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EFLtrainer
Joined: 04 May 2005
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 Posted: Thu Feb 15, 2007 12:26 am Post subject: Minimum Wage redux |
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I said the same thing many months ago. I guess the CEO of COSTCO is a leftwing, frothing-at-the-mouth lunatic, too, eh?
Costco CEO: Raising Minimum Wage Is A Good Thing
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By: Nicole Belle on Wednesday, February 14th, 2007 at 9:06 AM - PST
I get so tired of the naysayers about the raise in the federal minimum wage causing unemployment, when studies show the opposite is true. So then, it is a nice thing to see a CEO backing up that info too.
AFL-CIO:
...Jim Sinegal, who founded the discount chain Costco Wholesale Corp., told The Washington Post yesterday that it makes good economic sense to raise the minimum wage.
The more people make, they better lives they're going to have and the better consumers they're going to be. It's going to provide better jobs and better wages...
Chuck Collins, a senior economist for the Institute for Policy Studies, has more on the business group Tompaine.com. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Thu Feb 15, 2007 5:00 am Post subject: |
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| When your workers can't afford the things you make and sell, you're not going to have a very happy and productive work force. It seems to me that was Ford's philosophy. Ford wasn't a left wing freak (he was a right wing freak) but even he saw the positive ramifications of paying his work force a living wage. |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Fri Feb 16, 2007 4:35 am Post subject: |
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| It is simple: they can't afford to save it. If you give it to them, they will spend it. The reason big business doesn't like it is that it goes to the workers' pockets first. |
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ddeubel
Joined: 20 Jul 2005
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| Posted: Fri Feb 16, 2007 5:58 am Post subject: |
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| Quote: |
| It is simple: they can't afford to save it. If you give it to them, they will spend it. The reason big business doesn't like it is that it goes to the workers' pockets first. |
This first to the troughism is certainly part of it, but not all. Workers with less, also are workers that can be controlled more. For whatever reason. Further, workers who are paid less, tend to work harder. Truism. I don't mean they are more satisfied, just more desperate. This has been key to a lot of American productive capacity.
Is it right? NO. But from the hill top, the ants tend to look like pleasant beings....
DD |
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luvnpeas
Joined: 03 Aug 2006
Location: somewhere i have never travelled
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| Posted: Sat Feb 17, 2007 3:38 am Post subject: |
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Agreements between consenting adults are none of the government's business. Employment is an agreement between consenting adults. You have the right to make me a bad offer for work, and I have the right to accept it.
I doubt studies show raising that minimum wage reduces unemployment. An economy is an extremely complex thing, and the minimum wage is an extremely political thing. Put the two together, and you get a high probability of "research" finding whatever some ideology wants to believe.
It is fairly common-sensical that raising the minimum wage will 1) hit small businesses the hardest, and 2) increase unemployment. If you increase the cost of something, you increase the incentive to find an alternative to it.
The counter, I suppose, is the trickle-up theory mentioned in this thread. Modern politics consists of these endless and ultimately unresolvable see-saw "disputes" between the trickle-down ideologists and the trickle-up ideologists. Eventually, the economy does poorly (for whatever reason), and the group in power is replaced by the other, which reigns until the next downturn (for whatever reason), to be replaced by its partner in crime again, and so on. Nothing is truly resolved, no theories are ever verified, but everybody gets to feel alternately justified and outraged. Why don't we just get the government out of the business of social engineering entirely? |
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Octavius Hite
Joined: 28 Jan 2004
Location: Househunting, looking for a new bunker from which to convert the world to homosexuality.
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| Posted: Sat Feb 17, 2007 4:04 am Post subject: |
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| The problem is that the unions have failed to go after service workers in any meaningful way. Groups like the AFL-CIO are too busy trying to keep manufacturing jobs that are destined for China, India, South Korea, etc and so they neglect the huge service industry that if unionized would breed a rebirth of the middle-class growth that came from the unionization of the automakers and other manufacturing. |
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EFLtrainer
Joined: 04 May 2005
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| Posted: Sat Feb 17, 2007 7:19 am Post subject: |
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| luvnpeas wrote: |
I doubt studies show raising that minimum wage reduces unemployment. An economy is an extremely complex thing, and the minimum wage is an extremely political thing. Put the two together, and you get a high probability of "research" finding whatever some ideology wants to believe.
It is fairly common-sensical that raising the minimum wage will 1) hit small businesses the hardest, and 2) increase unemployment. If you increase the cost of something, you increase the incentive to find an alternative to it. |
Actually, the economics are pretty solidly on the side of raising the wage. It was argued for ages and considered dogma that what you state is reality. But sometimes common sense is wrong. This is one of those cases. Yes, trickle up, it does. What DOES NOT happen is trickle down. The wealthy never give it up. When the middle class and incomes expand, it is solely due to an expanding economy, not the largesse of the wealthy.
