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Thread: Minimum Wage

  1. #61
    Senior Member Bamboo's Avatar
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    Quote Originally Posted by onemoretime View Post
    EPI's a notorious front for the hotel and restaurant lobby. Take that info with a grain of salt.

    "There are three kinds of lies: lies, damned lies, and statistics" - Samuel Langhorn Clemens
    Figures. I can't find any data that's not from the government that isn't sketchy.

    But, based on anecdotal evidence, it seems correct. Most people don't stay in those jobs (high turnover).

    If an employer is employing people he doesn't need, then he's either not a very good employer, or has other priorities than simply profit, wouldn't you say?

    Minimum wages primarily cut into profit margins. Since this is a marginal shift, prices do not subsequently rise ("passing on the cost to customers"), for fear of losing business to competitors (who will make up the marginal loss with the volume increase). Meanwhile, since low-wage workers tend to spend most of their money, anyway, there is an increase in the velocity of money, to the benefit of the entire economy.
    Let's say you own a business. You hire two people.

    John sits in a chair. This function, while menial, is critical to operations. He gets paid $6.
    Bob stands. He gets paid $15.

    Then, Gov says you have to pay John $8.

    If you want to avoid a profit loss, and you can't raise prices, you lower Bob's wage to $13. Assuming Bob is smart, he quits and goes to work somewhere for $15. In the real world, $15/hr pay isn't that specialized. If you got paid 15 somewhere, you can probably get another job for $15. Maybe you have to start at $12 and then work back up. You get this job at a business that doesn't need "sitters" (ie, low pay workers, generally mainenence), and thus, can afford to pay you 15 instead of 13.

    Your business suffers, because you probably can't get the same quality of labor at $13. IRL, maybe you can, but overall, nah.

    Overall effect on economy??? for above?

    However, your second point sounds right. But the trade-off is bread & butter vs. long term investment. Wealthy investors (who hoarded their earnings) are good for development. And having people to spend $ on said development is...good for development. So, where do the numbers point as to how much should go where? I don't know really. What controls are there in the market?

    Wages increases and tax incentives. Raise wages and lower taxes?

    Sign me up
    Don't know how much it'll bend til it breaks.

  2. #62
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Bamboo View Post
    Huh? Once again, I think the sign holder should get paid.

    My point is, 8/hr for doing crap work is excessive, and the money that could go toward wages for other people at that same company is instead going to minimum wage increases. If you own a business, you have to make a cut somewhere. Guess what, most likely, the owner isn't cutting his profits. He's cutting elsewhere.
    Yeah sure, its a hike in business expenses but some people just arent going to be able to do business, not everyone gets to be an astronaught you know?

  3. #63
    Gotta catch you all! Blackmail!'s Avatar
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    Quote Originally Posted by Bamboo View Post
    Nice story, give a real life example of that.
    Is this all you could reply?

    This parable is in fact very real, and it explains a lot.

    ---

    Nonetheless, I'm surprized to see why some of you didn't understand what the ultimate consequence of their flawed reasoning was.

    You see, the theory of labor market segmentation was first elaborated by a guy called John Elliott Cairnes (if you have ever heard his name).
    In particular, he was studying the economy of slave-states (especially the Confederate States), and showed how vastly inefficient they were. His works have had a decisive influence on the outcome of the Civil War.

    Because, as I tried to show you, that's what you get when you have no minimal wages: a SLAVE ECONOMY. The effect is impossible to avoid precisely because the wages will drop as low as possible, because then, the boss will try to maximize his profits by paying his employees the less he possibly can (just as Magic Poriferan noticed).
    My parable was just a way to show you the mechanism behind it, and why it would go that way and only that way.

    Now, maybe it's your ideal as a society, that we should treat these poor bastards as slaves, that they deserve it, but that's not entirely relevant to the subject we're discussing here.

    ---

    Slave-economies are severely limited. They can thrive only as parasites of more-developped economies -and can become very efficient parasites-, and that's why I asked you some questions about China (which is a modern form of slave economy, precisely because you have no minimal wages there).
    But nonetheless, slave economies are bound to NEVER reach the level of economical development of a rich country, because their masses have no or almost no domestic market. Slave-economies have no or almost no middle classes: only masters and slaves. The first gets €999, the second €1, and nothing in between, just like in my parable.

    Most of the time, it's only a temporary phase of industrial development. If China wants to become a real superpower one day, sooner or later, it will need to introduce a local form of minimal wage, just like in any other developped country. We shall see this in ten, twenty years or more, let's be optimistic for the Chinese people.

