GOP-Run Senate Kills Minimum Wage Increase

Question, what's wrong with letting the market set wages?

Look around a bit and you'll find that very few people actually make minimum wage these days., A vast majority of them are under the age of 25, which means that your typical minimum wage earner is probably a high school or college student working an after school or on campus job .Even then it is just a starting wage for most jobs and anyone who bothers sticking around (most minimum wage jobs have a HIGH turnover) probably won't be making that for long. The only thing the minimum wage really accomplishes is reducing the number of potential positions available and raising another cost to employers. At no time has increasing the minimum wage ever greatly improved the economic power of those making minimum wage.

 

Personally, I don't think the Federal Government should set the minimum wage. The states can have their own minimum wage laws and many of them do. You will find that the more urban states such as the North East, West Coast, and the upper Mid West, already have minimum wage laws that are in the $6.75+ range. Most of the more rural states either have no minimum wage law (relying on the Federal one) or have rates modestly over the Federal minimum wage.

As it should be. The cost of living in New York is significantly higher than the cost of living in Missisippi. Therefore the minimum wage in New York ($7.15) is rightfully greater than the minimum wage in Missippi ($5.15). The cost of living in the Portland area of Oregon (where a large percentage of Oregonians live) is very high, and likewise, they have a high minimum wage of $7.50.

Why do you think a one size fits all is appropriate when the cost of living varies so widely across the nation?

 

<div class='quotetop'>QUOTE(Marlin @ Jun 22 2006, 08:18 AM) [snapback]275170[/snapback]</div>

Simple. There is no excuse for the cost of living to vary across the nation. This is an artificial situation cause by people like you who believe in states rights and fake free markets. The cost of living differences are caused by the complete mismanagement of our economy and the global economy myths.

 

<div class='quotetop'>QUOTE(tomdeimos @ Jun 22 2006, 08:21 AM) [snapback]275189[/snapback]</div>

It has nothing to do with "mismanagement of the economy" its a basic principle of macroeconomics. In smaller countries it is possible to have a fairly uniform standard of living, but in a country as vast as ours there are literally thousands of factors, most of which are totally out of the control of anyone, that affect the standard of living in different parts of the country. Scarcity of land, natural resources, desirability of the land are things that nobody can "manage". Basic rules of supply and demand dictate prices in those situations. Unless you're going to start resorting to absolute socalism or communism where the government owns everything and divvys up property equally, you'll never acheive your "eutopia". Sorry, no thanks I like what we've got right now. Its not perfect, but at least it allows those who are willing to work hard and acheive something in life to succeed.

 

<div class='quotetop'>QUOTE(tomdeimos @ Jun 22 2006, 09:21 AM) [snapback]275189[/snapback]</div>

Of course it must vary - the cost of living in Peoria would be the same in Maui or Anchorage? How is that possible? Does each make its own food, refine its own oil, produce its own steel and cars - do they use resources the same too, the same amount of electricity, of oil, of natural gas - do they each have the same water, soil, etc?

States Rights -- read the Constitution please.

Fake free markets - I might agree with you in certain areas like Health Care which the government controls, but in general how so you think they are faked?

Who is mismanaging our economy?

 

<div class='quotetop'>QUOTE(tomdeimos @ Jun 22 2006, 08:21 AM) [snapback]275189[/snapback]</div>

How far 'west of Boston' are you that you are not clearly seeing the 'Boston' factor in your cost of living?

I grew up in rural Montana and now live in the Chicago suburbs. My 1 acre located 60 miles west of Chicago is worth more than the 2 square miles of farmland I have Montana. The taxes on my house on 1 acre here could more than pay the taxes on my brothers house at the farm, plus about 5500 acres of farmland.

I would be easily more affluent in that place than I am in my current place on less than 1/2 my current income. It would also be pretty hard to have a job that pays 1/2 my current income and live there. No one there makes that kind of money.

There are more people in my subdivision here than there is in the entire county where I grew up. It takes a lot fewer dollars to live there than it does to live here. I can't imagine where you get the idea that the cost of living should be the same for them as it is for someone 10 miles outside of Boston, Chicago, LA, San Fran, NYC, or any of the major population centers.

Why such a discrepancy in cost? More people are willing to pay more money to buy my house so they can live here, raise their family and go to their job. At the farm in Montana, you close down the house if you move away. Nobody's looking to buy the house for any reason. If they were, they can have their pick of many and the location at the farm is not exactly ideal unless you are in the witness relocation program and need to disappear.

