Can someone answer my question about the minimum-wage hike?

[scioto99]

(Because, god knows, I'm not an economic genius.)

Here's what I understand:

People work for businesses. Businesses are all different. There are businesses out there, I'm sure, where the owners have vast mansions and the workers are scraping by on next to nothing. The owners could well afford to double the salaries of their minimum wage workers. And that would be the fair and honorable thing to do. In those cases, a minimum wage hike would be great.

OTOH: I can tell you that in my area, businesses fail all the time. I assume they fail because they aren't making enough money to stay afloat, despite the fact that they pay their employees seven-whatever an hour. Just in my neighborhood strip mall in the past few years, shops that have come and gone include:

the card shop
the gymnastics joint
the Asian manicure place
the sports memorabilia store
the haircut place
the fro-yo place
the lacrosse-and-soccer equipment place

When the businesses close, the employees go from making min wage to making zero. Of course, in moves the liquor store, the veterinarian, the healthclub, the weird dance studio, and so on - so that makes for new job opportunities, I guess. Maybe some of those places will make a go of it. Who knows. It just seems kinda unstable.

So I don't quite get how all businesses can start paying a higher wage to employees, when many businesses can't survive even while paying the current crappy wage.

I have heard the theory that when employees get raises and are suddenly making the amazing sum of 13 or 15 an hour, they will all rush out and gleefully spend their improved paychecks on cards, gymnastic lessons, manicures, sports memorabilia, haircuts, fro yo and shin guards - thus making all business owners rich and happy and eager to hire new employees. But that will take some time, if it ever happens. Actually, it seems kinda like a crapshoot to me.... I mean, if I were a hardworking minimum wage worker and suddenly my salary doubled, I would use the money to pay off my debts, start a mutual fund, get my mom that colonoscopy she needs. I wouldn't start getting manicures. And I'd still buy my shin guards at Goodwill.

Can someone connect the dots for me?

[TM99]

1. You want to understand?

Then stop posting ridiculous right wing and neoliberal propaganda, and go read up on how it has been implemented in the past.

Do you think this is the first time we have raised the minimum wage? Of course not, and it is always done incrementally. Sanders plan calls for $15.00 an hour by 2020.

Economists and wage & labor policy wonks have done this for decades. But I am really getting sick of new posters coming in here repeating this same meme all innocent like. Do you think we can't see through it?

[scioto99]

2. I asked a question. In fact, I almost added at the bottom, "I hope this isn't a dumb question",

but I figured that would be overly self-effacing, esp as I said at the outset I am no economist.

Thanks for your rude reply. Jeez.

Yes, you are right - I could dig around and read up on it, and get some economist's version out of some journal, that might or might not be mainstream thought, and that might or might not come out in favor of it - but I figured people on this site generally ARE in favor of it - since both dem candidates are in favor of it - and therefore that some of you-all are knowledgeable and would be able to tell me how it works in a few pithy sentences.

If you don't wanna explain it, fine. I will hope others here are willing. And polite.

[Gormy Cuss]

4. Why not dig around and read up on it?

Why on earth would you prefer to get info from anonymous posters on the internet?

[TM99]

8. We have seen an in rush

of trolls and frankly paid operatives in the last few months.

If I see a post that seems similar to several already done, that is naturally where I am going to go.

We are in favor of it. And even without snark, even Wikipedia explains how the minimum wage has always been raised incrementally over a period of years so that businesses can adjust. You will also find that for the most part, small businesses do not pay just minimum wage only. They are almost always well above the national rate. It is the big box retailers like Walmart and fast food like McDonald's who will only be paying minimum wage. They can easily given time absorb the labor costs and pass on only a tiny price hike in product.

[whatthehey]

22. And you dismissed the answer in advance

Whatever you claim you would do with a change from starvation to subsistence level income does not change decades of data on marginal propensity to consume, which at this income level nears 100%. That money will be spent in other words. Spent on any business providing a desirable product or service. Manicure places, gym schools and whatever manage to exist and prosper even now. Well planned and managed ones will certainly do better with more money in the hands of their customers.

[eniwetok]

23. don't expect a rational discussion here...

There are some here that are incapable of an intelligent discussion and automatically jump to the conclusion that if anyone dares disagree with their ideas... they must be sent by Heritage, Cato, or CEI. I got no end of shit for my own position that supported the MW... the national base wage for UNskilled labor to go to $11, the highest the MW had ever been adjusted to inflation... and to let states and cities go higher if they wanted... and even THAT was called right wing. Many here just think they can decree their wish list upon the land. What makes this possible is because they believe that the money will magically just recirculate and there will be no problems. Do they have proof this would work even in depressed backwater regions? No... it's just as silly as right wingers believing that irresponsible tax cuts create revenue booms and pay for themselves.

[SoLeftIAmRight]

27. lol

got to love chicago

[whatthehey]

28. So you're saying economists have marginal propensity to consume utterly wrong?

The poorer you are the more of your money goes straight back into demand. Even the Chicago school doesn't dispute that. It's not magic; it's decades of consistent data.

[eniwetok]

30. nice theory

Nice theory... but it doesn't follow that you can just double the MW in 4-5 years without problems. Sure, rich urban areas can deal with it. But we're talking about the LOWEST even the most unskilled kid will have to be paid regardless of whether they live in that city or some rural backwater.

And there's a difference between people getting food stamps or some other net INFLOW into an economy... and the economy of some small town trying to self-sustain a MW that doubles.

Economies tend to find some equilibrium... maybe not always the most beneficial to all... but there's some stability. 25 states are now $8 or below for a MW and 19 states are at $7.25 . Obviously these MWs are criminally low. But to double the MW on every state for the LEAST skilled workers... will do what all those oil spikes in the did to the economy... only on the local/regional level.

[whatthehey]

46. I can't say I've seen data on regional MPC. I suspect little variation

If you are poor in Manhattan NY or poor in Manhattan KS you still have unmet needs and certainly wants. You'll still spend extra income. While some of that money will leave local economy, at the subsistence level current MW is, thst won't be a huge ratio. Food and shelter and transportation are local economy spend for the most part. It's comfortable folks with lower marginal propensities to consume who are ordering $500 espresso makers from Amazon. After that people tend to spend money on both improvements to lifestyle like a tumble dryer instead of a washing line and entertainment like eating out. Both again dominated by local spending. Middle class and above spending is more likely geographically widespread with vacations, luxury items not found in those backwoods burgs of yours, major league sports etc. And remember what kinds of businesses are in those burgs? There aren't too many Maserati dealers and pet spas in East Bumfuck ID. There are convenience stores, bars, mechanics, pizza joints and gas stations though, all of which see large gains with greater disposible income among the poor.

Of course there are some risks to massive MW increases, but they are systemic not local. Inflation is first among them, but competition and automation have tamed that lately. Automation is a threat itself too, but East Bumfuck Burger King is likely to be the last not the first to have the CAPEX basis to invest in that.

Will individual businesses suffer? Of course, but it will be by consumption shifts a huge minimum wage hike will cause not the MW itself. If I owned laundrettes I'd be nervous when more customers can afford home laundries. Payday loan offices will likely see lower traffic. But shifts in customer bases and externalities are part of the risks of doing business. People who opened video rental stores in 1985 were fools if they weren't looking to do something else by 2005. People who opened Italian restaurants needed to change menus when their neighborhood became Chinatown.

[Chan790]

92. To be fair...

it's actually just you that I suspect of being on the payroll of Heritage.

You only post in threads on this one narrow topic and even after it's explained to you in repeated, excruciating detail exactly why and how you're wrong...you continue to repeat the same debunked examples and arguments. That absolutely has the scent of a paid poster working off a script of vetted talking points.

[MH1]

59. The reason a higher minimum wage doesn't kill jobs (at a macro level)

Is because jobs are created by people spending that additional cash.

The folks who are getting minimum wage are living (barely, if that) paycheck to paycheck. Every additional dime that comes in, gets spent. (As opposed to people who make more than they need to spend immediately.)

That creates "demand" in the economy. Demand for more goods and services. Which needs more people to produce those goods and services.

Now, that is at the macro level. Overall, the economy grows because demand grows. AND - more importantly - people live better lives.

The downside is that, like with any policy decision, there may be losers as well as winners. If a small business is not providing goods and services for those with lower incomes ... or the employees of the businesses that see an uptick in demand from the minimum wage workers ... yes it is possible some of them will struggle. If their higher costs are not offset by higher demand, they could be in trouble. But I would ask, what is it they are providing to society if they do not see an increase in demand in this situation? And for that small subset of businesses that might be adversely affected -- while those providing essential goods and services will grow - is it worth continuing to withhold a living wage from a large subset of the population? With the increase in public support services that poverty causes? Not to mention all the other negative effects of poverty, and the flat out human misery.

