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More on The Minimum Wage
#1
Arnold is at it in Kalifornia. And this time it is the minimum-wage.



Quote:California Raises Minimum Wage to $8
8/22/2006
"More than 1 million Californians who earn the minimum wage will get a nearly 20% pay increase over the next year and a half, thanks to an agreement announced Monday between Gov. Arnold Schwarzenegger and Democratic leaders in the Legislature. The hike, the first since early 2004, will lift the state minimum wage to $8 an hour from $6.75. Workers will get a 75-cent increase Jan. 1 and an additional 50 cents on Jan. 1, 2008."

However, passage of another minimum-wage bill is a case of expediency over principal, and common sense. It may make for good PR, but it does not accomplish what it is supposed to do.

Quote:The Minimum WageGood Intentions, Bad Results
By Roger Koopman

Ideas have consequences, Richard Weaver once wrote. They pace the course of human history—both good ideas and bad. And while intentions may be honorable, the passing of time has proven that, in the long term, you can’t get good results from bad ideas.

The minimum wage is a classic example of a good intention and a bad idea. The idea behind minimum wage legislation is that government, by simple decree, can increase the earning power of all marginal workers. Implicit in this idea is the notion that employment is an exploitive relationship and that business owners will never voluntarily raise the wages of their workers. Businesses, we are told, must be coerced into paying workers what they deserve, and only politicians know what this is.

Not only does this line of thinking run contrary to the most basic economic principles of a free society, but it is also patently illogical. If government could raise the real wages of millions of Americans by merely passing a law announcing that fact, then why stop at $3.35 per hour, or $4.65, or even $107 Isn’t $500 per hour more compassionate than $50? Absurd, you say, and I would agree. But the “logic” is perfectly consistent with the idea of a minimum wage, once you have accepted the premise that political decrees can raise wages.

What does make wages rise? It is most certainly not government edicts that simply rearrange and redistribute existing wealth. Wages rise in response to the creation of new wealth through greater productivity. The more that a society produces per capita, the more there is to distribute through the marketplace in the form of higher wages, better benefits, and lower prices.

The “bigger economic pie” concept is not complicated in the least, and yet it is a principle that seems to elude us time and again in matters of public policy. We know instinctively that government cannot create or produce anything. It regulates, confiscates, and consumes, all at the expense of the private economy. And yet we still believe that government can wave its magic wand with laws like the minimum wage, and we all will be better off.

Politicians engage in this deception to buy political favor from special interest groups. We keep falling for these political deceptions because our focus is on short-term personal gains rather than on the long-term consequences to the entire nation. We see the apparent benefit of having our own wages increased. But we don’t consider the nameless victims of the minimum wage hike who will lose their jobs because the government has priced them out of the labor market. (It is precisely because minimum wage laws eliminate low-skilled workers from competing in the job market that organized labor lobbies Congress for massive minimum wage hikes.)

Commenting on the minimum wage, economist Henry Hazlitt put it succinctly:

[quote]You cannot make a man worth a given amount by making it illegal for anyone to offer him less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.

The rest of the article can be found at the provided link here.
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#2
Ofcourse conservatives are at fault over this. Shock

Let me explain myself before you all strangle me :lol:. A while back I was actually listening to Rush Limbaugh. The jist of what he was saying was you have to educate the American people and then your ideas will be embraced with little effort to convince them. Liberals control the public schools, the colleges, the universities, the media and they've convinced people of "compassionate myths".

How did conservatives respond to this for many years? Stay out of the public schools, the colleges, the universities and the media. Simply complain these institutions are biased yet I didn't see much of an effort to change or replace them. Ofcourse they have been changing this around. Talk radio, Religious schools etc. Its about time.

I've made it my mission to learn as much of economics as I can and educate others around me. Once they learn I won't have to convince them of anything. They will come to the correct conclusion themselves. More importantly they will make better decisions personally and they themselves will reject the left wing propoganda.

Lets take an example of all things the movie Accepted. Make our own colleges and send our students out to the world. Success speaks for itself. :lol:

Now let me share with those who do not know, what I have learned from reading Thomas Sowell's Basic Economics. Wages are basically the price of the service you are providing, the value of what you are providing is what determines your wage. You would pay 10-15 dollar for a turkey but not for a tomatoe. If government made you pay $15 for a tomatoe you would just make salads without tomatoes since it has little value.

