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Interesting video explains problems with the minimum wage.

I did not see anything in the video indicating the matching (1:1) relationship you're describing.

The video stated that the rising costs harm those that the minimum wage is trying to help, with the implication that they are in fact worse off, or no better. That requires at least a 1 to 1 relationship. At a less than 1 to 1 relationship(which in fact where it would be, the increase in minimum wage does in fact benefit those workers directly(and other workers indirectly, and harm some workers too).
 
The video stated that the rising costs harm those that the minimum wage is trying to help, with the implication that they are in fact worse off, or no better. That requires at least a 1 to 1 relationship. At a less than 1 to 1 relationship(which in fact where it would be, the increase in minimum wage does in fact benefit those workers directly(and other workers indirectly, and harm some workers too).

I think you're inferring things that the video is not actually suggesting. I understand the video looks at the issue simplistically, but it does a decent job describing the underpinnings and risks of hiking wages as an attempt to improve the situations of the poor.

Also, we're doing ourselves a disservice with absolutistic statements about minimum wages either "helping" the poor or "hurting" the poor, but not both. Most if not all social policies (and in fact most policies in general) have a tendency to help people in some ways and yet harm the very same people in other ways. For example, they can help people in the short term and harm them over the long term.
 
They only have increased buying power until the prices catch up and bring them right back to where they started.

For the increase in prices to match the increase in buying power, it would require that all workers are effected(not true), and that labor is the only cost(also not true). Otherwise the increase in price will be smaller than the increase in buying power.

To give you an example, one that is much closer to the real world, though still vastly oversimplified, than what the video presents. Let us look at an increase tomorrow of US minimum wage to 10 dollars an hour, a 2.75 dollar increase. That would directly impact about 26 % of the workforce(http://nelp.3cdn.net/24befb45b36b626a7a_v2m6iirxb.pdf). That is a 38ish percent increase in pay and we can safely say that after taxes but before other considerations that I will go into, at least a 30 % increase in spending power.

Labor costs as a percent of total cost for a product/service vary wildly. However, in almost every case it is less than 100 %. That means for those companies who utilize labor at under 10 $ hour will have to increase their price per unit by less than 38 % to maintain the same level of profit. I cannot find the numbers, but I think on average, the cost of labor is about 50ish %, and since this is just illustrative, we will use that number. at 50 % labor costs, the cost per unit of good/service would have to rise 50 %, thus giving an increase in spending power of 15 % minimum. It would actually be higher since those businesses who already pay more than 10 an hour do not have to raise their price, and remember, that is 3/4 of all jobs that make over 10 an hour/ So we could now revise our increase in spending power to about 26 %, roughly(and assuming I did my math right).

Now of course it is more complicated than that. Many jobs have annual wages ties in part to cost of living. The wages at those jobs would increase too, though again at a much lower rate. This all leads to a certain amount of inflation that would ripple outward from the increase in minimum wage and the resulting increase of wages for those mentioned above. This inflation would diminish fairly rapidly and would still be far lower than the increase in spending power for those making now under 10 an hour.

And it is important to note that there are literally hundreds of factors I did not consider. The whole system is vastly complex, which is why your video trying to make it simple fails miserably.
 
To give you an example, one that is much closer to the real world, though still vastly oversimplified, than what the video presents. Let us look at an increase tomorrow of US minimum wage to 10 dollars an hour, a 2.75 dollar increase. That would directly impact about 26 % of the workforce(http://nelp.3cdn.net/24befb45b36b626a7a_v2m6iirxb.pdf). That is a 38ish percent increase in pay and we can safely say that after taxes but before other considerations that I will go into, at least a 30 % increase in spending power....

I do not recall the exact figure now or where I saw it, but I have seen an estimate that an increase in minimum wage to $9.80/hour would expectedly result in something close to $50B in new economic activity (The number was like $46B or $48B or something in that general range).
 
