Raising minimum wage bad for jobs?

[Marksist]

I have this Math professor who goes on these little conservative political tirades that have nothing to do with math quite often. Today he brought up Florida's recently passed amendment raising the minimum wage one dollar per hour from $5.25 to $6.25 and he spouted the conservative response to that amendment, that it was bad for jobs and he said "it would lead to more outsourcing to India."

So I was wondering how you guys feel about raising the minimum wage, and if $5.25 is an appropriate minimum wage, and that extra dollar per hour would put a hurt on businesses.

[Big Phil]

Take a VERY simplistic scenario.

Let's say you run a McDonalds, and you pay an average of $5/hour to each employee. Overhead (insurance, cost of materials, taxes, etc.) account for another $10/hr per employee. You have 10 employees.

Every hour you are open costs you $150 in expenses. Let's say in an average hour you bring in $180 in revenue. You have a $30 profit margin.

If you raise the hourly pay to say $7/hour, it now costs you $170 in expenses, and you only make $180, so your net profit is now only $10.

If you try to raise the prices, some of your customers go somewhere else where it's cheaper, so now you're only bring in $150/hour in revenue, so now you're operating at a loss.

Like I said, this is very simplistic, but I hope it illustrates the point.

[tharkûn]

Would your opinion change if the proposal was to raise minimum wage 2 dollars an hour? How about 4? 20? 50? Obviously raising minimum wage to extremely high rates does hurt businesses substanially, so it stands to reason that at first glance raising it a small amount hurts businesses a small amount.

What complicates the picture is the question are there benifits to businesses for raising the minimum wage? Well obviously businesses which supply discretionary goods and services to minimum wage earners win.

Outsourcing is a more difficult proposition. If wages make up 75% of the costs a business has and all its employees are mimimum wage then they experience an overall cost increase of 14%. If the profit margin was less than or even close to that percentage, the business would then fold. There are cases like this where it is economical to hire someone at 5.25 but not at 6.25, but these direct impacts are not all that big. Most jobs aren't minimum wage and the direct cost would be quite low.

However the indirect costs can hurt as well. If you increase mimum wage then everyone working at 6.00 an hour will expect a raise as well, previously they were earning more than the new guys who got minimum wage and they beleive they deserve to be ahead as well. So those guys get a pay increase as well. But then keeping up with the Joneses can theoretically snowball. Eventually everyone demands a pay increase and the net result is delayed inflation and no net increase in long term purchasing power for minimum wage earners. During the process some employers might opt not to increase the wages of their employees and set up shop overseas.

The above is debated by economists and there are views for and against. If you buy it fully then minimum wage increases are decidedly bad.

Personally my opinion comes from the idea that the labor market follows the laws of supply and demand. Minimum wage is then an attempt at government price fixing, and historically governments have had a piss terrible record when they engage in it. In my opinion a better effort is to let the market determine price and make up any shortfall necessary for basic subsistence with welfare.

[Master of Ossus]

Raising the minimum wage is a mixed blessing. Not only does it cut back on the number of jobs available for the economy, but it also creates a wage differential which can harm people who aren't covered by the minimum wage.

[Alex Moon]

The whole minimum wage issue is a bit more complex than either side likes to make it out to be. When conservatives talk about the damage from raising the minimum wage, they are refering to the effects of the minimum wage on a perfectly competitive market. The problem is that in the labor market, all firms have some monopsonistic power, meaning that they will pay less than the true value of a persons work.

On the other hand, we shouldn't take that to mean that raising the minimum wage is a good thing. The primary reason that firms have some monopsonistic power is due to the costs of transitioning from one job to another. These costs are not going to be universal, and as such raising the minimum wage will have some downward effect on employment, although not nearly as much as one would expect from a competitive market. The best bet for improving the wages of workers in general is to reduce the costs of transitioning from one job to another. Would give you the same effect as a minimum wage increase, but would allow it to naturally adjust itself to each specific industry.

[Obloquium]

I have this Math professor who goes on these little conservative political tirades that have nothing to do with math quite often. Today he brought up Florida's recently passed amendment raising the minimum wage one dollar per hour from $5.25 to $6.25 and he spouted the conservative response to that amendment, that it was bad for jobs and he said "it would lead to more outsourcing to India."

