That minimum wage is literally a secured base upon which a warranty is implied, of the sort spelled out in the bill of rights, vis. : the right to enjoyment of happiness,is easily dismissed as just that: an a warranted implication.
But the moral implication of such a warranty is very basic, and as to the question, as to who does an inflationary spiral hurts most: the worker//consumer-or the owner//producer-revolves around the double entailment of producer-as the owner and/or the worker.
Both, the worker and the owner/capitalist produce, in different senses, and production is the pivotal element in the formula. But to the question as to what is contained in production which really is common to both, is best defined by again reverting to the question : who gets most out of inflation? For it is a very basic character of limits, as minimum limits the value of per hour wage that it is not allowed to fall under.
Production and product demand can be manipulated, and inflated prices favor the rich, if wages can be raised as well. This creates inflation. But in order to keep product demand, wages have to be increased, as well. So where does the benefit lay?
The thing is: there is an unseen as yet upper limit as well. Where, simply the management of money supply, demand and production may falter. This is where we are, now, at a time, when the internationalization of world capital in toto, is yet to kick in.
The upper limit to individual capital holding I intuit to be one trillion dollars, and within a generation , this may come to be. I predict, this upper limit, can not sustain any modicum of a minimum wage, since dynamically, the emphasis will shift to upper limits.
So progressive opposition to minimum wage will seem to be an insubstantionally voiced cry in the desert, because, it will make little difference. That it is a progressive opposition, is also questionable, since basically, it is the very opposite: a regressive plan to rollback prices and wages, -to re-emphasize lower limits, to avoid the panick which may ensue in capital markets world wide, where the dollar will become as worthless as the penny has become in the course of only two or three generations.
This is a free wheeling intuitive approach of the big picture, the long run, where both: the worker and the capitalist may suffer. Rather then opposing a yet controllable process, leave limits where they are, and work with the substantial aspects of the dynamics behind the limits.
A minimum income also causes prices to rise. It also redistributes incomes.
The difference is that a person has a choice about which products to buy and from which company. There is a feedback system in place.
The buyer is paying someone to produce a product which he/she wants or needs.
People don’t have a choice in paying taxes. (Or to be more precise, middle class people doesn’t have a choice. The wealthy can avoid taxes.)
The taxpayer is paying to get services which he/she may need, use or agree with but also very likely that he/she is paying for services which he/she does not want or agree with.
I think that you equate the higher min. wage with the reduction of positions available, the opportunities available and I don’t see why. Since it is across the board, it might just lead to inflation. But if you add outsourcing and offshoring…then I can see your point. A higher min. wage makes labor in american soil higher. Then again, it is not always as clear cut as the math would suggest. Boeing’s 787 Dreamliner being outsourced to Japan and Italy cannot be explained by their lower labor cost. But that is only one industry. In as far as a job in McDonalds for example I don’t believe that the level of the wages creates demand. As long as there is demand there will be a need for labor, and increasing wages could actually increase demand. Your case for a negative effect due to higher wages is simply not there. Now, as I said, you could make a case that some jobs will be outsourced to India, China, Dominican Republic…sure, but that depends on the total costs of ownership involved and it applies only for certain industries. It makes little sense in the fast food sector.
I agree with you to some extent. Adequate wages might reduce the drive in employees to venture for something better, reducing turnover. I think that this applies only to some individuals and not across all employees. The most negative effect that I see is that dense cities need to lose some of their population. A higher wage would keep people from venturing into other areas of the country and perhaps increase the influx of people into these cities because they now can afford it.