I do not recall the exact figure now or where I saw it, but I have seen an estimate that an increase in minimum wage to $9.80/hour would expectedly result in something close to $50B in new economic activity (The number was like $46B or $48B or something in that general range).


From increased demand for goods due to higher spending power by 1/4 of the population?
 
I think you're inferring things that the video is not actually suggesting. I understand the video looks at the issue simplistically, but it does a decent job describing the underpinnings and risks of hiking wages as an attempt to improve the situations of the poor.

Also, we're doing ourselves a disservice with absolutistic statements about minimum wages either "helping" the poor or "hurting" the poor, but not both. Most if not all social policies (and in fact most policies in general) have a tendency to help people in some ways and yet harm the very same people in other ways. For example, they can help people in the short term and harm them over the long term.



Could you explain how you think raising the minimum wage would harm people in the long run..
 
From increased demand for goods due to higher spending power by 1/4 of the population?

You do realize that only like 4 or 5% of the workforce makes minimum wage don't you--the same 4 or 5% who mostly don't save or invest but operate on a money-in money out budget.
 
Ok, let's take Luxembourg, minimum wage of 13.86 USD an hour (second highest minimum wage), highest GDP per capita in the world.

Cost Of Living Comparison Between Luxembourg And United States

compare cost of living and purchasing power between america and luxembourg,id expect 14 dollars or close an hour if i had to pay over 100 usd for a pair of jeans that costs 20-30 bucks in america,or had to pay twice as much in rent for equivilent housing.
 
You do realize that only like 4 or 5% of the workforce makes minimum wage don't you--the same 4 or 5% who mostly don't save or invest but operate on a money-in money out budget.

You do realize I documented that 1/4 of the workforce would see in raise in my scenario, right? And that in my scenario any one making under 10 an hour would receive a pay raise, not just those making minimum wage? Do try and read my posts a bit more carefully in the future so these mistakes do not happen again.

Oh, and the actual number is 4.7 % in 2012. I saw it while I was looking up the under 10 an hour.
 
right so compare high minimum wage European states to the us and you'll see we are miles ahead.

well minimum wage itself was never supposed to be what people call a liiving wage,its simply supposed to be the minimum you can pay someone for regular non commission employment.

in my opinion,federal minimum wage should only be adjusted for inflation,and it should be left to individual areas to justify minimum wage levels based off their cost of living.now of course some restaurant in a rich area would easily raise prices,knowing full well people would pay it,but alot of those areas pay above minimum wage anyways because cost of living.take places like seattle,working at whats normally a minimum wage job there pays around 12 an hour,but they spend alot more on living expenses.whereas rural georgia for example the federal minimum wage buys a someone decent living compared to other areas.
 
You do realize I documented that 1/4 of the workforce would see in raise in my scenario, right? And that in my scenario any one making under 10 an hour would receive a pay raise, not just those making minimum wage? Do try and read my posts a bit more carefully in the future so these mistakes do not happen again.

Oh, and the actual number is 4.7 % in 2012. I saw it while I was looking up the under 10 an hour.

No you used a poor source for your point--millions of people are classified as tip-workers and would not have their federal minimum wage hiked to $10 per hour so the number of people making $10 an hour or less who would benefit the way you claim would be less than the number you allege. I have not sourced an exact number for them but it would be in excess of 3 million people based on known numbers I have seen.
 
That's kind of a strange analogy.

The minimum wage is not very high and there are plenty of exemptions to it. Trying to equate $7.25 to $100.00 is ridiculous. If anyone ever proposed a $100 minimum wage, I will march on Washington with you. But to claim that $7.25 kills jobs is disingenuous. There is a certain standard you hold businesses to. If you can't afford as little as $7.25 - you really don't have much of a business, now do you?
I actually have family that owns a fishing guide service company and they liked to higher local kids to help them pay for college but as the minimum wage in their state rose the could no longer to hire as many. So there is a realize example of how rising minimum wage creates less opertunity for young people and entry level employees.
 
