What Minumum Wage Buys, then and now

[Skwim]

How about "closer' to $43.25???

I just re-figured and came out with $43.63 Arrrgh! I just hate this new abacus.

 

[9-10ths_Penguin]

So what should the minimum wage be? The industries who only pay minimum are generally those that employ teenagers and immigrants as a majority of thier workforce. Fast-food joints,for example. If these employers had to pay,say $12 per hour to every worker, we could be faced with much higher prices for the,um, food they sell. Is anybody really willing to pay $10 for a Taco Bell burrito, or a similarly priced Big Mac? Think of the cost of some of these items when purchased at higher-end eateries even now....combined with included tips. I totally agree that current minimums should be raised, but without some sort of restraint on the prices that may be charged as a result, it may be like a one-legged man at a butt-kicking contest.

This is the 500# gorilla in the room. A "livable wage for all" sounds so relentlessly positive, how can anyone but those fringe libertarians (me) argue against it?
But put a number to it....say $20/hr, & practical problems loom even for leftish folk.
What would happen to Obama's interns who already make less than the fed min wage?

There would also be greater outsourcing to private contractors, & greater impetus for automating newly expensive unskilled labor.

I'm not sure of the point of these doom-and-gloom predictions when there are plenty of available comparators.

For instance, take Ontario:

- the general minimum wage is $10.25 ($9.76 US at the current exchange rate) (source: Minimum Wage | Ministry of Labour)
- unemployment is at 7.5% (source: Unemployment rate remains at 7.1% for June - Business - CBC News)
- a Build Your Own Box combo at Taco Bell is $4.99 ($4.75 US) (source: my visit there last week. )

Anyone want to provide this information for where they are to see how they compare?

 

[Revoltingest]

I'm not sure of the point of these doom-and-gloom predictions when there are plenty of available comparators.

Doom & gloom? My point is that we should consider the possible consequences (which
will be some mix of trends I cited) before embarking on living wage legislation.

For instance, take Ontario:
- the general minimum wage is $10.25 ($9.76 US at the current exchange rate) (source: Minimum Wage | Ministry of Labour)
- unemployment is at 7.5% (source: Unemployment rate remains at 7.1% for June - Business - CBC News)

I don't think that's a livable wage, if it means being able to support oneself comfortably with a single full time job.

 

[9-10ths_Penguin]

I don't think that's a livable wage, if it means being able to support oneself comfortably with a single full time job.

I didn't say that it's a livable wage. What I wanted to do was explore the claim that increasing the minimum wage encourages jobs to leave or increases prices. Information on minimum wage, unemployment levels, and prices for consumer goods is readily available, so it seems to me that we can see whether or not the evidence supports the truth or falsehood of the claim.

 

[Reverend Rick]

All I know is 7.25? Is a joke.

All I know is the joke is on anyone who accepts a job making that kind of money and actually believes they can live on wages like that.

7.25 an hour buys a cell phone or a movie ticket or perhaps a happy meal and some gasoline. Rent, food, utilities.......no way.

 

[SpeaksForTheTrees]

Those pesky money changers lol remember the onez that Jesus whipped and drove from the temple , Mathews account is inaccurate however 2000 years later they now run the US,World Economy ..)
Inflation is a tea tax , sold into slavery @ $7 an hour.
Founding fathers gave US citizens the right to bare arms to protect from tyrannical government and foreign kings but they never considered the money changers.

 

[DallasApple]

All I know is the joke is on anyone who accepts a job making that kind of money and actually believes they can live on wages like that.

7.25 an hour buys a cell phone or a movie ticket or perhaps a happy meal and some gasoline. Rent, food, utilities.......no way.

I never said anyone believes it will.So how is it a joke? I believe minimum wage SHOULD pay a living wage.Laugh all you want. Minimum wage SHOULD pay a living wage.

 

[Revoltingest]

I didn't say that it's a livable wage. What I wanted to do was explore the claim that increasing the minimum wage encourages jobs to leave or increases prices. Information on minimum wage, unemployment levels, and prices for consumer goods is readily available, so it seems to me that we can see whether or not the evidence supports the truth or falsehood of the claim.

Actual evidence will be a murky thing, given the complexity of economics. Rather than asking "if" prices will increase if wages increase, the question should be whether the total net effect is better or worse. And that would depend upon the amount of the increase. It's possible that a small increase would be great, but a large increase would be bad.

 

[9-10ths_Penguin]

Actual evidence will be a murky thing, given the complexity of economics.

Is this an admission that your concerns aren't rooted in evidence?

