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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Dos Equis on December 24, 2011, 10:52:39 AM
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Is this is a good thing?
Minimum wage increases for workers in eight states
By Blake Ellis @CNNMoney December 23, 2011
(http://i2.cdn.turner.com/money/2011/12/23/news/economy/minimum_wage_increases/chart-min-wage.top.gif)
NEW YORK (CNNMoney) -- While some workers are worried about smaller paychecks next year, more than 1.4 million low-income earners will see their wages go up on New Year's Day.
Minimum wage rates in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington will rise between 28 and 37 cents per hour on Jan. 1, thanks to state laws requiring that minimum wage keeps pace with inflation.
Rates in these states will range from $7.64 per hour (in Colorado), to $9.04 (in Washington) in 2012.
While the federal minimum wage rate is $7.25 -- amounting to annual income of just over $15,000 -- 18 states and Washington, D.C., have rates above the federal level. Ten states raise their rates each year to make sure wages reflect increases in the cost of living. (Nevada will revise its minimum wage in July, while Missouri's rate is still under the federal minimum wage.)
The small boosts for 2012 are estimated to tack an extra $582 to $770 a year onto the paychecks of full-time workers, according to the National Employment Law Project, a non-profit advocacy group.
What's more, the increases could be a mini-boost for the economy. The expected rise in consumer spending as a result of the wage increases would add $366 million to the nation's gross domestic product and lead to the creation of more than 3,000 full-time jobs.
Why I still believe in the American Dream
"Increasing minimum wage is a key form of local stimulus," said Paul Sonn, legal co-director at NELP. "It helps front-line workers whose wages have been stagnant and falling by putting more money into the pockets of low income families who then spend the money at local businesses."
Workers considered low-wage, with median wages under $13.52 an hour, have watched their wages decline 2.3% since the recession began, NELP found. About 80% of the low-wage workers impacted by the increases are over the age of 20, and 78% work at least 20 hours per week.
And the minimum wage boosts are being introduced at a crucial time, with the fate of the payroll tax cut in limbo. The House and Senate finally approved a short-term extension of the payroll tax cut on Friday, extending the life of the tax break until February.
The payroll tax cut allows workers to pay only 4.2% on the first $110,100 of their wages into Social Security -- 2 percentage points less than the normal 6.2% rate.
What the payroll tax deal will do
But if an extension isn't approved for all of 2012, lower-income Americans stand to lose hundreds of dollars a year in savings, while workers making over six-figures could see their paychecks shrink by thousands of dollars a year. Overall, an estimated 160 million Americans would see a reduction in their paychecks.
But raising minimum wage could help to offset the hit for millions of low-income workers in these states, said Sonn.
"The eight states that are raising the minimum wage on January 1 are protecting themselves in case Congress can't get its act together again to extend the payroll tax break beyond February," said Sonn.
"The higher wages for workers at the bottom will boost their incomes at least as much if not more than the payroll tax break will."
http://money.cnn.com/2011/12/23/news/economy/minimum_wage_increases/index.htm?hpt=hp_t2
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Econ 101: If the price increases for a good, then people will buy less of it. So higher minimum wage = less employment for unskilled workers.
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yea, aside from pockets of abuse, IMO without that 'floor' of a minimum wage, the average wage would increase.
$7.50 an hour is terrible, but it means people accept 8.25 an hour because "hey, at least I'm not making min wage".
in reality, if you're giving your body, voice, mind and time for 60 minutes, you probably deserve more than 8.25 as well.
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yea, aside from pockets of abuse, IMO without that 'floor' of a minimum wage, the average wage would increase.
$7.50 an hour is terrible, but it means people accept 8.25 an hour because "hey, at least I'm not making min wage".
in reality, if you're giving your body, voice, mind and time for 60 minutes, you probably deserve more than 8.25 as well.
Yeah man, but if you looked at some of the people who work minimum wage jobs - and then you investigated how much they actually contribute to their employer, you'd come to the realization real quick that a lot of people just aren't fit to earn more than $8.25/hour.
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Econ 101: If the price increases for a good, then people will buy less of it. So higher minimum wage = less employment for unskilled workers.
to simplistic of a view to be serious bro...how many businesses margins are that razor thin where they have to?