Bottom line: overall, an increase in the minimum wage will cause the economy to GROW, and MOST businesses will do better. Those who don't, need to adapt. There is a moral calculation here and the best outcome for the most, is with increasing the minimum wage.

I hope that helps.

[eniwetok]

64. just because something's plausible

The reason a higher minimum wage doesn't kill jobs (at a macro level) Is because jobs are created by people spending that additional cash.

The folks who are getting minimum wage are living (barely, if that) paycheck to paycheck. Every additional dime that comes in, gets spent. (As opposed to people who make more than they need to spend immediately.)

That creates "demand" in the economy. Demand for more goods and services. Which needs more people to produce those goods and services.

Just because something's plausible doesn't mean it's connected to reality. It can be just another monetary perpetual motion scheme. Thom Hartmann used a similar rationale for a 55 retirement age... that the labor shortage it would create would boost wages and workers would pay more into SS to cover the extra costs of those extra people on SS.

Right!

The simple fact is there's NO guarantee those bigger paychecks will recirculate in town creating more demand to offset the extreme increase in wages. And as money is drained away from that ecosystem... because people pay down debt, buy from Amazon or save for retirement... businesses might just as easily cut hours and lay off workers to compensate for the higher wages. They may automate if they can.

There's no free lunch and as the old saying goes... if something sounds to good to be true...

[MH1]

86. Okay, I just described ECON 101 Demand-side economic stimulation. What

do you offer as an alternative? Supply-side?

It's not "plausible", it is REALITY, that as I said, for low income workers, "every additional dime that come in, gets spent".

What you are arguing, is WHERE it gets spent. You do have a point that the economic effect is complicated by the internet and online retailers. So that person who is living on a shoestring may be ordering from Amazon instead of purchasing in the local economy.

Well I am going to throw your own argument right back at you. "Just because something's plausible doesn't mean it's connected to reality". The idea that a person who is barely surviving, will spend a raise at Amazon rather than the local grocery store or Wal-mart, is plausible, but not realistic in any large way. If you believe that is truly what happens, please show some hard evidence. To me, it does not make sense that someone who barely has enough to eat or feed their kids, is going to spend their raise on new headphones at Amazon. Yes, maybe a small amount gets spent on something celebratory. But overall, they're going to spend it on groceries and other essentials. Which are more easily procured locally, for people at the margins.

Remember we are talking about MINIMUM WAGE here. Minimum wage workers are not putting much if anything into retirement accounts, even if they get a raise to $15 an hour. Because THEY CAN'T AFFORD TO.

To your point "businesses might just as easily cut hours and lay off workers to compensate for the higher wages" --- not if demand is rising. That was what my whole previous post was about. On a MACRO level, demand increases if you increase minimum wage. SOME individual jobs may be lost for the reasons you cite, in businesses that are not responsive to the type of demand that is increased by this policy. But overall there will be MORE JOBS in the economy.

(Not sure why I have to argue demand vs supply side economics on a supposedly liberal web site. It's ECON 101.)

[eniwetok]

89. RED HERRING ALERT!!

Where have I EVER made any supply side argument? I've argued that we MUST raise the MW... and if we're talking a NATIONAL MW... it will apply to the most unskilled worker even in depressed areas of the county... and I favor that to be what was once the HIGHEST the MW has ever been which today would be $11... and if states or cities want to go higher.

How TF is that a right wing or supply side argument? In ALL the OECD nations if we look at their MWs in terms of US dollars and parity purchasing power the HIGHEST nation is Luxembourg at $11.20. Here are the numbers and the source

From https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE

USD 2014 Purchasing power parity (PPP) in 2014 dollars... hourly MW

United States $7.2
Canada $8.2
United Kingdom $8.2
Ireland $8.7
New Zealand $9.1
Netherlands $9.6
Belgium $10
Australia $10.9
France $10.9
Luxembourg $11.2

Some here use a very high Australian MW but that's based on the exchange rate.. which would be $15.2 in 2014. PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates.

So if someone wants to falsely call me a right winger when I'm advocating for $11... a whopping 20c below the HIGHEST OECD MW... then f*ck them. I just tire of someone claiming that a PLAUSIBLE theory must be factual... and we can safely base policy on it. I'll object if it's some right winger claiming that irresponsible tax cuts pay for themselves... or if a Dem is making a similar magic wand argument about a $15.

[eniwetok]

26. when was it EVER doubled in 5 years?

You claim... ah gee... it's incremental... and that takes care of ALL problems. IT TOOK FROM 1936 to 1956 for the MW to double the first time and 10 years from 1950 - 1960ish to double.

[TM99]

58. I am not arguing with a shill.

What an interesting thread. One poster throws out the question, then disappears, and another comes in to argue for only an $11.00 minimum wage.

Interesting indeed.

[eniwetok]

66. typical intolerance

I have no idea who the OP person was... but I do know who I am... and I'm sick of this bullshit where people like you can throw out unfounded accusations that someone MUST be a right wing shill just because they disagree with you. Who TF ever said that whatever TF YOU believe is connected to reality?

I have a pretty solid record of supporting a higher MW in other forums... and here as well. Just because I think it's nuts to apply what was originally designed as a "living wage" for the big city... to ALL unskilled workers even if they're in some rural backwater doesn't make me a right winger. It makes you a gullible dolt who has no common sense. BTW.. there is NO OECD nation that has a $15 MW in terms of parity purchasing power. The highest in 2014 was Luxembourg at $11.2.

As I wrote to another person throwing around such unfounded accusations as you.

I've been arguing for a higher MW for years... I just believe $15 was pulled out of thin air, and while it may be sensible for high flying urban areas... it's makes NO sense as a NATIONAL MW that would also apply to UNskilled workers in depressed or rural areas. Nor do I buy the magic wand arguments that OF COURSE there will be no problems. There's simply no data to back that up... and NO OECD nation has a MW as high as $15. It's uncharted territory.

http://www.thomhartmann.com/forum/2014/04/minimum-wage-earners-being-ripped-7363-year

http://www.thomhartmann.com/forum/2013/11/no-evidence-minimum-wage-hikes-cause-job-losses-or-inflation

http://www.thomhartmann.com/forum/2013/11/mimimum-wage-workers-subsidize-our-economy

http://www.thomhartmann.com/forum/2015/03/phony-right-wing-research-minimum-wage-hikes

http://www.thomhartmann.com/forum/2015/03/reagan-minimum-wage-value-drops-73-where-were-teen-jobs

http://www.thomhartmann.com/forum/2015/03/fdrs-1937-message-congress-pass-minimum-wage-law


So FO.

[TM99]

68. Honestly I don't give two shits who you are.

I don't care if you want an $11.00 or a $15.00. I give two shits further that you outraged at my response. Bye bye!

[eniwetok]

83. your inability to rationally discuss this issue

Your inability to rationally discuss this issue and lack of intellectual integrity to retract your false allegations is no reflection on me.

So let the record show that you were unable to prove that the nation... even when the MW was increasing in real value... NEVER doubled the MW in a mere 5 years.

And let the record ALSO show that looking at all the OECD nations in terms of standardized dollars and parity purchasing power... the HIGHEST MW is Luxembourg @ $11.20. So you're going to make a fool of yourself with your false accusations to criticize someone who's advocating for 20c less an hour that the highest paying OECD nation?

Ya, I'm a real right wing shill.

FOAH

[eniwetok]

67. you evaded the question

So pray tell Einstein... I provided the source... SHOW US ANY OTHER TIME IN US HISTORY THE MW DOUBLED IN REAL VALUE IN FIVE YEARS!

Let's see what your intellectual integrity quotient is. Put up or shut up.

[AgadorSparticus]

54. You know, I HATE these kinds of snarky, arrogant posts.

Someone is asking a question and trying to promote discussion. Didn't your mother ever taught you that if you don't have something nice to say, then keep your mouth shut?

Take the tin foil hat off. Not everyone is a right-wing nut just because they are asking a question or don't believe in what you believe in. Good lord.....

[TM99]

57. Tough shit.

I don't really care what you hate or don't.

There have been a lot of these same types of posts that are pure neoliberal horseshit. I will call it as I see it. If the poster proves me wrong, then I will own it.

But guess what? The OP made a post, got a reply they didn't like, and disappeared. Now another RW neoliberal Heritage Foundation loving 'progressive' is here arguing the point.

Perhaps I was the right one? Yeah, I won't wait for an apology.

[eniwetok]

69. paranoid?

Gee, I can only assume that you're referring to me... someone who's actually advocated for the highest MW we've ever had... and a MW that has been losing value since 1968. And I've said it was fine if states or cities wanted to go higher.

