Talk Elections

Ted Kennedy wants to raise minimum wage from $5.15 to $7.00. That's absurd. It will put many small businesses out of business.

Not a good idea. It might help SOME of the poor, but the ones that lose their jobs won't be so happy. Most employers pay more than minimum wage anyways. When I worked at Burger King, everyone got $6.50 to start. When I worked at a movie theater, I got $6.00 to start and getting a raise was easy when I advance in experience. Hardly necessary.

California is at $6.75 and our economy is just fine.

So much for stopping outsourcing then! :)

I never saw why there is this liberal deference to small business. At this stage in the game, we should be moving to nationalize economic functions, not decentralize them.

But you must consider this. The minimum wage as it was in the late sixties would be $8.17 today adjusted for inflation and small business was surviving. I suppose we have to account for higher interest rates and amenities that businesses need today that weren't needed then, but my point is that that was what was considered needful back then. Considering some of the things that families need today, it would be obscene for the minimum wage to not be higher than that. The fact of the matter is that it is pointless to talk about small business owners when their workers can't make enough money to survive.

Yes central planning worked really well for all of the Communist countries.  ::)  

So it's better for people to be out of work and have no income than it is for people to have a job, be ga and being a productive member of society?   Even the lowest job, will provide a record of important skills for success (ie. attendance, timeliness, attention to detail, etc.) and demonstrate that might be worthy of moving up.   Oh wait I forgot central planners want everyone to be dependent on the government.

Besides you don't need to be able to aford drink at Starbucks 7 times a week to survive.  One of my friends just moved into a trailer park, with rent, food, and beer he needs about $300/mo to live confortably.  Of course the central planners probably want to tear down the trailer park and build "low-income" houses which will rent for $400-$500/month.  

We should absolutely increase the minimum wage, preferably to about $10/hour.  Increasing the minimum wage has a only very minor effects on overall unemployment.  And any specific business that cannot afford to pay their employees more than slave wages should not be in business in the first place.

Although I think we should make exceptions for a very small number of industries that only hire teenagers or other people who do not have to be self-dependent.

Raising the minimum raise to $7.00 would be an economic disaster. Small businesses would go out of business, and larger companies would have to lay people off. You can't pay as many people at $7.00 an hour as at $5.15 an hour. Unemployment and prices would go up. If you don't believe that, think about what NewFederalist wrote. Why don't you raise it to $10. Then $20. $30? $50? No. It would destroy the ecomony. Raising the minimum wage won't help. Also, people working at minimum wage are mostly teenagers and young adults. Those are starting level jobs, not careers.

If a business is only willing to pay its worker $5.15 and these workers are not teenagers or people who don't have to support themselves (e.g. disabled), then that business is exploiting the desperation of the working poor and deserves to go out of business.   It seems like when many people here refer to "small business" they basically mean "business that can't operate efficiently".  
 
Also, our country would be much better off if we weren't coddled by the low consumer prices having a perpetual underclass makes possible.  Raising the minimum wage might slightly raise these prices, but it wouldn't raise unemployment.   It may put some inefficient firms out of business, but it will strengthen those firms that operate efficiently, enabling them to hire more people.

this is doable and wouldn't have to cause layoffs if he limited CEO pay like in Denmark. Say that no employee can be paid any more than say 7 times more than the lowest paid employee in the company. So if the janitor's making around $15k a year ($7 an hour with a 40 hour work week before witholding tax), the top CEO can't get anymore than $105k a year. And how can $105k a year not be enough?

:)

We in Cali can handle a $7.00 minimum wage.  Somewhere that doesn't have our cost of living, like Wisconsin, would have a lot of trouble, since wages and prices tend to be lower.  I like things as they are, where the Feds set a floor of $5.15, and the states add to that on a case by case basis.

I would support a modest increase in the minimum wage, $5.35 or so.  

An increase to $7 would work, but it needs to be done gradually, not all at once.

I agree that the minimim wage should not be increased all at once...and I think the serious proposals to increase it do it over two or three years.  I think it should be raised about $1/year for the next 4-5 years.

I think min. wage should be indexed to inflation.  It should be $8.00/hr for certain retail/easier jobs and $15.00/hr. for more technical and harder labor jobs.  I personally do not feel CEOs are valued at what they are.  Yeah some CEOs are worth a few million, but some are glorified managers and making tens or even hundereds of millions and that's not right.  There should be stricter SEC rules on stock options coupled with min. wage increases.  

