Poll: Minimum Wage

[CIVPhilzilla]

Since I'm in the mood to debate econmics. I want to see what the participants of Civfanatics feel about minimum wage. From what I gather from other threads there should be a wide spectrum of views on the issue.

 

[Tulkas12]

The minimum wage should adjust for inflation. It should not be a living wage.

 

[CaptainF]

I don't exactly know my views.

I guess I could say that it should be a tad bit higher.

 

[CIVPhilzilla]

As many people on this forum know I am a firm believer in free market capitalism. As such I believe that minimum wage restricts the ability of the market to reach the correct equilibrium by setting an artificial value.

I believe that minimum wages should be abolished, as I have faith in the ability of the market to determine the appropriate value of labor. If buisnesses run into trouble and lack the ability to adjust their wages they could run into a situation where they have to lay off employees or cut back on planned hiring increasing unemployment. Also there is a potential for the higher costs of labor reaching the consumer and inducing greater than needed inflation.

More to come later, I can assure you.

 

[Mr. Dictator]

The minimum wage should adjust for inflation. It should not be a living wage.

but some people are just not smart enough to go to college and get a better job. do you think god has some pre-birth curse put on them?

i think minimum wage should be a living wage. not all people who work at a minimum wage job are bums, thats a stereotype.

but i dont think it should be a very comfortable wage. that way no one could just say they didnt want to get an education

 

[Godwynn]

I'm all for lowering it. The prices of practically everything will plummet, and jobs will come back to America because of its highly educated workforce, and will then be able to compete with companies worldwide.

I want people to realize that if the minimum wage drops, so will prices. Most seem unable to comprehend this. They figure if people get paid $1.00 per hour, then microwave meals will stay at $3.00. This is not true since the cost to manufacture it will lower as well. Also, if no one can afford to buy it, then it will be impossible for that company to stay afloat since it is not selling any product.

The unemployment rate will almost become zero since corporations and small businesses will be able to hire more people. Just because the minimum wage is $1.00 does not mean raises will become unknown. Corporations will still compete for the same skilled workers, the fastest, brightest or strongest.

Complaining about illegal immigrants taking jobs for less? Fear no more! Why would corporations hire some illegals if they are going to make the same as Americans, who pay taxes to fund roads, or development to help business?

This hits home to me since my towns largest employer (employs 1,100 people out of a town of 11,000) is closing and it outsourcing its manufacturing plants to Mexico. I would have loved for them to stay and save this town.

 

[Mr. Dictator]

I'm all for lowering it. The prices of practically everything will plummet, and jobs will come back to America because of its highly educated workforce, and will then be able to compete with companies worldwide.

I want people to realize that if the minimum wage drops, so will prices. Most seem unable to comprehend this. They figure if people get paid $1.00 per hour, then microwave meals will stay at $3.00. This is not true since the cost to manufacture it will lower as well. Also, if no one can afford to buy it, then it will be impossible for that company to stay afloat since it is not selling any product.

yes but the extra money put in there pockets would help with the costs.

i could be wrong mind you, it just seems like common sense.

im not an economist so feel free to point out my ignorance

 

[Godwynn]

yes but the extra money put in there pockets would help with the costs.

It would seem this way. But there is another problem along with that. Outsourcing. If an American company sells a can of soup for $1.50 and one made in Myanmar sells it for $0.75 the consumer is going to purchase the cheaper one, so the American company loses business. Look on the tags of your shirt. Any of them say made in America? Think if those jobs came back. It would be cheaper than outsourced ones since it would save of shipping across the Pacific Ocean, and increase sales of Made In America.

 

[Elrohir]

As a conservative, I don't think it's the government's job to decide such things, and I would like to see the minimum wage abolished, at least at the Federal level.

As a kid looking for a job, I'd like to see it raised above the pathetic $5.15 an hour level it is now.

I'd have to go if the first one more, but I imagine I'll be less conflicted once I'm rich.

 

[CIVPhilzilla]

yes but the extra money put in there pockets would help with the costs.

i could be wrong mind you, it just seems like common sense.

im not an economist so feel free to point out my ignorance

Money like anything else is a commodity and its value is determined by supply and demand. If you increase minimum wage and increase the ammount of money across the board, the value of the dollar declines due to the increased supply. Also if buisnesses are paying a higher wage than they initially planned for they may put that extra cost into the cost of the item of produciton, or produce less of the item since they can't afford the extra labor. Either way the cost goes up directly (price increase to cover cost) or indirectly (supply of item goes down, price goes up).

 

[De Lorimier]

Unlike you, I have absolutely no faith in the "market". As much as we all hope and would like to think that this market can regulate itself and treat employees properly, the truth is, it doesn't and never will if we don't make sure it does. Minimum wage is one of the tools we have to make our economic system liveable for regular people. It should be high enough to make rent and pay minimal bills and groceries. Decent standards of living should be the goal for everyone who's willing to go out and work.

But that's just coming from someone who actually works for his money and for his rent and bills. I'm sure our resident teenagers living with mom and dad will have more to say on the subject than me.

 

[CIVPhilzilla]

Unlike you, I have absolutely no faith in the "market". As much as we all hope and would like to think that this market can regulate itself and treat employees properly, the truth is, it doesn't and never will if we don't make sure it does. Minimum wage is one of the tools we have to make our economic system liveable for regular people. It should be high enough to make rent and pay minimal bills and groceries. Decent standards of living should be the goal for everyone who's willing to go out and work.

But that's just coming from someone who actually works for his money and for his rent and bills. I'm sure our resident teenagers living with mom will have more to say on the subject than me.

