Does minimum wage hike cost us jobs?

How did you get that from my post? That isn't even what I said. Interesting.

 

Well...you said "If the wage would have been going up with inflation over the years...".

I didn't do the math but others have indicated that adjusted for inflation the minimum wage today should be about $19/hour. This would be more than 'double' our current minimum wage. This means the entire wage scale today would also be more than double what it is. This would further mean the higher cost of doing business in the USA will make the USA even less competitive than we are today.

So while you think my comments are 'interesting', actually they're just a response to your words...

 

The PEOPLE can demand a LOT of things, and ultimately muster the political will to change many laws over time.

Many can suggest or claim that the workers in American society are getting a fair deal... but intuitively, MOST know better.

I don't know the exact economic mechanics to PUSH things toward being more equitable... but I will advocate for the same, the rest of my lifetime.

 

Industry has been seeking options ever since the first industrialized manufacturing workers asked for a raise over 150 years ago and people just like you have been saying the exact same things you say ever since. Funny thing about that, real wages rose steadily from the 1840s to the 1970s and the supposed horrific negative impacts of rising wages never appeared because worker productivity also increased and that allowed employers to raise workers wages while reducing their cost of goods, and prices.

The big problem these days is that since the 1970s wages have declined even though productivity has continued to increase. The reason economic growth is so low these days is because a consumer driven economy can only grow so much if consumer incomes do not also grow. The problem was disguised for decades by a massive increase in consumer credit and a few housing booms. The days of easy credit are over and economic growth is now far more dependent on consumer income growth.

That crack about tens of millions of Americans with 401ks demanding the best possible returns is just a bad joke because most 401ks are so poorly invested that they are lucky to get any returns at all. Giving workers a raise will have zero impact on that. If anything it will increase the number who can afford to have a 401k.

I could care less about how much profit a company makes as long as they don't do it with my tax dollars, which is what they are doing when they pay their workers so little that they must avail themselves of public assistance. I do not see requiring employers to pay their workers enough so they do not require public charity as forcibly taking their profits. I see it as recovering my hard earned taxes from unscrupulous thieving profiteers so it can be better spent elsewhere, like fixing our crumbling infrastructure. Any work that requires massive subsidies to stay in the US should be kicked out because it is stifling innovation and sucking the life out of the economy.

Tell me how you expect the US economy to return to its historical economic growth rate without wage increases.

 

You don't seem to understand and/or respect the dynamics of the private sector economy? What determines the cost of goods? What determines the price of goods? What determines the cost of labor? Why do US manufacturers outsource? How important are US exports? How does corporate taxation effect business? Why is the US in a global marketplace and not a protectionist economy? There are worldly and complex and intertwined dynamics going on and most all of it functions in a harmony which is created by the natural processes within this economy. If we meddle too much in this process, forcing unnatural actions, it creates a less than desirable environment to do business. When we do this, business will seek out alternatives to sustain and grow the business while earning profits. In the case of this thread, forcing the minimum wage to whatever levels will have consequences because nothing is free! Once upon a time in la-la-land, there was such a thing as a US company who used US materials and labor and sold into the US markets. Today we sell all around the world, buy from all around the world, use labor and materials from all over the world, locate facilities all around the world, invest US dollars all around the world, etc...the point is US business today has options to seek when things like more expensive labor become untenable issues...

 

There are plenty of dollars in the hands of the consumers today. But today is very different than 1970 in how we spend. While most of us in 1970 lived reasonably frugal lives, this is not the case today in which average people spend inordinate amounts of their cash on drugs, alcohol, tobacco, lottery tickets, casino gambling, sports and entertainment events, cell phone service, TV service, Internet service, designer clothes and shoes, travel, and when we run out of cash for these things we simply abuse credit purchases. And, we spend far more on our homes and cars today, as well as insurance and medical care. There's plenty of cash today but we're not very smart about how we save and spend it.

Well...like it or not, millions of Americans have a vested interest in the health of the stock market. These Americans demand the best ROI and when they don't get it they change their investments. These public companies are required to provide the best products for the lowest prices while also sustaining and growing profits, and when they can't achieve this with the status quo, they simply seek other options like lower cost labor.