So I was wondering how you guys feel about raising the minimum wage, and if $5.25 is an appropriate minimum wage, and that extra dollar per hour would put a hurt on businesses.

I don't know. This excerpt from the Economist (1 Feb 2001) does a great job summing up the latest round in the debate. You should find it useful for digging up more information.

[HyperionX]

It's not possible to live on a minimum wage full time job in the US, therefore they are irrelevant. Eliminate them by raising the minimum wage is an ideal solution.

[Stormbringer]

It's not possible to live on a minimum wage full time job in the US, therefore they are irrelevant. Eliminate them by raising the minimum wage is an ideal solution.

Wow, what trollish shit.

A good many people that have a minimum wage job do not have it for living wages but rather as a part time job for spending money during high school or such. Do they deserve to have their jobs eliminated for no good reason at all?

Second all, such jobs generally need to be done for the business, even if they're skill-deviod, peon-level positions. Does that mean restaraunts, super markets, and general retailers (Best Buy, Barnes & Noble, etc) all should be closed? Because most of those couldn't survive with out a certain amount of cheap labor.

[HyperionX]

It's not possible to live on a minimum wage full time job in the US, therefore they are irrelevant. Eliminate them by raising the minimum wage is an ideal solution.

Wow, what trollish shit.

A good many people that have a minimum wage job do not have it for living wages but rather as a part time job for spending money during high school or such. Do they deserve to have their jobs eliminated for no good reason at all?

And you have evidence that such people will certainly lose their jobs? And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

Second all, such jobs generally need to be done for the business, even if they're skill-deviod, peon-level positions. Does that mean restaraunts, super markets, and general retailers (Best Buy, Barnes & Noble, etc) all should be closed? Because most of those couldn't survive with out a certain amount of cheap labor.

So therefore you are saying that, about a decade ago, when the current minimum wage was set up and was worth a lot more then it is now, there were absolutely no restaurants, supermarkets, and general retailers whatsoever? Obviously, something is wrong with your logic. I think you've been drinking too much Republican kool-aid and forgot that none of these jobs require pay at the absolute minimum wage to exist, and in fact many if not most of them pay above minimum wage.

The current minimum wage is in real dollars the lowest it has been in decades, and thus a number of truely worthless jobs are forming around it. Working double and triple shifts a week on minimum wage in order to survive isn't just a waste of time, it's literally harmful on families, physical and mental health, etc. Getting rid of such jobs are a good idea, and if people lose them, then so be it, they need to get a real job with real pay anyways.

[Andrew J.]

That the minimum wage should increase as time goes by and inflation continues is fairly obvious. The question, of course, is in the exact amount of the change. The problem is furthermore compounded by the nature of changes in the minimum wage, ie; large changes seperated by long periods of time. Ideally, it would be tied inversely to the relative value of the dollar, but the bureaucracy and hassle required to make small updates everytime the Fed releases its reports on inflation would probably be too unpalatable for most people or corporations to tolerate.

[Rogue 9]

I was just engaged in debate with some Libertarians the other day over labor unions, and a passing mention of minimum wage on my part led to a gigantic strawman/red herring in which first one asked pointedly if I was in favor of raising minimum wage. Knowing where that would go, I said no, it's fine where it is. He came back with "In other words, you support banning people from working for what they want to. Minimum wages cause massive unemployment in the entry-level and low-skilled workforce. Ever wonder why ghetto slums are full of people who are unemployed?" Worst. Hijack. Ever.

[Quadlok]

Y'know, the minimum wage is $7.35 here, and we still seem to have plenty of peon level positions.

[Master of Ossus]

Y'know, the minimum wage is $7.35 here, and we still seem to have plenty of peon level positions.

Some cities and states with unusually high costs of living raise the minimum wage, but the effects of such should not be considered indicative of what a national change in the minimum wage would do. The fact is that most large cities have high costs of living, where businesses can afford to employ people even in entry-level positions for wages well over the national minimum wage.

[tharkûn]

Some cities and states with unusually high costs of living raise the minimum wage, but the effects of such should not be considered indicative of what a national change in the minimum wage would do. The fact is that most large cities have high costs of living, where businesses can afford to employ people even in entry-level positions for wages well over the national minimum wage.

