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232 Comments
- R34C7, on 10/11/2007, -31/+105The minimum wage increases unemployment and supports the marginality of people beneath their means.
Companies don't just pay more to their workers and eat the extra expenses! Most companies, especially small ones, cannot afford to pay their employees more. Companies lay people off to make up the difference and then there are no more jobs, only a few people actually benefit from a market price floor.
It is simple economics that when you create a price floor (increase the price of something) there is less demand. My guess is that a job at menial pay is better than no job and at the very least it provides job experience that may lead to raises and advancement.
"The road to hell is lined with good intentions" - tim04, on 10/11/2007, -36/+105and here comes the layoffs...(or increased hirings of illegal immigrants)
- denkc, on 10/11/2007, -3/+60@zabaf
You could have at least read the description. It says INCREASE by $2.10. - Jeffmr1, on 10/11/2007, -22/+78Doesn't the congress understand that the increase in minimum wage is bad for the poor? This has been proven by, not only conservative, but "progressive" researchers as well. Sure, increasing the minimum wage puts more money in the pockets of workers, but it will drive up the costs for consumers while eliminating jobs for the poor. It makes no sense, congress should have cut spending and lowered taxes for the poor, that would have been way more effective.
- inactive, on 10/11/2007, -2/+55from 5.15 to 7.25, for the arithmatically challenged
- bjkrautk, on 10/11/2007, -6/+51Hooray inflation!
- codyman, on 10/11/2007, -17/+58Sweet! I love it when they do stuff like this cause don't we all love our friend inflation!
http://en.wikipedia.org/wiki/Minimum_Wage#Costs - irvman21, on 10/11/2007, -12/+51"Minimum Wage is 2.10? Its 8$+ for a 16 year old in Ontario. ANd it goes up with age untill somewhere after 23..."
Reading comprehension - apparently not so strong in Ontario. Try reading it again, this time long for the word "increase" - biotch, on 10/11/2007, -26/+59Here in Cali the minimum wage is 7.50 and there is no lack of cheap labor opportunities. I can still go get a chicken sandwich for a buck too. So quit whining about prices going up by such an infinitesimal amount you most likely wont even notice it.
The minimum wage hasnt been raised in over a decade and if you adjust for inflation the current buying power of the minimum wage is at a 51 year low.
http://www.epi.org/content.cfm/ib224
It was also last raised just before the best half of the largest and longest economic expansion in US history.
The poor have very little to go on with the minimum wage as low as it is. Its next to impossible for the poor to keep up when costs per capita keep inflating. Congress for example has received numerous raises since the last minimum wage increase.
As for small businesses,
"Senate Democratic leaders have already signaled they will accept changes designed to shield small businesses from adverse consequences of higher labor costs."
http://www.msnbc.msn.com/id/16558329/
Seriously have some compassion for the poor. There are a lot of hard working poor in this country that deserve better than they are getting. - inactive, on 10/11/2007, -10/+41[quote]
"This is a great day for America's middle class," said Rep. George Miller, D-Calif., chair of the House Education and Labor Committee. "America's workers have been waiting for a raise for a long time."[/quote]
- This guy needs to resign. This is a payraise for teenagers mostly, and any adult who gets paid the federal minimum is well below the poverty line. Adding salt to the wound, raising the minimum wage does nothing but hurt the middle class with inflated prices on products and services. I think it's good that they're including tax breaks for small business, but doesn't this hurt them as well by making them jump through extra hoops? - Nutmegan, on 10/11/2007, -5/+36If the feds really want to help the poor, they should repeal the minimum wage.
- inactive, on 10/11/2007, -18/+49lowered taxes for the poor??? They already pay nothing, you think the government should further reward people for not making money?
- Jeffmr1, on 10/11/2007, -7/+36@jcm267
Nobody should be rewarded for not making money. However, people do need help in this world, it's the hope of many conservatives/libertarians that charity should replace welfare, and i agree. The fact is though, that until we can get rid of welfare, we need to get people off of welfare. 80% of welfare recipients get off by the end of two years, they are usually single parents with multiple children and many work full time. The system is also set up so that it forces people to 'hustle backwards', whenever you make more money, you lose more benefits than the amount of extra income you are receiving, leaving you less money than if you had been making less and still on welfare. This is how people become 'addicted' to welfare, not because they enjoy the free handout, but because they cannot support their family because the system sets you up to fail.
