No increase in minimum wage

[TheBigHurt35]

As for the full time job part.  I do believe if a person is going to work a 40 hour job, they deserve to earn a living wage.  If someone wants to make less, there is nothing that makes them HAVE to work 40 hours in a week.  If you are looking at a 2nd income job, it would fall under that part time category, as I can't see someone working 80 hours in a week.

 

I disagree with this. It would be unreasonable to expect, say, McDonald's to pay someone $20,000/year to flip burgers, even if they work "full time."

 

Most graduate students work 50 hrs/week or more and typically earn about $17,000-$25,000/year (depending on the cost of living where they work).

[JUGGERNAUT]

OK well this for starters is 100% wrong.

 

Economics 101, as you like to site, states pretty clearly that less of something will be demanded when a higher price is asked for it.  The precise amount of that decline is related to its elacticity and how far up that price is moved.  It is abundantly clear that a dollar an hour increase would have an adverse effect on the number of people employed in this country.  If anything it would exaserbate the job flight to cheaper foreign labor markets.  The net effect on tax base would be determined by how many people lose jobs in relation to the amount of raises for the people who stay in the labor market.

 

Its pretty obvious to me that using the last recession as an example, companies will not hestitate to lay off employees in order to maintain profits, and ergo pump up their stock price. Labor is viewed as another commodity to companies, and they have shown no inclination towards cutting into their profit margin for their employees.  They would rather dump more work on existing employees vs hiring new ones, or lay off employees and dump more work on the remaining employees.  Both of those trends were pretty clear since the recession of 2001.

<{POST_SNAPBACK}>

 

All of that is nice discussion on supply vs demand and price (albeit a wrong one)

but it says nothing to refute the cyclical relationship I presented above. Since I did not mention anything about price or supply & demand (because Enzi didn't in his quote) I'll take the time to do that now. Productivity is a function of supply & demand. I did mention productivity above. Demand is assumed for a good or service otherwise there would be no reason to produce it. The decision to increase productivity for any business is predicated on their being greater demand than supply.

 

I noticed that you bothered to say nothing with respect to the trade deficit or any other indicators I mentioned showing how the US citizen is getting screwed by globalization. So I'll just assume we are in agreement there. So let me list your fears so to speak & respond to each:

 

Fear 1 - Raising the minimum wage will result in a higher growth rate of shifting jobs from citizens to non-citizens.

 

To accept this fear you would have to accept to premises associated with the raise:

A) The raise will echo throughout the salary structure & thus affects all wages

 

This is simply not true. There is no correlation between mimimum wage earners & salaried employees. Salary wage earners are primarily dictated by what each local market will bear for paying for services. A raise in mim wage from $5.15 to $6.15/hr would have little to no impact on salaried wage earners.

 

Union wages are negotiated via collective bargaining sessions based on how much an employer can be expected to pay for a particular service in a local market. There is little correlation to mim wage standards here as well.

 

B) A larger portion of minimum wage earning jobs can be shifted to non-citizens.

This is simply not the case. The majority of min wage jobs are local service oriented in which the service must be performed in person. They can not be shifted overseas but they can be replaced by non-citizens if the politicians allow it. They can close the loopholes in the Visa laws to prevent that from happening.

 

Fear 2 - Companies would rather layoff workers & reduce productivity rather than increase operating costs.

 

They do so at their own risk. We no longer live in the 70's, 80's or 90's. This is the new millenium where technology has leveled the playing field & converged costs of production for most companies. That has more than doubled the total number of companies doing business in the US in the past 15 yrs. A company choosing to reduce their supply is opening the door for a company seeking to fill that demand.

Never has that been more apparent than in this decade.

 

What is even more apparent is that a company seeking to do this now risks competition not just from US companies but also foreign companies. We have seen this already in the banking & finance industries. Loans that US bankers are reluctant to process are being processed by foreign banks doing business in the US.

 

I'm assuming you are referring to the late 90's when you mention the last recession.

That had little to do with wages & more to do with over-evaluations & mismangement of interest rates by Greenspan. The economy grew under Clinton because low rates for loans allowed more little fish to swim in the pond & operate with a technological reliance on the bigger fish. As long as the rates remained low or grew slowly these fish could continue to swim. This little fish - big fish harmony fostered some of the best growth this nation's ever seen & scared one Alan Greespan.

 

Having little to no understanding of the little fish - big fish relationship felt it was better to raise rates & curb inflation than to allow inflation to grow under free-market principles. In doing so he caused the MAJORITY of the little fish to sink & as a result they stopped feeding the big fish. It was the decline of their ability to feed the big fish that caused the market to tank.