Adequate wages remove at least the need of workers to keep not one but two or three jobs. A living wage may allow a worker to survive on only one job, creating openings in other markets. Bringing in more people into the workforce is not a bad thing. Maybe bare minimum jobs will be harder to get because the available applicants will have better resumes, attracted by the adequate wages…I can see that. I don’t think that this is a bad thing though. Competition, in my opinion, is good. It should be our goal to bring up people to a higher standard rather than guarantee a job to the most unqualified. I also don’t think that this is actually the case. In the use the current argument against immigration is that they are taking jobs away from American workers. I don’t buy that. In Alabama their anti-immigration laws affected farmers who rely on cheap undocumented labor. (buzzfeed.com/davidnoriega/al … .oveOBPBnO). Certain jobs are simply not being pursued by able American bodies and are somehow beneath them, which is why they fall into the hands of undocumented workers. Would a higher min. wage affect such jobs? I don’t know; all I know is that there is a broad spectrum of bottom of the barrel jobs and some go unfulfilled.
Agreed, tough it depends on the reliability of automation.
But why would they lose their jobs to begin with. Sure some workers will enter the workforce with capable resumes, but at the same time we have job openings left open by workers who are now able to survive with only one job instead of two. There is also the fact that some jobs go unclaimed by Americans where displaced American workers, if any, could gravitate towards. If indeed a non-worker today does so out of a choice because of secured affluence it is not a guaranteed that such workers would jump back in to get a job at McDonalds. I highly doubt it. But this is just as much speculation as saying that they will jump back in. Enough to say that there will be an effect, but I wouldn’t conclude based on what I know today that retirees, for example, will flock to employment lines at McDonalds any more that workers today would flock to agriculture jobs even with an increase in pay-- not when other prospects are there to be pursued.
Yes, I agree. I didn’t mean that point as a criticism of a minimum wage, but as support for the idea that a minimum wage isn’t ‘free’ just because it acts on businesses. Its effects are tax-like.
But the price increases from a minimum wage filter through society. If we have to pay the janitor more, then it costs more to wash the floor, and every business that has a moderately clean floor is going to have to increase its prices. If the price of collecting garbage goes up, every business that produces garbage is going to have to raise its prices. Choice won’t do a lot in this case, because the price increase will be pervasive (it will encourage people to avoid businesses and products that employ a lot of humans in their production).
So, again, the effect is tax-like: the price of almost all goods and services increases, effectively leaving people with less money in a poor attempt to redistribute wealth from the top to the bottom (but actually redistributing from the top and bottom to the middle). And as a tax, it is a regressive consumption tax: a millionaire and a pauper will pay the same increased price for a loaf of bread.
People don’t have a choice in the minimum wage either. If I need a job done that is worth $14/hour to my business, and the minimum wage is $15/hour, I am not allowed to hire someone at a price that makes doing that job worthwhile, even if there is someone who desperately wants to do the job for $14/hour.
Anyway, my point is just that the minimum wage is often treated as though it’s a ‘free’ policy, as though there’s no associated cost that society as a whole pays, and it just benefits people without costing anybody else anything. In fact, it operates much the same way as a tax, except that the cost tends to be payed by the least-well-off in society, those who are most sensitive to price increases. And it is non-transparent: the cost increases don’t accrue evenly across all good and services, but in complicated and hard-to-trace ways. I can’t see how this is better than a progressive tax on individuals that funds a minimum income at the same net social cost. The minimum wage seems more expensive and less effective to the same end.
At the extremes, it’s easy to see this effect. Say tomorrow, the minimum wage changed to $100/hour. No one could hire anyone for any job for less than $100. One likely outcome is that the corner store that makes a couple hundred dollars a day would lay off most of its employees. In the short term, businesses couldn’t afford to pay their employees that.
In practice, the minimum wage usually doesn’t work this way. First, increases are small, they’re generally phased in over a period of years, certain types of business and certain types of job are exempted. And I think (though I am less certain of this point) that even a significant increase in the minimum wage would, over the long term, be absorbed by the market in the form of inflation. I’m more certain that, for modest increases, the employment effects on net are few.
But despite that the net effect is roughly zero, the effect isn’t even across affected workers. There is a real increase in unemployment among minorities, women, and other vulnerable classes of worker.
