Gosh,DF, why didn't you say before that raising the minimum wage was a bad idea--you could have saved us a lot of trouble? I think Ricky, Danivon and myself understand very well the argument you just put forth, but much of the argument here has been whether your contention is in fact correct. The other major contention is should businesses be allowed to pay a full-time wage that is less than necessary for their minimum needs, meaning the difference between that wage and a minimal subsistence must be supplied by the government so that in effect government is providing subsidies to businesses for the hiring of low-wage workers. Perhaps you could provide arguments that address those two arguments and not just provide us with conservative dogma with which we are all very familiar.

freeman2 wrote:The other major contention is should businesses be allowed to pay a full-time wage that is less than necessary for their minimum needs, meaning the difference between that wage and a minimal subsistence must be supplied by the government so that in effect government is providing subsidies to businesses for the hiring of low-wage workers.

Of course, this presumes, somewhat delusionally, that if the minimum wage was raised to a "living wage," the government would stop giving assistance to those who were now receiving a "living wage."

It won't.

But, perhaps government will shrink if it is no longer having to supply so much in welfare and food stamps?

That is not the nature of the modern welfare state.

Perhaps you could provide arguments that address those two arguments and not just provide us with conservative dogma with which we are all very familiar.

Sorry, didn't mean to interrupt your more meaningful discussion of liberal dogma with which we are all very familiar.

In what part of "Government is the answer" have I erred? You believe that to your core. You may reframe it and rephrase it however you like, it is the root of all your "solutions."

RJ, I don't think that I have made the argument that minimum wage laws lead to more prosperity. What I have tried to argue is that higher minimum wage laws will lead to a better quality of life for low-wage workers and that beneficial effect outweighs the negative effects ( if any)

Yeah, Brad, the employee can ask for a higher salary if he makes more widgets but currently he is not likely to get it. With increasing globalization (meaning if you're making widgets in say Iowa you are essentially competing with someone willing to make these widgets for $10 a day in China and other low-wage countries) and decline in unions workers are not getting compensated for their productivity gains. With only about one in ten workers unionized and usually state laws allowing workers to be fired for any reason, your lazy employee will be fired post-haste.

freeman2 wrote:Yeah, Brad, the employee can ask for a higher salary if he makes more widgets but currently he is not likely to get it. With increasing globalization (meaning if you're making widgets in say Iowa you are essentially competing with someone willing to make these widgets for $10 a day in China and other low-wage countries) and decline in unions workers are not getting compensated for their productivity gains. With only about one in ten workers unionized and usually state laws allowing workers to be fired for any reason, your lazy employee will be fired post-haste.

This is not liberal, ant--capitalist dogma?

Capitalism exploits workers.

Productivity is not rewarded.

The market does not work.

Capitalists want to move jobs overseas.

All that's missing:

"Imagine all the people, sharing all the world . . . you may say I'm a dreamer . . ."

See, this is where I would expect you to post studies that counter the ones I posted indicating that worker wages have been staying flat while they have been making productivity gains. But go ahead and stay in your conservative bubble and not let facts get through...

freeman2 wrote:See, this is where I would expect you to post studies that counter the ones I posted indicating that worker wages have been staying flat while they have been making productivity gains. But go ahead and stay in your conservative bubble and not let facts get through...

Don't have to post studies. When you have nearly 8% unemployment, and many, many workers who are underemployed, is it wonder that wages are not going up?

Some corporations are doing well, some are not.

However, even for those with overflowing coffers, here's what they know: taxes are about to go up; energy prices are going to go up (thanks to the "none of the above" strategy employed by the President and his EPA), medical insurance costs are going to go up (Obamacare), and demand is not going up (because the economy is going nowhere fast).

So, why would they raise wages? It's called "supply and demand" for a reason.

In your view, government can change the laws of economics. Good luck with that.

We can talk all day and night about how much should a person get for a wage. My point is:

Is it the Government's responsibility to ensure that one worker is paid equally with another, even though productivity is different. It is nice that you brought up the foreign worker, but it really does not apply, as the US government does not force the other nations to mandate a minimum wage. So, the comment about globalization; while a causative factor; does not have much impact.

What about the Chicago/Galesburg employer issue. A grocery in Chicago charges more than a grocery in Galesburg, but the cost of employment is mandated to be the same.

Where does it state that the US Government has a responsibility to mandate minimum wage?

Hypothetical: A factory decides to pay it's employees $1.00/hour. The employees leave. Does the employer make any money?

No. It is not in the best interest of the employer to have no employees. The employer should be able to hire the MOST productive people available, and should keep them happy as long as they are productive, and benefiting the company financially to a level that validates the wage.