Its not that they must pass on the increase its that they will...
And if we as consumers were concerned enough we would retaliate with our patronage of their business but we dont(for now).
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Yeah man, but if you looked at some of the people who work minimum wage jobs - and then you investigated how much they actually contribute to their employer, you'd come to the realization real quick that a lot of people just aren't fit to earn more than $8.25/hour.
totally agree with this though...
but then again you look at ppl making 40k a year and realize they should probably be making 60k a year so its give and take all around.
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to simplistic of a view to be serious bro...
Not at all. It's how businesses make calculations day-to-day. You won't buy the same amount of labor at $10/hour as you will at $5/hour.
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Yeah man, but if you looked at some of the people who work minimum wage jobs - and then you investigated how much they actually contribute to their employer, you'd come to the realization real quick that a lot of people just aren't fit to earn more than $8.25/hour.
very randian of you though mr. atlas ;)
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very randian of you though mr. atlas ;)
Haha, it's not even Randian though! It's just basic business and economics.
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Econ 101: If the price increases for a good, then people will buy less of it. So higher minimum wage = less employment for unskilled workers.
100% correct. Im not sure what it is that makes people think that labor is immune from the laws of supply and demand. I guess its the same thing that makes people think health care is immune from the laws of supply and demand - the human factor.
Do people think that if a man jumps from the Empire State building, that he wont go splat when he hits the ground? Do they think the laws of physics will spare him because he is a living breathing human being?
San Francisco just raised thier minimum wage to $10.00 !! Think very hard and be honest with yourself. If youre a 17 year old with no work experience, how easy do you think it will be to get a job at that wage?
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100% correct. Im not sure what it is that makes people think that labor is immune from the laws of supply and demand. I guess its the same thing that makes people think health care is immune from the laws of supply and demand - the human factor.
Do people think that if a man jumps from the Empire State building, that he wont go splat when he hits the ground? Do they think the laws of physics will spare him because he is a living breathing human being?
San Francisco just raised thier minimum wage to $10.00 !! Think very hard and be honest with yourself. If youre a 17 year old with no work experience, how easy do you think it will be to get a job at that wage?
the funny thing is that ppl dont realize that the law of supply and demand are dependent on human nature.
If human nature was different then the law of supply and demand would not apply.
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the funny thing is that ppl dont realize that the law of supply and demand are dependent on human nature.
If human nature was different then the law of supply and demand would not apply.
It's not dependent on human nature at all. It's dependent on the fact that we live in a world with finite resources.
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Not at all. It's how businesses make calculations day-to-day. You won't buy the same amount of labor at $10/hour as you will at $5/hour.
no son, businesses should be anyways although not always run in a way that helps the consumer while benefitting the business. You dont create good will by shitting on the consumer, or at least you dont after a certain point...we just havent reached that point yet.
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It's not dependent on human nature at all. It's dependent on the fact that we live in a world with finite resources.
Indeed sir, and its human nature to realize that we can get more from that....
Its human nature to be GREEDY!!!
so by that the law of supply and demand says that if demand is high and supply low then we CAN CHARGE MORE....NOT THAT WE MUST CHARGE MORE
AGAIN, without human nature the law of supply and demand is nothing more than theory...
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Haha, it's not even Randian though! It's just basic business and economics.
LOL its very randian my friend...
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Indeed sir, and its human nature to realize that we can get more from that....
Its human nature to be GREEDY!!!
so by that the law of supply and demand says that if demand is high and supply low then we CAN CHARGE MORE....NOT THAT WE MUST CHARGE MORE
AGAIN, without human nature the law of supply and demand is nothing more than theory...
No, the laws of supply and demand do not depend on whether people are selfish or altruistic. They do not state that you can charge more, but that you should charge more. If only 100 units of a good can be produced at $15/unit but the demand at $15/unit is 200 units, what happens? A shortage occurs. You need prices to increase in order to equilibriate supply with demand.
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no son, businesses should be anyways although not always run in a way that helps the consumer while benefitting the business. You dont create good will by shitting on the consumer, or at least you dont after a certain point...we just havent reached that point yet.