There would be a surplus of tomatoes. If you artificially inflate the prices of jobs there will be a surplus in this people, meaning more unemployment. I can't fire my accountant but I could fire the janitor and ask others to clean up after themselves and help clean up myself.
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#3
Devil's advocate:

I know that minimum wage is negative and hurts the most those it is meant to help. The economics is clear and the logic unassailable...

Except - in the statement made: "...employment is an exploitive relationship and that business owners will never voluntarily raise the wages of their workers. Businesses, we are told, must be coerced into paying workers what they deserve..."

Forget the argument that makes the easiest sense to express. What needs to be argued is the basic fact that business owners DO voluntarily raise wages, and that the coercion by government retards that increase. The rejoinder always comes back that greedy CEO's are compensated far higher than they deserve, and if that out-of-proportion salary was redistributed throughout the workforce, the wages would be higher.

This is what must be argued to combat the concept of a minimum wage. It is hard, because to do so you are then held up as a "corporate shill" and easily dismissed.

If you dislike the minimum wage, then understand the CEO salary-level and develop an answer that works. This may help:
Quote:In the economists' "tournament model," in which CEO pay is seen as a prize in a game, increasing a CEO's pay increases the incentives for lower-ranking executives to attain the CEO position and its prize wages. In this model, Tabarrok speculates, even a poorly-performing firm may hike its CEO's pay in order to induce greater effort from its demoralized executives.
If a corporation does well, part of that success comes from the whole executive structure pulling together. If the man or woman at the top does poorly and the corporation fails, then he/she will be quickly replaced, and a large salary will be mandatory to get a more competent CEO to rise from the ranks and fix the failure. If the corporation fails - everyone loses their jobs.
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#4
The hike in the minimum wage passed by the Democratic majority in Congress last year is a big reason teen joblessness is at its highest level in 60 years, says Investor's Business Daily. Americans are now finding out the true cost of the minimum wage increase as the unemployment rate shoots up.

Wall Street was stunned when the U.S. jobless rate jumped to 5.5 percent in May from 5 percent in April. It seems the problem was that hundreds of thousands of youths poured onto the job market at the same time, thanks to the end of the school year. Many, if not most, won't find jobs; they've been priced out of the market, says IBD.

Consider these facts?
-The minimum wage was hiked 14 percent to $5.85 an hour last July.

-Next month, it will go up an additional 12 percent to $6.55 an hour.

-In July 2009, it's slated to rise 10.7 percent to $7.25 an hour.

If that sounds like a lot, the actual cost is much higher after you fold in taxes, benefits and Social Security that businesses pay on behalf of young workers, says IBD.

Economist David Neumark of the University of California, Irvine, has found a 10 percent minimum wage hike cuts employment of young, unskilled workers by 8.5 percent.

Employers forced to shell out an added 40 percent over three years to employ the least educated, least trained and overall least productive workers are finding a good reason not to do so -- unless it's absolutely necessary.

Young people should get paid more only after they work a while, gain some experience and actually become valuable to their employer -- rather than having higher pay mandated by the federal government, says IBD.
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#5
Here is a specific example of how a higher min wage affects part time employment for sudents.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#6
You cannot even call it unintended consequences, because we've been forecasting this actuality every time the issue of arbitrarily raising the minimum wage comes up.
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#7
WmLambert Wrote:You cannot even call it unintended consequences, because we've been forecasting this actuality every time the issue of arbitrarily raising the minimum wage comes up.

With us, that is true Bill. With the other side,...........what was that definition about stupidity, where it is doing the same thing over and over, expecting one outcome, while always getting another?
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#8
Definition for insanity: doing the same thing over and over and expecting a different result?
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#9
WmLambert Wrote:Definition for insanity: doing the same thing over and over and expecting a different result?

That's right! We have a couple here, who 'practice' this logic. Wink1
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#10
It is odd. I googled to find out statistics or recent news about the connection between min wage and unemployment, and came up with scads of articles at the top of the list explaining how min wage ups unemployment.