This is a major problem with national minimum wages. The impact of raising it is not going to be felt evenly throughout the country. Where I live the city has a ludicriously high "living" wage that anyone who does business with the city has to pay. The thing is most of the businesses that do business with the city already pay more than living wage.

When you live in high cost of living area minimum wage should be below your cost of living.

And you have evidence that such people will certainly lose their jobs? And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

There are legions of people who want one of two things:
1. Job experience.
2. Supplemental income.

Minimum wage jobs are entry level jobs and teenagers like them because when they want to move up to something better they hope to have established a track record behind them. The legions of individuals seeking supplemental income are not confined to teenagers. They include individuals holding down a second job, the elderly, college students seeking to limit degree indebtness, mothers who want to work when their children are in school, etc.

But what the hell go another 10,000 dollars into debt so somebody else can feel good that all jobs are sufficient to live off of.

So therefore you are saying that, about a decade ago, when the current minimum wage was set up and was worth a lot more then it is now, there were absolutely no restaurants, supermarkets, and general retailers whatsoever? Obviously, something is wrong with your logic. I think you've been drinking too much Republican kool-aid and forgot that none of these jobs require pay at the absolute minimum wage to exist, and in fact many if not most of them pay above minimum wage.

Why not just raise the minimum wage to 100 dollars an hour then? Obviously you have no proof that people will lose their jobs or that anything other than Republican kool-aid says it is bad

The current minimum wage is in real dollars the lowest it has been in decades, and thus a number of truely worthless jobs are forming around it. Working double and triple shifts a week on minimum wage in order to survive isn't just a waste of time, it's literally harmful on families, physical and mental health, etc. Getting rid of such jobs are a good idea, and if people lose them, then so be it, they need to get a real job with real pay anyways.

Virtually no one does.

1/2 of all minimum wage earners are under 25. Five times as many part time employees earn minimum wage as full time employees.

I really don't want to dredge BLS figures but suffice it to say it is the extreme minority of minimum wage earners who persistently earn minimum wage and try to subsist off it. Indeed most minimum wage earners are merely recent hires who are being vetted and stop earning minimum wage within a month of hire.

But tell my why should a college kid in Arkansas be forced to quit his low paying job given that he will be unable to hold a "real job" because he simply has too few hours in the day after classes and studying? Why should a mother be forced to place her child into daycare simply because she wants to supplement the family's income, why shouldn't she be able to take a low paying job because the hours allow her to accomodate her child's schedule?

If people want "real jobs" then either they go get them or they are unable to do so. If the problem is the inability for individuals to subsist off off whatever wages their labor commands in the market why, not just have the government give direct welfare? That way the cost is evenly distributed throughout the economy (rather than hammering certain industries while leaving others untouched) and employers won't feel any pressures to reduce employment.

[Obloquium]

I'm really curious. Why are people taking such strong positions on the relationship between the minimum wage and employment? A quick lit review reveals no consensus on the matter, so wouldn't that lead a good empiricist to leave it at "I don't know yet?"

[Stormbringer]

And you have evidence that such people will certainly lose their jobs?

The simple fact that the profit margin on most jobs employing minimum wages is not anywhere near what it would need to be to pay a wage some one could live off? You didn't say just boost the minimum wage you talked about making it a wage to live off and the profit margin is just not there. At best that's the going to mean there are going to be a whole lot less jobs available.

And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

Ah yes, let's force out all part time jobs. They're only kids and they should get a real job.

Nevermind that a good many of them are jobs that are only viable at part time and are simply a way of providing a bit of discretionary income and work place experience to teenagers. Those jobs aren't and won't necessarily be viable at a full living wage but are none the less good and productive ones. Is it really worth costing them their jobs, indeed wiping them effectively out, so that a drop out with no more education than them can live off a bottom rung job?

So therefore you are saying that, about a decade ago, when the current minimum wage was set up and was worth a lot more then it is now, there were absolutely no restaurants, supermarkets, and general retailers whatsoever? Obviously, something is wrong with your logic. I think you've been drinking too much Republican kool-aid and forgot that none of these jobs require pay at the absolute minimum wage to exist, and in fact many if not most of them pay above minimum wage.