Demand props up the value of my house so the county and school district tax me harshly. I'm getting taxed harshly and can't afford to live here unless my company pays me more. To pay me more they have to charge the clients more, and the clients need our services so they hire us anyway and then charge their customers more. Their customers need (food, banking services, hardware), so they pay more off the shelf for stuff and since they are paying more off the shelf for stuff, their boss needs to pay them more and the whole cycle continues.

In Montana, if they decide to tax them harshly, they just go broke and move away. An empty house sits there for years and one day falls down.

Even in communist China, it costs more to live in Shanghai than it does to live in some rural village 200 miles away.

 

<div class='quotetop'>QUOTE(tomdeimos @ Jun 22 2006, 09:21 AM) [snapback]275189[/snapback]</div>

Utter nonsense. Cost of living is largely driven by value of real estate, which varies wildly from place to place across the country. The value of real estate is a pure free market thing. Real estate prices are highest in the most desirable places to live, especially those close to cities where most people work, but also because of crime rate, social, cultural and educational opportunities, infrastructure and other similar type factors that add up to a quality of life.

Increases in minimum wage are directly inflationary. No one "wins" with an increase in minimum wage. Low-earners wages go up, sure. And so do the cost of the lowest cost goods and services they they are themselves the biggest consumers of.

 

<div class='quotetop'>QUOTE(AnOldHouse @ Jun 22 2006, 10:15 AM) [snapback]275216[/snapback]</div>

Actually people lose with an increase in the minimum wage. As an employer, there is a hesitancy to hire more people if the costs of hiring are artificially raised. Add to that the employer contribution to FICA and other hiring penalties employers make and you can see how it really hurts people.

And you are correct - it will cause a ripple effect of raising the costs of everything to cover the artificialy increase in wages. Inflation gets a push here too. That is why most people wont want it raised at all - it is not a Democrat or Republican thing - it is a smart policy to let the MARKETPLACE determine wages - not the government.

 

<div class='quotetop'>QUOTE(dbermanmd @ Jun 22 2006, 10:46 AM) [snapback]275231[/snapback]</div>

But it certainly is a Democrat politician thing that is routinely rolled out in election years to secure favor from the low-wage earners and sympathizers.

 

What is one definition of a third world country? The gap between the rich and the poor. What happens when that gap becomes too wide? Destabilization. The best and brightest emmigrate. Revolution. Redistribution of land and wealth to the less than best and brightest who are left. Net loss.

 

The argument that raising minimum wage will only lead to more and more costs is not a fair one... a rise in minimum wage means more spending power... and we all know how Bush encouraged us to spend more to help out the economy.

 

Then why stop at $7 or $8/hour....make the minimum wage

$125.00/hour, the minimum paid vacation 90 days/year, paid maternity leave (from conception), 100% medical and dental, guaranteed employment,

be sure to pay for all of this with confiscatory taxes on the wealthy (anyone making more than me)

tax the rich to feed the poor, til the rich are just as poor......

 

<div class='quotetop'>QUOTE(Mirza @ Jun 22 2006, 01:17 PM) [snapback]275312[/snapback]</div>

It's not "fair" only because you don't like it. It's a fact.

Raise wages and businesses that pay those wages will increase the cost of goods and services to the consumer to make up for it. Thus, the "increased spending" power you claim is almost immediately offset by the higher prices of those goods and services. The only thing that is served is higher inflation and votes for Dems from people who think the Dems just "gave them a raise" and sypathizers who don't understand basic economics or those who choose to focus only on one part of the whole economic equasion.

 

Uhhh the old argument wasn't fair and you know that. I was watching news last night and the commentator brought up some very good points:

-Here is one I remember well: Costs on the whole have risen... healthcare costs are up I think 45%, and insurance rates have increased. These people are on a whole having a harder and harder time dealing with finances.

What you don't want to know is that I am taking a position of neither for nor against Dems or Reps on this issue. I pointed out an inconvenient factor in your argument.

I suspect the situation is FAR more complex... and trying to figure out everything is not a simple one, and making a reasoned decision concerning all known factors takes more time to reach. For example, what would it take to reduce health care costs? How do we reduce inflation?

I read an article about the cost of gasoline... the author factored in inflation and found that complaints about gas pricing were not as warranted as some people would propose.

