it was and had the background to make a stab at a technical field.

Most of the people I worked with were dropouts and had families, it was already too late for them to take a risk on devoting themselves to a new field, even if they had the experience and drive to do so. That's not to say they were unhappy or dissatisfied, for the most part they were glad to have the work to do.

So should people like that, the gears in the machine of industry, be allowed a bit more compensation periodically to keep up with inflation? Yeah, I think so. I also think certain progressives are wrong when they suggest there's some sort of solution that applies to everyone; we need factory workers and jobs. We need call center employees and jobs. They can't all be transformed into knowledge workers simply because the jobs or demand isn't there for services at that scope.

The right solution is this: Band-aid current workers with an increased minimum wage and universal health care while implementing a long-term strategy of vocational training rather than the misguided attempt to get everyone to go to a liberal arts college and get a worthless degree along with a mountain of debt. There's no reason we can't identify who might be better served by becoming a skilled tradesperson and enabling them to start building the experience that is vital in that field.

[Telefrog]

Most of the people I worked with were dropouts and had families, it was already too late for them to take a risk on devoting themselves to a new field, even if they had the experience and drive to do so. That's not to say they were unhappy or dissatisfied, for the most part they were glad to have the work to do.

Oh, man. I can't even count how many single moms I knew that had to work the crappy overnight job because it was the only thing they could get that allowed them some small bit of time to raise their kids and provide food and rent. There was no time or money left over for furthering their own education to break the cycle. The workers that consistently were able to promote up in the company were young single guys because they could take extra shifts and cross-train up.

[Timex]

Reading "Calm down nancy" cracked me up for some reason.

On the topic of the minium wage, I don't really oppose it for any kind of ideological reason.

I just tend to think that it's ultimately ineffective. Seems like it just leads to inflation, eventually... and then you're back in the same boat, but with dollars worth less.

If you jack up the minimum wage, and folks with no skills start making more.. then that means that the rest of the workforce is gonna start demanding more for performing their jobs. And all this new money ends up causing the guys making the stuff they're buying to just jack their prices.

So what's the point? I understand the goal, which is that folks won't be as impoverished.. but is there any evidence that such a change actually achieves that goal?

[Timex]

Could you link to those studies which show that increasing the minimum wage does not lead to inflation which ultimately negates the increase?

[Houngan]

Could you link to those studies which show that increasing the minimum wage does not lead to inflation which ultimately negates the increase?

Could you link to the studies that say it does?

Raising the minimum wage might work as you theorize, but it also might work to narrow the wealth gap between the poorest and everyone else without pushing the middle class up or the cost of goods up. If you don't hold that corporate profits remain at the same level no matter what, there is room to allow for a narrowing of the pay band.

[Timex]

Intuition suggests that it would.
Thus, I'm going to need to see evidence to suggest that it actually functions in some counterintuitive manner.

If you don't hold that corporate profits remain at the same level no matter what, there is room to allow for a narrowing of the pay band.

Those corporations are going to attempt to maximize their profits, no matter what. If you are going to increase low end wages, in an attempt to increase demand, then that will increase prices. Which will, at least to some extent, negate some portion of that original wage increase. And that in turn will cause other employees to demand increases in their wages, which will feed into the system.

The notion that increasing demand increases prices is self evident, and thus would need supporting evidence to suggest that this wouldn't be the case.

[Houngan]

Intuition suggests that it would.
Thus, I'm going to need to see evidence to suggest that it actually functions in some counterintuitive manner.

Those corporations are going to attempt to maximize their profits, no matter what. If you are going to increase low end wages, in an attempt to increase demand, then that will increase prices. Which will, at least to some extent, negate some portion of that original wage increase. And that in turn will cause other employees to demand increases in their wages, which will feed into the system.

The notion that increasing demand increases prices is self evident, and thus would need supporting evidence to suggest that this wouldn't be the case.

So in your mind profits trump all, corporations exist only to generate profit, and your intuitions define reality until proven otherwise? What are you, Akira?

[Timex]

Err.. I guess?
What do you think corporations exist for? Fun? Altruism?

Pretty much all publicly traded companies basically exist for the purpose of turning a profit. This is why people invest in them. There may be differences in terms of what the period of that profit is, and short term profits may be sacrificed for long term sustainability... but the goal is always pretty much gonna be profit.

I find it weird that this is even something we would argue over. Maybe I just didn't understand your question?

In terms of my intuitions being true until proven otherwise... if someone suggests something that is counterintuitive, then ya.. I'm gonna ask for supporting evidence.

I thought this was the way things worked here. Folks say stuff, and support them with evidence.

I didn't say, "That's not true!" I merely asked for the "many studies" which were claimed to exist. I wanted to read them to see if they changed my mind, and so that I could learn more about the mechanisms by which increasing the minimum wage would lead to permanent increases in the standard of living.

[Houngan]

I ought to have thrown a "should" in there. Corporations are and can be members of a community, otherwise corporations would never institute any philanthropy. Through regulation and taxation we can make them contribute more or less to the environment in which they operate. At the bottom line corporation's goal is to maximize profit but if you build in public-serving actions through regulation then their profit comes after philanthropy and other taxes/programs/fees/ rather than before or in place of same.