Ya... that's really being a right wing shill. The $11 I've advocated for as the MINIMUM an unskilled worker in a depressed rural area can get is just 20c lower than the HIGHEST MW any OECD nation has as a MW in terms of parity purchasing power. I provided the link in another post here.

Sorry Einstein... your inability to think beyond simple minded talking points is no reflection on me. I have a long history of supporting a realistic MW and I supplied the links to my posts in other forums. So FO.

[AgadorSparticus]

75. You were right? Who the hell knows. All you did was attack the guy.

Clearly you don't care what I think or anyone else thinks. Just what you think and those that agree with you. There isn't much room for discourse these days on DU with tension so high and nerves so raw, I guess.

Too bad you came out sounding like a douchebag with that tone. You are probably right that there is more to this story. I am not on DU 24/7 to be privy to this stuff.

[TM99]

77. Yes, I am likely right.

I don't care about what trolls thing, you are indeed correct there as well.

I don't suffer fools or trolls gladly.

[steve2470]

5. we get a lot of trolls here

If you have a thick skin, are patient and show an obvious desire to learn new things (as I have striven to do), you shall be rewarded. People need to get to know you.

[steve2470]

6. 10 Reasons to Raise the Minimum Wage (with Charts)

http://www.alternet.org/economy/10-reasons-raise-minimum-wage-charts

[eniwetok]

35. oh no!!!

If I'm being called a shill for Heritage and the right because I suggested we have the national MW be $11...the highest it's ever been, and let states and cities go higher... what are they going to think of you pushing a site that calls for a mere $10.10?

JK... peace!

[Ichingcarpenter]

7. Who's helped by raising the minimum wage?

[Rex]

39. Yeah well, the pattern is to get ignored when you show something like this.

Proof or facts or reality seems to be bothering whomever it is that keeps signing up here to pretend they just found out about the MW. Frankly it is getting very old.

[laundry_queen]

101. +1

[Atman]

9. Opening a successful business means research and planning.

Just because ones dream is to own a sports memorabilia store that doesn'take it viable. Think realistically; selling a product relatively few people need, how many autographed baseballs or fan shirts can you possibly sell in order to cover rent and utilities, and wages for an employee or two, and then still have enough left over to pay yourself even a modest wage? This is the mistake of so many small businesses like the ones you described. Greeting cards? You get 'em at CVS or the grocery store, or print the online. How many could you sell and still make even $31k a year?

If you want to succeed, serve a market no one is serving. Better yet, create a market no one else has thought of. Every small town has those type of redundant little places you described, with nowhere near enough of a population base to support them. In fact, most of those places should be Mom & Pops with zero employees, so minimum wage isn't even a factor.

Do a business plan, crunch the numbers. Research your market. If you can't realistically sell enough product to pay your overhead, it's not because of the minimum wage. It's because it's a bad business plan.

[Kalidurga]

10. I knew from the question what was to follow.

Businesses closing and people losing their jobs. Well that happens now. I doubt it will happen more frequently just because people get paid more.

Start asking real questions like who deserves to not have enough money after working full time for basic expenses. Unless you don't want to talk about that because quite frankly that is a discussion I don't see most people who ask this question are prepared to answer.

[Taitertots]

11. Who doesn't do $15 worth of work per hour?

Those are the only jobs on the chopping block.

We shouldn't have a low minimum wage to protect a tiny fraction of businesses that are about to fail. It's protecting the owners from their own bad decisions at the expense of millions of other people.

[KG]

12. I lulz'd.

[Iggo]

13. 16 yr olds will make slightly okay money.

[Fla Dem]

14. If you are in a start up small business, barely able to pay the rent and utilities why on earth

would you hire help? Your business certainly doesn't support it. You have family members husbands/wives work for free. If your new business isn't worth you working 18 hour days, then it should go bottom up. You only hire additional help when the business and sales demand it. This is a canard the RW throws up. Businesses fail because there was not a good business plan, the product being offered wasn't needed, the owner didn't know how to run a business.

[Skittles]

25. correct

this one will eventually hit ALL those canards

[Rex]

41. Someone sure is upset about the working poor getting a few more pennies.

What next, "new voice", will appear here to pretend to be clueless about the MW? Stay tuned...

[Skittles]

55. ever notice the people who are hysterical about minimum wage

never seem upset at "maximum wage"? Workers getting stiffed while CEO's rake in the big bucks? Fuck them all.

[Rex]

62. Oh yes! Same set of folks that poo poo'd all over OWS.

Never a bad word for the government or wall street or the MIC for that matter. Loooooove for predatory capitalism.

[Brickbat]

15. "So I don't quite get how all businesses can start paying a higher wage to employees, when many

businesses can't survive even while paying the current crappy wage."

Business don't fail because of the wages they're required to pay. Businesses fail because their owners are crappy business people. A higher minimum wage isn't going to change that.

[ronnie624]

16. The illogical assumptions that underpin capitalist ideology

are so numerous and glaring, sometimes it's very difficult to understand how so many can embrace such nonsense.

[trotsky]

17. Sure, if you connect this dot for me:

Please demonstrate that every time the minimum wage has increased, the result has been 1) an increase in the number of businesses failing, and 2) an increase in the unemployment rate.

I mean, we've raised it many times, surely there must be a lot of good historical data to back up your concerns.

[lancer78]

18. People WILL go out and spend that money

on things they need and want. Henry Ford realized this when he doubled the daily wage he paid his employees.

[ronnie624]

19. And god knows we need more consumerism. n/t

[HughBeaumont]

20. The answer lies with the owners . . .

. . . particularly the ones that planned their business around a real-dollar wage LOSS (which the Federal minimum is) being static for years . . . hell, even a decade or so!

"Capitalism would be great if we figured out a way to not pay workers but have them still buy our stuff!"

[B Calm]

21. It all boils down to DEMAND. If the business has demand for the product they

are selling, they'll be able to afford to pay wages that will fill the demand.

[Skittles]

24. zzzzzzzzzzzzzzz

one trick pony

[SoLeftIAmRight]

29. keep you eye on the invisible hand

it takes care of all problems

if you really want to understand - let me know - i will help

[Glassunion]

31. About all of those businesses that closed.

Did they have enough customers to support their business? Were they managed properly?

Sometimes businesses just fail. They may have been a poor idea from the start, and there is nothing that anyone can do to resolve it. If a decent, good or even great business is poorly managed, it will fail as well.

If a business requires labor, it should not be built on the premise of paying "crappy wages". If they can't survive by paying crappy wages, they should have closed up shop a long time ago. They do not have the business acumen in which to operate their own shop.

[1StrongBlackMan]

32. LOL ... reading some of the responses you got to your question ...

I thought I'd say, "welcome to DU".

[Glassunion]

33. Lol...

Glad you're back out of timeout.

[1StrongBlackMan]

34. I got a pardon from the Governor!

[Glassunion]

44. Did they give you your dime back?

[1StrongBlackMan]

45. Nope ... they spent it.

[Glassunion]

47. Figures. If you get another one, just hide it really well.

[1StrongBlackMan]

49. LOL

[Warpy]

36. People who go from 7.25 to 15.00 will start spending money on food

and improved living situations and probably keep up with their bills. The people who sell them food, improved living situations, and the goods and services they can finally pay for in a timely manner will go out and spend their money on many of the things you cited.

It's a ripple effect and money at the absolute bottom tends to multiply as it spreads out.

That has been known since the early days of the New Deal. Naturally, economics schools have always tried to discourage it.

ETA: If the minimum wage goes up across the board, you can expect more strip mall businesses to fail: payday loans, car title loans, pawn shops.

[eniwetok]

38. nice theory...

Sure... my dad was in the CCCs and made $30 a month... kept $5 and $25 was sent home. No doubt this kept some of the economy alive. But the MW was then only 25c an hour... about $4.20 today http://money.cnn.com/interactive/economy/minimum-wage-since-1938/

There's a wee bit of difference between $4.20 and $15.

And there's ALSO a big difference between new money being given to the working poor from the outside... say food stamps, whatever... which of course gets spent immediately... that's the velocity of money argument... and expecting a town to magically do the same with the money it already has. So it's easy to say that someone may be able to purchase more... but the stores that have to pay more, aren't guaranteed all that money will come back in sales. It's just an empty claim that OF COURSE it will all work out. How many here have made the arguments that the $15 will help with school, savings, etc... things UNconnected to neighborhood stores? Yet we're also to believe that OF COURSE the money will all go back INTO those stores that have to pay more. Those stores that are suddenly forced to pay $15 might do the obvious... cut hours and fire employees. And let's not forget that when the MW was last @ $11 we had strong unions and a protectionist economy... which also served to draw wages up. Today many companies have the escape hatch of free trade.

[Warpy]

43. Cheap labor conservatives always spout their bogus "studies" instead of the DoL or CBO

both of which have studied this stuff extensively and without profit seeking bias.