Could you explain how you think raising the minimum wage would harm people in the long run..

A complex but important question. Generally, the more the going rate of human labor is arbitrarily raised, the more attractive its technological replacements become (i.e. it promotes obsolescence of human labor). Also, the wage hike initially tends to put disproportionate financial pressure on the specific industries that disproportionately rely on it, which are leisure and hospitality, food service, and retail. Lastly, it puts added pressure on those who are actually earning minimum wage (young, never married, less educated, just trying to gain work experience to get the next job, etc.) to become more productive. The video actually did a decent job of explaining the downsides of raising the minimum wage, which is that it constrains options for the very people it purports to help.

To give some specific context to who these minimum wage earners really are:

In 2012, 75.3 million workers in the United States age 16 and over were paid at hourly rates, representing 59.0 percent of all wage and salary workers. 1 Among those paid by the hour, 1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum.2 Together, these 3.6 million workers with wages at or below the federal minimum made up 4.7 percent of all hourly paid workers.

Characteristics of Minimum Wage Workers: 2012 - BLS

And see here for the tables of those characteristics.
 
No you used a poor source for your point--millions of people are classified as tip-workers and would not have their federal minimum wage hiked to $10 per hour so the number of people making $10 an hour or less who would benefit the way you claim would be less than the number you allege. I have not sourced an exact number for them but it would be in excess of 3 million people based on known numbers I have seen.

I used a source, which is more than you have done. I also understand that your objection has been proven false. I also was using largely estimates and rough numbers to illustrate my point, a point you have not been able to refute in any way.
 
I used a source, which is more than you have done. I also understand that your objection has been proven false. I also was using largely estimates and rough numbers to illustrate my point, a point you have not been able to refute in any way.

No you have not "proven" your point. The BLS puts the number of workers whose hourly wage is below minimum wage at 2.6% and acknowledge that it is an understatement of the number (Tables 1 - 10; Characteristics of Minimum Wage Workers: 2012) and that is with 2.1% making minimum wage ergo more people make less than minimum wage than make minimum wage.
 
I actually have family that owns a fishing guide service company and they liked to higher local kids to help them pay for college but as the minimum wage in their state rose the could no longer to hire as many. So there is a realize example of how rising minimum wage creates less opertunity for young people and entry level employees.

Your family is uniquely good hearted in wanting to provide jobs to help local kids pay for college.

But most businesses are not so generous. They hire people only if they need them, and can make a profit from their services. So, for the most part, a company will pay to get the labor itself.

Lets for example say the minimum wage went to just $1.00 per hour. That what it was when I started work, a while ago. What do you think would happen? Nobody would want to work for $1.00 an hour, am I right. So, lets say the least people would take was $4? So now you can hire 2 people for the old price of one. Do you think thats what the business would do? Or would they just have the same number of people making $4 per hour?

Now, if we can agree on $4 - meaning you can say to me that you think somebody might take a $4 an hour job, I'll have to ask why just another $3.25 should be a problem? What business depends on that low level of person? What will they even get for $4?

Now, it's truly unfortunate that your family is impeded in their desire. But there are a lot of exceptions. I looked on the website and they actually have a deal on this for short term opportunities that are opportunities of kindness.
 
No you have not "proven" your point. The BLS puts the number of workers whose hourly wage is below minimum wage at 2.6% and acknowledge that it is an understatement of the number (Tables 1 - 10; Characteristics of Minimum Wage Workers: 2012) and that is with 2.1% making minimum wage ergo more people make less than minimum wage than make minimum wage.

Which would be mildly relevant is I had talked about people making below minimum wage, which I was not. If you talk about people making less than 10 dollars an hour, which I was, that is a completely different number.
 