I look at the NFL last year. They went on strike because the owners made more money. Apparently greed was an issue because the players are being paid to play a freakin' game! The players have contracts. If the players do not want to play for X salary, then don't! Just wait until your contract comes up for negotiation, and dicker for more money. The NHL is doing this, and now the players are not getting any money. Either are the owners. This is the same situation as the Hostess company. The workers/unions asked for more money. The business said no, and closed. Yes, the Hostess owners got bonuses, but the employees are being paid a little bit more than minimum wage, too.

Obviously minimum wage is not the issue. It is equality of pay. The workers want to be paid similarly to owners/managers. Until the workers place some money at risk in the business, they have no right to similar wages.

In summation, I would think that a worker should negotiate for higher wages, and the employer should pay according to productivity. The government should not mandate what that pay should be, regardless of what the standard of living is in Ghana or anywhere else.

I'm not anti-capitalistic, DF , but there had been a trend towards capital getting more of the national income over the past 30 (particularly since 2000)years and I think that is unfair, is leading to difficulty in supporting a safety net, and is going to lead to social upheaval unless we do something about it. Here is a study of how workers have seen their share of national income go down over the past
30 years. http://www.clevelandfed.org/research/tr ... gropro.cfm

I don't see it as being anti-capitalist to try to change things that have changed negatively since a given point of time (1980), to try and change policies to restore equilibrium between labor and capital. Since the labor/capital ratio had been relatively stable prior to that, the ratio at that time seems a good place to return to. By the way, while it is expected that wages will lag productivity in a recovery., the lag has been a lot worse in this recovery

freeman2 wrote:I'm not anti-capitalistic, DF , but there had been a trend towards capital getting more of the national income over the past 30 years and I think that is unfair, is leading to difficulty in supporting a safety net, and is going to lead to social upheaval unless we do something about it. Here is a study of how workers have seen their share of national income go down over the past
30 years. http://www.clevelandfed.org/research/tr ... gropro.cfm

I don't see it as being anti-capitalist to try to change things that have changed negatively since a given point of time (1980), to try and change policies to restore equilibrium between labor and capital. Since the labor/capital ratio had been relatively stable prior to that, the ratio at that time seems a good place to return to. By the way, while it is expected that wages will lag productivity in a recovery., the lag has been a lot worse in this recovery

"Unfair."

". . . going to lead to social upheaval . . ."

". . . restore equilibrium between labor and capital . . ."

Again, the solution is not the market, but government . . .

You can call my viewpoint "dogma;" it's your right. However, your viewpoint is not any less "dogma" (sic) than mine.

All I need to refute it is Europe. They've certainly tilted the playing field toward workers (far more than anything we've ever tried here). Does it work? That depends on one's viewpoint.

I see rioting in Greece, Spain, etc. and I don't really think it does. Government cannot negate the rules of economics. When it comes in with a heavy hand, government often receives the back of the hand from those rules.

bbauska wrote:We can talk all day and night about how much should a person get for a wage. My point is:

Is it the Government's responsibility to ensure that one worker is paid equally with another, even though productivity is different.

Actually, the question is not 'equality'. It's whether work pays. If wages are low, that reduces the incentive to work. As a nation, surely you don't want to have a situation where the incentive to work is reduced. That's what happens when wages fall.

I look at the NFL last year. They went on strike because the owners made more money. Apparently greed was an issue because the players are being paid to play a freakin' game! The players have contracts. If the players do not want to play for X salary, then don't! Just wait until your contract comes up for negotiation, and dicker for more money. The NHL is doing this, and now the players are not getting any money. Either are the owners. This is the same situation as the Hostess company. The workers/unions asked for more money. The business said no, and closed. Yes, the Hostess owners got bonuses, but the employees are being paid a little bit more than minimum wage, too.

WRONG! The company asked the employees to take a pay cut. One of the reasons they refused to was that they'd noticed that the people running the company - which had raided the pension fund and then noticed it was underfunded (oops!) - were awarding themselves large pay increases as the company slipped back into bankruptcy.

Obviously minimum wage is not the issue. It is equality of pay. The workers want to be paid similarly to owners/managers. Until the workers place some money at risk in the business, they have no right to similar wages.

STILL WRONG. Employees at Hostess had equity in the company. When it was brought out of administration in 2009, part of the deal was that employees gave up some of their contractual rights in exchange for equity.

And I repeat, it's not about 'equality'. That's DF's caricature of the argument, and is as silly as it was 100 years ago. It's about a fair day's pay for a fair day's work.

In summation, I would think that a worker should negotiate for higher wages, and the employer should pay according to productivity. The government should not mandate what that pay should be, regardless of what the standard of living is in Ghana or anywhere else.