Go peddle this horseshit elsewhere. We're done.

[eniwetok]

73. more scurrilous accusations

Gee... put up or shut up. Where have I EVER cited any right wing "studies" on the MW. We, SHOULD know they are all bogus...

But why should we believe any left wing happy talk that OF COURSE we can simply go to $15 MW for even the most unskilled worker even in an depressed rural area of the nation... and it will just magically work because they'll just pay the business back with more demand? That claim is as nutty as the right wing claims that irresponsible tax cuts are a free lunch... that they create so much revenue they pay for themselves.

Sorry... I need evidence... and empty claims just don't suffice. But you're free to believe them... and no doubt you will.

[eniwetok]

85. You didn't even read the CBO report... did you?

I don't agree with it... and obviously you never read it. Here's what it said looking at both a $9 and $10 MW... that it would raise wages but increase unemployment.

from https://www.cbo.gov/publication/44995

Effects of the $9.00 Option on Employment and Income

The $9.00 option would reduce employment by about 100,000 workers, or by less than 0.1 percent, CBO projects. There is about a two-thirds chance that the effect would be in the range between a very slight increase in employment and a reduction in employment of 200,000 workers, in CBO’s assessment. Roughly 7.6 million workers who will earn up to $9.00 per hour under current law would have higher earnings during an average week in the second half of 2016 if this option was implemented, CBO estimates, and some people earning more than $9.00 would have higher earnings as well.

The increased earnings for low-wage workers resulting from the higher minimum wage would total $9 billion; 22 percent of that sum would accrue to families with income below the poverty threshold, whereas 33 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.


Effects of the $10.10 Option on Employment and Income

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.

Many more low-wage workers would see an increase in their earnings. Of those workers who will earn up to $10.10 under current law, most—about 16.5 million, according to CBO’s estimates—would have higher earnings during an average week in the second half of 2016 if the $10.10 option was implemented. Some of the people earning slightly more than $10.10 would also have higher earnings under that option, for reasons discussed below. Further, a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.

The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates.


Again I don't agree with it... but since YOU cited the CBO... you might want to read what you cite but it's obvious that the horsesh*t spouter isn't me.

[abelenkpe]

37. There's a corner in my neighborhood where businesses always fail

Several buildings with retail space. Shops open and close all the time. I've seen furniture stores, hairdressers, clothing shops, florists and financial advisers at this corner. It's not because of employee wages. It's prime real estate in an affluent area where the owners demand insane rent for the shops and where there is no parking for customers. It's just a couple blocks outside the main shopping area where so many tourists and out of towners come to walk around and shop. So no parking, odd location and high rent kills every shop and business that tries to make a go of it on that particular corner. The owners don't care. They inherited the building from parents who bought during the depression and so they wait and wait and wait until some poor fool tries to make a go of it there. No one lasts more than two years tops.
Anyway you can check the links provided in earlier replies. Raising minimum wage leads to improved business and economy not the other way around. If you have to pay your employees so little to survive you have no business doing business at all.

[eniwetok]

48. the question is how much?

Raising minimum wage leads to improved business and economy not the other way around.
Absolutely, the current $7.25 is criminally low. But the question is, knowing that states and cities can go higher, what makes sense as a NATIONAL MW for the least skilled workers both in urban but also rural areas? I don't buy the perpetual motion machine argument that business will simply make the higher wage back in profits. That's based on the faulty assumption that no one will pay down debt, save, buy things from Amazon, or spend the windfall in ways that don't get recycled back into their community. Go too high and it's going to be equivalent to what the oil price shocks were to the economy... only some states will take a beating. Currently about 25 are still at $8 and below, with 19 of them @ $7.25.

[Starry Messenger]

40. State min wage in CA is $10.10. $15 is being phased in.

There won't be any sudden shocks.

If your business plan doesn't include expanding pay to employees, you are a shitty business.

[eniwetok]

50. fine... then if your theory is true

Then why stop at $15... why not decree $25 or $30?

Yup... and oil spikes never created recessions either.

Ah gee, there's a real world out there.

And let's be clear so far only CA has said it would go to $15 statewide. All your reassurances are nothing but empty claims. We'll see what actually happens. NY is taking a wiser approach... and is targeting the NYC area for $15... and upstate might only go to $12.50.

[PETRUS]

51. Wow, multiple logical fallacies.

Appeal to Fear/Slippery Slope/Straw Man

Maybe you should make a few more posts complaining about the lack of rational discourse.

[eniwetok]

81. are you suggesting...

Are you suggesting that there is NO economic force that EVER can disrupt the economy?

Show me ANY OECD nation that has a MW as high as $15 in terms of parity purchasing power. I posted the numbers elsewhere. The highest nation was Luxembourg at $11.20 US. Yet you think we can magically more than double MW... in what, 5 years, and there will be absolutely NO negative consequences ANYWHERE?

IT'S NEVER BEEN DONE. The fastest we ever raised the MW was to double it in ten years... and that was at a time when we had a protectionist economy and strong unions. They acted to pull wages up. Today business can outsource jobs, or bring in cheap imports, or automate. And they've always been able to cut hours and lay people off. The economy has become addicted to a depreciating MW. So we have to both get rid of free trade with cheap labor nations... and rebuild the union movement.

I'm sorry you think that such a reality check is appealing to fear.

[PETRUS]

88. I did not suggest "that there is NO economic force that EVER can disrupt the economy."

And your response is nothing but a redeployment of the same kind of bad arguments I just called out.

[eniwetok]

95. well we KNOW high oil prices

It's pretty obvious you were denying the fact that spikes in oil prices were responsible for most of the recessions of the 70s, 80s, 90s, and may have been the final straw in the Bush Crash.

Yet you seem to believe that going to a $15 MW... even for the most unskilled workers in the most depressed areas won't cause any problems. The simple fact is $15 is uncharted territory for such a NATIONAL MW. The highest any other OECD nation has in terms of purchasing power is $11.20 US... and I've been advocating for a return to the HIGHEST the US MW has ever been... which today would be about $11. Numbers and source below.

For that I've been accused of being a right wing shill and for advocating predatory employment. The real fact here is that some at DU are irrational, throwing out a $15 number that has no real world counterpart and justifying it by peddling monetary perpetual motion... that OF COURSE businesses will simply make the money back with higher demand. It's just as crazy as the Orwellian Right claiming irresponsible tax cuts would pay for themselves.

From https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE

USD 2014 Purchasing power parity (PPP) in 2014 dollars... hourly MW

United States $7.2
Canada $8.2
United Kingdom $8.2
Ireland $8.7
New Zealand $9.1
Netherlands $9.6
Belgium $10
Australia $10.9
France $10.9
Luxembourg $11.2

Some here use a very high Australian MW but that's based on the exchange rate.. which would be $15.2 in 2014. PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates.

[PETRUS]

109. You're a compendium of bad arguments.

The oil shocks are not a good example. First of all, the price of oil in the 70s quadrupled in a short time. Raising the minimum wage to $15 by 2020 involves annual increases of about 20%. This is a difference of orders of magnitude. It's as if you're flying into a panic over a weather forecast of a few inches of precipitation because you can recall a storm that dumped a couple of feet of rain and caused flooding. Also, the increase in oil prices was triggered by a sharp reduction in supply. The US economy is currently experiencing a lack of demand. These problems are opposite in character, and flattening the income curve would help to address the current problem.

So far your tactics have involved bringing up teenagers, stoking anxieties about the fate of small businesses and less affluent communities, responding to specific proposals to raise wages by x by saying "if x, then why not x+y," and insisting that because other nations don't have current minimum wages that high in nominal or PPP terms (ignoring the open question of what policy will be in those places in five years) that we shouldn't either. None of it is convincing, none of it is empirically sound, and I doubt it's lost on many readers here that this rhetoric is identical to the kind of crap emanating from openly right-wing sources.

[eniwetok]

111. how many right wingers favor the MW being the HIGHEST we ever had?

The ONLY reason I bring up teens is not because I don't know there are many adults that get the MW... but because since we're talking about a NATIONAL MW... it will APPLY TO THOSE UNSKILLED TEENS. We're talking after all about the MINIMUM wage in the nation... and it has to make sense even in depressed rural areas. The idea that one can take what was to be a living wage from a high flying urban area and apply it everywhere is simply absurd. So, no... it's not a tactic... it's a fucking reality check.

As for other nations... again IT'S A REALITY CHECK. I don't see you complaining if some here toss out deceptive numbers about Australia or some McDs in Denmark. The use of OECD PPP numbers simply shows what other advanced industrial economies are paying as a minimum. Sorry if NONE Of them are at $15.. but my suggestion to go back to $11 is just 20c lower than the highest on that list. That alone would be about a $7300 raise over the current $7.25. I know... just chicken feed in the minds of those who demand $15 and think there will be no problems because in their magical thinking... local stores will just make it back in increased demand. That's just an empty claim. Of course they could just cut hours and lay workers off. If you think this is just right wing clap trap it's because you've never run a business.

