Minimum Wage - a True Litmus Test

[dgs49]

One can tell with absolute certainty whether a government official has a modicum of integrity or is merely a pandering hack by his or her position on the Minimum Wage.

Every competent economist in the world knows that the mere EXISTENCE of minimum wage laws is a counterproductive abomination, taking work away from millions who might otherwise be employed, and "taxing" businesses for the difference between the economic value of their least valuable employees and the state-mandated wage.

The fatuous arguments in favor or a minimum wage (and raising the minimum wage from whatever it is to something higher) fall flat on their faces when confronted with reality and logic.

If a $9 minimum wage is good, why stop there? Why not $12 or $15? Wouldn't this create a situation where every full-time worker can "live with dignity." Hell, why not $25/hr? Every worker should be able to buy a house!

Democrats cannot even countenance the root question of, "Where does the extra money [over the economic value of the employee] come from?" If a person can actually earn $5 per hour, but the government forces the employer to pay $9, where does that extra $4/hour come from? The employer's exhorbitant profits? Most small businesses operate on a shoestring. Can it be passed along to the customers?

On what basis?

A "higher" minimum wage - as they have in Western Europe - creates the horrible situation where those most in need of a first job - those with minimal skills and no experience, are simply excluded from the job market.

Proponents like to point to examples in high cost of living areas where increases in the minimum wage have not resulted in job losses. But this is not representative. The actual minimum wage in those places is in fact higher than the mandated Minimum Wage, so in those pockets of high COL, the increase has no effect. But in the rest of the economy, smaller towns, low COL areas, and rural areas, a high MW results in removed opportunities for the very people who require the most help.

When the Government mandates prices of anything that exceed their true economic value, three things always occur. Consumers (employers) consume less of the item, they seek ways to replace it (with automation, generally), and a black market arises, where the product is exchanged "under the table." (Think, "illegal immigrants.")

Honestly, has everyone forgotten the times when you bought gas at a "service station," where the attendant would pump your gas, check the oil, check your tire pressure, and clean your windshield FOR FREE? Remember when shop owners used to keep the sidewalk in front of their store swept clean of debris? When high school kids could get their forst jobs stocking shelves in the local Mom & Pop gorcery store (and the store owners could afford to pay them)?

All of these jobs have gone the way of the dodo bird largely because of advances in the Minimum Wage, and politicians' "compassion" for those at the bottom of the economic totem pole.

The president is a tool.

[Econoline]

Still no actual statistical proof of this tired old argument? (Conservatives like to trot this out every time the minimum wage is mentioned; every time an increase has actually passed, the predicted dire effects have not materialized and the argument has been disproved.)

Carry on, then.

P.S. When the actual minimum wage is falling in terms of the cost of living (i.e., actual purchasing power) wouldn't the conservative argument suggest that employers should be adding minimum wage jobs?

P.P.S. Why not simply index the minimum wage to inflation and be done with the perennial political argument once and for all?

[Econoline]

If a $9 minimum wage is good, why stop there? Why not $12 or $15? Wouldn't this create a situation where every full-time worker can "live with dignity." Hell, why not $25/hr? Every worker should be able to buy a house!

Still another golden oldie, still stupid.

If cutting the top income tax rate to 25% is good, why stop there? Why not 20% or 15%? Wouldn't this create a situation where every full-time millionaire can "create new jobs for everyone"? Hell, why not a top tax rate of 2%? Every rich person should be able to buy a yacht, a jet, and a private island!

(See how stupid it sounds?)

[dgs49]

So I have to PROVE that if the price of something is artificially increased beyond its economic value, the consumer will use less of it?

Wow.

ECON 101.

[oldr_n_wsr]

How many people actually expect to work their entire lives making minimum wage?
I made minimum and quickly proved myself to advance beyond that wage scale. I told my kids, when you apply for a job, see what the pay scale is and then ask for a review in 3-6 months and see if they think you are worth more. In the mean time, work you tail off and prove to them you are worth more.

If all you ever do is "your job" then that is all you will ever do. (pay rate is the same philosophy).

[Grim Reaper]

So I have to PROVE that if the price of something is artificially increased beyond its economic value, the consumer will use less of it?

Wow.

ECON 101.

Yes, the burden of proof does fall upon you. Especially when this same argument has been used repeatedly every time the minimum wage has been increased. And somehow the planet hasn't come to screeching halt as of yet.