So, anyone who thinks about the issue must know the connection. Thus, those who agitate for higher min wage are clearly playing to stupidity. But this is not news, it is just the left preaching to the choir. Should economics be taught in high school? Probably not, because the collectivist version would be taught there.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#11
If you believe that a Jackass can change it's......................, think again. Frederic Bastiat would have a field day with today's Jackass party. In their zeal to 'appear' compassionate, they are hurting the very people they CLAIM to be helping. Go figure.

Yep, once a Jackass, always a Jackass. Wink1

Quote:Mandating Unemployment: Congress prepares to kill more jobs.


Here's some economic logic to ponder. The unemployment rate in June for American teenagers was 24%, for black teens it was 38%, and even White House economists are predicting more job losses. So how about raising the cost of that teenage labor?

Sorry to say, but that's precisely what will happen on July 24, when the minimum wage will increase to $7.25 an hour from $6.55. The national wage floor will have increased 41% since the three-step hike was approved by the Democratic Congress in May 2007. Then the economy was humming, with an overall jobless rate of 4.5% and many entry-level jobs paying more than the minimum. That's a hard case to make now, with a 9.5% national jobless rate and thousands of employers facing razor-thin profit margins.

There's been a long and spirited debate among economists about who gets hurt and who benefits when the minimum wage rises. But in a 2006 National Bureau of Economic Research paper, economists David Neumark of the University of California, Irvine, and William Wascher of the Federal Reserve Bank reviewed the voluminous literature over the past 30 years and came to two almost universally acknowledged conclusions.

First, "a sizable majority of the studies give a relatively consistent (though not always statistically significant) indication of negative employment effects." Second, "studies that focus on the least-skilled groups [i.e., teens, and welfare moms] provide relatively overwhelming evidence of stronger disemployment effects."

Proponents argue that millions of workers will benefit from the bigger paychecks. But about two of every three full-time minimum-wage workers get a pay raise anyway within a year on the job. Meanwhile, those who lose their jobs or who never get a job in the first place get a minimum wage of $0.

Mr. Neumark calculates that the 70-cent per-hour minimum wage hike this month would kill "about 300,000 jobs for those between the ages of 16-24." Single working mothers would also be among those most hurt.

Keep in mind the Earned Income Tax Credit already exists to help low-wage workers and has been greatly expanded in recent years. The EITC also spreads the cost of the wage supplement to all Americans, not merely to employers, so it doesn't raise the cost of hiring low-wage workers.

For example, consider a single mom with two kids who earns the current $6.55 minimum at a full-time, year-round job. In 2009 she receives a $5,028 EITC cash payment from Uncle Sam -- or about an extra $2.50 per hour worked. Other federal income supplements, such as the refundable child tax credit, add another $1,900 or so. Thus at a wage of $6.55 an hour, her actual pay becomes $10.02 an hour -- more than a 50% increase from the current minimum. (See nearby table.)

But that single mom can't collect those checks if she doesn't have a job, and the tragedy of a higher minimum wage is that it will prevent thousands of working moms striving to pull their families out of poverty from being hired in the first place.

If Congress were wise and compassionate, it would at least suspend the wage hike for one or two years until the job market recovers. We know this Congress won't do that, but someone has to speak up for the poorest, least skilled Americans.
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#12
The common sense and basic logic leaps off the page. How long will it take for an out of work teenager to stop adoring Obama while waiting for a stimulus job and get a clue?

The EITC hit that comes from the wage hike should be explained to everyone. Maybe Dora or Diego could get it across to them.
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#13
When the "health bill" passes, all these min wage folks (in a company whose payroll is >=$250K) will have to be provided with health care "benefits". I would hate to be a small businessman now.

Come to think of it, the wage threshold of $250K would seem to invite hiring illegals as a means to keep under the radar.

Maybe Quadrat, an erstwhile entrepreneur, would tell us what he would do, if he were still in business and facing these mandates. After all, he just lectured us on the moral necessity of being a paternalistic employer.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#14
jt Wrote:When the "health bill" passes, all these min wage folks (in a company whose payroll is >=$250K) will have to be provided with health care "benefits". I would hate to be a small businessman now.

