Welfare Pays More Than Minimum Wage In 35 States

[Curious George]

Is anything too sacred to permit regulation?

I should elaborate: to regulate through government.

 

[dust1n]

I think that this is more of a condemnation of absurdly low minimum wages than it is a condemnation of too-lavish welfare programs.

But you're right in one respect: getting off welfare can often mean a major financial hit. This is one big reason why things like universal health care (REAL universal health care) are so important.

Perfect example. Relying on the city's charity program, once I got a second job and exceeded the 1000 a month limit, I was discontinued from their program after three months of work just to get to see a neurologist (needed such visit just to even get a prescription for medications I would no longer be provided for). I had to reschedule the appointment until January for now, as I can't get private insurance (preexisting condition, and all... like literally, denied) until the health care bill kicks in next year. I think I do have the option of 200+ dollars a month through the military (as my father is a long-term military hospital worker). I will have to probably take that 1000+ additional expensive for the rest of the year; just to cover any potential emergencies.

 

[SpeaksForTheTrees]

Sterilizing people sounds a bit much ..
The real problem is10% of the worlds population control 90% of the wealth.

 

[Sunstone]

The real problem is10% of the worlds population control 90% of the wealth.

I agree that's likely the core problem. Raising minimum wage probably wouldn't seriously hurt anyone's interests -- not even the interests of the over-class. But greed is a great motivator. A man or woman with a billion dollars thinks just like a man or woman with a thousand dollars -- "I need more!"

 

[Aquitaine]

I agree that's likely the core problem. Raising minimum wage probably wouldn't seriously hurt anyone's interests -- not even the interests of the over-class. But greed is a great motivator. A man or woman with a billion dollars thinks just like a man or woman with a thousand dollars -- "I need more!"

I don't think Humans in general have properly adapted to increased wealth, prosperity and technology over a relatively short period of time in our history. Even if we have a billion dollars, we're still stuck in that survivalist mindset of "must acquire more!".

It seems that way to me, anyway.

 

[Curious George]

I agree that's likely the core problem. Raising minimum wage probably wouldn't seriously hurt anyone's interests -- not even the interests of the over-class. But greed is a great motivator. A man or woman with a billion dollars thinks just like a man or woman with a thousand dollars -- "I need more!"

But raising the minimum wage would translate to a shifting of the loss. Business owners would not lose money, they would just raise prices.

 

[McBell]

A report by the Cato Institute study found that all of the Welfare payments available to people in 35 states pay more than minimum wage and in 13 states it pays in excess of $15.00 an hour. Now what would the incentive be to attempt to get off welfare? It appears that the welfare system is in need of an overhaul and make it a system that helps people to get back on their feet instead of living off the backs of those that are working. The lead-in to this article can be found at:
The Work versus Welfare Trade-Off: 2013 | Cato Institute

Is the rest of the article merely more of the artificial inflating of numbers?

 

[Sunstone]

But raising the minimum wage would translate to a shifting of the loss. Business owners would not lose money, they would just raise prices.

That's pretty shifty economics, if you ask me.

More seriously, I've heard that notion has been debunked.

 

[Curious George]

That's pretty shifty economics, if you ask me.

More seriously, I've heard that notion has been debunked.

Well, I would love to read about the debunking. A long long time ago, I worked in restaurant and everytime there was a wage increase there was a subsequent or even simultaneous increase in price. But I happen to know some published statisticians and a economics grad student. My previous statement was based on what I saw in my limited experience, but I shall ask them and get back to you, if you can point me in the way of a paper, that would be helpful also.

 

[Shermana]

Well, I would love to read about the debunking. A long long time ago, I worked in restaurant and everytime there was a wage increase there was a subsequent or even simultaneous increase in price. But I happen to know some published statisticians and a economics grad student. My previous statement was based on what I saw in my limited experience, but I shall ask them and get back to you, if you can point me in the way of a paper, that would be helpful also.