    ---

    So, if you want the US to immediately regress to an inferior stage of economical, political and societal development, please, eliminate every minimal wage!!
    While some corporations may experience immediate short-term benefits, the whole American society may collapse shortly afterwards, because it will lose every intellectual job, university and research center almost overnight (plus it will then be entirely dependent of Europe's domestic market to sell its inferior products).
    And these intellectual jobs are in fact the real wealth of America: take the Silicon Valley, for instance. But to get that, to attain such points of excellency and maintain your economical leadership, you NEED a more balanced society than modern China. And hence, you NEED minimal wages.

    As a matter of fact, the level of minimal wages a society can afford is a good indicator of economical and political development (or if you want, see for instance the HDI -> Human Development Index - Wikipedia, the free encyclopedia ). Countries with high minimal wages aren't necessarily underdevelopped or suffering from economical turmoil and high unemployement rates (let's take the Scandinavian countries, for instance). It depends of several other factors, all very complex (local politics, level of public infrastructure, avalaible services, dominant ideology, human and cultural capital, cohesion of society, environment, structure and segmentation of the economy, and so on and so on). And each country has to invent its own solution of the equation: what would work in California may not necessarily work in Norway, and vice-versa.
    Please note that I'm not saying how the state of California should adjust its exact level of minimal wages, and whether if raising it is a good idea: I'm just saying this state's economy requires the presence of minimal wages, that this regulation tool is an ABSOLUTE necessity (that was your question, wasn't it?).

    So now, do you understand complexity within a globalized world? After having read your insane ramblings, you and JHBowden, I shall diagnose a severe case of economical myopia (short-sightedness), a typical form of ideological hysteria called libertarianism (or a variant of it). Congratulations: even the harshest proponents of the Chicago school have never gone so far that what I've discovered here. And boy, they are already very harsh and without mercy...
    Now, it's time to treat yourself, and quickly! Please, swallow the red pill...
    Believe me: biased ideologies are never useful when you need to get the full scope of the real world. I don't know if you will feel better without them, but it's your choice.

    ---

    If you were ever wondering if what I'm saying is based on actual, real life experience, let's say that in the past I've worked in Shanghai with an economist who also happens to be my best friend since childhood. Now, guess what we've seen there...
    Last edited by Blackmail!; 12-26-2009 at 04:32 PM.
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  4. #64
    Senior Member Bamboo's Avatar
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    I think people should be paid, and I never said you should eliminate the minimum wage.

    I simply think that raising the minimum wage to $8/hr is too high, and ultimately is going to slow down the economy. I think having a base of workers who work in the $6-7 range would be useful for some tasks. KEEP IN MIND, just because there is a wage that is the "minimum" that an employer can pay, doesn't mean he will. If you are a first year plumber, you wouldn't work for 7 or 8 bucks an hour, because you can find work that will pay you 15-17.

    Please note that I'm not saying how the state of California should adjust its exact level of minimal wages, and whether if raising it is a good idea: I'm just saying this state's economy requires the presence of minimal wages, that this regulation tool is an ABSOLUTE necessity (that was your question, wasn't it?).
    The first part was really all I was addressing. I actually pointed out that I saw minimum wages as a useful regulation tool. I don't think I asked that as a question.



    Seriously, I think you are taking my responses the wrong way. You're battling with me, and I'm not really into battling. You do make a variety of points which intuitively seem correct, but I don't really see how they directly address my point about raising the minimum wage in the state of california to $8/hr seems too high.

    Far from coming into this thread acting like I know everything, I'm actually trying to provoke not arguments, but conversation. See my last post.

    Your business suffers, because you probably can't get the same quality of labor at $13. IRL, maybe you can, but overall, nah.

    Overall effect on economy??? for above?

    However, your second point sounds right. But the trade-off is bread & butter vs. long term investment. Wealthy investors (who hoarded their earnings) are good for development. And having people to spend $ on said development is...good for development. So, where do the numbers point as to how much should go where? I don't know really. What controls are there in the market?
    I'm willing to engage in this sort of conversation, generally with people who don't call me insane.

    You're clearly passionate, and normally I'd tell you off or ignore you, but you seem to have some knowledge about what's going on, so I'll ignore you calling me short-sighted and insane, and hope you address my questions...

    Cheers
    -B

    Also, my bls website link is broken? Worked yesterday...
    Don't know how much it'll bend til it breaks.