Your point? What you just said has literally nothing to do with the argument at hand. In fact, watch me use your argument in my favor:
One way to provide a superior service to your customers is by providing lower prices. One way to provide lower prices is to reduce your labor costs. Thus, a business that could hire workers at below the minimum wage would be able to better customer satisfaction by lowering prices.
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No, the laws of supply and demand do not depend on whether people are selfish or altruistic. They do not state that you can charge more, but that you should charge more. If only 100 units of a good can be produced at $15/unit but the demand at $15/unit is 200 units, what happens? A shortage occurs. You need prices to increase in order to equilibriate supply with demand.
hahaha and why does there need to be an equilibrium? b/c that is what brings the most money...again GREED SIR, human nature...
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Your point? What you just said has literally nothing to do with the argument at hand. In fact, watch me use your argument in my favor:
One way to provide a superior service to your customers is by providing lower prices. One way to provide lower prices is to reduce your labor costs. Thus, a business that could hire workers at below the minimum wage would be able to better customer satisfaction by lowering prices.
LOL your forgetting a crucial part if the ppl consuming your service are the ppl your shitting on by lowering pay rates or jobs then what?
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LOL its very randian my friend...
If you really think so, then I suggest you try working as a manager at a McDonald's, as I once did. At least 50% of your job is allocating your available labor correctly and controlling labor costs.
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hahaha and why does there need to be an equilibrium? b/c that is what brings the most money...again GREED SIR, human nature...
If there is not an equilibrium then you are not providing the good to the people who want it the most. You are, in essence, introducing a very serious inefficiency to the market process.
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LOL your forgetting a crucial part if the ppl consuming your service are the ppl your shitting on by lowering pay rates or jobs then what?
You're forgetting the part that if you can hire 20 people at $5/hour or 10 people at $10/hour that one way you get ten people without jobs or an income and the other you get everyone employed.
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If you really think so, then I suggest you try working as a manager at a McDonald's, as I once did. At least 50% of your job is allocating your available labor correctly and controlling labor costs.
LOL have a buddy whos dad owns a number of McDonalds around Houston he just finshed "burger U" and has worked as a manager for them probably going on 2 years now.
I myself work for a company whos number one cost is labor, I know that of what I speak my friend ;)
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If there is not an equilibrium then you are not providing the good to the people who want it the most. You are, in essence, introducing a very serious inefficiency to the market process.
LOL the only reason its "inefficient" is b/c youre not making as much as you could be...
Again your not being as GREEDY!!!!!!!!!!!!!!!!! as you could be...
without human nature, more specifically the greed part, supply and demand is simply theory...
like I said, but thank you for making my point ;)
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You're forgetting the part that if you can hire 20 people at $5/hour or 10 people at $10/hour that one way you get ten people without jobs or an income and the other you get everyone employed.
lol again youre looking at it with the same margins....stop looking at it with the same margins and look at it with the idea of the company lowering their margins in order to employ or pay more to the ppl that are consumers of their product/service and there by creating more demand.
Lower margins but higher revenue, in the end there might be a net gain!!!
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LOL have a buddy whos dad owns a number of McDonalds around Houston he just finshed "burger U" and has worked as a manager for them probably going on 2 years now.
I myself work for a company whos number one cost is labor, I know that of what I speak my friend ;)
So if you know anything that you're talking about, you'll understand when I say that the cheaper it is to pay labor, the more you can hire.
LOL the only reason its "inefficient" is b/c youre not making as much as you could be...
Again your not being as GREEDY!!!!!!!!!!!!!!!!! as you could be...
without human nature, more specifically the greed part, supply and demand is simply theory...
like I said, but thank you for making my point ;)
No, the reason why it is inefficient is because you have no mechanism for determining who wants the good in question the most. In a normal market process, the goods go to the people willing to pay the most, in other words, the goods go to the people who want the good the most. If you freeze the price below a market level, the goods will not go to those people as it should and instead you'll have a lot of people who don't get the good that would be willing to pay more in order to get it.
lol again youre looking at it with the same margins....stop looking at it with the same margins and look at it with the idea of the company lowering their margins in order to employ or pay more to the ppl that are consumers of their product/service and there by creating more demand.