If I was president of the USA, the first thing I would do is find out what government can do to help the private economy to better compete in the global marketplace and greatly increase exports. Then at about 9am the first day, I would ask the IRS to change it's tax policy of corporate taxes on profits earned OUTSIDE of the USA. At 10am, I will ask how we increase farming from 5% of the population to 25%? At 11am, I will ask that the defense budget be reduced by 20%. At 11:30am, I will ask for a $2 trillion, 4 year program to repair and rebuild the US infrastructure. At noon I will go to lunch for one hour. At 1PM, I will ask the government to partner with private enterprise to add thousands of fresh water reservoirs and hydroelectric dams, with pipelines and canals distribute potable water wherever it is needed in the US. At 2PM, I will meet with the leaders of both houses of Congress, and tell them if they don't move quickly to solve all issues, to find consensus, that I will personally drive both of them from office. At 3PM, like most all presidents, I will play golf then meet up with my mistress. The next day, anyone one of the department heads who does not display a positive can-do attitude will receive a single notice that they are fired if they don't get on track. Also on this day, the president will be assassinated because no one wants to sacrifice, everyone is self-serving and greedy, and they won't like the idea of personal performance requirements...

 

I do appreciate it. Still, I think too much is allowed there. More checks and balances are required and have been for some time.

 

The reason for low wages at this time is that we have an abundant potential workforce, but a scarcity of jobs. Employers definitely have the upper hand in negotiations with job-seekers, who fiercely compete against each other for limited opportunities offering meager “trickle down” wages. It is the law of supply and demand in play here; when workers are scarce, wages go up.

In periods of recession, it hurts our economy even more when prices go up while wages remain stagnant. Employers are not going to pay more more than necessary to attract workers, and those workers that are actually employed have limited ability to stimulate recovery with their low wages. I believe that a minimum wage hike would be the best "economic stimulus package" that our government could offer.

 

Enforcing laws against force and fraud are all that's required. Otherwise, the private sector works better than anything else.

 

Correction: Laws against WHATEVER kinds of trickery which afford the sinister undue advantage over masses of people, are exactly what's needed.

You may personally want to call for greater limitations on the scope of such things... and I understand that; but the last thing we need are laws that truly have no teeth. Don't you think people have been screwed-over enough, by fat-cats? (I do.)

 

It is not simple supply and demand working here that keeps wages down. In a capitalist free market economy workers should be able to organize to gain leverage in the market place as easily as the owners of the other capital inputs. Government has passed numerous laws over the years and adopted policies and instituted education that is designed to inhibit and deter workers from exercising their free market rights to organize themselves and gain market power.

I have heard and read hundreds of blowhards railing against government interference in the markets but I have yet to hear one that would include giving workers free reign to organize. In fact most of these free market charlatans are rabidly anti-union and that might make them some sort of capitalists, but definitely not free market capitalists.

 

Can you provide a single example of how YOU have been screwed over by a fat cat?

 

You appear brain dead? You CANNOT force others to do ONLY what YOU want! As has been repeated many times here, industry which you villainize, has options to deal with others trying to force things on them...like labor reduction, outsourcing, automation, robotics, facility relocation, etc. You seem to think that a form of thuggery railed against an employer is the best course of action which I guarantee you will backfire every time you try this! Your economic philosophy of believing you can demand anything you wish will simply push industry to seek better business environments...this has been happening for years, is happening today, and if you get your way the US will be void of industry in the near future...great plan!!

 

You're mistaken if you think that I'm saying that laws against force and fraud shouldn't have teeth.

What I'm saying is that we only require laws against force or fraud, not unnecessary laws that give the advantage to fat cats.

 

Union affiliation may be helpful, but often they are as exploitive as the employers of the people that they represent. The BIGGEST problem as I see it is the stock exchange. Stockholders are attracted to corporations exhibiting the highest return on investment. Therefore, the satisfaction of shareholders is more important than the satisfaction of workers and consumers. Top executives seek to keep production costs low and sale prices high to maximize investor return in order to justify their own high salaries and increase their bonuses. Worker compensation is considered more or less a fixed cost, regardless of profits.

Higher profits realized by the corporate sector have not provided the labor force with a proportional share of benefits, resulting in an ever- increasing imbalance in our economy. Is it really fair that stockholders and executives are rewarded for the successes of the corporate entities, while the hard work and dedication of the productive employees who are directly responsible for those successes do not justify additional compensation? Their only reward is that higher goals will be set for them to achieve.