  5. #65
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    Quote Originally Posted by Evan View Post
    So....why the hell has California raised their minimum wage twice in the last two years? Seems pretty retarded to me.

    What do y'all think?
    I don't know why. You tell me. I live here, but pay very little attention to our utterly dysfunctional state government.

    I assume this was a feel-good measure. Raising the MW costs the legislature nothing, and gives the appearance of "helping the poor." Appearance trumps reality 99.999976% of the time in California. Naturally, those who benefit from such an increase will be able to directly credit Sacramento for their small raise, while those who are not hired, lose their jobs, have their hours cut, etc. will not blame the new MW for their plight.

    Concentrated benefits versus diffuse costs and all that jazz...

  6. #66
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by Bamboo View Post
    I simply think that raising the minimum wage to $8/hr is too high, and ultimately is going to slow down the economy.
    Suppose you work 40 hrs a week, so 160 hrs a month. $8/hr is 1040 dollars a month, which is probably survival level in most big californian cities (where, I guess, rent should be around 700 dollars per month).
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  7. #67
    Senior Member Bamboo's Avatar
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    Facts: The thing is, half of those who are making minimum wage are students and live at home, and the remainder are age 23 and over. As a whole, 2/3 get a better paying job/raise within one year. And many of these people are working part time - not as a primary means of employment.

    Opinion:
    So, arguably, that sucks. But if you are getting minimum wage you are, in an economic sense, a minimum performer. It's not fun or easy not having money. I say if you are single man or woman, however, it's fair. If you want a lifestyle, you need to provide something to get it.

    If you have kids (I found a statistic that suggested that around 5% of minimum wage earners were single mother's with kids) than getting government support is a good thing.

    Otherwise, work harder, or, ideally, work smarter. This is why education is important. But even without formal education, investing in social skills and ingenuity can get you cash, either in better jobs/self employment. You don't need chemistry or biology to come up with ideas. $12-15/hr (double minimum wage) is easy to reach. Wages suck - sell things to get a better profit.

    Perspective:

    My dad owns his business (antiques). His dad owned his own business. His dad owned his own business (furniture). On my mom's side, my grandfather owned his own business (liquor), and my uncle owns his own also. That's just the close family.

    Chances are, I'm going to be self-employed and...own my own business.

    I'm sure that as a result of this, I see getting money as making opportunities more than "getting" a job from someone else.

    Right now I'm 20, taking a year off college, and living at home.I do handyman work, sell items that I buy/repair, do deliveries, work for my dad, work estate sales, and pursue random opportunities. I don't have an official employer. A lot of my income is cash, so I'm not really sure, but in the last year I made about 17,500. That includes 2 or so months of not doing anything to find work. So since March. Works out to 20 something in 12. I want 10,000 in my bank account before I get an apartment. It's nice not having rent - sucks if you don't start saving early.


    The way I see it, if you're a healthy guy or gal and you're making minimum wage for very long, you need to try harder, or try smarter.
    Don't know how much it'll bend til it breaks.

  8. #68
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by FDG View Post
    Suppose you work 40 hrs a week, so 160 hrs a month. $8/hr is 1040 dollars a month, which is probably survival level in most big californian cities (where, I guess, rent should be around 700 dollars per month).
    Not even close. This doesn't account for unexpected expenses.

  9. #69
    Glowy Goopy Goodness The_Liquid_Laser's Avatar
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    Often when I see discussions like this there seem to be two underlying viewpoints:

    1. Organizations exist to serve people.

    2. People exist to serve organizations.

    I can't say that I really understand viewpoint #2. In this case who cares if businesses suffer from the existence of a minimum wage? If that business is exploiting its workers then it would be good for it to go out of business.

    If a business helps consumers but exploits its workers, then is it really a good business? If organizations exist to serve people, then it is not a good organization.
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  10. #70
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by The_Liquid_Laser View Post
    Often when I see discussions like this there seem to be two underlying viewpoints:

    1. Organizations exist to serve people.

    2. People exist to serve organizations.

    I can't say that I really understand viewpoint #2. In this case who cares if businesses suffer from the existence of a minimum wage? If that business is exploiting its workers then it would be good for it to go out of business.

    If a business helps consumers but exploits its workers, then is it really a good business? If organizations exist to serve people, then it is not a good organization.
    I dont agree with that exactly but I understand the ball park argument.

    The reason being that more people dream of owning a business than being employed by one therefore more people will have the interests of their dreams in mind than their real interests in mind. Fantasy rules the roost, just about one of the only things that both Jung and Freud could agree about.

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