Research Shows Minimum Wage Increases Do Not Cause Job Loss | Business For a Fair Minimum Wage

Selected Research in chronological order

Lawrence F. Katz and Alan B. Krueger, “The Effect of the Minimum Wage on the Fast Food Industry,” Industrial Relations Section, Princeton University, February 1992.

David Card, “Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage,” Industrial and Labor Relations Review, October 1992.

David Card and Alan Krueger, Myth and Measurement: The New Economics of the Minimum Wage (Princeton, NJ: Princeton University Press, 1995).

David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply,” American Economic Review, December 2000 (in this reply, Card and Krueger update earlier findings and refute critics).

Jared Bernstein and John Schmitt, Economic Policy Institute, Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase, 1998.

Jerold Waltman, Allan McBride and Nicole Camhout, “Minimum Wage Increases and the Business Failure Rate,” Journal of Economic Issues, March 1998.

A Report by the National Economic Council, The Minimum Wage: Increasing the Reward for Work, March 2000.

Holly Sklar, Laryssa Mykyta and Susan Wefald, Raise The Floor: Wages and Policies That Work For All Of Us (Boston: South End Press, 2001/2002), Ch. 4 and pp. 102-08.

Marilyn P. Watkins, Economic Opportunity Institute, “Still Working Well: Washington’s Minimum Wage and the Beginnings of Economic Recovery,” January 21, 2004.

Amy Chasanov, Economic Policy Institute, No Longer Getting By: An Increase in the Minimum Wage is Long Overdue, May 2004.

Fiscal Policy Institute, States with Minimum Wages above the Federal Level Have Had Faster Small Business and Retail Job Growth, March 2006 (update of 2004 report).

John Burton and Amy Hanauer, Center for American Progress and Policy Matters Ohio, Good for Business: Small Business Growth and State Minimum Wages, May 2006.

Paul K. Sonn, Citywide Minimum Wage Laws: A New Policy Tool for Local Governments, (originally published by Brennan Center for Justice) National Employment Law Project, May 2006, includes a good summary of impact research.

Liana Fox, Economic Policy Institute, Minimum Wage Trends: Understanding past and contemporary research, November 8, 2006.

Paul Wolfson, Economic Policy Institute, State Minimum Wages: A Policy That Works, November 27, 2006.

Arindrajit Dube, Suresh Naidu and Michael Reich, “The Economic Effects of a Citywide Minimum Wage,” Industrial & Labor Relations Review, July 2007.

Jerold L. Waltman, Minimum Wage Policy in Great Britain and the United States (New York: Algora, 2008), pp. 17-19, 132-136, 151-162, 178-180.

Sylvia Allegretto, Arindrajit Dube and Michael Reich, Do Minimum Wages Really Reduce Teen Employment?, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, June 28, 2008.

Michael F. Thompson, Indiana Business Research Center, “Minimum Wage Impacts on Employment: A Look at Indiana, Illinois and Surrounding Midwestern States,” Indiana Business Review, Fall 2008.

Hristos Doucouliagos and T. D. Stanley, "Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis," British Journal of Industrial Relations, vol. 47, no. 2, 2009.

Sylvia Allegretto, Arindrajit Dube and Michael Reich, Spacial Heterogeneity and Minimum Wages: Employment Estimates for Teens Using Cross-State Commuting Zones, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, June 25, 2009.

Arindrajit Dube, T. William Lester and Michael Reich, Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, August 2008.
Published by The Review of Economics and Statistics, November 2010.

John Schmitt and David Rosnick, The Wage and Employment Impact of Minimum‐Wage Laws in Three Cities, Center for Economic and Policy Research, March 2011.

Sylvia Allegretto, Arindrajit Dube and Michael Reich, Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, June 21, 2010.
Published by Industrial Relations, April 2011.

Anne Thompson, What Is Causing Record-High Teen Unemployment? Range of Economic Factors Drives High Teen Unemployment, But Minimum Wage Not One of Them, National Employment Law Project, October 2011.

John Schmidt, Why Does the Minimum Wage Have No Discernible Effect on Employment?, Center for Economic and Policy Research, Febuary 2013.