When the government is having to step in and support people on poverty pay, using taxpayers money, then it becomes the government's business, and that of the taxpayers.

Anyway, your point about productivity is odd. The US is far more productive than it was 30-40 years ago, but real-terms pay has stalled for all by the people at the top. Seems that this is not actually working too well in practice.

For all his faults, Henry Ford got it. He didn't just pay according to 'productivity'. He worked out that if he paid his employees enough that they'd be about to buy his product (cars), they would be likely to, and what's more competing employers would come under pressure to do the same, which added to the wage bill, but it also meant people with more disposable income. Potential customers.

Unfortunately, modern business is far more short-termist and less visionary than Mr Ford, and it's all about quarterly reporting and shaving margins etc. Meantime, taxpayers like you are paying subsidies through welfare.

Doctor Fate wrote:So, why would they raise wages? It's called "supply and demand" for a reason.

In your view, government can change the laws of economics. Good luck with that.

Which 'laws of economics' are you referring to here?

Minimum wage policy works alongside supply and demand. One of the things it does is to increase the disposable income of the lowest paid workers. This provides extra 'demand'. The economy, with the slack that it has in it with unemployment etc, can easily expand to meet that demand, which would be a good thing.

Now, please quit with the childishness (quoting Imagine? why you've never done that before!), and either address things without simply denigrating others' positions or at least try and back your ideas up with some evidence.

danivon wrote:

Doctor Fate wrote:So, why would they raise wages? It's called "supply and demand" for a reason.

In your view, government can change the laws of economics. Good luck with that.

Which 'laws of economics' are you referring to here?

Minimum wage policy works alongside supply and demand. One of the things it does is to increase the disposable income of the lowest paid workers. This provides extra 'demand'. The economy, with the slack that it has in it with unemployment etc, can easily expand to meet that demand, which would be a good thing.

At the end of this post, you cite the need for evidence. I see none in your argument.

What is foolish is to simply believe we can wish poverty away. "If a young adult cannot produce enough of value to justify being paid a living wage, nothing we do to the minimum wage will help. He, the institutions which trained him and the society in which he lives, have far bigger problems." (cribbed from the Financial Times)

You speak of "disposable income" and AlterNet has a piece that is on the same page:

To get the economy back on track, spending power has to be in the hands of those who actually spend in the real economy. That means regular people, not the super-wealthy who tend to hoard wealth or invest in financial products. The minimum wage story is not just a story about income inequality, but rather it’s about an elite that has hijacked the economic system and made it work less productively than before while redistributing more of what is working to themselves.

In other words, it's income redistribution.

Now, how about some facts:

Out of 73 million hourly paid people (excluding all the self-employed) some 4.3 million get the minimum wage or less. Well, that’s close to 6% of the relevant labour force (or more like 3% or so of the total labour force including salaried workers). Changing the pay rate of 6% might have some marginal effect on inequality, yes.

But look a little more closely at the figures. Of those at or below minimum wage some 39% are in food prep and related industries. This includes all of your friendly neighborhood waiters and bartenders and we all know absolutely that they’re not living purely on their wages. We rather get reminded of this when we foreigners forget to leave them a tip (I have actually had a waiter in NYC tell me, as I was sitting down, that he had to tell me as a foreigner that a 20% tip was normal). Indeed I’ve done the job myself for a couple of years and no one at all goes into that industry for the joy of the paycheck. It’s the tips that matter and they make minimum wage an irrelevance (I suspect even more than used to be true in the place I worked. The Motley Fool HQ is now across the street which should do wonders for tip income).

Another 17% are in sales and related jobs. Again, no one is doing that sort of work for minimum wage without there being a commission system on top.

Another way of slicing the same numbers is that 50% or so of those on minimum wage are 24 or under: students and trainees in effect.

Changing the wages paid of that over 50% of minimum wage earners who get tips or commission on top of the minimum wage really isn’t going to change inequality very much. Or another way of looking at this is that once you take out those for whom minimum wage is just a basic, before tips and or commissions, we end up talking about 3% or so of hourly paid workers, or something like 1.5% of the total workforce.

Game-changer?

Nope. Just something that will end up with fewer teens working, higher costs and prices, etc.

You want to change lives? Teach people how to live on less than what they make. Teach them the importance of hard work and a high-quality, usable education.

Doctor Fate wrote:At the end of this post, you cite the need for evidence. I see none in your argument.

Freeman has provided plenty. I have already cited the UK experience. You have... ?