Workers in America are called "lazy" when they require additional government assistance to support their families and denigrated for receiving entitlements, while shareholders sit back and let the fruits of the labors of others roll in. Yet, popular opinion is that the corporate sector should remain self-regulatory (except for occasional instances where government support is needed to protect it from unscrupulous workers and consumers).

Workers are also consumers, so in order for our economy to grow, workers must prosper. A general wage increase would be a good start, but ETHICAL government intervention is necessary to address the root of the problem, and you can see the problem with that. An effective democracy requires a unified populace.

 

You call this guy "brain dead" and then confirm the validity of his argument in your rebuttal . . . . ???????????????

The business sector, working sector, and consumer sector are all mutually dependent upon each other, but you say that the business sector unilaterally controls all negotiations. We can either let ourselves be bullied into submission or we can resort to government interventions and some sort of collective bargaining; government should have responded with sanctions long ago on American corporations relocating to foreign countries or outsourcing. With one-third of the world's wealth, YOU CAN'T MESS WITH THE U.S.

No, I definitely don't advocate taking your advice to "GIVE UP".

 

If you cannot see the problems with wealth inequality in this society, I cannot and will try to show you in this forum.

Let's just know we disagree here/now.

- - - Updated - - -

We need "force" sometimes; living in the real world tells us that. Laws which protect regular working people from being abused/cheated, are good laws as well.

 

Agreed. When someone initiates force or fraud, then we may need force to stop/punish them.

Not if they violate person or property.

 

Can you give me an example of what you mean by, "initiates force"? (I wonder if we are on the same page.)

Personal rights/property... are legally defined. So, some deliberation about the same may certainly be in order.

 

Examples: murder, assult, battery, rape, theft, burglary.

In general, when someone violates or trespasses against his neighbor's body or against his neighbor's property. (Or makes a threat to do so, as in assault.)

By property, I was referring to things in the world that you own.

 

I agree generally, in the sense above.

- - - Updated - - -

I think you are very correct in the above!!

 

Except for trying to put me down, your post makes sense. So in essence you're saying the USA has ran it's course on having an advantage in the world?

 

You are just making stuff up now. All I want is for businesses to stop forcing me and everyone else to subsidize their profits with tax dollars. If they go out of business or relocate because their subsidies are removed that is their choice. We would all be better off without them anyway because newer more efficient business operators that can afford to pay decent wages would move in and take their place.

You seem capable of thinking in only one dimension about workers wages, that if they go up by any amount at all it will be a complete economic catastrophe for the entire nation. There is absolutely no evidence that this has ever happened or will ever happen in the almost 200 years of economic data available to economists who actually study these things. In reality studies indicate that increased wages generate more economic growth than any other deployment of money in an economy.

You really need to stop relying those idiotic economic theories that are so divorced from how economies actually function that they should be catalogued as science fiction or fantasy.

 

I don't try to put anyone down so no sense in going there?

I'm not sure what 'advantage' you are talking about?

The USA, it's industries, it's businesses, it's manpower, etc. are simply a component of the global marketplace. We buy and sell and do business all over the world as others do in the USA.

I'm not sure what advantage the US has in the world other than it's a pretty safe place to invest and do business. Short of this, we are competing with others around the globe for materials and labor, etc.

Regarding the minimum wage, it is a cost of doing business, and if you force an increase in the minimum wage then you force an increase in the cost of doing business. You can force anything you politically wish into the private sector but make sure you understand the downside risk potential before you do it...

 

You still don't get it? BUSINESS does not force anyone to subsidize their business? It is government who 100% decides how they wish to support their citizenry, and since government has no money, when they dream up these mandates, the costs must be absorbed by others..in this case the business expense increases.

The minimum wage has never been forced to increase 200-300% as some of you propose. Just as with all other wages, you can slowly adjust them upward but you cannot ramp them up 200-300% overnight without some problems.

Why do we have minimum wage workers? For the same reason we have middle and upper wage workers...because everyone earns a wage based on their skills and the supply of labor. Therefore, even if you increase the minimum wage to $50/hour, once all other wages are adjusted proportionately, the $50/hour workers are still earning minimum wage and will have the identical problems they perceive they have today. All you will do is increase the cost of living, inflation, and greatly reduce our exports due to high costs...and those minimum wage workers will still be earning minimum wage...