Korean Job Discussion Forums

[Adventurer]

By ELLEN SIMON, AP Business Writer
1 hour, 38 minutes ago



NEW YORK - More than 650 economists, including five winners of the Nobel Prize for economics, called Wednesday for an increase in the minimum wage, saying the value of the last increase, in 1997, has been "fully eroded."


Economists including Nobel prize winners Kenneth Arrow of Stanford University, Lawrence Klein of the University of Pennsylvania, Robert Solow of the Massachusetts Institute of Technology, Joseph Stiglitz at Columbia University and Clive Granger of the University of California, San Diego said in a statement released Wednesday that the real value of today's federal minimum wage is less than it has been at any time since 1951.

Federal minimum wage is $5.15 an hour. Twenty-two states and the District of Columbia have set their minimum wages above the federal level.

"We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed," the economists wrote.

Critics of a minimum wage hike have contended a higher minimum wage lead employers to cut jobs or move them offshore. They also say that many minimum wage earners are teenagers working after-school jobs.

The economists disagreed, writing that a phased-in increase in the federal minimum wage to $7.25 "falls well within the range of options where the benefits to the labor market, workers, and the overall economy would be positive."

The economists wrote that they share the view of a 1999 Council of Economic Advisors Economic report that found "the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment."

The economists wrote, "While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families."

The economists spoke on a conference call hosted by the Economic Policy Institute, an economic research group based in Washington, D.C.

[I suppose when Nobel Prize argue that such a small increase doesn't hurt the economy, it makes it hard for fiscal conservatives to include opposition to it in their repertoire. Anyway, are not China and India increasing their per capita income? Also, a huge gap between rich and poor whether in Canada or the U.S. would hurt the respective economies when it comes to competing with other OECD countries.]

[cdninkorea]

I've heard this before, and I have a question about it:

I've seen and heard very convincing evidence that minimum wages lead to increased unemployment- from economists (Milton Friedman, for example) and various (right-wing) think tanks.

Yet I also hear people, sometimes well qualified people, argue that minimum wages have little to no effect on unemployment levels. Yet I've never seen them present an actual arguement about why the economic models and proofs that demonstrate minimum wages=higher unemployment are wrong.

Why is that?

[gang ah jee]

[huffdaddy]

[ddeubel]

There are many ways to argue for and against a rise in minimum wage.

I would take the road which holds 2 of the arguements for a raise (especially relevant at this given "economic" time).

1. Profit margins. Is the business making money, are profit levels across the board generally large? If so, there is the ability of business in general to absorb a rise in the minimum wage without a negative effect on the running of the business. Sure , the higher ups will have to forsake their yearly stock options and bonuses or buy one less new toy --- but time to create some equity. It is out of control.

2. The morality of it. The minimum wage has to keep to inflation or it is just a prop. It forces a lot of the economy to go "underground" and society as a whole "officially" loses -- that is the proper piggy bank of the country. And on a purely compassionate level, it is degrading for people, whatever age/class, to do hard work for such a pittance.

Let's not forget the Republican's most audacious bill the last 2 years. Nothing to do with civil rights, Guantanamo or national insecurity. It was their failure to pass the minimum wage hike and then try to blame the Democrats for it -- because they tied massive tax cuts for the rich to it (regarding the inheritance tax). SHAME SHAME SHAME.

Forget all else. This kind of politics is one reason to vote anything but Republican.

DD

[Gwangjuboy]

They should raise the minimum wage for people over a certain age and keep it low for students who usually have support from other sources e.g student loans, parents etc.

[Adventurer]

[jmbran11]

[Moldy Rutabaga]

What seems likely to me is not that the lower the better or the higher the better, but that there is a sweet spot where minimum wages protect the vulnerable from being exploited where not being too high to discourage employment. I've seen both-- I remember being in Alberta in 1995 when the wage was $5 CDN, which was a wage no one could live on, and trying to find work in BC where the minimum was $8 CDN, which was a wage a lot of employers wouldn't or couldn't pay. Thus I had the choice of making peanuts in one province or not getting a job in the other because the employers found buying a computer cheaper.

I don't agree with the idea that the minimum wage should only apply to a certain type of people; such would not only be a legislative burden but would be viewed justifiably as unfair by those deemed outside the law.

The problem with a minimum wage that's too low is that it doesn't show up on economic indices, but in a broader way it's terribly damaging to the social contract. I read something that made me think a while ago-- the writer said, "The bible tells us that he who doesn't work shouldn't eat; but then isn't the corollary of this that someone who does work should eat?" To expect people to work but to abuse them with an unfair wage, and to put them in a society which doesn't respect what they do-- well, in the long run it's dangerous to make people feel like suckers for obeying the rules.

Ken:>