Personally, i am a federal libertarian and strict constitutionalist, but on the state level i consider myself to be a 'fiscally conservative progressive'. I think that there should be some form of welfare until it is feasible to eliminate it, but it needs to be comprehensive helping the recipient to get an education and eventually survive (and i do mean survive, although they work full time, welfare recipients struggle to afford housing and food let alone medicine) without having to 'hustle backwards'.
I used to be completely against welfare, siding with conservatives saying it made people lazy and that these were do-nothing people. But if you really study welfare, you'll find out that these people work very hard for pay that fails to keep up with the costs of living. It's most important to realize that this is a compound problem. These people need welfare because laws in place make it harder for businesses to pay fair wages, for charity to succeed and for these people to become self sufficient members of society. Welfare clearly shouldn't be the answer to the problem, but government has helped in creating such a large problem that we now need another one (welfare) to help clean this mess up.
What we really need are politicians giving us solutions to problems rather than flashy PR stunts like raising the minimum wage. - tendonut, on 10/11/2007, -5/+34@Salgat
Hah, when I worked at Sam's Club, they made hitting 40 hours a week or having to take a lunch sound like the devil. The cashiers really took it in the ass too.
"Oooh! Hurry up! You gotta punch out before 6:59 or you will be forced to take a lunch tomorrow!" Oh noes! a lunch during a 6 hour workday? Who would want such a thing?!?
Same for when one would accidentally go over 40 hours a week and be considered full time. They made it sound like overtime was the same thing as having your dick cut off. They phrased it to make it sound terrible. It wasn't until I explained to a few of them that overtime = time and a half. They were like "OMG Really?" and started taking their time with the whole punching out thing. - inactive, on 10/11/2007, -6/+34i have a feeling this is the reason congress conceded the iraq funding issue. a tradeoff of sorts. politics, sigh.
- pintomp3, on 10/11/2007, -19/+46if costs to the consumer were such a concern, then companies would stop giving multi-million dollar golden parachutes to ceos regardless of their performance.
- feelgoodinc, on 10/11/2007, -4/+30@sbader
Arguments against the minimum wage:
1. The vast majority of economists believe the minimum wage law costs the economy thousands of jobs.
2. Teenagers, workers in training, college students, interns, and part-time workers all have their options and opportunities limited by the minimum wage.
3. A low-paying job remains an entry point for those with few marketable skills.
4. Abolishing the minimum wage will allow businesses to achieve greater efficiency and lower prices.
5. When you force American companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign workers, where labor is much cheaper.
6. Non-profit charitable organizations are hurt by the minimum wage.
7. The minimum wage can drive some small companies out of business.
8. A minimum wage gives businesses an additional incentive to mechanize duties previously held by humans.
9. Cost-of-living differences in various areas of the country make a universal minimum wage difficult to set.
10. The minimum wage creates a competitive advantage for foreign companies, providing yet another obstacle in the ability of American companies to compete globally.
11. The minimum wage law is just another example of government condescendingly controlling our actions and destroying personal choice. Citizens do have the ability to say no to a lower wage.
Arguments for the minimum wage:
1. Adults who currently work for minimum wage are likely to lose jobs to teenagers who will work for much less.
2. Workers need a minimum amount of income from their work to survive and pay the bills.
3. Businesses have more power to abuse the labor market.
4. It forces businesses to share some of the vast wealth with the people that help produce it.
Source: http://www.balancedpolitics.org/minimum_wage.htm
Nice little site that covers it pretty succinctly and also gives some other references to follow on if you are so inclined. - inactive, on 10/11/2007, -23/+49"Most companies, especially small ones, cannot afford to pay their employees more."
If you cared to RTFA you'd have seen that they included tax breaks for small business, but I even have a problem with that. This will be just more paperwork to file, more money passing through the hands of government, and more bureaucracy. Raising the minimum wage is economically counterproductive. - Godwhacker, on 10/11/2007, -5/+29This is just a dog and pony show. The real minimum wage is controlled by the Federal Reserve and is manipulated every time they raise interests rates to halt a growing economy. If you really care about the poor, educate yourselves about our economic system.
This video is a good start:
http://video.google.com/videoplay?docid=-9050474362583451279&hl=en - Salgat, on 10/11/2007, -19/+42Bah, all this does is encourage and benefit unskilled labor. How about we attack the real problem, company's sleazy practices that make someones times be only a few hours under the 40 hour full time requirement, thus eliminating things like benefits from them. Thats only one example.