 

[Sunstone]

Well, I would love to read about the debunking. A long long time ago, I worked in restaurant and everytime there was a wage increase there was a subsequent or even simultaneous increase in price. But I happen to know some published statisticians and a economics grad student. My previous statement was based on what I saw in my limited experience, but I shall ask them and get back to you, if you can point me in the way of a paper, that would be helpful also.

There's far less work done on the relationship between minimum wage increases and price increases than there is between minimum wage increases and employment, but here's one article on the former that has a few links to references:

http://www.truth-out.org/news/item/14050-minimum-wage-hikes-do-not-cause-inflation

 

[esmith]

Research Shows Minimum Wage Increases Do Not Cause Job Loss | Business For a Fair Minimum Wage

And I counter with:
Employment Policies Institute | Minimum Wage
Raising the Federal Minimum Wage | NFIB
Why Raising The Minimum Wage Kills Jobs - Forbes
Australia's Failed Minimum Wage | Stossel's Take Blog

So as you can see there is disagreement among many.

 

[tytlyf]

And I counter with:
Employment Policies Institute | Minimum Wage
Raising the Federal Minimum Wage | NFIB
Why Raising The Minimum Wage Kills Jobs - Forbes
Australia's Failed Minimum Wage | Stossel's Take Blog

So as you can see there is disagreement among many.

But you've linked to opinion pieces and one is Australia? I'd rather rely on his research studies.
Got any research esmith? Fox doesn't count.

 

[esmith]

But you've linked to opinion pieces and one is Australia? I'd rather rely on his research studies.
Got any research esmith? Fox doesn't count.

So, the Australia's economy is totally different from everywhere else in the world including the US? And your sicking rant against one news sort is becoming a little bit more than comical, every think maybe it's time to get some help? And what source of information about what does and does not help or hurt the economy is anything but opinions based on assumptions.

 

[tytlyf]

So, the Australia's economy is totally different from everywhere else in the world including the US? And your sicking rant against one news sort is becoming a little bit more than comical, every think maybe it's time to get some help? And what source of information about what does and does not help or hurt the economy is anything but opinions based on assumptions.

Apples and Oranges. Kinda like those Greece predictions. Not relevant.

We only attack fox on tv, you attack how many outlets on tv? Hypocrite? Not my fault fox is run by a propaganda master for GOP politicians. Still haven't got that yet?

And no, research is like science. Not opinion pieces like your stossel picking any country to scare the crap out of people as usual.

Why did Roger's #1 man just get fired?

 

[Shermana]

And I counter with:
Employment Policies Institute | Minimum Wage
Raising the Federal Minimum Wage | NFIB
Why Raising The Minimum Wage Kills Jobs - Forbes
Australia's Failed Minimum Wage | Stossel's Take Blog

So as you can see there is disagreement among many.

Indeed there is disagreement, but in order to see whose sources are being more honest, or at least accurate, we need to examine the actual data.

For instance, here's one of the studies listed as a reference in your first link:

Employment Policies Institute | The Effect of Minimum Wage Increases on Retail and Small Business Employment

Employment Results

Using government data from January 1979 to December 2004, the effect of minimum wage increases on retail and small business employment is estimated. Specifically, a 10 percent increase in the minimum wage is associated with a 0.9 to 1.1 percent decline in retail employment and a 0.8 to 1.2 percent reduction in small business employment.

These employment effects grow even larger for the low-skilled employees most affected by minimum wage increases. A 10 percent increase in the minimum wage is associated with a 2.7 to 4.3 percent decline in teen employment in the retail sector, a 5 percent decline in average retail hours worked by all teenagers, and a 2.8 percent decline in retail hours worked by teenagers who remain employed in retail jobs.

These results increase in magnitude when focusing on the effect on small businesses. A 10 percent increase in the minimum wage is associated with a 4.6 to 9.0 percent decline in teenage employment in small businesses and a 4.8 to 8.8 percent reduction in hours worked by teens in the retail sector.

1. This corrolation could have been during an overall downturn in employment.

2. As Minimum wage increases, more adults could be applying for the same jobs.

Those 2 explanations alone can easily blow any attempt to make a link of causality out of the water, and they don't really discuss things like this.