And, as you point out, if the minimum wage doesn’t apply in all jurisdictions, the unemployment effects are going to be worse, as any job that can be done more cheaply in a neighboring jurisdiction will be outsourced. And as I mentioned before, automation will similarly increase unemployment if it costs less than the minimum wage to install and operate a robot that can do the job roughly as well. That will still be a problem in service sector jobs like fast food that can’t be offshored.
While the drive may decrease, there will also be an effect of reducing mobility for anyone whose labor is worth only slightly more than the minimum wage. For those individuals, there will be increased competition for fewer positions, and that will make them reluctant to leave an established job in search of something else.
I agree that it will affect different areas differently, but I think the effect would actually be to increase density. A rural general store has less earning potential than a city convenience store, so they may be less able to absorb the increased labor cost. Over time inflation would probably fix this too, but the lag may be fatal to many rural businesses. One thing the city businesses have going for them is that the raw number of their potential customers who will see a wage increase is greater, meaning their earnings are likely to increase as well.
I agree. Immigration creates more jobs than the immigrants occupy. But again, the effect is not uniform: low-skill workers are actually displaced by immigrants.
And I actually think the minimum wage is good for illegal immigrants, since more employers will be willing to risk hiring illegal workers who they can pay under the table at a lower rate.
To your last paragraph, I admit that my points about increasing labor force participation by people who choose not to be in the job market is speculative. I think it stands to reason, but so much of how minimum wage works across the whole economy is counter-intuitive.
Through consumerism? Immigrants don’t save money to pass to their children in the same way as non-immigrants?
… not to mention sending money to their families across the border.
But then we are talking about the best way of raising the minimum wage. 10.10 an hour would have different effects than a jump to 15.00/hr, a jump of 100% over the current mandated minimum. I don’t doubt that there would be a negative effect on employment levels because small business will not be able to easily absorb the higher labor costs, but studies do show that the benefits to remaining workers would be significant. A higher min. wage would lift many families out of dependency on federal government subsidies which could be directed to assist the 100 to a 150 thousand that are likely to be affected. How a particular company absorbs the higher costs is near impossible to determine because it is not always a math calculation, and certainly not easy to change the operations structures of a company (doing the same production with less employees would require such a change which might not be palatable to owners).
What I’ve been saying.
Nothing in this life is for free. But this is not new and it is why we have current tax exceptions for those that are unemployed or under-employed. In fact, it should be noted, for some it will not be convenient to exchange their federal subsidy for a paying job.
Well, to be fair, automation will be pursued regardless. Any automation that is proven to be effective becomes a norm by the force of competition. A higher min. might accelerate it, but leaving the min. the same will not eliminate automation form replacing workers across the globe. But I wonder how lower birth rates affect the overall available workforce when challenged by automation.
The reduction in positions due to an increase in min. wages will not be felt in all industries. I can see an effect in fast food restaurants, but these will probably be felt as higher prices on products and not a loss of opportunity in other industries. Since most low wage workers are youngters, some in college, I think that their prospects will be affected. Older workers will be challenged to gain a job in an industry that would cease to be the safety net, I don’t deny the challenge, but government can provide subsidies that could ameliorate their situation just as they do today.
I agree with you on this.
I think that some jobs are just too low skill. We have to account for human pride here. There is a reason why you will see a mercedes in subsidized housing and a pair of 200 dollar sneakers on a person living on welfare.
I agree, but it depends on oversight. I don’t think that fast food restaurants will be able to get away with what construction and agriculture get away with.
Yes, of course. In addition, the number of jobs does not increase (workers are replaced by workers and by machines, so the number of jobs decreases) but decreases very quickly, so that the number of the workless persons and welfare recipients (social benefit claimants) increases very quickly - let alone the higher cost of the repair of destroyment, vandalism, of more prisons, more police actions, more policemen, more social workers, more courts, more officers, more judges, more prosecutors, more lawyers (did Carleas mean this jobs? ) … and so on.
Increasing immigrant flow increases government dependence and thus government size and authority. Government eventually must take over all jobs to ensure “proper” utilization of the working masses. Thus government jobs increase in number and private business management jobs decrease in authority and in number - Socialism created through promoted immigration.