Lower margins but higher revenue, in the end there might be a net gain!!!
That never happens in practice and you know it.
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No, the reason why it is inefficient is because you have no mechanism for determining who wants the good in question the most. In a normal market process, the goods go to the people willing to pay the most, in other words, the goods go to the people who want the good the most. If you freeze the price below a market level, the goods will not go to those people as it should and instead you'll have a lot of people who don't get the good that would be willing to pay more in order to get it.
Or in other words the goods should go to the ppl in which you can make the most money off of?
first I didnt say freeze, second what would be wrong with the situation you implied?
it would be that the person selling wouldnt be making the most from the product they were selling, right?
thats the inefficiency youre talking about...
they arent being as greedy as they could be...::)
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So if you know anything that you're talking about, you'll understand when I say that the cheaper it is to pay labor, the more you can hire.
That never happens in practice and you know it.
HOLY SHIT SON, do you not listen?
do you know what margins are?
ok, if you do think about this if your workers are ppl who consume your service/product and you pay them more while keeping your prices the same(so lowering your margins), so they are able to consume more....
you may have a net gain b/c you increase revenue to cover your decrease in margins...
what part of that do you not get?
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That's a hell of a way to do business in the real world but I guess it works in Never Never Land. No offense Tony, but you have spoken like a true Micheal Moore economic crackpot. Yes, of course greed is involved in the pursuit of profit, but thier is also fear of losses. Your making a standard liberal falacious notion to think that there will be an increase in total revenue for the company if that company pays more than what is necessary to an employee, so that employee will spend it on other companies and therefore the money will eventually come back to the employer from other companies that do the same thing. It would be more likely that the company would go out of business and then thier would be NO income for those now unemployed people to spend.
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That's a hell of a way to do business in the real world but I guess it works in Never Never Land. No offense Tony, but you have spoken like a true Micheal Moore economic crackpot. Yes, of course greed is involved in the pursuit of profit, but thier is also fear of losses. Your making a standard liberal falacious notion to think that there will be an increase in total revenue for the company if that company pays more than what is necessary to an employee, so that employee will spend it on other companies and therefore the money will eventually come back to the employer from other companies that do the same thing. It would be more likely that the company would go out of business and then thier would be NO income for those now unemployed people to spend.
No offense taken and Indeed my friend, however...I seriously doubt a company raising their wages for a portion of their employees by less than 50 cents an hour is going to cause a business to go under.
Again show me a business that runs on that thin a margin and Ill show you a business thats going to go under when the wind changes direction.
Im not saying it will work only that it could work, and if you deny that it could work youre being dishonest.
Again Im not saying that it would work but A saavy company in the right position could easily pull it off.
Yes it goes against conventional thinking and in the face of our atlas friends views but that doesnt mean it wouldnt work.
You cant paint each business with the same brush just like you cant paint each economy with the same brush.
Yes certain principles work better than others but b/c economics whether you want to except it or not is based on human nature different cultures will thrive/struggle given different economic scenarios.
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This:
That's a hell of a way to do business in the real world but I guess it works in Never Never Land. No offense Tony, but you have spoken like a true Micheal Moore economic crackpot. Yes, of course greed is involved in the pursuit of profit, but thier is also fear of losses. Your making a standard liberal falacious notion to think that there will be an increase in total revenue for the company if that company pays more than what is necessary to an employee, so that employee will spend it on other companies and therefore the money will eventually come back to the employer from other companies that do the same thing. It would be more likely that the company would go out of business and then thier would be NO income for those now unemployed people to spend.
And yes, raising the minimum wage by $0.50 does change business decisions. It doesn't cause the business to go under but it does cause the business to cut back on labor costs either by hiring less than it otherwise would or employing its current labor force for less total hours per week.
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Lot's of actual studies on the topic can be found here: http://raisetheminimumwage.org/pages/job-loss
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This:
And yes, raising the minimum wage by $0.50 does change business decisions. It doesn't cause the business to go under but it does cause the business to cut back on labor costs either by hiring less than it otherwise would or employing its current labor force for less total hours per week.
again it doesnt have to, if they lower their margins...
do you know what margins are ayn?