Minimum Wage: What's the Other Argument?

[El_Machinae]

Well, only if income is not redistributed. Wealth will concentrate, and so would its resulting income. A progressive income redistributive process wouldn't stop the accumulation of wealth upwards but would allow the effective incomes (i.e., what you can actually buy) to rise perpetually. The wealthy would continue to get more wealthy in an absolute and relative sense, and the non-wealthy could get richer in an absolute sense.

 

[Borachio]

And that's what's been happening for the past two centuries.

Also income disparities were becoming less up to about 1970 but they've since started increasing again.

I don't know. I can't see it continuing indefinitely. I honestly can't.

 

[El_Machinae]

I can't either.

What you want is a progressive income tax that includes a negative income tax portion, and swivels around the median income and where the bottom grows at the growth rate of the economy.

 

[onejayhawk]

And that's what's been happening for the past two centuries.

Also income disparities were becoming less up to about 1970 but they've since started increasing again.

I don't know. I can't see it continuing indefinitely. I honestly can't.

I see conflicting reports on that. I get the impression that political axes are being sharpened at the expense of accuracy.

I can't either.

What you want is a progressive income tax that includes a negative income tax portion, and swivels around the median income and where the bottom grows at the growth rate of the economy.

We have one, at least federally. It is not uncommon for bottom quintile to receive more on their tax return than they paid in. The amount of negative taxation is sufficient that those below median income average almost zero federal income tax.

J

 

[Borachio]

Well, I've no particular political axe to grind. Except that I don't like to see people not having adequate diets and working too hard.

I've no objection to people being as rich as Croessus, if that's their bag and they've no other interest in life. As long as it doesn't adversely affect other people. But it seems that it must.

 

[MobBoss]

There's a minimum wage and there's a living wage. The first is typically much lower than the second.

People on minimum wage in the UK often enough receive tax credits, so that the government is in effect subsidizing their employer. None of this can be good.

I believe that increasing levels of inequality is a disgrace and it'll all end in tears sooner or later.

The concentration of wealth in the hands of a smaller and smaller minority seems to be an inevitable consequence of capitalism that surely can't continue indefinitely, can it?

If you raise the minimum wage significantly, and this results in increased unemployment, aren't you by default concentrating wealth in the hands of a few? Simply because you change the metric from many having some, to fewer having a bit more, how does this really change things?

The point being, if you're one of the lucky few to not get fired or hours reduced due to a higher wage increase, you're not really getting that money from rich people...you're taking it from the ones that got fired.

 

[Borachio]

Oh, I agree with your logic. It seems like we're caught whichever way we turn.

But what we've got is even worse than raising the minimum wage, imo: we've got the government indirectly subsidizing employers. Employers, moreover, who can't afford to pay their workers a living wage.

 

[MobBoss]

Oh, I agree with your logic. It seems like we're caught whichever way we turn.

But what we've got is even worse than raising the minimum wage, imo: we've got the government indirectly subsidizing employers. Employers, moreover, who can't afford to pay their workers a living wage.

Lets be fair......lots of employers do pay their workers a living wage. However, most of those have skills and experience that make paying them that wage a good investment.

Do you think part of this has to do with the current generations problem with a sense of entitlement? That they shouldn't have to work hard or at all in order to 'make it' per se?

I mean, if you do pay those workers with zero skills or experience as much as you do people that have college degrees, how is that fair to the people with college degrees? What then, is the incentive to even get a college degree?

 

[El_Machinae]

The point being, if you're one of the lucky few to not get fired or hours reduced due to a higher wage increase, you're not really getting that money from rich people...you're taking it from the ones that got fired.

Oh, goodness no. That's not true. The money isn't being transfered from the low-productivity worker to the higher-productivity worker.

(And I'm FULLY agreeing that a minimum wage can cause some unemployment!!!)

What happens is that people are hired according to their marginal productivity. If a person is 'worth' $15/hr to the employer, the employer will hire them for any value less than that (and pocket the difference). If an employee only generates (say) $6/hr, then the employer won't hire them for any more than $6.

So, a MW that jumps from (say) $11 to $15 will cause all the people who are 'worth' $11-$15 to lose their jobs. But anyone whose value was greater than $15 (even if you paid them less, historically) will be able to keep their jobs.

