Minimum wage. Raise it, lower it...?

[Martha]

Sorry, I can't help. I took the pledge.

 

[ERD50]

Sorry, I can't help. I took the pledge.

I should follow your lead - I've got things to do (or so DW tells me!) - ERD50

 

[HFWR]

Free markets are a good thing. Still, what with all the financial shenanigans that result in funny money stock options and golden parachutes, it's hard to begrudge someone earning $6.55/hr...

 

[Notmuchlonger]

Those sign flippers make at least 10 an hr.

 

[ERD50]

Free markets are a good thing. Still, what with all the financial shenanigans that result in funny money stock options and golden parachutes, it's hard to begrudge someone earning $6.55/hr...

True, but I don't think it helps to look at it that way. You don't right a wrong by monkeying up somethin' else. I thinks that's why we have so many laws and so much tax code. Address the problem.

-ERD50

 

[HFWR]

Just expressing empathy for someone who could probably make more on food stamps and welfare. It's a reality that some folks will be stuck doing **** jobs for **** pay. But it's worth remembering the old saw about each part of the body - brain, heart, lungs, etc. - bragging how they were most important.........until the colon shut down.

 

[ERD50]

Just expressing empathy for someone who could probably make more on food stamps and welfare. It's a reality that some folks will be stuck doing **** jobs for **** pay. But it's worth remembering the old saw about each part of the body - brain, heart, lungs, etc. - bragging how they were most important.........until the colon shut down.

Fair enough. And for the record, I'm serious when I ask for good reasons to support a min wage. I have a strong preference for free markets, but I do think there are exceptions. This may, just *may* be one of them.

oooops almost stopped, can't get off the soap box (hey - we are in 'Other topics' - wudda-ya-know!) that fast....

It's a reality that some folks will be stuck doing **** jobs for **** pay.

True. But I still question, is it best to mess with the pay scale of *every* low wage employee (like HS kids on their part time or summer jobs), or is it best to try to deal with the specific problems that some people may have. It's hard for me to picture someone being stuck in a min wage job for very long, unless that person has some disability (maybe slight). Or is it just easier, more effective to use the 'rising tide' approach? I honestly don't know.

I still feel that since a min wage is something that requires an action, that those proposing the action bear the burden of proof that it will help. I've heard the arguments that it could raise the prices of goods (affecting the poor the most), that it could result in fewer jobs (counter-productive). No doubt there is something to that, but I have no idea if the good outweighs the bad or visa versa. So unless the govt can prove there is an overall benefit to society, I think they should stay out of it.

But I am willing to listen to reasoned input. You just might convert me.

-ERD50

 

[HFWR]

IMHO, it's not sound economic theory, and is arguably a wash as social policy. Heck, I might even vote for Ron Paul, though I prefer Les Paul.

As a "human" issue, the folks that change our tires, clean our toilets, mow our yards, and diaper our kids (and grandparents) work pretty danged hard for not much reward.

Empathy is not really a political philosophy...

 

[ERD50]

IMHO, it's not sound economic theory, and is arguably a wash as social policy. Heck, I might even vote for Ron Paul, though I prefer Les Paul.

Lester William Polsfuss for president! I'm going to get some bumper stickers and yard signs printed! I've had enough of this Obama/McCain debate!

-ERD50

 

[HFWR]

Lester William Polsfuss for president! I'm going to get some bumper stickers and yard signs printed! I've had enough of this Obama/McCain debate!

-ERD50

Try getting that name on the headstock of a guitar...

 

[harley]

Try getting that name on the headstock of a guitar...

LWP - That's what Paul Reed Smith had to do.

 

[Gardnr]

True. But I still question, is it best to mess with the pay scale of *every* low wage employee (like HS kids on their part time or summer jobs), or is it best to try to deal with the specific problems that some people may have.

This is the argument for the Earned Income Credit, which I think has merit. I honestly haven't given it the study time to fully know whether it's the right approach or not, but it's intended to give some help to those who need it without the ill affect on market forces (i.e. wage pressures, etc.).

I don't think there are any perfect answers to this, but I do think we have to find a way to take care of some of those in our society who just won't be able to earn much of a living but are willing to work hard. Believe me I'm not a bleeding heart but we do have to find some middle ground answers between pure capitalism and pure socialism. The hard question is finding where the sweet spot is, now isn't it?

 

[HFWR]

I fancy myself an amateur humorist and curmudgeon-in-training, in the great tradition of Mark Twain, or Dave Berry. Granted, I may not be particularly good at it, but if my posts were processed through that filter, their true [-]lack of[/-] meaning might be clearer...

List of humorists - Wikipedia, the free encyclopedia

Definition of Curmudgeon

I was trying to point out the irony, if you will, of the pilfering of America using extra-legal means by CEOs, lobbyists, Congresscritters, and such, whilst we argue about the minimum wage.