<div class='quotetop'>QUOTE(AnOldHouse @ Jun 22 2006, 01:29 PM) [snapback]275321[/snapback]</div>

 

<div class='quotetop'>QUOTE(Mirza @ Jun 22 2006, 12:44 PM) [snapback]275331[/snapback]</div>

Well, one way to reduce inflation is to reduce the money supply, which is effectively what happens when the Fed raises interest rates. It doesn't reduce the actual number of dollars floating around per se, but it does make lending a little less lucrative and saving moreso.

It is completely folly to expect an employer to comply with an increase in minimum wage without raising their prices for the goods. So if your burger flipper makes an extra $1 an hour, an employer is going to distribute that increase in the price of those burgers, fries and drinks. When the store clerk who got the same $1 hike in minimum wage comes to buy a burger and fries their extra buying power is effectively nullified.

Inflation is a fact of life. You can sit around and whine about it or say "the government out to do something" or you can take action personally. Are health care costs ridiculous? Sure...I don't really think that drug companies need to take out TV and print ads for their wares to the general public or schmooze doctors to use product A or drug XYZ. We can get the lawyers off of honest physician's backs by instituting loser pays systems so that someone who experiences a complication from a risky procedure won't try rolling the dice in civil court to "win the lawsuit lottery".

 

Do away with minimum wage and Walmart will be paying $1 an hour.

Why not do away with laws prohibiting sweatshops, child labor, work hours and breaks? Pretty soon we'll be just like India.

 

Well, one way to reduce inflation is to reduce the money supply, which is effectively what happens when the Fed raises interest rates. It doesn't reduce the actual number of dollars floating around per se, but it does make lending a little less lucrative and saving moreso.

*********Interesting. Thanks for the insight.

It is completely folly to expect an employer to comply with an increase in minimum wage without raising their prices for the goods. So if your burger flipper makes an extra $1 an hour, an employer is going to distribute that increase in the price of those burgers, fries and drinks. When the store clerk who got the same $1 hike in minimum wage comes to buy a burger and fries their extra buying power is effectively nullified.


********** A negative to the debate for increasing minimum wage... but how does it factor with other positive and negative factors to increasing the minimum wage?


Inflation is a fact of life. You can sit around and whine about it or say "the government out to do something" or you can take action personally. Are health care costs ridiculous? Sure...I don't really think that drug companies need to take out TV and print ads for their wares to the general public or schmooze doctors to use product A or drug XYZ. We can get the lawyers off of honest physician's backs by instituting loser pays systems so that someone who experiences a complication from a risky procedure won't try rolling the dice in civil court to "win the lawsuit lottery".

*********** FINALLY someone provides good, concrete suggestions instead of whining about whining, if you will.

*But as a to be soon medical student, I resent the attitude that you say I should be proactive... because that is exactly what I will be doing! But there is no way you can be blamed for not knowing that . The previous responders to this thread whined and posed nothing constructive of helping these people... I think your proactive exclamation is more suited to them than the OP.

Again, things are NOT good for those of the lower class who depend on minimum wages for a living and have faced exorbitantly increased costs (over time) given what they make. I believe the year was 1946 or so that the minimum wage has not increased since.

 

For the past 15 years i have written letters to the various administrations and congressmen pointing out the folly of the current tax system in reference to health care deductions. There is a common misconception that medical expenses are deductible, but the truth is that most lower-middle class taxpayers never exceed the 2% exclusion in order to deduct their medical expenses.

This simple change could really benefit over 65% of taxpayers. In my case, in one year I spent about $4,000 in medical bills (above insurance coverage) and was not able to declare any of it.

As noted before, raising the costs of business will in turn actually harm the lowest paid employees most when they are laid off or have to spend more to cover the additonal costs to other goods and services.

The fact remains that we currently enjoy the lowest unemployment numbers in decades and the economy by and large is expanding. In California, it was noted that the average farm laborer gets $9.50/hr; far above even the proposed minimum wage. I doubt that an increase in the Federal minimum wage will affect that, nor really better anyone else in the long run.

It is merely another way that the 537 elected criminals in the District of Corruption can point fingers and pretend that they care about you, while they all drive 3.5 miles in their limosines to the next boondoggle to prove they are fighting for the little guy....

Walt (getting off soapbox now)

 

WSTANDER... for the last reponse... I have nothing against that... kudos on the action.

You may be right on the long run that it would not help most people... but one positive (at least based on the short term) is that those who work hard and are on the very minimum wage will benefit from it... if you are correct... and nothing I have learned indicates that you would be... rasining minimum wage would be a bandaid and problem would come back to bite us again.