And yes, the economy could use more demand... BUT WE'RE NOT THAT PRE-FREE TRADE ECONOMY. Demand for most consumer products won't be met with more being hired in US factories... but foreign ones. We'll just hire more people for retail. So the recycling effect is grotesquely exaggerated by the $15 crowd. When the MW was last $11 we had a protectionist economy and strong unions.

As for oil, OK... so you admit that when something knocks an economy out of some state of equilibrium... (and that's not a value statement over what we have today is desirable... clearly the MW must go up...) then it can have negative effects on the economy. True some of those hikes were big but what % of business costs did they represent compared to labor costs? You seem to believe that if raise the MW by gradual increments of 20% that's no big deal. But with the exception of 49-56 it's never doubled in such a short time. Again, then we had a protectionist economy and strong unions. Today service businesses may not be able to outsource... but what little left of manufacturing can. Such as steep hike is going to hit those 25 states that are still $8 or below.

The bottom line is at least I know from BEA and BLS numbers that we could handle $11... when conditions were favorable. There's simply NO data that show we can move to $15 without major problems. Hell, the CBO predicted going to $10 would cost 1 million jobs.

We really need to restructure the economy back along sane lines... ending free trade with exploitative nations and rebuilding the union movement so there are other forces pulling wages up and not just government decrees.

[Starry Messenger]

53. Why not lower it to $5 again, just to settle your mind?

[Rex]

42. Oh how cute! ANOTHER new person just learned about the MW and has problems with the poor

getting a few more bucks! Hey all 5 or 6 of you that keep parroting the same shit over and over - nobody believes a WORD of the shit you type. Give it up.

[eniwetok]

52. hey, enough with your unfounded insinuations...

I've been arguing for a higher MW for years... I just believe $15 was pulled out of thin air, and while it may be sensible for high flying urban areas... it's makes NO sense as a NATIONAL MW that would also apply to UNskilled workers in depressed or rural areas. Nor do I buy the magic wand arguments that OF COURSE there will be no problems. There's simply no data to back that up... and NO OECD nation has a MW as high as $15. It's uncharted territory.

http://www.thomhartmann.com/forum/2014/04/minimum-wage-earners-being-ripped-7363-year

http://www.thomhartmann.com/forum/2013/11/no-evidence-minimum-wage-hikes-cause-job-losses-or-inflation

http://www.thomhartmann.com/forum/2013/11/mimimum-wage-workers-subsidize-our-economy

http://www.thomhartmann.com/forum/2015/03/phony-right-wing-research-minimum-wage-hikes

http://www.thomhartmann.com/forum/2015/03/reagan-minimum-wage-value-drops-73-where-were-teen-jobs

http://www.thomhartmann.com/forum/2015/03/fdrs-1937-message-congress-pass-minimum-wage-law

[PETRUS]

60. It's not uncharted territory.

Minimum wage as a % of per capita GDP is the appropriate measure, both in terms of how people experience their lives (money is positional) and in terms of the economy's ability to perform.

Full-time minimum wage workers in other wealthy western nations (UK, France, Germany, etc.) are earning pay equal to around 45%-50% of per capita GDP. The current proposal to raise the US minimum wage to $15 by 2020 would put us in that ballpark. I believe the US minimum wage in 1968 represented pay of more than half of per capita GDP, by the way.

[eniwetok]

61. where is there ANY nation with $15 MW?

Here's a link to the minimum wages for OECD nations both in terms of the exchange rate and purchasing power. And while several had MWs higher than the US... none were anywhere close to $15.

From https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE

USD 2014 Purchasing power parity (PPP) in 2014 dollars... hourly MW

United States $7.2
Canada $8.2
United Kingdom $8.2
Ireland $8.7
New Zealand $9.1
Netherlands $9.6
Belgium $10
Australia $10.9
France $10.9
Luxembourg $11.2

Some here use a very high Australian MW but that's based on the exchange rate.. which would be $15.2 in 2014. PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates.

So my preference for an $11 MW... back to the 1968 rate is 20c an hour less than the maximum $11.2 for Luxembourg. Again this is the NATIONAL MW for the lowest skilled worker even in depressed rural areas. States and cities can certainly go higher.

[hunter]

65. Do I get free health care and college with that?

Okay, tell me how it's not "free" it's paid for by taxes.

Duh.

Sam Walton is dead, son. His heirs have lot's of money but they're worthless.

[eniwetok]

71. so how are businesses responsible

Yup other advanced industrial democracies do have other policies than the US such as free health care and... I'm not sure how many have free college.

But then those nations probably are not as antidemocratic nations as the US... a nation designed so elites would have a veto over the People. Just about all OECD nations are sane enough to have some version of national health care. Germany even mandates corporate/labor cooperation. Wow!

So given that difference... where health care and "free" college are probably paid for through high income taxes... or VAT taxes in those OTHER nations... how can you compare them to the US where the $15 crowd wants to make local businesses responsible to pay a $15 MW even in poor rural areas without that broader context? That $15 is a MW that's $3.80 above even the highest OECD MW.

I'm sorry that you're having problems understanding this. $15 might be fine for high flying urban areas. But please don't pretend that high urban MW can just be imposed from on-high to every nook and cranny of the nation without negative consequences.

But I suspect you will anyway.

[hunter]

76. If you get accepted to a German College, it's free. You don't even have to be German.

BTW, Wal Mart failed miserably in Germany because Germans weren't buying that low-wage anti-union bullshit.

Small town America is poor BECAUSE wages are low and companies like Wal-Mart suck the money (and the life) right out of them, places so miserable that meth and heroin and unprotected sex start to seem like reasonable recreations to the people trapped there.

I've spent a lot of time in small towns. I don't generally have a high opinion of small business people, or small farmers, or small town politicians and landlords. Oh, I know, we're force-fed a lot of myths about opportunity and all that crap as children; that if we work hard we too can be a millionaires, but it's mostly bunk. Propaganda.

Good union jobs and socialist government policy would be beneficial, especially in impoverished rural U.S.A..

Low wages are never beneficial. The best jobs can't really be exported either -- teaching, medicine, building and improving housing and other infrastructure, child and elder care... you can't send that work overseas.

The U.S.A. is a land of grifters and their marks, mean selfish people and their victims, and it always has been. Moving from slavery to wage-slavery was a step up, but it's long past time for us to grow up and become a truly civilized nation, not some shit-hole of a perpetually "developing" nation that thinks it won the world because it was the first to have the BOMB and happened to be a bit beyond the technical grasp of Nazi Germany and Imperial Japan. (I suspect, had we been in the same geographical position of Russia, that the U.S.A. would've folded to the Nazis like France did. Hell, many U.S.A. citizens supported the Nazis at first, and some still do.)

I'm not inclined to leave the U.S.A. quite yet, I've still got some kind of hope and fondness for this place, and things are not as bad here as they were for my ancestors who fled Europe for Wild West U.S.A. in the mid-nineteenth century as pacifists and other sorts of religious heretics, but I don't see any reason to tolerate any of the stuff that makes any nation a shit-hole. Racism, religious intolerance, corruption, slavery and wage slavery, ignorance, illiteracy and innumeracy... the U.S.A. reeks of these things.

There's no polite way for me to say this, but in my not-so-humble opinion and based on your postings here, I believe you are one of the grifters, defending low wages because there is something in it for you.

[eniwetok]

79. full of it

There's no polite way for me to say this, but in my not-so-humble opinion and based on your postings here, I believe you are one of the grifters, defending low wages because there is something in it for you.

Gee, so I'm advocating for the HIGHEST the MW has ever been... 20c below the HIGHEST OECD nation in USD parity purchasing power... and in your cheery Orwellian way manage to translate that into my advocating for "low wages"?

I've certainly debated enough irrational right wingers on this topic over the years but it is shocking to find so many here who are out to lunch on the the other side who are advocating for magic wand, free lunch economics. What I see are people starting with a conclusion and finding any way to justify it... which is obvious when their position is to take a high URBAN MW and try to apply it NATIONALLY to the most UNSKILLED person even in the most economically depressed region of the nation. That's just nutty. And given that the Right and corporate Dems have so f*cked up this economy with free trade and the destruction of unions... and have let the MW depreciate so far... I even worry about what my $11 will do to the economy is certain regions. Yet we have to do something.

As for myself, I have no bone in this fight except to get the MW, the wage that serves as the back up to what I see as a fair level as evidenced in my postings from the Thom Hartmann forum. It's criminal that workers have something like $7600 a year stolen from them. Got together with some friends last night and we were discussing this. One of them, same age as me... mid 60s' has 25 years experience in Quality Control and when his old employer left the state, and his UI was running out, the best job he could find last year doing QC was $10.65 an hour... that's BELOW the 1968 MW. It's fucking criminal.

