Consequences of repealing minimum wage rates.

Honestly if they did repeal the min wage, it'd just make welfare a better alternative to work - why would a person work 40 hours a week for, say, $5 per hour ($800 a month) when they could just quit their job, and apply for welfare, food stamps, public housing, etc - what with all the welfare they'd probably "earn" more just living off the govt, minus the actual work - there'd be no reason to even get a job unless someone just 'enjoys' flipping burgers as a hobby.

Even with the current min wage laws we already have this problem - many people just choosing not to work because they're able to live nearly the same just on welfare as they would working the graveyard shift at McDonald's.

 

In the US, and in California, there is no change for age - a major difference.

 

Minimum wage squashes a worker's ability to compete for work in the market.

 

No, it marginally reduces economic rents and, if job search frictions dominate, reduces equilibrium unemployment

 

How about standard of living?

A great many years ago, I actually had a clerk at the welfare office actually try to show me how I would make more in money and benefits quitting my job and living on welfare then I would by working. But I did not quit my job, because I aspired to being more then just the bottom rung on the economic ladder.

And this misses a key element, is that the more skilled a person is, the more they can demand from an employer. I have been refining my skills in computers for over 30 years, so now I can get an "entry level" position at the $55k range. But it has taken a lot of work, study and experience to get to this position.

And when some company called me offering me an hourly job at $15 an hour, I simply told them "no thanks" because I am skilled and experienced enough to know what the market rate for my abilities are. And if a company is not willing to pay the prevailing market rate for the skills and abilities of the individual, they are not going to find anybody for the position. I have even left jobs where the pay was not what was promised.

When I do independent DJ work, my rate is at least $100 a night. And on 3 occasions I took jobs on the condition that the remainder not paid by the club would be made up in tips. And when the tips did not even come close to that, I left. And most of the time I knew the DJs that replaced me, and they were nowhere near as good as I was. And ironically enough, all 3 clubs closed within 1-3 months of my leaving. After all, who is going to go to a club where the DJ sucks? I have done that at at least 2 computer jobs as well, and the same result happened. They would either start to play games with my pay (one renegotiated the fee after the service was done, only collecting his costs so I got paid $100 for 2 days work which should have been $300), or demand other services outside of work (one in particular would have me pick up printers from over 100 miles away, then never compensate me for my gas). So I left, and being unable to find somebody of sufficient abilities at the wage they offered they ended up closing up shop.

Most companies that pay minimum wage are low-no skill jobs, designed for entry level individuals who need little to no training. Fast food is a good example of this, how much do you need to know before working at McBurger Palace? But as you move up and gain more skills, the pay goes up also. Otherwise you just move on and they have to train somebody else all over again.

Yea, 20 years ago I could have quit working and just lived off of welfare. But then I would not own a Goldwing, 2 pickups, a motorhome, and most of the nice things I have which make my life more pleasant (from my laptop and nice desktop, to 55" flat screen and 1,000+ DVD collection). I believe that if somebody is to get ahead in life, they have to work for it, not have it all handed to them.

 

I'm talking about bottom of the rung min wage jobs. If a person could make more living on welfare or panhandling then they could working as a cashier or fast food worker then there'd be little incentive to work.

 

And some do that, more power to them. However, the upward career path for welfare or begging is not very good, and the retirement plans really-really suck.

Myself, I am starting to approach the age of retirement (I am 4. I am working full time, doing military on the weekends, putting money into retirement, and planning on how I will enjoy my retirement in another 15 or so years. And I could not do a fraction of what I want without the work I have been putting in for most of my adult life.

If somebody wants to live off of welfare only because when they hit 65 they have not worked enough to even get Social Security, then do not expect me to have much pity if their diet is Alpo and their idea of excitement is sitting on a neighbor's porch instead of their own. They are the ones who made that decision on how to spend their life, and I will laugh as I spend my retirement cruising around the country on my motorcycle (and the occasional overseas trip).

 

Except that Bernanke is not employed by the government, he is employed by the banks and his salary is primarily drawn from the interest that those banks charge. It is the banking system which drives inflation.