Anywho, sorry, the evidence is pretty solid: raising the minimum wage results in little or no change in unemployment or inflation. Unemployment seems to raise no more than a point or so. Yes, it probably leads to the least skilled losing work, but shouldn't that fact be used to encourage staying in school longer, developing skills, etc?
And to call economics social engineering is a bit strange. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Sat Feb 17, 2007 7:38 pm Post subject: |
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| EFLtrainer wrote: |
| luvnpeas wrote: |
I doubt studies show raising that minimum wage reduces unemployment. An economy is an extremely complex thing, and the minimum wage is an extremely political thing. Put the two together, and you get a high probability of "research" finding whatever some ideology wants to believe.
It is fairly common-sensical that raising the minimum wage will 1) hit small businesses the hardest, and 2) increase unemployment. If you increase the cost of something, you increase the incentive to find an alternative to it. |
Actually, the economics are pretty solidly on the side of raising the wage. It was argued for ages and considered dogma that what you state is reality. But sometimes common sense is wrong. This is one of those cases. Yes, trickle up, it does. What DOES NOT happen is trickle down. The wealthy never give it up. When the middle class and incomes expand, it is solely due to an expanding economy, not the largesse of the wealthy.
Anywho, sorry, the evidence is pretty solid: raising the minimum wage results in little or no change in unemployment or inflation. Unemployment seems to raise no more than a point or so. Yes, it probably leads to the least skilled losing work, but shouldn't that fact be used to encourage staying in school longer, developing skills, etc?
And to call economics social engineering is a bit strange. |
Economists tend to agree on two things, efl. 1) Rent controls are bad. 2) minimum wage laws cause unemployment and/or underemployment. Full stop.
By the way, what is a "point" in unemployment? Do you mean a percent? Do you know how many people a percent is? It is a percent of a percent? Typically, a "point" in econ is one percent. If the minimum wage increased unemployment by 1% it would be an unmitigated disaster of historical proportions.
If you do not understand the mechanics of something, don't talk about it.
It is the most unskilled, as you point out, who loose their jobs at Burger King or wherever. You say they should stay in school longer etc. What nonsense. They are the lowest skilled because they DIDN'T stay in school at ALL. Losing their jobs will encourage criminality, welfarism or vagrancy. They are the least will suited to return to school.
The lowest skilled have only one chance. That someone will hire them at a "testing" wage (where by the employer can test out the employees abilities at a minimum cost) and train them. School is a non-starter. Burger King is all they got.
But that doesn't matter much either. In America, there will just be increases in illegal Mexicans working, as their comparative advantage is that they work below minimum wages laws. Yet another reason why blacks and Hispanics are on a collision course in America. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Sat Feb 17, 2007 7:43 pm Post subject: |
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http://www.azcentral.com/news/articles/0210biz-teenwork0210.html
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New wage boost puts squeeze on teenage workers across Arizona
Employers are cutting back hours, laying off young staffers
Chad Graham
The Arizona Republic
Feb. 10, 2007 12:00 AM
Oh, for the days when Arizona's high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power.
That's certainly not the case under the state's new minimum-wage law that went into effect last month.
Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees.
advertisement
And teens are among the first workers to go.
Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support.
Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school.
"I've had to go to some of my kids and say, 'Look, my payroll just increased 13 percent,' " he said. " 'Sorry, I don't have any hours for you.' "
Messner's monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high.
"We go to great lengths to hang on to our high school workers, but there are a lot of kids who come in and get one check in their pocket and feel like they're living large and out the door they go," he said. "We never get our return on investment when that happens."
For years, economists have debated how minimum-wage increases impact the teenage workforce.
The Employment Policies Institute in Washington, which opposed the recent increases, cited 2003 data by Federal Reserve economists showing a 10 percent increase caused a 2 percent to 3 percent decrease in employment.
It also cited comments by notedeconomist Milton Friedman, who maintained that high teen unemployment rates were largely the result of minimum-wage laws.
"After a wage hike, employers seek to take fewer chances on individuals with little education or experience," one institute researcher told lawmakers in 2004.
Tom Kelly, owner of Mary Coyle Ol' Fashion Ice Cream Parlor in Phoenix, voted for the minimum-wage increase. But he said, "The new law has impacted us quite a bit."
It added about $2,000 per month in expenses. The store, which employs mostly teen workers, has cut back on hours and has not replaced a couple of workers who quit.
Kelly raised the wages of workers who already made above minimum wage to ensure pay scales stayed even. As a result, "we have to be a lot more efficient" and must increase menu prices, he said.
While most of the state's 124,067 workers between the ages of 16 and 19 made well above $5.15 per hour before the change, the new law has created real-life economic opportunities.
Liliana Hernandez brings home noticeably more under the new law. The 18-year-old, who attends Metro Tech High School in Phoenix and works part time at Central High School, is saving the extra money, maybe to put towards buying a used car.