Obviously you miss the massive difference between minumum or near-minimum wages paid at most of those jobs and the "wage you can live off" that you want to pay. There's no need for the dishonest tactic of comparing one with the latter. That's a major difference and you obviously fail to grasp that; the difference in scale between a minimum wage increase and a living wage is significant enough to put it far beyond a mere minimum wage increase.

The current minimum wage is in real dollars the lowest it has been in decades, and thus a number of truely worthless jobs are forming around it.

I don't really disagree with you on that issue. However because the minimum wage is low doesn't mean that a massive increase, such as the one you propose, is suddenly feasible. And it certainly means that at least some jobs will be cut and others reduced severly.

Working double and triple shifts a week on minimum wage in order to survive isn't just a waste of time, it's literally harmful on families, physical and mental health, etc. Getting rid of such jobs are a good idea, and if people lose them, then so be it, they need to get a real job with real pay anyways.

I won't disagree that life is hard at the bottom rung of the socio-economic scale. Trying to make a living off minimum or near-minimum wage is near impossible and will take it's toll.

However does that mean that eliminating those jobs or forcing their transformation into living wage jobs is going to help? You assume that all or at least the overwhelming bulk of those jobs will magically be converted to "real jobs with real pay" and that the loss will be neglible. If you honestly believe that's the case I'd love to see your proof because from where I'm looking that doesn't seem possible.

You could force those jobs to become mutter better paying, but that's going to mean that a good many of them will be lost. If you're paying an employee twice what they were making before guess what, there are either going to be half as many or you're going to get massive inflation in prices. Either way it's going to hurt and not do the good you imagine it will.

If you want a real job with real pay, guess what you're going to have to get some education and work for it. There's a reason for thing like high school, vocational training, and colleges and univesities. They're there to prepare people to find real jobs with real pay. Those just don't fall into your lap. In no world is working the deep fryer at McDonalds going to be a realistic profession.

[Quadlok]

Y'know, the minimum wage is $7.35 here, and we still seem to have plenty of peon level positions.

Some cities and states with unusually high costs of living raise the minimum wage, but the effects of such should not be considered indicative of what a national change in the minimum wage would do. The fact is that most large cities have high costs of living, where businesses can afford to employ people even in entry-level positions for wages well over the national minimum wage.

Okay, I guess I should have figured that with houses costing two or three times as much or more in Washington than in, say, Texas, that other costs would also be skewed.

Still, I can't imagine Paloose or Aberdeen being very pricey to live in.

[Alan Bolte]

IIRC, there's a slightly more complex method of solving the problem that a minimum wage is supposed to solve, and does the job more effectively. It's sufficiently complicated that the layman is going to say 'you bore me, fuck off, and give me my minimum wage' to any legislator who tries to explain why he's trying to phase out regular minimum wage increases. Legislators who support minimum wage now tend to be more trolling for votes than anything. Or they could be dumb, which is common enough. Or, I could be remembering this all completely wrong.

Unfortunately, I can't remember what it's called, so I can't look up the details for you.

[entfern]

It's not possible to live on a minimum wage full time job in the US, therefore they are irrelevant. Eliminate them by raising the minimum wage is an ideal solution.

And you have evidence that such people will certainly lose their jobs? And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

[HyperionX]

And you have evidence that such people will certainly lose their jobs? And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

There are legions of people who want one of two things:
1. Job experience.
2. Supplemental income.

So therefore, let's screw sustenance workers. Irregardlessly points 1 and 2 can be achieved with a higher minimum wage, just as it was when the min. wage was higher in real dollars in the past.

Minimum wage jobs are entry level jobs and teenagers like them because when they want to move up to something better they hope to have established a track record behind them. The legions of individuals seeking supplemental income are not confined to teenagers. They include individuals holding down a second job, the elderly, college students seeking to limit degree indebtness, mothers who want to work when their children are in school, etc.

Read above. A higher minimum wage prevents none of this.

But what the hell go another 10,000 dollars into debt so somebody else can feel good that all jobs are sufficient to live off of.

Don't be stupid. Again, read above.