 

The US has yet to recover from Greenspan's conditions. Now let's consider the alternative. He leaves the rates low & allows inflation to grow. Based on most leading indicators at the time inflation may have grown 10% over the next 10 yrs if Greenspan slows the growth of interest rates. That 10 yr period would have given many more of the little fish enough time to substantiate their business in the global economy to where they could remain solvent & profitable as Greespan raised rates.

It was all a function of time & Greenspan didn't understand that.

 

There are several books available that discuss these very topics on the last major market sell-off. There are other books that show a correlation of foreign companies filling the void when these little fish went under. I have yet to read one book that suggests minimum wage was a factor at all.

[JUGGERNAUT]

This is somewhat related & hopefully some of you will wake up smell the crap piling up in your rosebeds.

 

I challenge you to go to favorite retailer & buy only products Made in America. You are not likely to find many. If Made in America means little to Americans then why should we think it will mean anything to the world? Something for the exporters to think about.

 

America is no longer valued by what it makes but rather by what it buys.

Along with the infrastructure grade report there is also our factory assessment grade report. American ranks poorly there as well. If you look at the numbers behind factory constructions & factory upgrades China is kicking our arse.

 

America's production capacity is declining rapidly while other nations are growing rapidly. The best measure of this is factory construction, factory enhancements, & factory orders.

 

America's best quality right now is credit. Bush touted new home ownership as a big sign that the economy is doing well. That's funny. Did he bother to look at the growth rate of mortgages defaulting in that time?

Probably not. He doesn't like bad news. The fact is that more Americans own mortgages not homes. That was predicated by not just low rates but lower down payments. Apparently banks were more willing to take on higher risks to grab those monthly payments. Anything for a quick stock boost.

 

No nation is any where close to America in terms of credit. Not in terms of growth numbers nor raw numbers. America's credit pot is so big that foreign banks & investors are now jumping in to help fuel it. It's kind of ironic. America has one of the worst savings %'s on the planet & yet the absolute best credit %. All of the emerging economies worldwide are growing very slowly in terms of their credit %. It's not easy to change a culture that way. Europe's credit % is no where near America's either.

 

No marketplace on this planet threaten America's because of her revolving credit economy. That includes Europe. The numbers are simply not there. If 50% of America's consumerism is supported by credit what does say for the other nations? How can they grow their marketplace to an American size without revolving credit? They can't. It means their growth will remain short-term until they do.

 

Why do I mention this? Because it's simple really.

If the avg min wage worker increases there annual pay by 2K then their credit will increase by 4K. That's how it works in terms of credit increases.

There are flat bases to begin with & then it's roughly 2 to 1 from that base.

Multiply that by all min wage hours in the US & you are looking at a cash

increase of billions for the marketplace & a credit increase in the 10's of billions.

[Texsox]

Where the heck am I going to get specific figures for where a businesses break even point is?  I have no idea who would fail, or how many would fail.  Do you?

 

I think you just answered #5 with the question you asked before that.  Is it worth keeping 2 people working at $4 an hour or one at $7.25 or $6.15 (depending on which plan you like)  You just kinda answered that except on a biggest scale with the 1 @80k vs 4 @20k.

 

As for the full time job part.  I do believe if a person is going to work a 40 hour job, they deserve to earn a living wage.  If someone wants to make less, there is nothing that makes them HAVE to work 40 hours in a week.  If you are looking at a 2nd income job, it would fall under that part time category, as I can't see someone working 80 hours in a week.

 

I think you just argued for the Dem plan of $7.00+

The minimum wage would be some where around $7.40 to have it be a livable wage. Sorry I wasn't clear on 2nd income, I was thinking 2nd income as in the spouse not staying home with the kids. Sadly, down here working two full time jobs is a reality for many people. The call centers here are filled with bi-lingual employees who work evenings and weekends in addition to their M-F 8-5 jobs.

[Rex Kickass]

I disagree with this.  It would be unreasonable to expect, say, McDonald's to pay someone $20,000/year to flip burgers, even if they work "full time."

 

Most graduate students work 50 hrs/week or more and typically earn about $17,000-$25,000/year (depending on the cost of living where they work).

 

Why is it unreasonable to earn 20,000 dollars a year flipping burgers full time?