Hernandez said she deserves the raise just like any other Arizona worker even if she still lives with her parents.
"I'm doing the best I can and working hard like everyone else," she said.
In the months leading up to last November's vote, advocates of the new law maintained that it would help Arizona create a "living wage" for some of the poorest workers.
The Economic Policy Institute estimated that 145,000 Arizonans would receive a pay raise. That was how many made $5.15 to $6.74 per hour.
At one press conference, a mother described how she was unable to afford basic school supplies for her son.
Opponents, however, said there was little talk about teenage workers. "Everyone wanted to focus on the other aspects of the minimum-wage campaign," said Michelle Bolton, Arizona state director of the National Federation of Independent Business.
An Employment Policies Institute study determined that 30.1 percent of affected workers in Arizona fell between the ages of 16 and 19.
"Workers affected by the minimum-wage increase are less likely to be supporting a family than the typical Arizona worker," it stated. "For example, 30.4 percent of the workers are living with their parent or parents, while only 7.6 percent of all Arizona workers are in this category."
John Weischedel, a senior at the East Valley Institute of Technology in Mesa, knows he is lucky to be making $8 per hour at an auto dealership and learning technical skills. So are most of his friends who make $9 or more per hour while still attending high school.
After the minimum-wage law went into effect, "a couple of my friends got laid off - they worked in fast food," he said. "They're going to wait until they're out of high school to find other jobs." |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Feb 18, 2007 4:39 am Post subject: |
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| BJWD wrote: |
Economists tend to agree on two things, efl. 1) Rent controls are bad. 2) minimum wage laws cause unemployment and/or underemployment. Full stop.
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Economists agree but do voters and politicians? We're not technically living in any economists ideally operating economy where consumers make rational choices. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Sun Feb 18, 2007 5:26 am Post subject: |
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Fair enough. But I would caution you at thinking that a typical economist is as distanced from reality as is, say, a typical "sociologist". They tend to deal with the data as it is and look for these relationships. They aren't just guessing.
We can all have different policy goals. You can want the MW raised and be comfortable with the increased unemployment. Or, you can believe with the economists that employment is more important than the MW and reject the whole thing. It is a matter of policy preference. But, you can not suggest that the relationship between MW and higher unemployment doesn't exist. Additionally, you have to understand that those people who are made unemployed are those who will have the least-best ability to deal with being unemployed.
So, increasing the MW should be met with increased assistance for the totally unemployable, as, they have been made totally unemployable because the government has legislated it so.
Again, this is all basically undone by the illegal Mexians. Their comparative advantage against the "documented" population is that they will work for lower than the MW stipulates. The Mexicans render this whole discussion quite pointless. |
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luvnpeas
Joined: 03 Aug 2006
Location: somewhere i have never travelled
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| Posted: Sun Feb 18, 2007 3:53 pm Post subject: |
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| BJWD wrote: |
| Fair enough. But I would caution you at thinking that a typical economist is as distanced from reality as is, say, a typical "sociologist". They tend to deal with the data as it is and look for these relationships. They aren't just guessing. |
| John Kenneth Galbraith wrote: |
Economics is a subject profoundly conducive to cliche, resonant with boredom. On few topics is an American audience so practiced in turning off its ears and minds. And none can say that the response is ill advised.
Economics is extremely useful as a form of employment for economists.
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Caution about treating economic research as scientific cuts both ways. You can find in it anything that you want to believe: Reaganites and Marxists have done so with equal success.
I doubt very much that economics agree "rent controls are bad." First, I doubt very much economists agree on anything. But if they did, I doubt it would contain a half-baked moral term like "bad."
Mexicans don't come to the US to work for less than minimum wage. They can do that in their own country. The majority of illegal immigrants in the US work for minimum wage or better in jobs Americans don't want to do, like spending all day in a field picking strawberries or roofing in the middle of summer. |
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Sincinnatislink
Joined: 30 Jan 2007
Location: Top secret.
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| Posted: Sun Feb 18, 2007 4:35 pm Post subject: |
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| Neoliberal bulls*it. All of this. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Feb 18, 2007 4:59 pm Post subject: |
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| Sincinnatislink wrote: |
| Neoliberal bulls*it. All of this. |
Wow, your ability to craft an argument is a credit to all here. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Feb 18, 2007 5:02 pm Post subject: |
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| BJWD wrote: |
Again, this is all basically undone by the illegal Mexians. Their comparative advantage against the "documented" population is that they will work for lower than the MW stipulates. The Mexicans render this whole discussion quite pointless. |
People don't want to do the work Mexicans do because it is low paid and hard. The argument to do away with illegal Mexican workers is pay more for picking field tomatoes. Americans will then take those jobs. Given the porous border, it's hard to control the flow of illegals. However, if Americans are in line for those jobs, there is no job for them to come north to, no? |
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