Employers don't 'subsidize' low-productivity employees out of high-productivity employees. If you're earning $15/hr from an employee you pay $12/hr to, you're not going to pay an employee earning you $6/hr an extra $3.

Minimum Wage is (effectively) a regressive tax, which limits transactions. It also causes Demand-Pull Inflation by dropping supply. (In counter-balance, depending on how people spend their money, there can also be a local multiplier effect of those funds. The employer (say) spends the profits in the Dominican while the employee spends their income locally.) It's a tax transfer from the employer to the employee. The people who lose their jobs are because it's a regressive tax, not because one employee is getting another employee's share.

 

[Borachio]

Aren't you assuming that all employees are productive employees? What about the people who clean the toilets for you? They're not (unless your business is toilet cleaning) directly earning you any money at all. They're part of the expenses you have to pay in order to maintain the place of production that enables your most productive employees to make money for you.

Or have I misunderstood what you're saying?

 

[MobBoss]

[responding to El Mac's post] That's not how it works in minimum wage jobs. You may have some employees better than others, but everyone starts at the same wage, with pretty small future raises based on a very loose systems. Those 'less than MW workers' you refer to still make their hourly wage, but generally employers will limit their hours worked, not their wage per hour. It results in a system where your less than MW wage worker still can earn as much or more than a better employee, they just simply do it for multiple employers.

And really, the skill set of an employee that's kept over one that gets let go isn't all that great in comparison at that level of employment. Who's kept may not even be about skills, but probably more about attitude and work ethic.

Aren't you assuming that all employees are productive employees? What about the people who clean the toilets for you? They're not (unless your business is toilet cleaning) directly earning you any money at all. They're part of the expenses you have to pay in order to maintain the place of production that enables your most productive employees to make money for you.

Or have I misunderstood what you're saying?

Are you suggesting that an employee that is productive at current minimum wage, will somehow be twice as productive at 15 an hour? From my days working minimum wage, the toilet duty was usually something people took turns doing as to spread around the displeasure of doing it.

 

[El_Machinae]

Aren't you assuming that all employees are productive employees? What about the people who clean the toilets for you? They're not (unless your business is toilet cleaning) directly earning you any money at all. They're part of the expenses you have to pay in order to maintain the place of production that enables your most productive employees to make money for you.

Or have I misunderstood what you're saying?

It's not a direct measure, but it's the calculus used. If the toilet cleaning is only worth $2/hr to the productivity of your business, you'll not hire anyone unless you can pay them less. If your business earns $60/hr more with clean toilets, it's not like you're going to pay someone $59 to do it if someone else is willing to do it for $11. But you'll happily hire someone to keep those toilets clean during all operational hours

A job's worth to the employer is not perfectly correlated to what they pay, since often you can find someone willing to work for slightly less.

 

[Zelig]

[responding to El Mac's post] That's not how it works in minimum wage jobs.

You say this, and then the rest of your post talks about completely unrelated stuff?

 

[MobBoss]

You say this, and then the rest of your post talks about completely unrelated stuff?

I didn't think it was unrelated.

Jeez, what the hell is up with the forum critics lately?

 

[Sonereal]

There's a movement afoot to increase the minimum wage in highly urbanized US cities to $15 /hr.

#1: What is your position on this? If you generally agree or generally disagree with some reservations then say whether you agree or disagree. I'd like to keep this as binary as possible. If you don't want to comment on the movement above then feel free to say on whether or not your local minimum wage should be increased.

Don't tell us why you have your position. A quick "yes, increase the wage," or "no, don't increase it," is ideal.

#2: Present an argument for the other side (ideally the best argument you can come up with). That is, if you want to increase the minimum wage then argue for it not increasing and vice versa.

Feel free to poke at the other side's argument, but stay in character. So if you really do want to keep the minimum wage as is then feel free to argue with people who want to increase it but are presenting the contrary argument, arguments you may agree with for real.

I'm curious if this will change anyone's mind or be interesting.

1. No, the minimum wage shouldn't be increased.

2. The cost of living may vary from state-to-state, and from suburb to city, but the cost of living in the United States has increased overall, and the minimum wage should reflect that. While there may be some jobs lost in the short-run, more people with more money in their pockets can stimulate the economy through spending and saving.