Meanwhile, they attempt to counter the FPI's claims with:

Even more troubling, the FPI analysis does not control for any changes in state-level socioeconomic or demographic characteristics that could affect both minimum wage hikes and changes in employment. For example, states may choose to raise their minimum wages when they anticipate strong economic growth in sectors that employ a large share of minimum-wage workers. If this is true, then estimates of the impact of the minimum wage on employment will be biased toward zero. Put another way, the FPI study does not hold “all else equal” in estimating the effect of the minimum wage

So basically they accuse the FPI of the same exact thing they do. Were they hoping no one would catch that?

 

[9-10ths_Penguin]

Well, I would love to read about the debunking. A long long time ago, I worked in restaurant and everytime there was a wage increase there was a subsequent or even simultaneous increase in price. But I happen to know some published statisticians and a economics grad student. My previous statement was based on what I saw in my limited experience, but I shall ask them and get back to you, if you can point me in the way of a paper, that would be helpful also.

Papers aside, I think it helps to consider the underlying assumption of this idea that raising the minimum wage will lead to an increase in prices: that the market will tolerate a raise in prices and that business owners/managers realize this, but - for some unknown reason - they decide not to do this until the minimum wage is raised.

If the market will bear the price increase, then why wouldn't they raise prices already? Are these businesses not worried about maximizing profit?

 

[Dirty Penguin]

A report by the Cato Institute study found that all of the Welfare payments available to people in 35 states pay more than minimum wage and in 13 states it pays in excess of $15.00 an hour.

Sounds like a good argument for an increased minimum wage. We have a huge income inequality gap in the US and it's been this way for decades. The top percentile have seen almost a 300% increase in their income despite the recession while the working poor and the middle class have had their homes and other property devalued.

Yet More Grim Inequality News from the CBO | Mother Jones

Now what would the incentive be to attempt to get off welfare?

It's seems you might not be aware that the working poor are receiving assistance despite having a job. It's not so black and white as the picture you try to paint here. I mean...nothing's changed. Even before this president we had high unemployment and a huge chunk of the population on or getting on public assistance. State Policies to Assist Working-Poor Families — Center on Budget and Policy Priorities. .....

But we know from looking at the facts over time it isn't isolated to race given that whites and blacks are almost equal when it comes to the amount of population receiving public assistance. We also have a huge population of elderly and children in the system.

Graph: Busting the Myths about Food Stamps : Our Blog : Welcome to The Century Foundation

It appears that the welfare system is in need of an overhaul and make it a system that helps people to get back on their feet instead of living off the backs of those that are working.

Except you don't know what you're talking about. Many, many of the people receiving assistance DO in "FACT" work. When you break it down it's not as simple as your rhetoric.

 

[Dirty Penguin]

I agree that an overhaul of the current welfare system should be looked at. The idea of reducing welfare payments as one enters the work force could be one of many ideas.

They do....

However, I do not think anything can be done within Congress. Look at the response to this article that is found here, little or no additional ideas just an outrage that anything could or should be done.

Congress, rather congressional repubteagans are only interested in stripping as much funding from the programs as possible ...$40 Billion in cuts....which is double than what they were clambering for before that. So NO....Congress isn't interested in structural reform, providing any funding to re-educate etc. They're interested in "cuts"....but they still want to pork up the farm bill because many of them (pubs and dems)...get nice fat subsidies "off the backs of those that are working."

 

[Curious George]

There's far less work done on the relationship between minimum wage increases and price increases than there is between minimum wage increases and employment, but here's one article on the former that has a few links to references:

http://www.truth-out.org/news/item/14050-minimum-wage-hikes-do-not-cause-inflation

Did you read your study? It suggested prices did increase to accommodate minimum wage but that increase had a negligible increase on inflation.

Here is a paper, in conclusions they conclude again that cost of minimum wage increase is passed mostly to consumers.
http://davidcard.berkeley.edu/papers/njmin-aer.pdf