A complex but important question. Generally, the more the going rate of human labor is arbitrarily raised, the more attractive its technological replacements become (i.e. it promotes obsolescence of human labor). Also, the wage hike initially tends to put disproportionate financial pressure on the specific industries that disproportionately rely on it, which are leisure and hospitality, food service, and retail. Lastly, it puts added pressure on those who are actually earning minimum wage (young, never married, less educated, just trying to gain work experience to get the next job, etc.) to become more productive. The video actually did a decent job of explaining the downsides of raising the minimum wage, which is that it constrains options for the very people it purports to help.

To give some specific context to who these minimum wage earners really are:



Characteristics of Minimum Wage Workers: 2012 - BLS

And see here for the tables of those characteristics.



I think you are forgetting who these wage earners actually are.. Take the 55-64 year old who has lost his good paying job, exhausted his unemployment but still has to live and eat...Then there are the 45-54 group who probably were trying to put kids through college when their jobs went down the drain...Then the over 25 group who may have small children... What are they supposed to do to keep their heads above water? If the only jobs they can find are minimum wage, they will take it just to survive...and just how can you survive on minimum wage? Let's take a working Mom who has lost her bookkeeping job and lands up working at WalMart for $7.25 an hour--she can't pay the bills, much less pay a babysitter so takes a part time job cleaning motel rooms.... She is struggling and has no time for her kids...Now let's say that they raise the minimum wage to $10.00 an hour.. She can quit the part time job, thus opening a job for someone else, and can now spend time with her children and continue looking for another job as a bookkeeper or stay at WalMart and try for a promotion or additional education... It is a win.....
 
I think you are forgetting who these wage earners actually are.. Take the 55-64 year old who has lost his good paying job, exhausted his unemployment but still has to live and eat...Then there are the 45-54 group who probably were trying to put kids through college when their jobs went down the drain...Then the over 25 group who may have small children... What are they supposed to do to keep their heads above water? If the only jobs they can find are minimum wage, they will take it just to survive...and just how can you survive on minimum wage? Let's take a working Mom who has lost her bookkeeping job and lands up working at WalMart for $7.25 an hour--she can't pay the bills, much less pay a babysitter so takes a part time job cleaning motel rooms.... She is struggling and has no time for her kids...Now let's say that they raise the minimum wage to $10.00 an hour.. She can quit the part time job, thus opening a job for someone else, and can now spend time with her children and continue looking for another job as a bookkeeper or stay at WalMart and try for a promotion or additional education... It is a win.....

Making up stories like these and pretending they are the norm is not effective, because they represent such a small percentage of Americans, and it is not a good idea to base across-the-board federal policies like the FMW on exceptional (relatively rare) cases.

Remember that when it comes to minimum wage, we are talking about 2.7% of working Americans. About half of those who make minimum wage are 24 or younger (nothing to sob about there, they're young, still trying to build up work experience). So the percentage of working Americans who are over 25 and making minimum wage is around 1.35% or so.

Naturally, some of those 1.35% of workers (who are 25+ and making FMW) are married to people who (presumably) make more than the minimum wage. Some have never been married and have no dependents. Some have mental illness, substance addiction histories, criminal histories, developmental disabilities, or other issues that have ultimately impacted their academic and professional trajectories such that no one should reasonably expect them to be making middle class salaries.

In short, we are already talking about a very small percentage of Americans as it is, and when you subtract away the people who don't actually fit the progressive storyline of the minimum wage-earning family of four going hungry and down on their luck, you realize these sad scenarios, while admittedly they do exist, are actually uncommon overall, and therefore not a smart concept on which to base an across-the-board policy like a federal wage floor.
 
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Making up stories like these and pretending they are the norm is not effective, because they represent such a small percentage of Americans, and it is not a good idea to base across-the-board federal policies like the FMW on exceptional (relatively rare) cases.

Remember that when it comes to minimum wage, we are talking about 2.7% of working Americans. About half of those who make minimum wage are 24 or younger (nothing to sob about there, they're young, still trying to build up work experience). So the percentage of working Americans who are over 25 and making minimum wage is around 1.35% or so.