[rubato]

A human being requires a certain minimum income to pay for their existence. If wages fall below that level the difference in cost is made up elsewhere; in other words that employee is subsidized by the rest of society for that employer. And that employer is exploiting not only the employee but the rest of the society. If a business is so useless that it does not generate enough income to pay for its employees a real capitalist would say it should fail rather than having everyone else subsidize it.

Only a stupid person cannot grasp this.



yrs,
rubato

[Lord Jim]

A human being requires a certain minimum income to pay for their existence. If wages fall below that level the difference in cost is made up elsewhere; in other words that employee is subsidized by the rest of society for that employer. And that employer is exploiting not only the employee but the rest of the society. If a business is so useless that it does not generate enough income to pay for its employees a real capitalist would say it should fail rather than having everyone else subsidize it.

Only a stupid person cannot grasp this.



yrs,
rubato

I respond with less insult than I receive.

yrs,
rubato

Here we have an excellent example of how, even when rube has a legitimate point to make, his inate nastiness is such that he simply cannot contain himself from fouling his own post and detracting from his point by tacking on a completely unprovoked gratutitous insult.

He wasn't "responding" to anything. No reference to or about him had been made whatsoever. None.

And of course, like his penchant for tossing out gratuitous insults at anyone who has the temerity to start a thread on a subject he doesn't approve of, (which he also did yesterday) this is scarcely a rare occurence; it's his standard operating procedure...In fact this type of behavior of his is so ubiquitous, that it has practically become part of the wall paper of this forum....


My purpose in pointing these things out, is that just in case rube really is delusional enough about his own behavor to actually believe that this surreal, perposterous claim: "I respond with less insult than I receive." is true, (rather than the actual obvious truth; that he is far and away the greatest initiator and generator of gratutitous unprovoked insults on this board, bar none; whoever is in second place isn't even close) that perhaps by bringing focus to his behavior, it can be "a teachable moment" for him....

(Yeah, yeah, I know, but remember I'm also the guy who thinks we have a good shot at developing real time faster than light propulsion, so my optimism is pretty much boundless....)

[rubato]

Still cannot respond to the substance.

You bring nothing of value.

yrs,
rubato

[rubato]

Screw the many for the benefit of the few is still the Republican way. Their total reliance on the meanness, and stupidity of low-wage, low-education, racist, bigoted rednecks who are harmed by their policies, to keep them in power is; the nastiest and nakedest form of cynicism I have ever seen.

________________________
http://krugman.blogs.nytimes.com/2013/0 ... imum-wage/

Two Observations on the Politics of the Minimum Wage

It looks as if President Obama has successfully set a political trap over the minimum wage. Raising the minimum is very popular — even a narrow majority of Republicans (pdf) are for it. But Republican leaders are opposed. And they’d like people to believe that their opposition is driven by sincere concern for workers who might lose their jobs.

Well, this isn’t likely to work; the public won’t believe in their sincerity, and for good reason. Here are two examples of why it won’t wash:

1. The truth is that top Republicans have so little regard for ordinary workers that they can’t even manage to pretend otherwise. Case in point: on the last Labor Day, Eric Cantor declared,

Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.

Yep: even on Labor Day, Cantor had nothing positive to say about workers, just praise for their bosses.

2. Consider a working couple with two children, earning the current minimum wage. How much federal income tax do they pay? If I’m doing the math right, the answer is, none — they get a refund. (They pay plenty of payroll taxes, sales taxes, etc., but that isn’t supposed to count). In the minds of Republicans, this makes them lucky duckies, members of the 47 percent, part of what’s wrong with America. The GOP just can’t credibly claim to suddenly be deeply concerned about their job prospects.

Maybe once upon a time, when Republicans were less intellectually inbred, they could have pulled off the stunt of seeming to care about the people supposedly hurt by a higher minimum wage. But I really don’t think they’re up to it at this point.
___________________________________'


yrs,
rubato

[Lord Jim]

You bring nothing of value.

yrs,
rubato

I'll be more than happy to lay the overall quality of my contributions to this board against yours any day of the week, sweet cheeks....

Should we have a poll on it?

[Jarlaxle]

No. :p

[dales]

1800 hrs PST, nice mellow Saturday afternoon, I wouldn't blame the rubester if he decided to inbibe in a few adult beverages.