[Fishbreath]

I don't have enough of a horse in this race to comment, but Wikipedia says:

In a 2008 book, David Neumark and William L. Wascher described their analysis of studies on the minimum wage, from several countries covering a period of over 50 years (but primarily from the 1990s onward).[3] According to the Neumark and Wascher, a large majority of the studies show negative effects for the minimum wage; those showing positive effects are few, questionable, and disproportionately discussed.
Based on the published studies they considered, Neumark and Wascher conclude that the minimum wage is not good social policy. They emphasize three conclusions: First, while acknowledging Card and Krueger, they found that studies since the early 1990s have strongly pointed to a "reduction in employment opportunities for low-skilled and directly affected workers." Second, they found some evidence that the minimum wage is harmful to poverty-stricken families, and "virtually no evidence" that it helps them. Third, they found that the minimum wage lowers adult wages of young workers who encounter it, by reducing their ultimate level of education.

Card and Krueger is the most study Wikipedia mentions showing that the minimum wage doesn't cause unemployment. Neumark and Wascher looks, as the quote above suggests, at studies all around. I don't have a copy, though, since it's priced like a textbook instead of something regular people might buy. I think the introduction is available as a preview from MIT Press.

On the other hand, there was consensus in from at least the 1970s until Card and Krueger's paper that the minimum wage had negative economic effects. On the original hand again, that might just mean they jumped on it as evidence for their preferred social policy. Given that Neumark and Wascher claim to show negative economic effects over 50 years in several countries, while Card and Krueger claim to show minimal economic effect in Pennsylvania and New Jersey over the course of 1993, I'd blindly elect to lend greater credence to the former.

[CLWheeljack]

Those corporations are going to attempt to maximize their profits, no matter what. If you are going to increase low end wages, in an attempt to increase demand, then that will increase prices. Which will, at least to some extent, negate some portion of that original wage increase. And that in turn will cause other employees to demand increases in their wages, which will feed into the system.

I'm not sure I see a mechanism by which raising the wages of minimum wage workers at McDonalds would propagate out to also raising the wages in their corporate headquarters, accountants, executives, marketing, etc. I don't think you can just assert that without any evidence.

It's not like there's somebody sitting there looking at the wage chart saying "Hey! I used to make twice as much as them, now I don't! Outrage!"

[ineffablebob]

I'm not sure I see a mechanism by which raising the wages of minimum wage workers at McDonalds would propagate out to also raising the wages in their corporate headquarters, accountants, executives, marketing, etc. I don't think you can just assert that without any evidence.

He's saying that it would indirectly cause those wages to go up, because a minimum wage increase would cause inflation would go up, and therefore those non-min wage people would want wage increases to keep up with inflation.

I don't agree that this is the case. People living at the minimum wage level are going to put that money right back in the economy and increase demand. Normally that would drive prices up, but remember, we're in a situation where consumer demand is low. Companies are downsizing and shedding capacity (or at least have been for the last four years). Why wouldn't that increased economic activity result in increased supply, rather than higher prices? Especially considering that the staples which low-income folks would spend the money on can be produced cheaply. If prices go up from some manufacturers, others will see an opportunity, expand capacity, and come in with lower-priced goods.

[wahoo]

Especially considering that the staples which low-income folks would spend the money on can be produced cheaply. If prices go up from some manufacturers, others will see an opportunity, expand capacity, and come in with lower-priced goods.

Service companies that offer cheap goods often pay the minimum wage.
A higher minimum wage means higher labor costs.
Why would companies not pass on higher labor costs in the form of higher prices, which will affect low-income people.

You can't magically raise labor costs without the higher costs showing up somewhere. Pick one: More unemployment; higher costs.

[Timex]

I ought to have thrown a "should" in there. Corporations are and can be members of a community, otherwise corporations would never institute any philanthropy. Through regulation and taxation we can make them contribute more or less to the environment in which they operate. At the bottom line corporation's goal is to maximize profit but if you build in public-serving actions through regulation then their profit comes after philanthropy and other taxes/programs/fees/ rather than before or in place of same.

That's all well and good, but ultimately the corporation is going after profit. I'm not saying it's good, or right, or whatever. I'm not making a moral judgement. I'm merely saying how it is.

So does anyone have any of those studies that suggest raises in minimum wages do not lead to inflation negating those wages? I'm still interested in seeing those studies that folks suggested existed to support that viewpoint.

Again, I have absolutely no ideological opposition to a minimum wage. If it actually benefits the economy, then I have absolutely no problem with it. The underlying goals of proponents of increasing it generally are good, and I tend to agree with those desires. I just doubt its ability to effectively achieve those goals.

That is, while I think it'd be great if it would work, I don't believe that it will.

[Houngan]

That's all well and good, but ultimately the corporation is going after profit. I'm not saying it's good, or right, or whatever. I'm not making a moral judgement. I'm merely saying how it is.

So does anyone have any of those studies that suggest raises in minimum wages do not lead to inflation negating those wages? I'm still interested in seeing those studies that folks suggested existed to support that viewpoint.

Again, I have absolutely no ideological opposition to a minimum wage. If it actually benefits the economy, then I have absolutely no problem with it. The underlying goals of proponents of increasing it generally are good, and I tend to agree with those desires. I just doubt its ability to effectively achieve those goals.

That is, while I think it'd be great if it would work, I don't believe that it will.

I think what we're really arguing is where the wage currently falls on its own version of the Laffer curve. No minimum wage is bad, I think we can agree, simply because someone will abuse someone else. A fantastically high minimum wage is also bad for obvious reasons, but right now I'm of the opinion that it could be a little higher considering the stagnation in real income over the last few decades.