Naturally, some of those 1.35% of workers (who are 25+ and making FMW) are married to people who (presumably) make more than the minimum wage. Some have never been married and have no dependents. Some have mental illness, substance addiction histories, criminal histories, developmental disabilities, or other issues that have ultimately impacted their academic and professional trajectories such that no one should reasonably expect them to be making middle class salaries.

In short, we are already talking about a very small percentage of Americans as it is, and when you subtract away the people who don't actually fit the progressive storyline of the minimum wage-earning family of four going hungry and down on their luck, you realize these sad scenarios, while admittedly they do exist, are actually uncommon overall, and therefore not a smart concept on which to base an across-the-board policy like a federal wage floor.



Unfortunately, this is the norm for many communities around the country where WalMart has come in and wiped out most of that communities small businesses, and there are thousands of WalMarts in this country, so don't think that it is a made up scenario.. Percentages may seem small, but we are talking about a lot of people..
 
Unfortunately, this is the norm for many communities around the country where WalMart has come in and wiped out most of that communities small businesses, and there are thousands of WalMarts in this country, so don't think that it is a made up scenario.. Percentages may seem small, but we are talking about a lot of people..

Even if there are, and philosophical arguments aside, a federal minimum wage is a very imprecise way to help people who are struggling.

Millions out there are making more than twice the minimum wage and still struggling. Your policy idea will forcibly pay 14-year old grocery baggers and 16-year old cart pushers and 18-year old baristas and 20-year old burrito makers several dollars more per hour because advocates like you were worried about the 30-year old single moms. And those very single moms could be out there making $16 an hour and still struggling financially because, well, they're single moms! Some families make six figures and struggle because they live in expensive cities, have large debts, and spend their money stupidly.

Millions of people out there will still struggle significantly regardless of what we do with the minimum wage. A disproportionate number of people making the minimum wage are young, they live with their parents, they're students in college seeking beer money, and they don't have a family budget to balance.
 

What are you guys thoughts on this?


This was relevant before minimum wage was put into effect - now that we've started it, we have to keep going. The moment you end that in Corporate America, the moment **** hits the fan. It's just not possible to do away with it - businesses are not that honest and people are not that smart.
 
Even if there are, and philosophical arguments aside, a federal minimum wage is a very imprecise way to help people who are struggling.

Millions out there are making more than twice the minimum wage and still struggling. Your policy idea will forcibly pay 14-year old grocery baggers and 16-year old cart pushers and 18-year old baristas and 20-year old burrito makers several dollars more per hour because advocates like you were worried about the 30-year old single moms. And those very single moms could be out there making $16 an hour and still struggling financially because, well, they're single moms! Some families make six figures and struggle because they live in expensive cities, have large debts, and spend their money stupidly.

Millions of people out there will still struggle significantly regardless of what we do with the minimum wage. A disproportionate number of people making the minimum wage are young, they live with their parents, they're students in college seeking beer money, and they don't have a family budget to balance.



.......and a significant number of people making minimum wage are not young people living with their parents, especially in small communities and rural areas...Raising the minimum wage is a win-win for everybody..People will actually be able to budget their money and have some extra to spend which is good for the economy...
 
.......and a significant number of people making minimum wage are not young people living with their parents, especially in small communities and rural areas...Raising the minimum wage is a win-win for everybody..People will actually be able to budget their money and have some extra to spend which is good for the economy...

If you don't want to think any more deeply about the issue than that, then why are you even responding to my posts?

Let's start at even an even more basic premise: there is no such thing as a federal policy that is "win-win for everybody."
 
If you don't want to think any more deeply about the issue than that, then why are you even responding to my posts?

Let's start at even an even more basic premise: there is no such thing as a federal policy that is "win-win for everybody."



I wanted you to try to see the actual people that those statistics represent...Apparently, you can't...
 
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