Drink up!

You're cute when you're tight.

[Lord Jim]

Be gone!



Before somebody decides to drop a house on you...

[dales]

LOL!

[oldr_n_wsr]

1800 hrs PST, nice mellow Saturday afternoon, I wouldn't blame the rubester if he decided to inbibe in a few adult beverages.

Drink up!

You're cute when you're tight.

Big Book terminology.

[Econoline]

From The Daily Beast:

Obama’s Minimum-Wage Gambit Puts Republicans on Defensive
by Eleanor Clift Feb 18, 2013 4:45 AM EST
The president’s surprise call for an increase to $9 an hour in the State of the Union has the GOP on the wrong end of popular opinion again.

It must be hard to remain stone-faced knowing you’re on television when the president says that anybody who works 40 hours a week shouldn’t be in poverty. Who could be against that?

That, at least, is how President Obama framed his call for an increase in the minimum wage to $9 an hour (up from the current $7.25). Seated right behind Obama for the State of the Union, and in full camera range, John Boehner managed to stay expressionless; he didn’t even pretend to empathize.

The next day the House Speaker dismissed Obama’s proposal, saying he’d been in the middle of periodic fights over hiking the minimum wage for 28 years, his entire political career, beginning in the Ohio House of Representatives. “When you raise the price of employment, guess what happens? You get less of it,” he said, staking out his opposition to Obama on an issue that once again leaves Republicans on the wrong side of popular opinion.

Raising the minimum wage polls well, with Democrats almost universally supporting it; independents, 74 percent; and Republicans, 50 percent, according to a Lake Research survey last year. With Obama on the road selling his proposals, Tony Fratto, a former Bush White House official, tweeted, “Has raising the minimum wage ever not polled well?” In a series of tweets, he proposed the GOP stop “fighting unpopular fights over and over again,” and instead outbid the Democrats and “insist on an $11 minimum wage.”

In a follow-up email, Fratto said his call for $11 was “mostly facetious,” but his larger point is that the “knee-jerk opposition to minimum-wage increases in my party … that’s a problem. Democrats know they can always call for a minimum-wage increase, and that will be popular … If this is simply a political exercise … take away the Democrat ability to claim a ‘win’ by effectively always outbidding them.”

There won’t be a bidding war with Republicans, and once you get beyond the political gamesmanship the White House makes a good case for advancing the idea of an increase in the minimum wage despite Boehner’s negative response. A senior White House official points out that in 1996, the Republican Congress passed legislation to raise the minimum wage that Bill Clinton signed into law. The previous year, then-Majority leader Dick Armey had vowed to oppose any increase with every fiber of his being.

**Democrats and Republicans agree on the politics, that it’s a loser for the GOP.**

During his State of the Union address, President Obama called on Congress to raise the minimum wage to nine dollars per hour.

President Bush signed the last increase into law in 2007 after Democrats regained control of both the House and Senate. “History has shown this is the type of idea that can get more traction than a lot of other things you might want to do about poverty,” says the White House official, attributing much of the rise in economic inequality to the erosion of the minimum wage through inflation. In austere economic times, hiking the minimum wage has the virtue of not costing the Treasury any money, though economists disagree over its effect on tax revenue and job creation.

The late Ted Kennedy worked with Bush on the ’07 increase, and he was the driving force in Congress over a period of decades to boost wages for the poorest Americans. **If Obama’s proposal becomes law, increases in the minimum wage would be tied to the cost of living, ensuring regular increases and defusing the issue politically.**

James Sherk, a senior policy analyst at the conservative Heritage Foundation, says that apart from the political differences that are playing out around Obama’s proposal, the current economic climate is likely to thwart any increase in the minimum wage. Recent increases, in 1990, 1996, and 2007, all occurred when the economy was seen as expanding and Republicans didn’t push back as much. Now, says Sherk, conservatives worry about the “unintended consequences, that you hurt the people you want to help.”

Democrats and Republicans disagree about the economic consequences of a higher minimum wage, but they do agree on the politics, that it’s a loser for Republicans and mostly a winner for Democrats. “It should resonate,” says Matt Bennett, a co-founder of Third Way, a centrist Democratic group. “No one will win an election on this, but it rounds out with some base voters that he’s focused on their needs, too.” Democratic pollster Stefan Hankin agrees that it speaks to the Democratic base, but warns that it also risks deepening the divide between the business community and Democrats at a time when the GOP is in such disarray that an olive branch to business might be better politics. Either way, Democrats have set a proposal in motion that if it doesn’t pass in this Congress, it likely will in the next.