NixonNow, your argument for boardwalk employers is absurd.  The Curly Fries owner pays Mexicans dirt and has about 5 mansions and a yacht.  Those guys can EASILY pay the rent.  

No do not raise minumum wage at all, unless i get the same increase as they do. Some of these  minumum wage workers aren't worth 2.50 let alone 5.15

105K a year is very little money in much of the US.  And certainly either $5.15 an hour or $7 an hour is truly desperation level income.  But minimum wage laws are authoritarian interventions in private interactions.  If we were more honest with ourselves we'd recognize that the working class is inevitably going to lead a poor sort of life, and no amount of restricting of freedom can change that.

Then the minimum wage ought to be raised to $8.17.

Raising the minimum wage is going to cause many small businesses to lay-off employees because many simply can't pay them.

Raising minimum wage is just going to increase the poverty rate and unemployment rate.

Not necessarily - how has the cost of buying the basic necessities changed based on inflation?

Uh, that's what inflation is. It's an increase in cost.

It's also a decrease in the value in money. It's a combination of both really. One could go higher than the other(making something cheaper doesn't necessarily decrease inflation).

Eh, I don't understand why people insist on promoting policies that result in putting small businesses out of business.

Everyone who is arguing this isn't addressing why firms should be encouraged to stay in business if they are paying their workers desperation level wages.

Certainly the abolition of slavery put some plantation owners "out of business", but I don't feel sorry for them.  

If a company can't treat their workers with the basic human dignity of a living wage, then that company should not have a place in the economy of such an affluent society.

Also, every economic report you hear touts the huge increases in the productivity of workers.  If workers have become so productive, why aren't they being paid more?  All the economic benefits of productivity are just going to corporate profits and consumer prices, not to the workers where they belong.

NickG,

Raising the minimum wage doesn't ensure that someone who is more productive than 10 years ago and is paid $10 per hour gets their fair share of money.

Most of those productivity gains are not the result of workers, either.  Its automation, which is funded and driven by management.

Actually, workers are paid more. As productivity increases wages increase, because the work becomes more valuable - it's a simple economic concept. Now, what you don't mention is whether this is an increase in the output of unskilled laborers(who are most likely to be paid minimum wage) or skilled workers - skilled workers make more use of modern technology, which sometimes requires skill, than unskilled laborers. According to the U.S. Census Bureau, om 1980 men with only high school education earned  an average of $36,430* anually, while male college graduates earned $52,492. In 2000, high school education men earned $36,770 and male college grads earned $69,421. What happened in that time frame? Computers happened, and the demand for skilled labor skyrocketed, so wages increased for skilled labor. If the productivity had increased for unskilled labor, the value of that labor would increase and wages would increase. People are paid for what their job is worth, plain and simple - if you are paid minimum wage, your job isn't worth much.

*Note - data adjusted for inflation and is in 2000 dollars.

I don't mean to suggest that raising the minimum wage would solve the problem of the distribution of productivity profits for those already making a middle class wage.

And yes, productivity gains are driven by automation.  But that doesn't change the fact that companies should now people able to afford to pay their workers more because they are able to get more work out of each worker.

Thirty or forty years ago, "small businesses" could afford to pay their workers to equivalent of $8/hour, because that was the minimum wage at the time.   Now, even after the productivity of those workers has increased over time (and it has, even for unskilled workers), you are saying that these same businesses would go bankrupt paying their workers more than $5.15?  I don't understand why this would be, except for some sort of "iron law of wages" idea that I would hope such an affluent society had gotten past a century ago.

Ontario pays $8.00 an hour, that's about... $6 American.

Siege

If you don't like how the capitalist system works, move to a communist country. People are paid for the value of their labor.

And think about it - has the productivity of the unskilled worker REALLY increased? In some areas, with automation, certainly(however, with automation workers require skills to operate machinary, so they could be classified as skilled workers), but what about those areas not as affected by automation. Is the average worker at Burger King or McDonald's really more productive than 20 years ago? Doubtful. How about if you work at a supermarket, does automation really affect you that much? Or if you are a cashier? Or any number of unskilled jobs that still haven't become automated? I'm sure you'll find in automated jobs that wages may have indeed increased. Minimum wage forces companies to pay more than a job is worth - since inflation has occurred and an increase in minimum wage has not, the average unskilled wage has come back closer to the efficient equilibrium wage.