“The process by which banks create money is so simple that the mind is repelled.” -- John Kenneth Galbraith

“The modern banking system manufactures “money” out of nothing; and the process is, perhaps, the most, astounding piece of “sleight of hand” that was ever invented.” -- John Kenneth Galbraith

 

This rant ignores the fact that the banks control the interest rate … and that the banks use that power to prevent full employment. The banks like to see unemployment around the 5% level, sometimes slightly lower and sometimes much higher. The banks consider low unemployment levels as being inflationary, that is why when unemployment is low they always raise the interest rates in order to “cool the economy”. Of course “cooling the economy” is just code for throwing people out of work. So, even if everybody had at least your work ethic/talent or better, at least 3% of the population would still be forced into unemployment. Just be glad that there are people more stupid and lazy than yourself, because if not for them you would be the one out of work.

 

Thank you for that wonderful conspiracy theory. When does the JIC enter into all of this?

And it completely is in opposition of what has often happened historically. How do you explain the era of "double diget - double digit - double digit" during the Carter Administration?\\Nice conspiracy, but no connection with reality, nor any connection with what I said. I dela with reality, not Fantasyland.

 

With government appointment and banking. He has the power to set the rate at the fed, not the banks. I get how their share powers work, but it is a government entity not a private clearance house.

 

Conspiracy theory??? Go to the yahoo financial page as of today, the big fear of the market is that on Friday the unemployment numbers will be stronger as judged by payrolls, and that will allow the banks to start “cooling the economy” by withdrawing stimulus. First it will be the withdrawal of “stimulus” and then as employment strengthens more, the banks will be the raising of interest rates. The banks will not allow full employment ... never … not so long as they are in control. You just happen to be blind as a bat, you can't see the evidence which is right in front of your face.

 

Hasn't someone over 18, by working for minimum wage, demonstrated little incentive to work?

 

Actually they wouldn't because welfare is typically only reduced by 50% of wages. So, for example, if a person was receiving $800 in welfare and then earned $800 they would still receive $400 in welfare for a total income of $1,200 or a 50% increase in their standard of living.

Our welfare laws actually encourage working as opposed to discouraging it. A working person is always significantly better off than a non-working person.

 

Not necessarily. We have some that are discriminated against in employment so the only job they might be able to get is one at minimum wage regardless of how much incentive they might have. Actually accepting the minimum wage job can, and often is, a sign of individual incentive.

 

Golly gosh, this is essentially a reference to the Phillips Curve. Are you seriously supporting that old hatted stuff?

 

Who, specifically, are these that are discriminated against?

 

No one makes more money on welfare than they do with a job and welfare combined.

Pan handling is different story because technically they're "working under the table" in violation of the law if they don't report the income.

 

The "banks" (i.e. Federal Reserve) doesn't create "money" under the US Constitution. They create "legal tender" currency based upon the authority of Congress to borrow on the credit of the United States. Legally a Federal Reserve note is a promissory note that is supposed to be redeemed in "lawful money" (i.e. not another promissory note) on demand. The only "lawful money" in the United States today are American Eagle Coins being produced by the US Mint under the American Gold Bullion Act of 1985. All American Eagle coins are "legal tender lawful money" in the United States.

The Federal Reserve will not redeem the promissory notes it issues and the US government refuses to enforce the law (i.e. under Title 12) that requires the Federal Reserve to redeem the notes.

 

Not necessarily. If you're assuming that the average kid straight out of high school is able to go to college, or that every person who's a college grad or earned some type of trade degree is able to find an above-average paying job in this market, that's false. A lot of people with degrees or experience end up settling with min wage or close to min wage jobs until something better comes around.

 

Being the number of people working at minimum wage is tiny, even the average kid that doesn't go to college will work for above minimum wage, or work at minimum wage for a short period of time.

Those with education and / or experience will move on, or move up.

The shame is minimum wage keeps a lot of kids out of the job market. If you must have minimum wage, make for those 21 and older.

 

Lots of kids? Where's your evidence? Try to make sure it isn't just some guff from a right wing pressure group

 

What is the harm in eliminating minimum wage until age 21?

 

Don't go all shy now. I've asked you to support your statement "minimum wage keeps a lot of kids out of the job market" with evidence. Let's have it

 

http://www.bls.gov/web/empsit/cpseea10.htm

Extracted from the link - Unemployment by age

16 to 17 years 27.1%
18 to 19 years 22.3%
20 to 24 years 13.3%
25 to 34 years 7.9%
35 to 44 years 6.4%
45 to 54 years 6.0%

Results even a marginal economist would see as a logical outcome - but of course, you need proof, how sad.

I ask again, what is the harm in eliminating minimum wage until age 21?