Strict-constructionist arguments aside, seems there are bigger fish to fry than the 1.2% of workers who get min wage...

 

[ERD50]

I was trying to point out the irony, if you will, of the pilfering of America using extra-legal means by CEOs, lobbyists, Congresscritters, and such, whilst we argue about the minimum wage.

Strict-constructionist arguments aside, seems there are bigger fish to fry than the 1.2% of workers who get min wage...

I agree that those are problems. But this thread is not titled 'Should we reign in CEOs and their Board of Directors...?', or 'What are the biggest problems facing the USA today...?',

it is titled 'Minimum Wage. Eliminate it, or get rid of it...?*'


-ERD50


*(hey, I can try to be funny, too)

 

[HFWR]

Not bad!

 

[ERD50]

This is the argument for the Earned Income Credit, which I think has merit. I honestly haven't given it the study time to fully know whether it's the right approach or not, but it's intended to give some help to those who need it without the ill affect on market forces (i.e. wage pressures, etc.).

Good points Gardnr. I get so busy with the mechanics of my taxes that I tend to skim over the intent of some of these items (like the EIC) that are just automatic based on the numbers (no decision required). At a glance, it does seem to address the issue better than an across the board min wage.

And it gets to my real point in any discussion like this. People don't stop to define the problem before they start in with 'solutions'. So, if we were to continue a big discussion on this, I would suggest that we need to first define:

what problem is it that we are trying to solve?

If we define the problem, would min wage look like a good solution? I'm very skeptical.

-ERD50

 

[ladelfina]

'Minimum Wage. Eliminate it, or get rid of it...?*'

ERD50, you succeeded!

I guess my question is how is putting a floor on wages different from putting a floor on grain or milk prices, or the current attempts to "prop up housing prices"? Multiple wrongs don't make a right.. but it's too bad to see low-wage workers being made out to be the only ones who should "suck it up" and face the full brunt of a pretty disadvantageous global wage market, at the same time that the US maintains other protectionist and interventionist strategies.

If the problem is "economic pain and instability in the low-to-middle class due to income inequality" then there are other tools for addressing that, but the min. wage is still one possible tool. It doesn't sound like the proposed increases are going to go very far in that direction, though.

 

[ERD50]

ERD50, you succeeded!

I guess my question is how is putting a floor on wages different from putting a floor on grain or milk prices, or the current attempts to "prop up housing prices"? Multiple wrongs don't make a right.. but it's too bad to see low-wage workers being made out to be the only ones who should "suck it up" and face the full brunt of a pretty disadvantageous global wage market, at the same time that the US maintains other protectionist and interventionist strategies.

I hope this doesn't scare you ladelfina, but you apparently missed my post #22 (that's OK, I know we have both been 'busy'). Seems we think alike on this issue:

And before anyone throws out that straw man, no, I'm not in favor of govt subsidies or industry specific tax breaks to business. Two wrongs don't make a right.

-ERD50

But in the post you quoted I specifically said that *this* thread is about min wage, *not* those other issues. I could rail on those also. Maybe someone should start a thread on it?

If the problem is "economic pain and instability in the low-to-middle class due to income inequality" then there are other tools for addressing that, but the min. wage is still one possible tool. It doesn't sound like the proposed increases are going to go very far in that direction, though.

Yes, min wage is a possible tool. I'm not certain that it is an overall positive though. Seems like a carpet-bomb approach to me. Have any evidence that it achieves the intended (unstated) goal?

edit/add: I took another look at the link Martha provided: http://www.epi.org/minwage/epi_minimum_wage_2006.pdf
it strikes me as very 'fluffy' esp for economists. Lots of opinion ('we believe') and 'most', 'some', 'little' wiggle words. Nothing quantifiable that I could see. No references, no data. Not convincing at all, sorry. If this is the best someone can do to support min wage, it speaks volumes against it.


-ERD50

 

[ladelfina]

I found this site but am too tired to read any of it:
Supporting minimum wages: research, reports, sites
There are materials supporting both sides.

 

[ERD50]

I found this site but am too tired to read any of it:
Supporting minimum wages: research, reports, sites
There are materials supporting both sides.

Thanks ladelfina, I will try to wade through some of those later. I'll keep an open mind, but the fact that the url of that site is 'raiseminwage.org' isn't exactly filling me with confidence regarding lack of bias on their choice of articles.

For a very quick reader's digest style note, I found this in wiki:

Economists disagree as to the measurable impact of minimum wages in the 'real world'. This disagreement usually takes the form of competing empirical tests of the elasticities of demand and supply in labor markets and the degree to which markets differ from the efficiency that models of perfect competition predict.