[eniwetok]

80. you evaded my question

So here it is again

Yup other advanced industrial democracies do have other policies than the US such as free health care and... I'm not sure how many have free college.

But then those nations probably are not as antidemocratic nations as the US... a nation designed so elites would have a veto over the People. Just about all OECD nations are sane enough to have some version of national health care. Germany even mandates corporate/labor cooperation. Wow!

So given that difference... where health care and "free" college are probably paid for through high income taxes... or VAT taxes in those OTHER nations... how can you compare them to the US where the $15 crowd wants to make local businesses responsible to pay a $15 MW even in poor rural areas without that broader context? That $15 is a MW that's $3.80 above even the highest OECD MW.

[hunter]

90. You've evaded ALL the reasonable questions and answers people have given you.

Low wages are why all the smart kids flee dumb-fuck small town U.S.A..

Before you complain about me I have an even lower opinion of places like gentrified high-tech San Francisco or any number of affluent U.S.A. suburban hells.

You assume I should blindly respect "local businesses." I do not. Maybe half of all "successful" local businesses seem to be run by assholes and grifters who are in bed with the local government and law enforcement. Higher wages scare these grifters, federally mandated and funded health care scares these grifters, good schools scare these grifters, all because well educated healthy people with a bit of spending money in their pockets wouldn't tolerate this grifter bullshit.

[eniwetok]

94. hardly

First of all where have I EVER said the MW should not go up? I've repeatedly said it should go up to at least $11... the highest it's ever been. That lasted for one year... and it's depreciated ever since 1968. That number is just 20c lower than the current high for OECD nations in terms of parity purchasing power... a way to compare wages without the distortions of exchange rates. For that I've been called a shill for Heritage and advocating predatory employment. There are some real irrational arsewipes here at DU.

As to your statement "Low wages are why all the smart kids flee dumb-fuck small town U.S.A.."

Sure... but mandating businesses pay what they may not have is no solution since they can just as easily cut hours and lay workers off.

There's some magical thinking going on to believe that a poor community is going to pull itself up with its own bootstraps if the MW is just doubled. But where's the money going to come from for a business to pay $31.2k plus another $1200 FICA to all its workers when 19 states... no doubt all GOP, have a FT MW jobs now paying $15k? The magic wand theory claims they'll make it all up with increased demand. This is free lunch thinking... monetary perpetual motion. It's really no different from the Orwellian Right selling irresponsible tax cuts claiming they'll pay for themselves... or Thom Hartmann... normally a pretty bright guy, claiming if we just set the retirement age to 55... the labor shortage would raise wages so much that the extra money that it brought in for SS would pay for all those extra retirees.

Sorry... I have a working bullshit detector and I'm not going to just sit by as liberal Dems delude themselves with the same magical thinking the Orwellian Right encourages.

[PETRUS]

87. I just explained a flaw in your figuring.

Either you failed to grasp what I wrote, or you've chosen to ignore it. If it's the former, re-read my post and think for a minute - it's not that hard to understand. If it's the latter, that suggests to me you're not actually interested in an honest conversation.

[eniwetok]

97. your post is not the devestating rebuttal you think it is

Your assumptions are still disconnected from reality in two key ways.

First we do NOT have European economies where there's a more equitable distribution of income. We have 25 states with a MW at $8 or below and 19 of them are at $7.25.

And there is NO OECD nation that has anything CLOSE to a $15 MW in terms of parity purchasing power. The highest is $11.20. I've posted the numbers and source numerous times in this thread.

$15 might be fine for high flying urban areas in the US. But we're talking about a NATIONAL MW. To think anyone is going to pay $15 to the most unskilled worker in a depressed rural area... and that business can magically make it back in more business... is laughable. Just because something's "plausible" doesn't mean it's connected to the real world. It's right up there with the gullible, if not dimwitted, right wing base eating up the Orwellian Right's big lie that irresponsible tax cuts... especially for the rich, will pay for themselves with increased revenue.

Look... I could care less what nutty bullshit you want to believe. Just don't pass it off as being handed down on a slab from on High.

[Baobab]

98. Public health care and education are essential, but they are forcing privatization..

We're telling countries like India to limit public higher education so that US brands can sell degrees. We're telling countries they cant have public health care because it keeps foreign vendors like Kaiser out, and controls the prices of drugs.

[PETRUS]

108. Your post is nonsense.

Apart from purporting to know what I think (you're not a mind-reader, or at least not an accurate one), mentioning that European economies involve a more equitable distribution of income says nothing. Of course there are countries where income is distributed more evenly (as it was in the US in the past). That's the point. We're discussing changes to the distribution of income. Noting that something isn't the case at a particular place and time does not prove that it couldn't (or shouldn't) be the case. On the other hand, the confirmed existence of a phenomenon somewhere does stand as evidence of its possibility elsewhere.

[eniwetok]

115. you never proved anything

All you did was make GDP claims you never backed up with a credible source or demonstrated to be relevant.

[PETRUS]

116. Oh? State your case, then.

The data is online and available to the public. If your understanding of economics is so limited that you don't get the relevance of per capita GDP - which I did explain - there's no shame in admitting that (although it calls into question the value of your opinions on the subject). If there's substance to your disagreement, it's reasonable for me to expect you to articulate it.

[eniwetok]

118. not my job to do your research or prove your points...

Seriously, your idea of trying to prove a claim you made or whether it's relevant to this discussion is you want someone else to do your homework for you?

When it comes to per capital GDP it's an interesting indicator in a generalized sense but alone it doesn't backup your case. Nations even with the same per capita GDP may have dissimilar priorities as we see with US military spending. Other nations offer more generous social safety nets.

For purposes of illustration only... when it comes to a German company vs a US being able to offer a comparable MW the US employer may be at a disadvantage since they include health insurance where the German company need not to.

But the bottom line remains that despite all the anecdotal tidbits tossed around so far about Australia or some McDs in Denmark, there is NO OECD nation that has a MW higher in parity purchasing power than Luxembourg... and as of 2014 that was $11.20 US. My suggestion we go back to the highest value the US MW has ever been... which would be $11 today, is on that high end of MWs. And since NO state has a MW higher than $10 today... that $15 is uncharted territory. And AGAIN, this is the NATIONAL MW for the least skilled worker even in depressed areas. States and cities can certainly go higher. I hardly see this as an unreasonable position. But some here are so intolerant if not rabid, they've repeatedly accused me of being a right winger.

[PETRUS]

119. It's your job to do your research and prove your points.

I did my research. You think my observations about the ratio between minimum wages and GDP per capita are incorrect? Then show me.

GDP per capita is all important here. (Your comment about varying spending priorities is meaningless. One person's expense is another person's income. The subject is distribution, and making intentional changes - by definition, all else will not be the same.) It's why a bus driver in the US makes more than a bus driver in Bangladesh. It's not the job itself, it's the size of the economy in which the work is being done. As I said before, a $15 minimum wage by 2020 is not "uncharted territory." We distributed income like that before, and other places do now.

There are political impediments to raising the minimum wage to that level, but you haven't been making a political argument. You've been attempting an economic argument, and (to borrow from Gertrude Stein), there's no there there. To that point, is it possible to raise the minimum wage to $15 and fuck things up? Sure. Will it necessarily fuck things up? No. The question is one of political will. If the will to raise the minimum to that level exists, the will do to it properly should be there as well.

[eniwetok]

120. OK, so you AGAIN refuse to do anything to prove the relevence of your claim

In the meantime I've demonstrated, using official OECD numbers, that regardless of whatever your per capita GDP is... at least in those OECD nations, the HIGHEST minimum wage when standardized to US dollars and parity purchasing power... is $11.20 US (2014). My suggestion has been the US MW... that is for the LEAST skilled worker regardless if they are in a depressed rural area... go back to the highest it ever was... which today would be $11 and let cities and states go higher if they want. And that justified all those who have accused or implied I must be a Heritage shill, right? Of course, they can now safely live in their IGNORE bubble safe from ever having their false accusations rebutted.

Here are those numbers again since they obviously have not registered the first ten time I've posted them.

From https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE

USD 2014 Purchasing power parity (PPP) in 2014 dollars... hourly MW

United States $7.2
Canada $8.2
United Kingdom $8.2
Ireland $8.7
New Zealand $9.1
Netherlands $9.6
Belgium $10
Australia $10.9
France $10.9
Luxembourg $11.2

Some here have used a very high Australian MW but that's based on the exchange rate.. which would have been $15.2 in 2014 in terms of the exchange rate purchasing power within Australia. PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates

[Rex]

100. What was unfounded? The OP has been banned.

We don't fall for cheap shit like you and the now banned OP push...conservatives have no right at all to tell others what should and shouldn't be policy.