---

** My emphasis. To reiterate:

Democrats and Republicans agree on the politics, that it’s a loser for the GOP.

If Obama’s proposal becomes law, increases in the minimum wage would be tied to the cost of living, ensuring regular increases and defusing the issue politically.

Given these 2 facts....can any GOP supporter here give me a rational reason for their party *NOT* supporting a proposal to index the minimum wage to the cost of living--thus eliminating a perennial political issue on which the Republicans *ALWAYS* lose?

[rubato]

...

Given these 2 facts....can any GOP supporter here give me a rational reason for their party *NOT* supporting a proposal to index the minimum wage to the cost of living--thus eliminating a perennial political issue on which the Republicans *ALWAYS* lose?

You're not barking up the "rational" tree. But it is true that if their goals were actually those they espouse they would agree with the deal as a way of limiting the minimum wage to a perpetually low, albeit constant, level rather than risking a larger increase.



yrs,
rubato

[Long Run]

Given these 2 facts....can any GOP supporter here give me a rational reason for their party *NOT* supporting a proposal to index the minimum wage to the cost of living--thus eliminating a perennial political issue on which the Republicans *ALWAYS* lose?

Because it is bad for America? Because some people get the basic Economics 101 concept of TANSTAAFL? (there ain't now such thing as a free lunch). That the minimum wage reduces employment for lower-end workers is without doubt in economics; this truism is only inapplicable when the legal minimum wage is below the true economic minimum wage. Thus, when the legal minimum wage is say $5 per hour, it is below 99% of the economic minimum wage jobs and is largely irrelevant. At the current legal minimum wage of $7.25 per hour, we have real unemployment staying above 11% (if you count the 8% rate and the number of people who have dropped out of the job market), so we are seeing the impact, especially among the poor and minorities. If the legal minimum wage goes up to $9, it will be above the economic minimum wage for some significant number of jobs, and it will reduce employment for low-income earners. When you add that the legal minimum wage is already going up due to the ACA (Obamacare), this would be a double hit and will hurt the economy.

Make no mistake, the vast majority of economists believe this, and most Rs believe this. There is one highly flawed study* to suggest otherwise, against numerous studies showing the conventional wisdom and common sense that increasing the cost of labor reduces the amount of labor purchased in the market place. Thus, in the face of this overwhelming consensus among experts that the minimum wage increases unemployment among low-skill workers, those who support an increased minimum wage should show: 1) that the increase in the legal rate will still be below the economic rate for 99% of the jobs; or 2) provide some other societal justification for preventing hundreds of thousands (and even millions when the economy is like it is today) of mostly young, low-educated people from getting jobs.


*

Earlier work by Princeton economists David Card and Alan Krueger (now the chairman of President Obama’s Council of Economic Advisers) purported to show that modest increases in the minimum wage don’t necessarily decrease employment and may even have a positive impact on jobs for low-skilled workers. Their use of survey data, however, was seriously flawed and their results were refuted by University of California at Irvine economist David Neumark and others.

In an article in Cato’s Regulation magazine in 1995, Donald Deere, Kevin Murphy, and Finis Welch carefully examined the Card-Krueger case studies, which appeared in Myth and Measurement: The New Economics of the Minimum Wage, and concluded: “Higher minimum wages go hand-in-hand with substantial declines in the employment of low-productivity workers. . . . The conventional wisdom remains intact.”

http://www.forbes.com/sites/jamesdorn/2 ... economics/

[dgs49]

Regardless of the "political" niceties, on what basis can anyone support a government mandate to pay a price for ANYTHING that is greater than its economic value?

How stupid would you have to be to purchase this commodity? Would you not minimize your use of it? Would you not seek out alternatives that are less expensive? Would you not try to buy it outside conventional channels so that you are not robbed in the purchase?

And what entitles anyone to be paid more than they are capable of earning? If you are inexperienced, ignorant, lazy, troublesome, or unreliable, you may not be worth ANYTHING to an employer. What is a trainee worth? Her productivity may well be NEGATIVE, because she consumes a co-worker's time to train her.