- jeffiek, on 10/11/2007, -2/+24I certainly agree that people need an education in economics, and the Federal Reserve is a big problem.
I watched the video. It's not a loony conspiracy piece. The explanation of fractional reserve lending is good and it's a lesson everyone should learn. In my opinion, the rest is a mixture. Good points mixed in with misconceptions.
I recommend viewing the beginning about fractional reserve lending and then either stopping or being very careful. - irvman21, on 10/11/2007, -3/+22Teenagers all over the state will rejoice in their raises. Everyone else will be pissed because In-n-Out will get more expsensive.
- inactive, on 10/11/2007, -10/+28I hope the people who are currently making the $8-9 an hour because they have stayed at their jobs for 4-5 years don't expect to get any raises for a few years. The businesses re oging to make up for what they are paying new hires.
Also, those now stuck at $9 an hour should now expect to have to do about 50% more work, since there will be fewer new hires to take up the slack.
(aspec...it is a very small percentge of people earning minimum wage who are actually trying to raise a family on it. Minimum wage workers are for the most part second income, kids and retired people. Yes, there are exceptions, but raising minimum wage hurts the ones who ARE trying to raise famileis on their paychecks. - nullcodes, on 10/11/2007, -9/+27Why not make the minimum wage $8,000 a month? There'll be no more poor people! People can buy all the things they need!
/sarcasm
Increased minimum wage makes it harder for a small business to start up (increased risk and capital requirement). Second, it artificially inflates the value of a work product. That is, increased minimum wage = price increases. This also means that work that is not valued or seen as important simply won't get done, and work that does get done will not be of high quality. Why? If it costs more to mow a lawn, less people will have their lawns mowed .. this would result in uglier lawns. Now this is the difficult part .. rather than an increase in unemployment, I fully expect a reduction in work product quality. Why would quality reduce? Say the artificially set minimum price to mow a lawn is $7, then this is the minimum cost to get a lawn mowed. However, this may also be close the "maximum" a person who needs a lawn mowed would be willing to pay (say $8). A landscaper would get the $7 or $8 regardless of whether he is good or not. Therefore for a landscaper .. the performance incentive for mowing a lawn is gone. Remember, a paying $8 is the upper limit. Now since the market prices are fixed, why should someone bust themselves to get the same or slightly better pay than someone who does a crappy job? Instead as a totally human reaction they may lax their own work quality. Furthermore, the lingering effect of anti-incentives would mean people don't move out of an existing profession in which they're inefficient in to a profession where they may have the more talent (because there won't be a wage increase in a reasonable short term).
So yeah, maybe unemployment will not change much .. but I expect it affect the more professional and upper echelon of workers -not just the minimum wage workers to lack motivation. It may get hard to find high quality skiled house painters, plumbers, and health care workers. Instead, you will get what's always deserved with reduced performance incentive: reduced quality of service.
Why not make the minimum wage $8,000 a month? There'll be no more poor people! People can buy all the things they need!
/sarcasm
Increased minimum wage makes it harder for a small business to start up (increased risk and capital requirement). Second, it artificially inflates the value of a work product. That is, increased minimum wage = price increases. This also means that work that is not valued or seen as important simply won't get done, and work that does get done will not be of high quality. Why? If it costs more to mow a lawn, less people will have their lawns mowed .. this would result in uglier lawns. Now this is the difficult part .. rather than an increase in unemployment, I fully expect a reduction in work product quality. Why would quality reduce? Say the artificially set minimum price to mow a lawn is $7, then this is the minimum cost to get a lawn mowed. However, this may also be close the "maximum" a person who needs a lawn mowed would be willing to pay (say $8). A landscaper would get the $7 or $8 regardless of whether he is good or not. Therefore for a landscaper .. the performance incentive for mowing a lawn is gone. Remember, a paying $8 is the upper limit. Now since the market prices are fixed, why should someone bust themselves to get the same or slightly better pay than someone who does a crappy job? Instead as a totally human reaction they may lax their own work quality. Furthermore, the lingering effect of anti-incentives would mean people don't move out of an existing profession in which they're inefficient in to a profession where they may have the more talent (because there won't be a wage increase in a reasonable short term).