 

A double cheeseburger at McDonalds pulls in 99 cents of revenue. I'd say that its reasonable to expect that on average, a McDonalds serves 30 customers an hour. Assuming that they sell one burger product worth 99 cents of revenue per customer, that. The burger flipper is responsible for nearly 30 dollars of revenue each hour. In a forty hour work week, that flipper is responsible for 1200 dollars of burger revenue. Now, I'm willing to bet that the average employee does more than make cheeseburgers. He probably also handles the fry machine, maybe fills drinks, cleans the kitchen area or dining room. Takes hot grease out to the dumpster too I bet. And works his ass off. 50 weeks a year, 2000 hours a year. And he's not worth 10 bucks an hour?

 

That's a hell of a lot harder work than I do or any grad student for that matter. Why shouldn't he get paid 10 dollars an hour? But the average McDonalds worker gets paid far less than that. Assistant Managers make about 8. An hour.

[Soxy]

s***, this graduate student would do very immoral things to make 17,000 a year. I make around 12,000 pre-tax.

 

But the way to think about graduate student money is: indentured servitude. Yeah it sucks, but in 5 years I'll be making a lot more money. I don't have to depend on making these kind of wages for the rest of my life. Later I'll be able to put money in the bank, start dabbling in the stock market or other types of money ventures. If you make less than 20K for your whole life how are you supposed to live when you get old and are out of work (especially with the apparent disappearing of social security)?

[TheBigHurt35]

That's a hell of a lot harder work than I do or any grad student for that matter. Why shouldn't he get paid 10 dollars an hour? But the average McDonalds worker gets paid far less than that. Assistant Managers make about 8. An hour.

 

I disagree. Having gone through six years of grad school and having worked at a Burger King waaaay back in the day, I can honestly say that the graduate student has the more demanding/stressful job.

 

I suppose that managerial positions at McDonald's should theoretically pay about $10/hour. Then again, not everyone in the fast food industry can be a manager.

 

BTW, $10 an hour is only a little over $19,000/year for a 40-hour week. That's still a pretty difficult salary to live on, especially when you're ineligible for student loans and have to pay Social Security (grad students don't).

Edited March 10, 2005 by TheBigHurt35

[Soxy]

That's still a pretty difficult salary to live on, especially when you're ineligible for student loans and have to pay Social Security (grad students don't).

Actually grad students are currently eligible for student loans. Up to about 10K a year.

[HighHeat45]

I just think its bulls*** that congress has voted to raise their salaries 4 times since the last time minimum wage was increased.

 

Didnt minimum wage increase January 1st of this year

[TheBigHurt35]

Actually grad students are currently eligible for student loans. Up to about 10K a year.

 

Yes, I know from personal experience.

 

I was pointing out that, unlike students, McDonald's employees aren't eligible for student loans and also get Social Security taken out of their paychecks (which is a real pain in the ass when you're scraping by to begin with).

[Soxy]

Yes, I know from personal experience.

 

I was pointing out that, unlike students, McDonald's employees aren't eligible for student loans and also get Social Security taken out of their paychecks (which is a real pain in the ass when you're scraping by to begin with).

Sorry, I misread that.

 

Yeah, it sucks. I can't imagine living on less than I do now--and I live in a damn cheap area too....

[JUGGERNAUT]

Getting back to the voting on this ...

GOP : +$1.10 in 2 steps over 18 mo +4.2 billion in tax relief/breaks directed primarily towards the restaurant business. Avg increase for min wage worker 1.5K to 2K a yr. Votes: 38 Y, 61 N. All Y votes GOP.

 

DEM : +$2.10 in 3 steps over 18 mo. Avg increase for min wage worker 3K to 4K a yr. Votes: 46 Y, 49 N. Nearly all Y votes DEM.

 

Think about the two proposals. The GOP was willing to raise the min wage & offer tax breaks to shoulder the burden on those businesses that would be most affected. The DEM simply wanted to raise the min wage by near 50%.

 

I can hear the 2006 stump speeches now:

GOP: We wanted to put more cash in the pockets of minimum wage workers while protecting their jobs by easing the tax burden on the businesses that employ them. The Democrats wanted an irresponsible & inconceivable plan to just raise the wage nearly 50%. Voters want responsibility & accountability from their government & that's what the GOP is giving them.

 

DEM: Maybe someone else can take a crack at this because I can't think of one.

Had they voted for the GOP measure they could have played the tradition card. We worked hard at battling the GOP to get some relief for minimum wage workers. That's no easy task when considering the history of the GOP. The Democratic party of the US continues to represent the working class against big business. Remember that when you cast your vote.

Edited March 10, 2005 by JUGGERNAUT