I’m not seeing how total employment necessarily changes in any direction due to an increase merely in immigration as long as the population size remains the same. But such migrations do increase obfuscation and the ability to manipulate all facets of society; racial balance, beliefs, allegiances, mindsets, … Immigrants are more easily conned into unwittingly giving more authority to the governance. A policemen can merely say, “it is the law”, and the immigrant seldom knows or has the confidence to question (not that non-immigrants are all that up on the law or confident either). Policemen in the USA have no obligation at all to tell the truth to citizens concerning anything (nor do lawyers or judges).
… and what allows for people like Billary Trump be the only candidates for president of the largest military force on the planet.
I think the evidence on this point is conflicting. We seem to agree that minimum wage increases cause inflation, and inflation would reduce, if not eliminate, the gains for the remaining workers.
But I think it’s important to look at all workers, not just the remaining workers. Studies also show that the lowest-skilled workers face a significant negative impact of a minimum wage. And the remaining workers tend to be second or third income earners: high school students, stay-at-home spouses, etc., i.e. frequently workers who are otherwise better off. So the redistributive effect of the minimum wage isn’t even certain for that class of workers who do benefit.
This is a good point, a minimum wage will at most accelerate adoption that would have happened anyway. But I think it is still an effective criticism of the minimum wage: automation means more and more people won’t be able to provide labor that a machine couldn’t do at a lower cost, so the minimum wage will tend to hit fewer and fewer people. And if, as I’ve claimed, the more vulnerable workers will be the most negatively effected by these trends, then over time the minimum wage will increasingly benefit the most well-off workers at the expense of a growing class of zero marginal product workers.
I should say, I take as a given then, because no policy intervention is free, we shouldn’t implement any policy that we expect not to provide a net social benefit. If the net benefit of the minimum wage is roughly zero (and we have good empirical evidence that it is), then even without any additional negative effects like those I’m presenting here, shouldn’t we reject it? Perhaps the question is better put like this: what is the cost to society of implementing a minimum wage against which we should weigh its benefits (we seem to agree that it is not zero)?
I agree with this, and that’s a part of why I support a basic income. The minimum wage addresses the problem by making very-low-skill, low-value jobs uneconomical. A basic income addresses it by giving very-low-skilled workers a real choice about whether or not a very-low-paying, very-low-skill job is beneath them.
James, Jerky, Arminius, the actual observed outcomes of immigration conflict with what you’re saying. Studies estimate that each additional immigrant creates 2 local jobs, mostly of the sort that can’t be offshored. A report looking at violence and criminality among immigrants and comparing it native-born citizens found that immigrants are on the whole less criminal, less violent and antisocial, less of a behavior problem than their native-born counterparts (as in, 2-5 times less likely to commit crimes, be incarcerated, or reoffend after incarceration). And while the cost benefit analysis of immigration is not settled, at least some reputable studies find that on net, immigrants pay more in taxes than they do in services. This stands to reason since immigrants frequently pay for services they are ineligible to receive, like Social Security.
Complete propaganda bullshit hidden in obscure studies formed to appear just, yet leave out critical details concerning exactly who is actually benefiting in what sort of way (ie. government vs private citizens). The only kinds of jobs being increased are governing and machine jobs (the very point in raising the minimum wage).
The thing to do is look at the unemployment rate vs immigration rate (not that honest statistics could be found for either).
…and then using immigrants to pay for the social security of prior residents??
What is the difference between immigrants paying for SSI and young residents paying for it?
Political arguments are always “weak” on all sides. They are meaningless drivel attempting to use math and statistics to persuade and influence while dodging questions. “Weakness” is all about showmanship, not reality.
I’ll start answering questions from you when you start answering them from me.
I am not arguing against “Progressive Opposition to a MW”, but merely some of the arguments put forth in the effort to justify it.
Over time there will be inflation but it does not mean that it will wipe out the gains in purchasing power afforded by a higher min. wage. It depends on many other factors.