So yeah, maybe unemployment will not change much .. but I expect it affect the more professional and upper echelon of workers -not just the minimum wage workers to be disencentived. It may get hard to find high quality skiled house painters, plumbers, and health care workers. Instead, you will get what's always deserved with reduced performance incentive: reduced quality of service.
On the bright side this min. wage increase is not that much since the vallue of most workers is already pretty high, but my point is that it will actually have a greater detrimental effect than positive. - InfidelAl, on 10/11/2007, -10/+28I got my first job at 15 making minimum wage. But guess what, I didn't keep working there forever! I got some experience and went to a different job where I made more. Rinse and repeat a few times... now I own my own home with two cars and two wonderful children. Don't give me some ***** about how the "poor" need extra money or help. They can go out and earn it their damn selves like the rest of us had to.
- inactive, on 10/11/2007, -3/+19People earning minimum wage are not, and never will be, "middle class". vThe middle class are the ones who get hurt the MOST by this. They do not see any increase in pay, and because of hte 40% increase to minimum wage earners, they will now not see an increase in their salary for quite awhile. Meanwhile, prices will go up. So they get hurt both ways.
- inactive, on 10/11/2007, -4/+20Will someone please tell me:
1) Why minimum wage laws are not inflationary
2) Why minimum wage laws are not unconstitutional
Thanks - aaronm67, on 10/11/2007, -8/+22Who gives a *****? Can you not think for yourself?
- jeffiek, on 10/11/2007, -6/+20"tell them that they can't have a wage increase."
No one is saying they can't have a wage increase. They can convince their employer that they're worth more. They can gain a skill that makes them worth more. They can have all the wage increases they can get on their own. In fact, I like seeing people get better jobs. The more talented and skilled the workforce around me is, the better off I am. BUT
It's not the governments job to take from one and give to another. Robin Hood only works in fairy tales. In the real world minimum wages hurt the very people they pretend to help. - jeffiek, on 10/11/2007, -1/+13@dgaspard
Now that you bring up Wal-mart. Their CEO came out in favor of it:
http://money.cnn.com/2005/10/25/news/fortune500/walmart_wage/
This raises an interesting question. Why? I've never seen much support on digg for Wal-mart, so I don't think anyone's going to support the theory that they're kind hearted employers. So why support a minimum wage hike? Well, it turns out that they're already paying at or above the minimum. A hike won't hurt them at all. So if they're not paying minimum, who is? THEIR COMPETITORS. And now the story makes sense. Raising the minimum hurts their competitors, so they favor it.
Perfect logic. - popothebright, on 10/11/2007, -3/+15= inflation
- Bobnoxous, on 10/11/2007, -7/+19Some of those who are making minimum wage won't have a job after this. Some companies will either cut back on staff, or they'll higher someone who's worth the higher wage. Like most government policies, they only work if we just assume nothing changes as a result. I bet most politicians flunked dynamics in school.
- dgaspard, on 10/11/2007, -2/+12I made minimum wage. By the time I was 17 I made $2 dollar more per hour than minimum wage. Even Wal-Mart pays a cashier 8 bucks an hour after a year. The only thing this hike does is make groceries more heart breaking to buy than gas.
- imjustabill, on 10/11/2007, -0/+10I'm a college student making 7.50 an hr. Not terrible by any standards. I don't make minimum wage, but if the increase were to happen to day I practically would be. Everyone making minimum wage just got a raise, but I didn't. The minimum wage hike will cause inflation, which means I'm going to be making less. Of course, so will everyone, including those making minimum wage, because everything is more expensive. Horray
- wm2010russ, on 10/11/2007, -8/+18@Homunculiheaded
fine, i wont say "if you want higher pay get a better-job-education-whatever!"
but i will say, if you want higher pay, work harder. that will lead to you getting a better job. isnt it a brilliant idea? - InfamousAtheist, on 10/11/2007, -0/+10@jeffmr1,
That was a very well thought out and articulate post. Your thoughts and positions mirror my own almost exactly. I came from the other side of the fence though; I used to be a welfare supporter until the Clinton years when I did some studying of my own in college and learned about many of the disgraceful abuses that take place under many welfare systems.