[eniwetok]

104. sorry for your delusions

But just because someone disagrees with you hardly makes them a conservative. If you were in any way fair... you'd have taken my old posts as proof that I'm the furthest think from a conservative. But it's clear that you place your own beliefs over objective evidence.

As for the OP... if I were sneaking into a right wing group... I might have used the same type of post. Now we'll never know. But his questions were valid. I also don't believe that you can just decree a national $15 MW... and that local economies will magically pull themselves up with its own bootstraps through increased demand. It's magical thinking... especially since the right and corporate Dems have so sabotaged the economy so there are no market forces pulling wages upward. The simple fact is that there is NO OECD nation that has a $15 MW in terms of parity purchasing power. The highest is Luxembourg @ $11.20. And NO state currently has a MW higher than $10.

$15 is uncharted territory.

But you're free to engage in all the magical thinking and unfounded accusations you want... making your choice of avatar all the more laughable.

[Rex]

106. Proof is right there for all to see, you can pretend otherwise.

Nobody buys your crap anymore. Enjoy your stay.

[Skittles]

56. he's "not sure what our point is", Rex

they never are

[Rex]

63. His mistake.

Told someone upthread how tiring it is to see this garbage capitalism year after year. How does Costco survive? The owner must be the anti-christ!

[eniwetok]

112. Yes... how does Costco do it?

You're assuming that if one chain excels in the high wage dept then every business can do it. Not very logical there, Spock.

Costco may be able to pull it off for some very simple reasons that can't be applied to other chains. They cherrypick locations. There's only one store here in western Mass... and the other 6 are out closer to Boston. With fewer stores consumers are willing to travel further while regular retail stores are a dime a dozen. The lots are always full at Costco. So they move enough merchandise at lower margins and do it with way fewer employees than other retail chains that feel compelled to have stores in every town. They also have no ad budget that I know of. I've never seen any flyers or TV ads for Costco. Add to that an ultra low turnover.

Please explain how EVERY retail employer can replicate this formula. It's simply not labor intensive.

[Rex]

113. I am done feeding you.

You are too desperate for attention. Sorry, have a good one.

[eniwetok]

114. translation:

You want to claim X as "proof" of something you're determined to to believe in... and when push comes to shove... you run from any questions whether your example actually "proves" what you claim it does.

This is supposed to be a rational discussion on public policy and some here prefer the rationale be faith-based. That reeks of starting with a conclusion and then working to find any reason to justify it.

Not very logical there Spock. No more than many here calling me a right winger for supporting the highest MW we've ever had... which would make it the second highest of all OECD nation in terms of parity purchasing power.

[Marrah_G]

70. Lower class workers spend at least 100% of the income they make.

Businesses will pay the least amount allowed by law if they can. This is the nature of business. When unregulated you end up with countries like China or India.

Every time a hike in the minimum wage is brought up the same thing is said and yet the results are never what they fear. Wages have been stagnant for a very, very long time. During that same time, the wealthy have been getting wealthier and the companies ar making more money then ever.

What will happen is that people might have enough to pay bills. They might even have enough non-work time to actually spend time with their families.

Please do not buy into the crap that a living wage will mean unemployment for massive amounts of people. That is not true and it has never been true.

[bhikkhu]

72. The four year failure rate of new businesses has been about 50% for ages

The solution isn't to lower the minimum wage (many of those failures are owner-operator anyway), and raising the minimum wage won't have much impact either. If you read any business sites, there's no shortage of "why businesses fail" articles, books, discussions, etc. From the perspective of people trying to start a business and make it work, paying wages isn't on the list of why things don't work.

[pnwmom]

74. You are asking the right questions, and that is why Obama, most Democratic Congress members,

and top economists support a $12 minimum wage, not $15.

The Princeton professor who did most of the research showing that raising the minimum will NOT cause job loss says his data only supports a rise to $12 -- after that, it might cause job losses.

He also says that individual cities and states could do well with a $15 minimum, but overall, the data supports a Federal minimum of about $12.

http://www.nytimes.com/2015/10/11/opinion/sunday/the-minimum-wage-how-much-is-too-much.html

When I started studying the minimum wage 25 years ago, like most economists at that time I expected that the wage floor reduced employment for some groups of workers. But research that I and others have conducted convinced me that if the minimum wage is set at a moderate level it does not necessarily reduce employment. While some employers cut jobs in response to a minimum-wage increase, others find that a higher wage floor enables them to fill their vacancies and reduce turnover, which raises employment, even though it eats into their profits. The net effect of all this, as has been found in most studies of the minimum wage over the last quarter-century, is that when it is set at a moderate level, the minimum wage has little or no effect on employment.


For example, David Card of the University of California, Berkeley, and I found that when New Jersey raised its minimum wage from $4.25 to $5.05 an hour in 1992 (or from about $7.25 to $8.60 in today’s dollars), job growth at fast-food restaurants in the state was just as strong as it was at restaurants across the border in Pennsylvania, where the minimum wage remained $4.25 an hour. Equally important — but less well known — within New Jersey, job growth was just as strong at low-wage restaurants that were constrained by the law to raise pay as it was at higher-wage restaurants that were not directly affected by the increase since their workers already earned more than the new minimum.

I am frequently asked, “How high can the minimum wage go without jeopardizing employment of low-wage workers? And at what level would further minimum wage increases result in more job losses than wage gains, lowering the earnings of low-wage workers as a whole?”

Although available research cannot precisely answer these questions, I am confident that a federal minimum wage that rises to around $12 an hour over the next five years or so would not have a meaningful negative effect on United States employment. One reason for this judgment is that around 140 research projects commissioned by Britain’s independent Low Pay Commission have found that the minimum wage “has led to higher than average wage increases for the lowest paid, with little evidence of adverse effects on employment or the economy.” A $12-per-hour minimum wage in the United States phased in over several years would be in the same ballpark as Britain’s minimum wage today.

But $15 an hour is beyond international experience, and could well be counterproductive. Although some high-wage cities and states could probably absorb a $15-an-hour minimum wage with little or no job loss, it is far from clear that the same could be said for every state, city and town in the United States.

[The Straight Story]

78. I will give you the capitalist view on it:

We want to expand trade, so we do something like NAFTA.

We know many will lose jobs now but in 20-25 years the economic gains will open a lot more business for jobs here which will increase employment.

It is considered a long term plan and screw the little guys now.

Min wage is the little guy doing the same thing but in their advantage now. It will cost some companies now but in the long run there will be more money flowing by more people (vs disappearing in tax shelters, foreign investments, etc).

So, businesses got their trade agreement to lower wages (by offshoring jobs/etc) and now the workers want something in return to balance it out.

[quaker bill]

82. Virtually anyone here can

the experiment has been run before. The results defy your concerns.

[eniwetok]

84. what experiment?

Just because there's a plausible theory that the money will be recirculated back to business in a virtuous cycle doesn't mean it's true... any more than the Orwellian Right claiming that irresponsible tax cuts pay for themselves. Much of that new income might easily be diverted out of a town or region and never be used to pump up local demand. And for the record the HIGHEST MW of any OECD nation in terms of standardized dollars and parity purchasing power is Luxembourg at $11.20 US PPP. There is NO nation at $15... though some use an exchange rate argument to claim Australia is...

I posted the numbers and the link a few times in this thread.

[quaker bill]

91. The minimum wage has been raised before

every time there are various fears about impacts on small businesses, employment, inflation.....

Results indicate every time they do it, the economy grows, very little economic displacement occurs, employment increases, and businesses become more profitable.

The experiment has been run (raising the MW) several times now and the results have been measured. It is not a theory, it is measured fact that the virtuous cycle exists and can be banked on (most literally).

[eniwetok]

93. not a question IF the MW has ever been raised

The question isn't whether the MW has ever been raised before... and it obviously reached it's peak value in 1968 after a unsteady rise from 1950. In today's dollars that would be about $11. And I've repeatedly argued in other forums using BEA and BLS numbers that the higher MW didn't seem to cause any problems in about 75% or so of the cases... and even when there may have been a uptick in unemployment... who really knew what the cause was and whatever it was disappeared soon. Some MW hikes took place on Jan 1st of a year and that was when seasonal XMas help was being laid off. That's a problem with economics is that there are too many variables in play.