So therefore you are saying that, about a decade ago, when the current minimum wage was set up and was worth a lot more then it is now, there were absolutely no restaurants, supermarkets, and general retailers whatsoever? Obviously, something is wrong with your logic. I think you've been drinking too much Republican kool-aid and forgot that none of these jobs require pay at the absolute minimum wage to exist, and in fact many if not most of them pay above minimum wage.

Why not just raise the minimum wage to 100 dollars an hour then? Obviously you have no proof that people will lose their jobs or that anything other than Republican kool-aid says it is bad

Now you are just being stupid. I was clearly refering to the fact jobs do not disappear instantaneously when the minimum wage is raised, just as has happened everytime it was raised in the past. No one is dumb to promote a min wage higher than living wages.

The current minimum wage is in real dollars the lowest it has been in decades, and thus a number of truely worthless jobs are forming around it. Working double and triple shifts a week on minimum wage in order to survive isn't just a waste of time, it's literally harmful on families, physical and mental health, etc. Getting rid of such jobs are a good idea, and if people lose them, then so be it, they need to get a real job with real pay anyways.

Virtually no one does.

Don't even know what you're refering too here...

1/2 of all minimum wage earners are under 25. Five times as many part time employees earn minimum wage as full time employees.

I really don't want to dredge BLS figures but suffice it to say it is the extreme minority of minimum wage earners who persistently earn minimum wage and try to subsist off it. Indeed most minimum wage earners are merely recent hires who are being vetted and stop earning minimum wage within a month of hire.

Dredge it up and let us see. Anyways, might as well raise minimum wages if there's going to be little pain. You've already admitted that there do exists extended minimum or near minimum wage jobs that should be paying better and few other jobs are going to be affected, at least according to your argument.

But tell my why should a college kid in Arkansas be forced to quit his low paying job given that he will be unable to hold a "real job" because he simply has too few hours in the day after classes and studying? Why should a mother be forced to place her child into daycare simply because she wants to supplement the family's income, why shouldn't she be able to take a low paying job because the hours allow her to accomodate her child's schedule?

As if a minimum wage job will sustain a college education... Once again, going back to the beginning of this exchange, you've yet to show why we need this particular and current minimum wage in order for any of this to happen instead of a higher one. So far you produced nothing but a giant strawman argument.

If people want "real jobs" then either they go get them or they are unable to do so. If the problem is the inability for individuals to subsist off off whatever wages their labor commands in the market why, not just have the government give direct welfare? That way the cost is evenly distributed throughout the economy (rather than hammering certain industries while leaving others untouched) and employers won't feel any pressures to reduce employment.

Because we're not communists. We want people to work for a living, but it should be a livable living.

[entfern]

Sorry. . . I accidentally hit submit instead of preview. . .

It's not possible to live on a minimum wage full time job in the US, therefore they are irrelevant. Eliminate them by raising the minimum wage is an ideal solution.

Most people live on several minimum wage jobs. Most of them being people who have graduated from High School and are either in College and paying their bills or have chosen not to get higher education and are striving to make a living for themselves.

And you have evidence that such people will certainly lose their jobs? And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

I am a teen still but I am not very dependant on my parents. I have been paying for all of my bills during the past two years through various part time jobs, some minimum wage, others not. . . though I admit most people aren't as insane as I am to want to be self-sufficient to such drastic measures, a fair number of students are doing the best that they can to not be the spoiled brat teens you think we are.

Evidence that I will lose my job? Heck yeah! I was almost fired bc I had a meeting with the Dean of Students and told my boss that I couldn't work one day. She threatened to fire me because I had too limited an availability and since I was working above minimum wage, to them, it was not worth keeping me any longer. It would be to their benefit to keep someone better than I, paying them a few more cents an hour than keeping me.

p.s.: thank god for a change in manager almost immediately

[CelesKnight]

IIRC, there's a slightly more complex method of solving the problem that a minimum wage is supposed to solve, and does the job more effectively. It's sufficiently complicated that the layman is going to say 'you bore me, fuck off, and give me my minimum wage' to any legislator who tries to explain why he's trying to phase out regular minimum wage increases. Legislators who support minimum wage now tend to be more trolling for votes than anything. Or they could be dumb, which is common enough. Or, I could be remembering this all completely wrong.

Unfortunately, I can't remember what it's called, so I can't look up the details for you.