I do tend to disagree with your position that state-level welfare is a good thing. I personally think it should be managed locally, for a couple of reasons:
1. State's have shown a pretty amazing propensity to mis-manage welfare systems. See New York for a good example.
2. Local distribution and management makes it easier for officials to make sure funding and other benefits reach those who really need it by reducing the amount of bureaucracy related to welfare programs. - inactive, on 10/11/2007, -2/+12Probably right. Becuase we made ourselves USEFUL to an employer, and thus make more money. We DON'T however, want to pay more for people to do a job that anyone can do.
- olddirtycr, on 10/11/2007, -6/+15I'm definitely not an expert on economics and such but wouldn't raising minimum wage inflate the prices of everything else to compensate, thus not really affecting anything beyond laying off more workers.
- jeffiek, on 10/11/2007, -0/+9In the short term? Maybe. In the long term? Definitely not.
Their are a variety of ways to cope with inordinately expensive labor. Cut down on labor intensive products for example.
"His corporate bosses told him to cut complex menu items to reduce labor costs. So he got rid of desserts like the Chocolate Tres Leches."
http://www.npr.org/templates/story/story.php?storyId=6619460
Increased automation. This does not have to eliminate a job entirely, just reduce the amount. Example, the scanners in supermarkets reduce the need for cashiers. Or course, changes like that would occur eventually. The raise in wages just makes it happen sooner.
That's just two. I think that's sufficient to refute the "you still have to have it" line of reasoning. - tehbored, on 10/11/2007, -2/+11This probably won't end well. Employers aren't going to be willing to pay unskilled workers that much.
- graystar, on 10/11/2007, -1/+10Exactly. How will the worker who earns 7.25 feel now, given they had to earn it? All the rest just get a giant enforced powerup with no extra work/skills required.
- SandorClegane, on 10/11/2007, -11/+20A PS to all the ignorant socialist bastards out there. DON'T try to sell us on how much better it is in Europe with your higher minimum wages. Your high minimum wages = your unemployment rates being better than double ours.
- Nutmegan, on 10/11/2007, -0/+9@sbader
Since you asked how repealing the minimum wage would help, here are a couple of explanations:
http://www.capmag.com/article.asp?ID=4173
http://www.capmag.com/article.asp?id=3296
Long story short, if your skills are only worth a certain amount, raising wages above that amount makes you unemployable--and the actual minimum wage is always $0.00. - inactive, on 10/11/2007, -0/+8Unions make me sick. The minimum wage shouldn't exist at all.
If a company pays $3 per hour, they'll get their money's worth (sloppy, lazy, slow, anti-social slobs), and I can guarantee that they won't be in operation very long. My company pays laborers well above minimum wage, because we refuse to hire the dregs of society. - Jeffmr1, on 10/11/2007, -0/+8@DiggCens0rs
No offense, but read that line again. I think you'll find that's exactly what i wrote.
@InfamousAtheist
You're absolutely right, the more local the better and i completely agree. I just meant that federal welfare should be done away with and it should be left up to the states in general. - wiihuck, on 10/11/2007, -0/+8from the article:
"the minimum wage goes up to $5.85 two months after Bush signs the bill, then to $6.55 one year later and to $7.25 the next year." - pjkundert, on 10/11/2007, -4/+12I know this won't be popular, but it has to be said:
"Why do politicians love to propose increases in the minimum wage?
1. It costs them nothing other than the ink and paper the bill is printed on.
2. The vast majority of the law’s supporters simply do not understand the technical economic reasons why the law fails to help the working poor.
3. Many people do not understand what the law actually means.
4. Powerful special interests favor the minimum wage for reasons unrelated to the welfare of low-wage workers.
5. The minimum wage promises to give us something for nothing."
This is an excerpt from an article by Mark Jeftovic, who runs EasyDNS.com, the great DNS hosting service we use for all our domains. Very smart man.
He wrote a very insightful analysis of the big Social Program addiction that Canadians are so warm to, and that the U.S. is now getting all lathered up about. A very great read:
http://mark.jeftovic.net/archives/69-That-comfy-cozy-Nanny-State.html - inactive, on 10/11/2007, -0/+7Nice that you link to some random blog and a union backed socialist think tank.... and you talk about everyone else being biased?
- inactive, on 10/11/2007, -0/+7Actually I think waitresses are exempt. I know they have been in the past. Waitresses I've talked with say they only make a few bucks an hour and rely on their tips.
- igdrasa, on 10/11/2007, -0/+7Minimum wages are a bad idea - here is why - http://video.google.com/videoplay?docid=6813529239937418232&q=milton+friedman
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