These workers you mention form the majority of min. wage workers so it should not be a surprised if what is left resembles this group.
I would like to point out that more important than the redistribution of wealth, a higher min. wage simply eliminates case of working poor workers, those that put in 40 hours and yet live in poverty. The min. wage should guarantee a livable wage. Inflation will erode some of the positive effects of a higher wage, but not completely and, as it does, you would see employers, charging more, being able to retain and even hire more. Employment is affected by many factors. A higher wage changes the dynamics but it does not bring about doomsday, and, since it doesn’t, it should be considered. Within the law there can be safeguards that should soften the negative effects. Seattle gave small owners a couple of years more to increase their wages. In essence this will give them time to figure out how to absorb the costs while enjoying a competitive advantage over franchise restaurants. I don’t believe that human labor is a commodity which follows the same rules of supply and demand. Higher costs, the argument goes, on labor reduces demand for labor. Labor is not like a beer or a cookies which we could go without if the price becomes too expensive for what we think it is worth. Labor is like medicine to a business and I would predict that either the labor costs will be absorbed or an appropriate substitute (automation, foreign labor, illegal workers) will be sought by employers. Automation and foreign labor is only available in some industries and illegal workers are not easy to hide, so, as far as the fast food restaurant example, I think that inflation (as it happened in NJ) is the most likely outcome. No doubt, under-performing branches will be cut and there will be more available workers on unemployment lines, but this is a short term effect. What happens after is an increase in purchasing power which creates demand and if inflation is really that high that means that the money is there to employ those workers. Like previous wage hikes eventually the employment levels return to a new normal.
Now the issue I have is with the calculation itself that sees a direct correlation between wages and employment because it is the same that decides that off shoring operations is best. Going after the lowest wages is not always translated in net profits for the company. If higher min. wage is bad for the unemployed, is a decrease of the min. wage better? Would it lead to more employment? No, in my opinion, because demand cannot be manufactured. You can increase capacity but this only means you are willing to take more chances, but eventually, if no one is buying your product, then there is no point to employ anyway at any wage. Less money in the worker’s pocket means less demand for goods. It is a vicious cycle that forms.
While automation means a decrease in certain jobs it would affect more those workers working for a min. wage as a second income (students, wives etc.). Workers who can give their entire day for availability will be able to retain the positions that are left.
What is this “good empirical evidence”? If anything experts point to the complexity on gauging the effects-- you instead make it sound as if it was easy.
You ask a good question. Now I would ask: Why have a mandated minimum wage at all? Doesn’t that kill jobs? Perhaps the answer is to provide a living wage. Is every company a good idea? Forbes article brought up a good point: “Arguments in favour of a minimum wage mostly hang on the idea that firms have a responsibility to ensure that their workers earn enough to live on. If a firm can’t pay its workers enough to live on, then it isn’t a viable business, because it is dependent on wage subsidies.” (forbes.com/sites/francescopp … 86f4f560c5). Even if some jobs are lost, even if some companies close, their customers represent a demand in need of supply and someone will inherit that demand and decide to provide a supply creating jobs that pay someone rather than occupy someone that is paid in reality by the state.
Sure, but even working in a pack to provide food, water, and shelter is a far cry from operating a toothpaste mixer or whatever. In that pack, what you’re doing directly relates to the pack’s (and so your own) survival. In the case of operating a toothpaste mixer, spending that much time doing something that has nothing to do with your needs would work against your survival were it not for compensation. Which is why the compensation has to be adequate to sustain survival. It may be that the market will just ensure that it stays that way anyway, I’m not an economist. But it seems to me that if there is a job that takes up all of a person’s time and doesn’t compensate them enough to take care of their basic needs, that is a job that won’t get done, and if you have that as a widespread problem, you’re looking at some sort of societal collapse.
Not if we’re trying to have a society that replaces pack-based subsistence living with something else. And we do, because a small pack of humans looking after their own subsistence can’t produce the next Star Wars movie.
) … and so on.