Low wages deincentivize labor. Think about it this way. If welfare recipients can get not much less than they would get making the minimum wage, and since it's non-taxable, in real terms they'd have a higher standard of living, why would they work? But if they would be earning more by working, there would be more of a reason to get up in the morning. In the long run, an increased minimum wage could reduce welfare spending.

Speaking of Minimum Wage increases, I read in the paper today that New York is probably going to raise the minimum wage here to $7.15 by 2007.  Pataki said he'll sign it if it passes in the state legislature.  I am very disgusted.

Getting rid of welfare entirely would be a good idea.  That what the Red Cross, churches and missions are for - helping the poor.  And since they are supervised by caring people, they have the incentive to get these people to want to work again, or have them do work for them in exchange for food and shelter.

I don't want to support a bunch of people who refuse to work with my tax dollars.  

The minimum wage elminates competition for work and hurts starting businesses, and increases cost to the consumer because that money is going to come from somewhere.  We would be better off without either a minimum wage or a welfare system.

That money goes somewhere too.   The worker who recieves the extra money spends it at a store, and the people who work at that store recieve it and then spend it again.

And the workers who are fired because the employer can't afford to pay all his employees this new higher wage aren't getting any money.

As long as it's kept within reason, no one will be fired.  In addition, the slight raise will allow other companies to expand and hire new workers as Mr. Smith buys their products with it.  It goes in a circle, they pay more but they also get more in return.

I disagree with such a huge leap in minimum wage, but I do think it should be raised to deal with inflation and make sure everyone has enough money to eat 3 meals a day comfortably rather than barely enough to survive (the natural minimum wage).

And you are not addressing the question of whether the government really has any business whatsoever trying to micromanage something as complex as a national economy, when every government that has ever tried to do so has wound up either impoverished, overthrown, or finally admitting that the market does it better.

This will never happen because Frist and Hastert will never let it happen. However, the minimum wage does it lower every year due to inflation and cost-of-living increases. If anything it should be tied to inflation.

Dear Lord, NO! The last thing we need is yet another government number tied to the bureaucracy that calculates inflation.  Indexing Benefits, taxes, penalties, etc. doesn't really make anything fairer, all it does is make things more complicated and provide jobs for bureaucrats and accountants.

Why don't we go back to the Gold Standard...Yet another reason why I despise FDR.

Well, suppose that I take a job paying $10 an hour. Then, after one year, there is a big oil shock that causes the price of everything to triple, so that it takes $10 just to buy what cost me $3.33 before. Do I have the right to ask my boss for a raise? Dear Lord NO! The last thing my boss needs is more work for his accounting department, which plays no role in creating the product his company sells. A raise for me definitely wouldn't make anything fairer. All it does is force my job to hire more accountants, so that they can multiply my current wage by the inflation rate. That would take them years (extreme sarcasm).

Ummm.....FDR has nothing to do with why we went off the gold standard.   It's mainly DeGualle.

Nixon.

FDR ended the gold standard in 1939.

Governor Pataki vetoed the $7.10 increse, but I don't think there is enough ink in his veto pen, because the bills were passed with over 2/3rd majority of both houses.

Here is the article.


http://encarta.msn.com/encyclopedia_761551563/Gold_Standard.html (http://encarta.msn.com/encyclopedia_761551563/Gold_Standard.html)

That is a good article. It shows what FDR did and what Nixon did... the gradual shift of the US away from the gold standard, which, was artificially causing the dollar to be highly valued.

What a jerk.

Yeah, he wanted to keep poor people from making any more money.

Yes, and then it was reinstituted after WWII at the Bretton Woods conference.  Nixon was forced to go off it again in the 1970's due to the French.

I don't think any politician actually wants to stop poor people from making money.  Most politicians love raising the minimum raise because it's a cheap way to brag that you've done something for your constituents.

Precisely the reason why the minimum raise isn't indexed to inflation.  How can you claim credit for something every couple years if it's automatic?

Apparently you've never heard of Newtzi "The Nazi" Gingrich, "Dirty Dick" Armey, "Phascist Phil" Gramm, "Toilet Tommy" Thompson, and George Dumbya Bush. Scuzzbags they are.