The real only questions are how much should we aim for and how fast should it be phased in. I've argued that any NATIONAL MW... the lowest any unskilled worker in even a depressed area of the nation would get should go back to that 1968 level and states or cities can go higher. As it turns out this $11 is just 20c lower than the HIGHEST OECD MW... which in 2014 was Luxembourg. For that I've been called a right wing shill and supporting predatory employment. The irrationally of some here at DU is frightening. This $11.20 was derived using a standardized measure called parity purchasing power to avoid distortions caused by exchange rates. We also have to remember that in 1968 we had a protectionist economy and strong unions. The right and corporate Dems have done incalculable damage to the economy since then and it's become addicted to a depreciating MW. MW workers are being ripped off to the tune of $7300 a year. Given the US and the OECD context... $15 is uncharted territory... and I don't buy the empty reassurances. The ONLY real experiment here is what CA has done... to go state wide with $15... compared to NY's approach to wait and see for upstate at $12.50. Right now CA is at $10... so we won't know the impact on poor and rural areas for years.

From https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE

USD 2014 Purchasing power parity (PPP) in 2014 dollars... hourly MW

United States $7.2
Canada $8.2
United Kingdom $8.2
Ireland $8.7
New Zealand $9.1
Netherlands $9.6
Belgium $10
Australia $10.9
France $10.9
Luxembourg $11.2

Some here dishonestly use a very high Australian MW but that's based on the exchange rate.. which would be $15.20 in 2014. But the PPP rate is $10.90 US. PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates.

[quaker bill]

102. One can always argue that people should be paid less.

The problem with international comparisons is that today, for the most part, MW jobs are service sector type jobs and are not exportable. Jobs that are or have been exportable to cheap labor markets have at this point been exported to the extent it makes any economic sense to the business owners to do so.

You cannot outsource shelf stocking, floor sweeping, burger flipping, delivery driving, cashiers, unskilled labor at construction sites, and lawn mowing to China or Mexico. This labor has to come from workers at the site where the labor is needed.

A more relevant analysis would look at how our economy actually works for people at this end of the economic scale. In short we as a culture make low wages sustainable by taxing businesses and more affluent individuals and transferring this revenue to the working poor in the form of an "earned income tax credit", food stamps, low income housing block grants, free meals at schools, food banks and other charitable efforts, TANF, and so on and on...

There is nothing wrong with any of these efforts to provide relief, other than that the funding is at times subject to political whim and the availability of the assistance is at times highly conditional. For instance, the homeless folks I have worked with over the decades often have very limited access to assistance of any sort as they have no fixed address and often enough a criminal record. I am not clear how making the desperately poor, frequently incarcerated, and homeless more desperate and poor serves any social interest, but we do this with intent of some sort.

All that said, this means of redistributing income is quite inefficient. It takes a large trained staff to work these programs to assure that requirements for all the various conditions are met. It would be inherently more efficient to simply have the employers pay workers sufficiently in the first place, rather than tax them and redistribute the revenue through government.

Now if the larger goal is to reduce the size of the poverty industrial complex in this country, then a wage in the neighborhood of $15 an hour is likely the right answer.

[eniwetok]

103. we have to restructure the economy

We're going to disagree how high the national MW should be. But even if we return to $11... the lowest even the most unskilled worker even in depressed rural areas can be paid... then we have to restructure the economy so the higher MW isn't flying in the face of market forces that are creating a downward drag on wages. Got together with some friends a few nights ago and we got talking about the debate here and one friend... age 64, with around 25 years in QC is getting only $10.65 here in high flying Mass doing industrial QC work. His old employer left town and with unemployment running out that was the best he could do. It's fucking criminal.

We need to end free trade with nations that don't impose the same overhead on corporations that we do... and add tariffs to make up the difference... and we need to rebuild the union movement. Both would end that downward pressure on wages. Maybe we need to get away from the adversarial relationship we now have and move to a more cooperative relationship labor has with capital as they have in Germany.

[Baobab]

96. Its a question of time.

Last edited Sun Apr 10, 2016, 12:24 AM - Edit history (1)

We have maybe 20-25 more years of jobs as we know them today. By mid century we'll have machines that are self aware and can think, like us.

So these next few decades are the sunset years of work as we know it now. Soon, machines will do virtually everyting a human can do better and cheaper.

But between now and ten, during that time, people need to make enough money not just for themselves - but for all of their descendants- (just kidding, sort of, but, perhaps not)

Because automation is coming. So people need to make more. Now, because many, perhaps most of those unskilled and medium skill and even many higher skill jobs wont be there in ten or fifteen years. they will be automated.

At the same time, many national leaders are making commitments to trade many services jobs away, for example:

Business and professional services,
including:
•Accountancy services
•Advertising services
•Architectural and engineering services
•Computer and related services
•Legal services
•Communication services
•Audiovisual services
•Postal and courier services
•Telecommunications
Construction and related services
Distribution services
Educational services
Energy services
Environmental services
Financial services
Health and social services
Tourism services
Transport services

WTO GATS is privatizing services of all kinds - including education and healthcare all around the world.

How are people going to get their kids an education when their public services are being monetized and housing is becoming more gentrified (all those visiting service workers will need places to live)

Meanwhile, domestc service workers will be struggling, and without a pay increase, its likely few will successfully keep a roof over their heads?

Rich people will be living off their nvestments now, and wont mind the vanishing of their jobs, but poor people need to earn money to pay rent, eat and pay their bills. But, jobs will be going away.

Some things could be much reduced. The average Rx drug costs pennies a month to make.

As you pointed out wages are not a simple issue.

Frankly, some businesses really should not be in business with employees, if they can not afford to pay a decent wage.

[steve2470]

99. This person was PPR'ed as a repeat disruptor

Profile information
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http://www.democraticunderground.com/?com=profile&uid=332595

[eniwetok]

105. oh no... not the DU tombstone!

[Rex]

107. We don't TS people anymore, you must be thinking back when you had another account on DU1 or 2.

Seriously, enjoy your stay you are nothing if not amusing. Just like all conservatives that try and disrupt DU, failure is your only option.

[eniwetok]

110. disagreeing with your positions...

Disagreeing with your position on the MW doesn't make me a conservative... as my old posts from the TH forum prove. I'm to the left of most liberal Dems on some key issues such as democratic reforms and curbing corporate power. I just don't believe in magical thinking... be it from the Dems or GOP.

Which reminds me, if you're a Trekie... have you caught the crowd sourced STContinues episodes?

http://www.startrekcontinues.com/

Live long as prosper Rex of Terran.

[KamaAina]

117. "And I'd still buy my shin guards at Goodwill."

Nope nope nope nope nope.

https://nfb.org/national-federation-blind-urges-boycott-goodwill-industries

The National Federation of the Blind (NFB), one of the oldest and largest organizations of Americans with disabilities, today called for a boycott of Goodwill Industries International, Inc., the nonprofit manufacturer and retailer, for its payment of subminimum wages to many of its workers with disabilities. Freedom of information requests filed by the NFB confirmed that Goodwill Industries employees have been paid as low as $1.44 an hour. The NFB and over forty-five other organizations support legislation, the Fair Wages for Workers with Disabilities Act (H.R. 3086), which would phase out and then repeal the nearly seventy-five-year-old provision of the Fair Labor Standards Act that permits special certificate holders to pay subminimum wages to workers with disabilities.

Dr. Marc Maurer, President of the National Federation of the Blind, said: “Goodwill Industries is one of the most well-known and lucrative charitable organizations in the United States, yet it chooses to pay its workers with disabilities less than the federal minimum wage. While this practice is currently legal and many entities engage in it, many other nonprofit organizations have successfully transitioned to paying their employees the minimum wage or higher. That Goodwill Industries exploits many of its workers in this way is ironic, because its president and chief executive officer is blind. Goodwill cannot credibly argue that workers with disabilities are incapable of doing productive work while paying its blind CEO over half a million dollars a year. Goodwill should be ashamed of such blatant hypocrisy. We are calling upon all Americans to refuse to do business with Goodwill Industries, to refuse to make donations to the subminimum-wage exploiter, and to refuse to shop in its retail stores until it exercises true leadership and sound moral judgment by fairly compensating its workers with disabilities.”

[eniwetok]

121. having worked in human services

In a previous lifetime or so ago I ran programs for dually diagnosed MR/MH... mostly residential but also ran a voc program. Some of my residential people worked in factories doing piece work and we were thankful they opened up their facilities. I'd sometimes drop at voc programs to know what was going on for each person and coordinate with voc staff.

No employer is going to pay full minimum wage, even as low as it is, to someone who is capable of only doing 10-20-30% of the work an able bodied person can perform. Pay was based on output as the law requires

Subminimum wages must be commensurate wage rates - based on the worker's individual productivity, no matter how limited, in proportion to the wage and productivity of experienced workers who do not have disabilities performing essentially the same type, quality, and quantity of work in the geographic area from which the labor force of the community is drawn.

https://www.dol.gov/whd/regs/compliance/whdfs39.htm

Businesses aren't charities and any law that mandates an unrealistic wage and these voc programs will dry up.