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From	Message
zorroloco 16-Feb-13, 07:16	minimum wage increase what do you think about the idea of raising the minimum wage? san francisco has the highest minimum wage in the state of california at $10.55/hr. unemployment in sf is 6.7% while it is 9.8% in the rest of the state. washington state has the highest unemployment rate in the country (for a state) at $9.19/hr and our unemployment is higher than the national rate at 7.8%.
softaire 16-Feb-13, 08:28	z I once advocated, here in this club, for a $20 per hour minimum wage. (or maybe it was $15) and I was serious. It was meant for people who do not also get paid by tips/gratuities. Most people, especially at the low end, work very hard/too hard and they should be able to have some reward for their hard work. The problem with setting a number like that (or any number)is that even if it does not result in higher unemployment, it will be out of date tomorrow. Wages as well as costs of goods/services and the resulting retail price of things should be determined by supply and demand. As you know, given that there is a demand for something, the more of something there is the less valuable it becomes. The less of something there is, the more valuable it becomes. Supply and demand are not instantaneously applied however. There is a lag time for prices to catch up with value.
zorroloco 16-Feb-13, 08:34	whoops my previous post should say, washington state has the highest minimum wage in the country, not highest unemployment rate.
orangemangood 16-Feb-13, 11:31	The Minimum Wage The higher minimum wage discourages private sector employers from hiring people at the low end of the spectrum, it's been proven all through history. Picking a couple of exceptions is like saying that people who don't take very good care of themselves will outlive the ones that do.
zorroloco 16-Feb-13, 12:44	mr i try to read with comprehension instead of assumptions. i posted two examples, one shows that a high minimum wage does not necessarily mean higher unemployment. the other shows that a higher minimum wage can be correlated with a higher unemployment. nor did i show support or lack of support for a higher minimum wage. while a higher minimum wage may discourage hiring, a low minimum wage means that millions of full time workers live in poverty and are not contributing to building the economy. there are pros and cons on both sides and it is a complicated issue worthy of more than a glib answer.
zorroloco 16-Feb-13, 16:09	received this today as a pm Re your Minimum Wage thread. I'm not a club member, hence the PM. Fwiw, the national MW in Australia is $15.96 per hour. Our currencies are at about parity at the moment so say about $16US. Our national unemloyment rate is 5.4....it ranges from 3.8 to 7.3 between the States. I've always throught the link between the two is overstated.
ace-of-aces 16-Feb-13, 17:44	Minimum wage increase, another political gimmick for Obama & Democrats! I am not against minimum wage increase. I am just analyzing what is the underlying motive behind minimum wage increase. Analyze, why Obama was re-elected for second term. His social-welfare and other entitlement programs have mass appeal whether hard working Americans can afford it or not for other Americans. For example, he attracted Hispanic votes by promising those who are already here to be given green cards. Obamacare, extending welfare and unemployment benefits without reducing have mass appeal. Jobs are flying overseas to India, China and other third world countries where labor is much cheaper without much regulations. It is already happening and I don't need another proof since we already discussed this matter in different threads. So, by increasing the minimum wage increase more American jobs will go overseas. This is very logical. What obama should do first is improve the economy and then consider to raise the minimum wage later. Raising minimum wage will backfire and more Americans will lose their jobs or beome unemployed. This is rather a political gimmick in order for the majority of the Democrats to be re-elected in the next elections.
proginoskes 17-Feb-13, 07:55	Look, this is simple. Economics is really nothing more magical than the study of *practical* human action. All things being equal . . . you are going to resist hiring a NEW employee (as stated above) because the new minimum amount necessary to pay them will not be worth it to you as a business. Think about this like someone who owns a business (if you do not own one yourself). Now, this can be offset, of course by other factors (which is why I started with "all things being equal") such as a better local economy (ei. San Francisco), and if you evaluate that it will be worth it to have an extra employee or two with new training, time, etc that you can afford the new minimum wage, then it can make sense to the business owner bring on a new hire regardless of the minimum wage. And in times of worse economies, you don't have much incentive to hire at baseline, and if the minimum wage is increased, you now REALLY don't have any incentive to hire. Furthermore, as per above, since you really harm the out of work worker with a raise in minimum wage, especially in a bad economy, it's actually probably best in general for the worker to allow for a negotiation of his wage, because this allows him to be more competitive relative to pears if he is willing to work for less. Of course there is worry then, especially in a bad economy with a scarcity of jobs that business would prey on the unemployed and hire for slave wages - though this could really only go on for so long and could only low-ball to a certain point, because at some hourly rate people simply wouldn't work for that employer anymore either because they thought he was a jerk for not paying for their work, or they couldn't pay their bill with what they were making, so what was the point of working there and the person will take a new job, go unemployed rather than work, or turn to crime - again taking us back to practical human action - all of which do not help the employer who needs labor that knows how to do its job. So the notion that employers would just lowball to infinity is not based on any reality which it's looked at under the microscope of human action. Mandating a minimum wage is just one more unnatural imbalance placed upon a market that would correct with time if allowed, but cannot due to governmental interference, even if intended for good, this will ultimately lead to harm as the market distorts, making any final correction that much worse, especially in a bad economy. (I think much of this distortion is done intentionally because it allows the billionaires to continue to be billionaires, while the rest of us get poorer in the process - it's the process of neo-feudalism) The one middle of the road kind of solution I see here, which I think both progressives and conservatives could possibly agree on would be an government infrastructure make work program. Where the government itself would provide the wage they think people should have, for short term jobs that improve the country in the aggregate - bridges, roads, damns. And when the private sector economy is allowed to correct, and begins to be positive again, these make work programs would phase out as the practical things these people would be doing would finish and they would take these new skills back into the private sector.