Come to think of it, the wage threshold of $250K would seem to invite hiring illegals as a means to keep under the radar.

Maybe Quadrat, an erstwhile entrepreneur, would tell us what he would do, if he were still in business and facing these mandates. After all, he just lectured us on the moral necessity of being a paternalistic employer.

The small businesses will do one of two things. The will either 1) get rid of the employees, or 2) make them part-time employees, so they will not have to provide their health insurance.

No matter how the State attempts to play dictator to the economy, businesses will find ways to work around the mandates, only making things worse for the very people the State professes to be helping.

Missing from 99.99% of All politicians is a course in understanding the Law of Unintended Consequences, and looking for the "Unseen" repercussions to all of their stupid legislation.
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#15
Here is the classic example of how economic pressure in one aspect of the business cycle will automatically create a vacuum, which is filled with a least costly alternative.  Forcing a $15/hour minimum wage law naturally leads to a cutback in human jobs, once automation becomes cheaper to install, and maintain.  SUCKERS!

McDonald’s unveils new job-killing self-service machines thanks to ‘Fight for $15’

Even if one is ignorant of basic economics, as these childish Progressives are, they should at least know about Newton's Laws of Motion.   His Third Law is most relevant.

Quote:For every action there is an equal and opposite re-action.

Well, now these kooks, in Washington, and all over the country, are witnessing the "opposite re-action" taking place.

[Image: 960x0.jpg?fit=scale]
A crowd of about 350 protesters stand on Broadway in front of a McDonald’s restaurant, Tuesday, Nov. 29, 2016, in New York. (AP Photo/Mark Lennihan)

The Cruelty of the $15 Minimum Wage


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#16
And here is your typical Jackass genius, who knows nothing about how the economic principle of "Supply and Demand" really works. It all sounds wonderful, and while it may seem like "The Right Thing To Do", it isn't, because it forces those businesses living "On The Margin" to raise prices, and have a higher chance of going bankrupt. Gah

Besides, laws forcing private businesses to do as the state requires is pure Fascism, i.e. Progressive idiocy. Spiteful

Raise the Minimum Wage to $15 Per Hour


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#17
Minimum wage is an incentive to either learn a trade or a get post-secondary education.
The true purpose of democracy is not to select the best leaders — a clearly debatable obligation — but to facilitate the prompt and peaceful removal of obviously bad ones. 
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#18
(11-30-2016, 12:41 PM)WarBicycle Wrote: Minimum wage is an incentive to either learn a trade or a get post-secondary education.

You mean a "negative" incentive, correct?
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#19
(11-30-2016, 10:56 AM)John L Wrote:  


Very funny - "MoveOn", a Progressive "left" organization is telling people what is the "right" thing to do!

S1
I know you think you understand what you thought I said,
but I'm not sure you realize that what you heard is not what I meant!
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#20
Sorry that this is a duplicate from the Castro (passings) thread.  The minimum wage isn't the worst damage that can be done.  Castro's "Maximum Wage" was much worse.  Essentially they are different sides to the same coin.  Those with the right connections ... economic and political  ... get the good stuff ... everybody else is 'entitled' to a pittance.  The "Maximum Wage" in Cuba is about $20/month ... effective for nearly everyone ... except of course for the 'somebody's ... like Castro's relatives. Apparently doctors and others are entitled to about an extra $10 more per month.  It's literally illegal to earn above the "Maximum Wage". The argument is that all the rest of life needs are subsidized ... except they aren't.  Food, medicine, etc... are in short supply except for black market alternatives.  The difference between Venezuela and Cuba are that the shortages ... food, medicine, toilet paper, pretty much everything are about ~30-40 years offset.  A little removed from the same offset between when Chavez and Castro took power ... although Venezuela's demise appears to be particularly accelerated.  The fastest way to make something expensive is to mandate it for free.  And the fastest way to ensure inequity is to try to cure it with 'minimum' or 'maximum' wages.  It's not implementation of 'minimum' or 'maximum' wages that spell doom ... it's the the total destruction of the middle class that gets crushed in the process.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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