What is foolish is to simply believe we can wish poverty away. "If a young adult cannot produce enough of value to justify being paid a living wage, nothing we do to the minimum wage will help. He, the institutions which trained him and the society in which he lives, have far bigger problems." (cribbed from the Financial Times)

It's great to see the original thought here. When did they publish that? In what context?

It's not about 'wshing' poverty away. But it is a way to reduce poverty and increase the incentive to work.

You speak of "disposable income" and AlterNet has a piece that is on the same page:
...
In other words, it's income redistribution.

Wait... So if I can find a Nazi who said something similar to you and then talked about killing all the Jews, do I win? A pretty fatuous means argument, frankly.

It's not about redistribution, it's about making work pay. Sure some people see it as part of 'redistribution', but then again what has been the trend in recent decades? Largely it has been 'redistribution' from the poor and the middle to the rich. Maybe that's what capitalism is supposed to do, but it isn't sustainable.

Game-changer?

Nope. Just something that will end up with fewer teens working, higher costs and prices, etc.

Well, there are ways to help. for example, the UK has lower minimum wage rates for under-21s, precisely to avoid the problem of youngsters not being able to work.

It makes sense to have age-banded rates, while still increasing the main minimum wage to something more related to cost of living.

You want to change lives? Teach people how to live on less than what they make. Teach them the importance of hard work and a high-quality, usable education.

Sure, we can teach prudence, although if people are being paid so little that they get state assistance, that doesn't help much. One way to teach the importance of hard work is to reward it appropriately. Hard work that pays a poverty wage is not going to be seen as important. Education is of course important, but not everyone will get it or will benefit from it, and even the poorly educated can get jobs.

So, what is the amount that a person, or a family, can live on in a year? Why should the basic income through full time work not allow someone to reach that level?

danivon wrote:

Doctor Fate wrote:At the end of this post, you cite the need for evidence. I see none in your argument.

Freeman has provided plenty. I have already cited the UK experience. You have... ?

Plenty--as you've seen if you read the rest of my previous post.

What is foolish is to simply believe we can wish poverty away. "If a young adult cannot produce enough of value to justify being paid a living wage, nothing we do to the minimum wage will help. He, the institutions which trained him and the society in which he lives, have far bigger problems." (cribbed from the Financial Times)

It's great to see the original thought here. When did they publish that? In what context?

It's not about 'wshing' poverty away. But it is a way to reduce poverty and increase the incentive to work.

There are many ways to increase the incentive to work., One would be not subsidizing able-bodied adults who refuse to work. This bit from Nancy Pelosi's daughter is priceless and a great demonstration of what I'm saying.

You speak of "disposable income" and AlterNet has a piece that is on the same page:
...
In other words, it's income redistribution.

Wait... So if I can find a Nazi who said something similar to you and then talked about killing all the Jews, do I win? A pretty fatuous means argument, frankly.

What is fatuous is dragging Godwin's Law into an argument.

That clip I cited from the AlterNet article is exactly what you and freeman2 are pushing.

It's not about redistribution, it's about making work pay. Sure some people see it as part of 'redistribution', but then again what has been the trend in recent decades? Largely it has been 'redistribution' from the poor and the middle to the rich. Maybe that's what capitalism is supposed to do, but it isn't sustainable.

Please. "It's not redistribution?"

Let's see.

Who does the "increase" in the minimum wage come from? From an employer. Where does he/she get the money?

Either from his/her own pocket or by passing the costs onto his consumers. It is mandated by the Government that the money goes to the minimum wage recipient.

You can call it a "coconut" or "Hawaii." It's still redistribution--taking from A by government fiat and giving it to B.

You want to change lives? Teach people how to live on less than what they make. Teach them the importance of hard work and a high-quality, usable education.

Sure, we can teach prudence, although if people are being paid so little that they get state assistance, that doesn't help much.

I don't know how you can say that--with 15+% percent getting food stamps.

Btw, I can't help but notice you complain about facts, I include plenty of facts, and you cut them out and don't respond to them. That seems a bit disingenuous. Actually, it seems very disingenuous.

One way to teach the importance of hard work is to reward it appropriately. Hard work that pays a poverty wage is not going to be seen as important. Education is of course important, but not everyone will get it or will benefit from it, and even the poorly educated can get jobs.

Given the number of people on minimum wage is approximately 1.5% of the workforce (one of those inconvenient facts you excised), by and large hard work does pay off.

There is a system which rewards those who aspire/achieve the bare minimum in terms of education and skills. However, it is not capitalism.

So, what is the amount that a person, or a family, can live on in a year? Why should the basic income through full time work not allow someone to reach that level?

So, those who would never define what a "fair share" of the tax burden was want to demand conservatives define what a "fair wage" for unskilled, not in demand labor is?