shamash 17-Feb-13, 09:25	prog, you have it all SDRAWKCAB speaking "practically", you have it all backwards. The American market economy is a consumption economy. Let's say that again: it is an economy based on consumption. Consumption by Americans, and most Americans with "disposable income" are working Americans. The purpose therefore of paying workers is so they will have the means of exchange for consuming what the economy as a whole produces -- produces for consumption. From that need, you work it out, you work out the input-output analysis, the Leontiev-style inputs and outputs to arrive at the mean wage, and then the minimum wage, necessary to make the economic engine purr.
proginoskes 17-Feb-13, 09:50	shamash is a funny guy . . . Good at chess, but bad, clearly, at economics. I have nothing backwards, and it's a laughable accusation. You can only flog a consumer economy for so long, just the same way you can only "stimulate" for so long. Eventually all the discretionary money (including credit) in a consumer based economy gets used up, because you cannot spend all your money on nonsense, you need food, water, fuel, shelter, and clothing. When this occurs, which is where we find ourselves today, and have been for the last few years, you may attempt to expand the money supply, so that people keep spending money, and they will for awhile, but this will eventually peter out as the expanded money supply leads to inflation of prices in things people have to buy, food, energy, clothing, etc. It's a really a mirage of economic growth, because it's not sustainable and produces nothing of real or lasting value and leads to inflation of the prices of real things, when only people with already outrageous amounts of money can afford. To simply increase a minimum wage does nothing to help the problem and everything to exacerbate it. You cannot stimulate and inflate wages ad infinitum without having "something" of real value to show for it. Buying sammiches and going to movies does not an economy make. The people of this country are going to be very sad when they realize the dishonest bill of good that was sold to them. The consumer economy did make the BANKS (through credit) and multinational corporations (via buying trinkets, made in OTHER countries) very wealthy, but the rest of us have become much poorer (though still not as poor as most of the world) in the process and ironically at the expense of sending all the productive jobs out of the country. We don't make anything anymore, and we're barely staying on top of the technological and science game.
softaire 17-Feb-13, 10:01	shamash Thanks for your post. You reminded me of a point that I wanted to make in my original post, but then completely forgot. JDH already just made most of it in his good post. If the government mandates any arbitrary minimum higher wage, the minimum wage employee WILL be temporarily benefited with a short term relatively higher income. However, without a corresponding increase in the demand, the employer will need to raise the retail cost of their goods or services. This simply results in a new round of inflation where everybody will demand higher salaries, higher retail rates etc. NOBODY will allow their positions to be degraded relative to their current status within the economy. To maintain equilibrium, all prices will go up correspondingly. Like I said before, it will not occur instantaneously, but will adjust back to equilibrium over time. The result of the mandated rise in minimum wages will be temporary for the low wages worker and another round of inflation for the economy.
itchynscratchy 18-Feb-13, 00:20	<<Picking a couple of exceptions is like saying that people who don't take very good care of themselves will outlive the ones that do.>> Jeff, you dismissed this but Mr I had a point. You can't pick out two examples and declare that there is no correlation. There are other factors, when you pick out two variables they may very well be related even if certain data points don't fit. That surely doesn't need pointing out to a Maths teacher does it?
itchynscratchy 18-Feb-13, 00:23	I know absolutely nothing about economics, but it seems logical to me that raising the minimum wage results in less jobs being available. I am not buying the argument that people are richer because it's an artificial metric, prices simply rise in response. If someone could make a logical argument in favour I'd like to hear it, but I haven't seen one so far.

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