Rather than asking "if" prices will increase if wages increase, the question should be whether the total net effect is better or worse.

In the big picture, that's what we're talking about. Potential negative consequences have been suggested (e.g. an increase in the price of a Taco Bell burrito or outsourcing of jobs to overseas), and I think that we can probably agree that, all else being equal, low wage earners having more money is a good thing, too.

If we find that bad things increase as the minimum wage increases, then yes, we would need to weigh the bad of those bad things against the good of the wage increase to decide whether the net effect is positive or negative. However, if we find that increasing the minimum wage doesn't affect those bad things at all - or if they actually get better - then we don't need to weigh the different factors against each other to conclude that the result is a net positive.

And that would depend upon the amount of the increase. It's possible that a small increase would be great, but a large increase would be bad.

Lots of things are "possible". It's "possible" that if the minimum wage is ever precisely $17.52, this will act as a secret password that will unlock a volcano monster in the Earth's core that will devour humanity. Do we need to worry about this possibility? That depends on what evidence and reason suggest about its likelihood of being true.

 

[Revoltingest]

Is this an admission that your concerns aren't rooted in evidence?

My concerns are rooted in experience & speculation.
Evidence in economics? That's a tough thing to find, since we can't do real
life experiments in the way we can with something as simple as physics.

In the big picture, that's what we're talking about. Potential negative consequences have been suggested (e.g. an increase in the price of a Taco Bell burrito or outsourcing of jobs to overseas), and I think that we can probably agree that, all else being equal, low wage earners having more money is a good thing, too.

There will be other effects too, which will depend greatly upon the level of increase. How many jobs will be lost because overseas costs will become relatively much less? How many jobs will be lost because the task becomes not worth doing? How many will be replaced by automation. These things are already happening, so a good question is what increase will there be.

If we find that bad things increase as the minimum wage increases, then yes, we would need to weigh the bad of those bad things against the good of the wage increase to decide whether the net effect is positive or negative. However, if we find that increasing the minimum wage doesn't affect those bad things at all - or if they actually get better - then we don't need to weigh the different factors against each other to conclude that the result is a net positive.

Any thoughts on how to determine what increase is optimum?

Lots of things are "possible". It's "possible" that if the minimum wage is ever precisely $17.52, this will act as a secret password that will unlock a volcano monster in the Earth's core that will devour humanity. Do we need to worry about this possibility? That depends on what evidence and reason suggest about its likelihood of being true.

Interesting hypotheses you have there.

 

[9-10ths_Penguin]

My concerns are rooted in experience & speculation.
Evidence in economics? That's a tough thing to find, since we can't do real
life experiments in the way we can with something as simple as physics.

I would settle for good reasons to believe your concerns might actually happen. What are they?

There will be other effects too, which will depend greatly upon the level of increase. How many jobs will be lost because overseas costs will become relatively much less? How many jobs will be lost because the task becomes not worth doing? How many will be replaced by automation. These things are already happening, so a good question is what increase will there be.

Other good questions:

- what minimum wage jobs are left that can be shipped overseas or simply eliminated?
- how many minimum wage jobs that currently exist would be shipped overseas or automated anyhow as relative costs change due to other factors (reduction in the cost for technology, for instance)?

Any thoughts on how to determine what increase is optimum?

Even before we ask that, we would need to have an idea of what the effect of raising the minimum wage would be. As you said earlier, it's possible that the effect of a small increase would be "great".

At the very least, then, we could try to establish the lower bound for the range inside which an optimal increase would lie. Hopefully you'll agree that for increases where no negative consequences result (whether that means an increase in the price of a burrito, shipping of jobs overseas, or some other measure), an increase in the minimum wage is better than the status quo (right?), so the lower bound is at least that high. That would be a starting point for discussion.

 

[Revoltingest]

It's getting late for involved posts.
Tomorrow!

 

[mounir]

i don't really understand how this works to have the minimum wage good for the people to have a comfortable life without suffering to survive among bunch of capitalists who do not care for anything unless the numbers are excellent for them . they are not the peopel wholove america but the ones who are greedy and love only greed and wealth . they are always good and the poor is always suffering especially some ones are living for this wage , this is catastrophe when these poor can not pay off their bills and they end up working full time and over time again , the slacery is back again . letting bunch of capitalists exploit the poor and let hom be slave again is not acceptable . people have to use their brain and gather for is right and enlighten the others for what is wrong . no buddy does this and no buddy uses common sense in this country because the others will call him either communist or socialist because they love the poor and the exploited .