"Negative Income Tax" perhaps?

The idea is that you eliminate all welfare and minimum wage laws, and then the gov't pays everyone $x a year, and has a flat tax of y% for all income. If x is $5000 and y is 50%, a person who doesn't work gets $5000 from the gov't and pays no tax. A person who makes $3000 gets $5000 from the gov't, and pays $1500 in taxes for a sum total getting $3500 from the government. Someone who makes $100k a year gets $5000 from the government and pays $50000 in taxes, for a total of $45000 in payments.

It serves the same purpose of the minimum wage--providing a bare bones income to everyone. However, it avoids the main problem of the minimum wage--raising the cost of labor. It also helps to remove the welfare trap you get the $x a year regardless of income. It would also seem to provide the best parts of both a progressive and flat tax--it burdens the rich more than the poor, but there are no loopholes for the rich to exploit.

Note: the true effectiveness of this is debated.

[HyperionX]

And you have evidence that such people will certainly lose their jobs?

The simple fact that the profit margin on most jobs employing minimum wages is not anywhere near what it would need to be to pay a wage some one could live off? You didn't say just boost the minimum wage you talked about making it a wage to live off and the profit margin is just not there. At best that's the going to mean there are going to be a whole lot less jobs available.

There is no evidence of this, especially seeing how in the past the real dollar value minimum wages were higher.

And seeing how most teenagers are dependent on their parents this is a low priority issue. If you want a reason then just tell them they should give there jobs to those who actually need them.

Ah yes, let's force out all part time jobs. They're only kids and they should get a real job.

Again with the "all" thing. It's just not the case that a rise in minimum wage will eliminate all current minimum wage jobs nor all part time jobs. A basis understanding of economics should tell you that some jobs will be lost but others will still be kept at higher pay.

Nevermind that a good many of them are jobs that are only viable at part time and are simply a way of providing a bit of discretionary income and work place experience to teenagers. Those jobs aren't and won't necessarily be viable at a full living wage but are none the less good and productive ones. Is it really worth costing them their jobs, indeed wiping them effectively out, so that a drop out with no more education than them can live off a bottom rung job?

So let me get this straight, discretionary income teenage workers over people who need those jobs? I beg to differ. Still, there's no reason to believe that teenagers will lose big on jobs (in fact doesn't the government gives subsidies for teenage workers?), and no reason to believe that all non-teenage working minimum wagers are dropouts. This is also, as a common conservative tactic, to claim that the poor somehow deserve their fate, without any regard to why there are minimum wage workers nor their plight. Simply put, give them a livable wage, or something pretty close to offset the regional differences in living wages, and we'll be better off as a whole.

So therefore you are saying that, about a decade ago, when the current minimum wage was set up and was worth a lot more then it is now, there were absolutely no restaurants, supermarkets, and general retailers whatsoever? Obviously, something is wrong with your logic. I think you've been drinking too much Republican kool-aid and forgot that none of these jobs require pay at the absolute minimum wage to exist, and in fact many if not most of them pay above minimum wage.

Obviously you miss the massive difference between minumum or near-minimum wages paid at most of those jobs and the "wage you can live off" that you want to pay. There's no need for the dishonest tactic of comparing one with the latter. That's a major difference and you obviously fail to grasp that; the difference in scale between a minimum wage increase and a living wage is significant enough to put it far beyond a mere minimum wage increase.

What the heck are you smoking? A living wage is $9 a hour on average in this country. In the past, minimum wage in real dollars was around $7-8 in todays money. The difference wasn't that big, and for clarity purposes something pretty close to minimum wage is good enough since it pretty close. One shift + some extra time to survive is not a disaster and fits my bill of livable wages.

The current minimum wage is in real dollars the lowest it has been in decades, and thus a number of truely worthless jobs are forming around it.

I don't really disagree with you on that issue. However because the minimum wage is low doesn't mean that a massive increase, such as the one you propose, is suddenly feasible. And it certainly means that at least some jobs will be cut and others reduced severly.

It's certainly not massive, but the minimum wage now is indeed very low and should be immediately raised.

Working double and triple shifts a week on minimum wage in order to survive isn't just a waste of time, it's literally harmful on families, physical and mental health, etc. Getting rid of such jobs are a good idea, and if people lose them, then so be it, they need to get a real job with real pay anyways.