So I'm going to fall back to my earlier statement. Since enacting a min wage is an action, I feel it is up to those suggesting the action be taken to demonstrate that there is a quantifiable benefit. From what I have read so far, there does not seem to be much agreement that there is a clear benefit. But I'll keep looking.

Oh, and also in wiki, they site several surveys of economists and min wage does not get much support. So the 'hundreds of economists' that Martha linked that support it is meaningless, there are many more against it.

I was going to make an analogy, but since we are not in the SoapBox, I'll let it pass...

thanks - ERD50

 

[ERD50]

One more viewpoint on this from me. If the case is made that some low wage workers do not have enough 'pull' in the market ( a possibility), I'd prefer to see that problem addressed, rather than carpet-bombing all low wage workers with money.

An analogy:

Let's say a tire manufacturer was somehow able to create a monopoly for its products. W/o competition, their product and services would likely be substandard, and prices would be high.

Three methods to deal with this:

1) Have the govt take steps to return a free market atmosphere to the tire industry.

2) Provide a rebate to consumers, every time you buy a tire, the govt will give you $20 to offset the problem.

3) Do nothing, monopolies eventually implode.

I see min wage as #2. It does not address the root problem, and is a 'one size fits all' solution, that penalizes some, and benefits others that did not need it. #1 is fine with me if done carefully. #3 probably works, but it can take a long, long time.

-ERD50

 

[FUEGO]

ERD50,

You might want to clarify what you mean by "quantifiable benefit". Is that a utilitarian notion of "greatest good for all" or "net positive economic benefit". Or a Rawlsian notion of "greatest benefit for the least advantaged members of society"?

I'm just hypothesizing here, but the minimum wage may not have a net positive economic benefit, but it may have a Rawlsian benefit of providing a positive benefit for the least advantaged. And if one goal of our social programs is to support (to a certain extent) the least advantaged, then minimum wage just may prove to be the most efficient (least damaging) method of encouraging work. I'm not an economist, so I don't know if that is true though.

In other words, it may be cheaper for society as a whole to fix prices in the labor markets and implicitly provide "welfare" for the least advantaged - those that can and will work anyway. Contrast this with unbridled labor markets or a labor market with a very low minimum wage, and you may have workers who, on the margin, decide not to work, and instead increase their share of some welfare allotment.

From a policy perspective, it may make sense to "price discriminate" when fixing prices in the labor market. I think others on this thread have suggested that some state min. wage laws allow "price discrimination" by exempting those under 18 and/or part time workers and/or certain job types from min wage laws. This would be more efficient than a blanket min wage law that might price some labor out of the market.

 

[ladelfina]

FUEGO, good point about welfare benefits. If min.wage jobs can't keep a family above the poverty level, then gov./we/taxpayers end up chipping in with food stamps and other services. That's what disgusted me with Wal*Mart when they went about officially counseling their workers on how to apply for Medicaid(!) because what they paid them was so low. And of course if basic welfare is 'competitive' with lower-end wages, there's not a lot of incentive to take lower-end jobs, esp. if someone has kids at home.

 

[FUEGO]

Thanks, and I'd like to throw out that I'm not necessarily for or against minimum wage laws - however I would like to see some evidence as to the costs and benefits of these laws as I tend to be skeptical of interferences with the market. Although I do support interference where there are market failures.

If we take as a premise that some level of welfare benefits are going to be provided, then let's do it in the "least bad" (economically speaking) manner we can. It seems like this might be by incentivizing work/productivity either through higher minimum wages (and discriminate where we can) or through the earned income credit.

Ladelfina, I have to disagree with you about walmart though. They were trying to help out their employees to the extent possible by encouraging them to take advantage of government programs that they qualify for. Their employees' wages are set by the labor market and are competitive. Walmart was doing what any employer should do - help their employees out where they can.

 

[ERD50]

Thanks FUEGO, I should clarify:

Yes, I am talking about overall benefit to the low-wage earners. You can call me a bleeding heart liberal if you want

That is why I'm looking for evidence. One of the debates that economists have is, does a min wage end up reducing the total number of low wage jobs, and does this create more problems than it solved? If it does, then maybe we didn't help the lower-income wage earners on average?

To ladelfina's post above - I think it is a tough call. Remember, the higher wage costs are reflected in the products, and poor people spend all their money on the basics. IOW, that increased product cost is not a 'progressive tax'. But, social programs are paid for mainly from progressive taxes. So which is really better?

I lean towards providing the social programs for those who really need it, rather than the broad brush of a min wage.

With Walmart, there is the argument ( I don't know if it is valid or not), that their lower prices have done more to help the poor than any negatives of low wages/benefits for some employees. I don't know.

Again, the person proposing the action of a min wage has the burden of proof.

-ERD50