Though then you run into a situation where the extra cost of goods caused by the minimum wage reduce the effect of the actual wage, while hurting everyone else in the economy as well.

 

[malclave]

i think minimum wage should be a living wage. not all people who work at a minimum wage job are bums, thats a stereotype.

Does anyone know of a study analyzing the demographics of people earning minimum wage? I searched briefly, but did not find one.

What I was trying to find out is things like how many minimum wage earners are the sole wage earner, how many are a shared wage earner (for example, a married couple where both spouses work), and how many are not principal wage earners for the family.

 

[Mr. Dictator]

Money like anything else is a commodity and its value is determined by supply and demand. If you increase minimum wage and increase the ammount of money across the board, the value of the dollar declines due to the increased supply. Also if buisnesses are paying a higher wage than they initially planned for they may put that extra cost into the cost of the item of produciton, or produce less of the item since they can't afford the extra labor. Either way the cost goes up directly (price increase to cover cost) or indirectly (supply of item goes down, price goes up).

oh, ok. understood.

i still think it could stand to go up though

 

[De Lorimier]

Though then you run into a situation where the extra cost of goods caused by the minimum wage reduce the effect of the actual wage, while hurting everyone else in the economy as well.

It beats your solution of having people working 2$/hour to make bigger benefits for the employers. The market will make sure those profits end up in the consumer's pockets right? I don't think so.

 

[Perfection]

I'm all for lowering it. The prices of practically everything will plummet,

No it won't. Most manufacturing jobs pay significantly above minimum wage.

The unemployment rate will almost become zero since corporations and small businesses will be able to hire more people.

Not really, after a low enough wage drop people simply won't work. Working costs a fair amount of time and money, you have to make it worthwile.

This hits home to me since my towns largest employer (employs 1,100 people out of a town of 11,000) is closing and it outsourcing its manufacturing plants to Mexico. I would have loved for them to stay and save this town.

I don't think that would've helped much, do you honestly believe that most people would accept such low wages as below minimum?

It would seem this way. But there is another problem along with that. Outsourcing. If an American company sells a can of soup for $1.50 and one made in Myanmar sells it for $0.75 the consumer is going to purchase the cheaper one, so the American company loses business. Look on the tags of your shirt. Any of them say made in America? Think if those jobs came back. It would be cheaper than outsourced ones since it would save of shipping across the Pacific Ocean, and increase sales of Made In America.

Please, shipping costs are negligable compared to the amount saved in wages. Abolishing minimum wages isn't gonna solve it as most people won't accept such low wages. The true solution is to let those jobs go and retrain the workforce for better jobs.

 

[WillJ]

previous thread on the subject

Like I said in that link, the situation boils down like so.

There are a bunch of employers out there, who each have a bunch of jobs that they want done, and for each job they have a reservation price as to what they're willing to pay (paying any more is uneconomical).

Now imagine that the government orders a minimum wage of $5 an hour. These would be the effects of such a law:

• In any situation where the employer has a reservation price of $5 or more and is paying the employee $5 or more, there is no effect.
• In any situation where the employer has a reservation price of $5 or more and is paying the employee less than $5, the employer will raise the wage to $5.
• In any situation where the employer has a reservation price of less than $5, the employer will fire the employee.

The overall goodness (possibly negative goodness, a.k.a. badness) of the minimum wage results from:

all the goodness resulting from increases of wages in situations of the second type*, minus all the badness resulting from unemployment in situations of the third type

*It's debatable whether or not increases in the wages of workers in situations of the second type is a good thing. Most would say it is, since in general it makes the economy more equitable.

Now we face an empirical question: Just how prevalent is this good stuff? (That is, how common is the second situation?) Conversely, how prevalent is the bad stuff? (That is, how common is the third situation?)

In the previous thread, the poster jwijn kindly helped me answer that question. The jury's still out, I'd have to say.

 

[Godwynn]

No it won't. Most manufacturing jobs pay significantly above minimum wage.

So employers are going to keep prices high to the point where no one can afford to purchase them, thereby selling nothing, and making no money?

Not really, after a low enough wage drop people simply won't work. Working costs a fair amount of time and money, you have to make it worthwile.

The cost of making a product and the price of selling it are related. If their purchasing power is not changed, there should be no difference.

I don't think that would've helped much, do you honestly believe that most people would accept such low wages as below minimum?

See Above

Please, shipping costs are negligable compared to the amount saved in wages. Abolishing minimum wages isn't gonna solve it as most people won't accept such low wages. The true solution is to let those jobs go and retrain the workforce for better jobs.

Again see twice above. So we let those jobs go? Not everyone can be a rocket scientist, someone has to dig ditches, as sad as it may be, it is a fact of life. Not everyone is cut out to be a physicist or an inventor.

 

[CIVPhilzilla]

It beats your solution of having people working 2$/hour to make bigger benefits for the employers. The market will make sure those profits end up in the consumer's pockets right? I don't think so.

It gives the companies the ability to be more competitive, and buisnesses can go back and forth aiming for better pricing of their products.

Also a source with general statistics about minimum wage.

 

[Pbhead]

the min wage is a price floor.


price controls can really screw things up. (you mentioned outsourceing and inflation, although true inflation comes straight from the government printing $$$)

therefore it should be abolished.

ever wonder where those boys with flashlights at the movie theater went? they turned into glow strips when the min wage affected them.

the kid with the broom at the local mom and pop store? minimum wage showed up with a vengence.

a min wage causes jobs to go *poof*

a minimum wage can, as many things, be explained by "Any socity that would sacrifice a bit of freedom to gain a bit of security deserves neither and loses both." Ben Franklen