I won't disagree that life is hard at the bottom rung of the socio-economic scale. Trying to make a living off minimum or near-minimum wage is near impossible and will take it's toll.

However does that mean that eliminating those jobs or forcing their transformation into living wage jobs is going to help? You assume that all or at least the overwhelming bulk of those jobs will magically be converted to "real jobs with real pay" and that the loss will be neglible. If you honestly believe that's the case I'd love to see your proof because from where I'm looking that doesn't seem possible.

You could force those jobs to become mutter better paying, but that's going to mean that a good many of them will be lost. If you're paying an employee twice what they were making before guess what, there are either going to be half as many or you're going to get massive inflation in prices. Either way it's going to hurt and not do the good you imagine it will.

They haven't in the past. http://salt.claretianpubs.org/ie/2003/11/ie0311.html

There is credible evidence that raising the minimum wage by 2 or so dollars will not create massive unemployment as many conservatives claim.

If you want a real job with real pay, guess what you're going to have to get some education and work for it. There's a reason for thing like high school, vocational training, and colleges and univesities. They're there to prepare people to find real jobs with real pay. Those just don't fall into your lap. In no world is working the deep fryer at McDonalds going to be a realistic profession.

But like you said, some has to take those crappy jobs, so at least make something worthwhile.

[Rogue 9]

IIRC, there's a slightly more complex method of solving the problem that a minimum wage is supposed to solve, and does the job more effectively. It's sufficiently complicated that the layman is going to say 'you bore me, fuck off, and give me my minimum wage' to any legislator who tries to explain why he's trying to phase out regular minimum wage increases. Legislators who support minimum wage now tend to be more trolling for votes than anything. Or they could be dumb, which is common enough. Or, I could be remembering this all completely wrong.

Unfortunately, I can't remember what it's called, so I can't look up the details for you.

"Negative Income Tax" perhaps?

The idea is that you eliminate all welfare and minimum wage laws, and then the gov't pays everyone $x a year, and has a flat tax of y% for all income. If x is $5000 and y is 50%, a person who doesn't work gets $5000 from the gov't and pays no tax. A person who makes $3000 gets $5000 from the gov't, and pays $1500 in taxes for a sum total getting $3500 from the government. Someone who makes $100k a year gets $5000 from the government and pays $50000 in taxes, for a total of $45000 in payments.

It serves the same purpose of the minimum wage--providing a bare bones income to everyone. However, it avoids the main problem of the minimum wage--raising the cost of labor. It also helps to remove the welfare trap you get the $x a year regardless of income. It would also seem to provide the best parts of both a progressive and flat tax--it burdens the rich more than the poor, but there are no loopholes for the rich to exploit.

Note: the true effectiveness of this is debated.

Hoo boy, I can hear the libertarians and fiscal conservatives screaming now. "That's income redistribution! YOU DIRTY COMMIE!"

[CelesKnight]

Like others here, I dislike raising the minimum wage because of the cost to business. However, I hate the fact that people can work and still not be able to support themselves. It seems to me that the better solution is to simply not tax those who are making less than a certain income. And by not taxing them, I also social security taxes.

First, let's see how much the working poor pay in taxes:

A person who makes the min wage (5.15 hr) and who works 40 hrs a week makes about 10500 a year. His his employer pays about $650 more in Social Security taxes on the employee's behalf (for a labor cost of 11150). The employee pays about $750 in direct social security and medicare . Federal income tax would be about $250, and state taxes could be about $125 more (depends on the state, of course). For a total of of $1775 in taxes (including the employer paid social security tax). That's about 16% of his income!

A person who makes $8 an hour (still below the "livable" wage) makes about 16500. The employer pays $1000 in social security on the employees behalf, and the employee pays another $1200 in direct social security and medicare. The federal income tax jumps dramatically to about $920, and the state tax is probably about $460. That's a total of $3580 in taxes. That's 20% of his income!


These estimates are crude of couse. My point is simply that the working poor pay a significant fraction of their income in taxes. Eliminating that taxes on the poor would give them all a huge boost in income. Raising taxes on the rest of us to make up for this has it's own problems of course...