Ok, regardless of me not liking any of the mentioned politicians that I've heard of, what exactly have they done to intentionally keep poor people poor?

He refuses to cite facts because "Republicans don't either."  Good luck.

Remember all that Contract With America garbage?

Nope. Never heard of it. Haven't been politically active that long(only happened when I became libertarian and had something I could actually believe in), but looking it up I found this:

http://www.house.gov/house/Contract/CONTRACT.html

So what part of it do you have a problem with?

Why only $25.00/hour?  Let's just go for it and raise the minimum wage to $500.00/hour.  Then by this time next year, all working Americans will be millionaires and we can all retire.  Woohoo!  Any business that can't afford to pay its employees a million dollars per year isn't operating effeciently enough and deserves to be put out of business.

Most manufacturing jobs already pay more than $7.00 per hour but raising the minimum wage will probably drive all wages up accordingly. Thanks to NAFTA and GATT american companies have to compete with 2 buck an hour labor in Mexico and buck an hour labor in China. How will raising the wage make us more competitive?

I am very pleased that Pataki vetoed the wage hike.  This more than anything else earns my vote if he runs again in 2006.  I am afraid that the legislature will be able to override, however.....

Aren't libertarians radically in favor of free trade?

I guess this is one of those inexplicable twists of fate but I'm a Libertarian who is not entirely sold on free trade. While I believe that a competitive free market is the best system for delivering quality goods and services at the lowest prices, I think the deck is very heavily stacked against American companies. Putting American industry out of business is probably not a good idea.

Free trade with minimal government intervention, yes. Forcing a wage increase would make manufacturing in other countries(with cheaper labor) more lucrative. Though the labor here may have cost more to start with, the savings on shipping may have prevented companies from moving their manufacture elsewhere. But with a wage increase, labor becomes more expensive, and thusly saving on labor rather than shipping may be more profitable, so thusly companies move the jobs out of country. Since the U.S. is the biggest consumber of goods, sometimes it makes sense to manufacture here, but if labor costs offset the savings on shipping the demand to manufacture here rather than elsewhere plummets, effectively cutting us out of the competition for the manufacturing job pie. Libertarians would rather the market do it's own work, which would likely be more beneficial to the country, since more manufacturing jobs would stay here.

As I see it, it stacks up like this: American manufacturers have to pay maybe $12 to $30 per hour for labor. Mexico pays $2 per hour and China pays $1. American companies have to pay high health care premiums for employees. Mexico and China don't. American companies pay about $200 billion in U.S. income taxes, and about the same in soc sec taxes for their employees + property taxes on their plants. Mexico and China pay zippo. On top of that American companies have to meet EPA and OSHA requirements which cost money. Mexico and China don't. As far as shipping goes its not that expensive. And Mexico is actually closer to many markets in the west coast than say Detroit is. I don't see a way in which American firms can compete against that. Its like sending our Olympic swimmers to the games with their hands tied behind their backs and an anchor around their necks and then telling them to beat the best swimmers in the world. Its almost as if free trade were intended to put American business out of business. I don't see that as a good thing.

David - you just proved why you can't have free trade with heavy government regulation. With government regulation it isn't free trade at all.

To my Libertarian friend from Georgia; you are correct. But the thing is we already have heavy government regulation and even if Badnarik gets elected he isn't going to be able change all of those things I mentioned. So allowing free trade with low cost countries while we are still bound with taxes and regulations is rather suicidal. My point is that whether we want high taxes or low taxes there will have to be some taxes. Those taxes have to come from somewhere, so why not get part of it from import taxes and take a proportional tax burden off of American companies.  BTW the constitution clearly gives congress the authority to levy taxes on imports.

Another good point, David. It comes down to something I was discussing in another thread - you can't have instant transitions. If you wanted to move to a new style of government, you have to do it over time. All at once will cause harm.

Taxes on imports - sometimes good, sometimes bad, depends on what it is on. I would prefer there be no tariff on imported cane sugar, for instance(to replace high fructose corn syrup in soft drinks, considering how much we drink: high amounts of fructose can screw up your metabolism and increase your risk for obesity, so regular sugar is preferable to the stuff we use now, but it costs more than it would otherwise so it's more profitable to use hfcs). On other things(cars, perhaps), I wouldn't mind so much.