I know that it doesn't seem reasonable from a purely efficiency standpoint that every job is able to provide a "living wage", politicians and business leaders need to realize that the bulk of workers at or near the minimum wage are no longer fresh-faced teenagers trying to raise money for their first car or people seeking to supplement their incomes, but people trying to maintain families that are likely receiving government benefits already.

Welfare programs have helped subsidized labor costs for employers, so raising the minimum wage would help taxpayers clawback the benefits corporations are receiving.

 

[Timsup2nothin]

And that sounds nice but where is the money coming from in the economy to nearly double everyone's salary? And yes I mean everyone, if a burger flipper gets a near 2X raise then the EMT is going to expect the same, as is the dental hygienist, as is the plumber, etc. especially when the prices for everything they like to buy spike in response to the bottom rung wages going up.

I think a career job should pay a comfortable living wage, but I dont think every job is a career caliber job.

See, here's where I don't see things the same way. I would have no trouble saying "You are making a comfortable living, so the fact that people who aren't are getting a raise is none of your business." Yes, prices on the kind of goods and services that minimum wage workers produce will rise. Yes, that will mean the people living more than comfortably might only get to live comfortably. No, I will not mourn for their loss of prestige.

For the most part I think the biggest thing they derive from living "more comfortably" is really just a sense of "better than", which they can either do without or they can feel bad, whichever. If being an EMT or a plumber is really making them better than a burger flipper, how come I have so much more use for burger flippers?

 

[onejayhawk]

Part of this discussion is running parallel to the Gwenyth Paltrow thread. A minimum wage is not intended to be a living wage, like SNAP is not intended to be your entire food budget. A minimum wage should designed for someone's first job, not someone with 10 years experience.

J

 

[Timsup2nothin]

Part of this discussion is running parallel to the Gwenyth Paltrow thread. A minimum wage is not intended to be a living wage, like SNAP is not intended to be your entire food budget. A minimum wage should designed for someone's first job, not someone with 10 years experience.

J

Looking at the income limits to qualify for SNAP one has to wonder where the rest of this food budget is supposed to be coming from.

 

[kramerfan86]

See, here's where I don't see things the same way. I would have no trouble saying "You are making a comfortable living, so the fact that people who aren't are getting a raise is none of your business." Yes, prices on the kind of goods and services that minimum wage workers produce will rise. Yes, that will mean the people living more than comfortably might only get to live comfortably. No, I will not mourn for their loss of prestige.

For the most part I think the biggest thing they derive from living "more comfortably" is really just a sense of "better than", which they can either do without or they can feel bad, whichever. If being an EMT or a plumber is really making them better than a burger flipper, how come I have so much more use for burger flippers?

That is not a realistic mindset. The jobs that are "more than comfortable" require more schooling and training. If you dont give the those people a raise to keep their job more appealing then why would they invest the time, money, and training into that career? Who is going to sign up for the stress of an EMT job if they dont make more money than the burger flipper? Who is going to invest the time and money to train for a dental hygienist job if being a walmart greeter brings in the same bank? The motivation to sign up for harder jobs or jobs that require more investment is you get better return on your stress and investment, its not practical to suggest you can just remove that return on investment.

 

[Timsup2nothin]

That is not a realistic mindset. The jobs that are "more than comfortable" require more schooling and training. If you dont give the those people a raise to keep their job more appealing then why would they invest the time, money, and training into that career? Who is going to sign up for the stress of an EMT job if they dont make more money than the burger flipper? Who is going to invest the time and money to train for a dental hygienist job if being a walmart greeter brings in the same bank? The motivation to sign up for harder jobs or jobs that require more investment is you get better return on your stress and investment, its not practical to suggest you can just remove that return on investment.

Let me ask you something...if money were not an issue would you choose to flip burgers? You get paid the same thing either way, and you want to claim that flipping burgers and sucking butt from obnoxious customers all day is what you want to do?

Here's a thought...pay the burger flippers enough that they can support their family and spare some time and money to get some training and they'll probably all be looking to be EMTs and dental hygienists, even if it is for the same money, because flipping burgers sux.