Author Topic: Convince me I'm wrong - minimum wage  (Read 2354 times)

engineer151515

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Convince me I'm wrong - minimum wage
« on: May 25, 2006, 06:30:13 AM »
some background info:
http://articles.moneycentral.msn.com/CollegeAndFamily/LoveAndMoney/LivingWageHowAbout9AnHour.aspx?GT1=8178

I have not earned minimum wage at my "day job" for many years.  
As a matter of fact, given my years of experience and education level, my salary has plateaued.  I might gain a Masters or PhD in engineering, but my salary will increase little (thus making the cost of advanced education a non-economic goal, if desired).  

That said, and the fact that my salary is not tied in any manner to the minimum wage or inflation scales (aka Union), I argue that everytime the minimum wage is legislatively raised, I am effectively taking a pay cut.  

Raise the min wage, and everything associated with min wage labor increases in price as well.  I pay for these products/services with the same salary.  


Tell me I'm wrong and why.  

Otherwise, commiserate with me.  Smiley

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Convince me I'm wrong - minimum wage
« Reply #1 on: May 25, 2006, 06:45:29 AM »
If $9/hr is good then $15/hr ought to be better, right?  Why not just legislate high paying jobs for everyone, which is pretty much what France and Germany do.  Of course those countries have 10+% unemployment but thats what unemployment insurnace is for.
I'd like to see one of these articles write about someone making min wage who was laid off when the co went out of business or laid off people because they couldnt afford the labor.
And as a former employer, I can tell you that raising the min wage by $3 increases the employer's cost by $4.50.  Do the math.
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K Frame

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Convince me I'm wrong - minimum wage
« Reply #2 on: May 25, 2006, 06:46:33 AM »
Every time inflation blips up, no matter what the cause, you take a pay cut.
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Convince me I'm wrong - minimum wage
« Reply #3 on: May 25, 2006, 07:32:06 AM »
Quote
Tell me I'm wrong and why.
Ok, your wrong.

I have no reason for why, I agree with you.

I saw a show about the struggles "low income" households were having.  On lady on a panel said that the federal minimum wage needed to be raised to help these people.  The reason this statement was so stupid is that the 4 families they showed were all making more than minimum wage.  What the hell does this lady think will happen when minimum wage is raised by $2 and these already struggling people making $2 more than minimum.  The will now be making minimum with the high-school kids.

High-school kid:  Yeah, more gas money.
Mom that was making $2 above minimum:  I can't pay the heating bill to keep my kids from freezing to death.
Stupid lady that proposed wage hike:  I feel good about myself and can now gloat to all my friends about how I am making peoples life better.

I might be exagerating a little bit.
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Convince me I'm wrong - minimum wage
« Reply #4 on: May 25, 2006, 08:54:11 AM »
As television sets and satellite and cable technology continue to improve, the desperately poor must be allowed to keep up with these advances.  Minimum wage laws are a legitimate way to do this.
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Convince me I'm wrong - minimum wage
« Reply #5 on: May 25, 2006, 09:53:09 AM »
I had been working for about a year, was still in high school when the last hike went into effect.  I went from earning above minimum wage to minimum wage.  Yes, I was pissed, because the prices of other places went up, and I had less buying power.

The local restraunts also cut down on workers, so unemployment went up.

The minimum wage should not be able to support a single mother with two children.  If we must have one, it should be able to support one person extremely modestly.  If you want a family, learn some skills and you'll make more money.

-edit because of rather important word drop

AJ Dual

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Convince me I'm wrong - minimum wage
« Reply #6 on: May 25, 2006, 10:53:31 AM »
Quote from: Firethorn
I had been working for about a year, was still in high school when the last hike went into effect.  I went from earning above minimum wage to minimum wage.  Yes, I was pissed, because the prices of other places went up, and I had less buying power.

The local restraunts also cut down on workers, so unemployment went up.

The minimum wage should be able to support a single mother with two children.  If we must have one, it should be able to support one person extremely modestly.  If you want a family, learn some skills and you'll make more money.
You're contradicting yourself here. You recognize the damage a minimum wage law does, then turn right around and say a single mother with two kids should be able to live off of it? You can't have both.

Hiking minimum wage is idiocy. Even having one is idiocy. The minimum wage drives inflation and unemployment, so every attempt at increasing it just has the same economic impact as a happless toddler who kicks the ball ahead every time he bends over to pick it up. He'll never "get there", nor will "living wage" advocates.

Besides, since we live in a modern welfare state, there already is an effective "minimum wage". As soon as the job earns less than AFDC, state, and city assistance, it won't be filled. (I'm obviously leaving illegal immigration out of this for the moment&)

Anyone who's actualy interested in fixing the unemployment/underemployment problem should be filling the streets, torches and pitcforks in hand, to demand the repeal of the payroll tax. Doing so would have a positive impact in many areas, illegal immigration, because legal labor would suddenly get a big boost in competitivness, and the same thing would even help the trade imbalance with places like China.

It wouldn't fix the trade imbalance overnight, but at a minimum, the industries that just barely lose out to China where Chineese Labor + Trans-Pacific shipping = Cheaper than American Labor, would suddenly find themselves competitive again.

The government itself would recoup the lost taxes through increased economic activity anyway.
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Convince me I'm wrong - minimum wage
« Reply #7 on: May 25, 2006, 11:41:05 AM »
Quote
You recognize the damage a minimum wage law does, then turn right around and say a single mother with two kids should be able to live off of it?
I think what he said was a typo, he said:
Quote
The minimum wage should be able to support a single mother with two children.  If we must have one, it should be able to support one person extremely modestly.  If you want a family, learn some skills and you'll make more money.
I think he meant "shouldn't" rather than should, as the rest of the paragraph implies that minimum wage should not be sufficient to support a family.

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Convince me I'm wrong - minimum wage
« Reply #8 on: May 25, 2006, 12:01:06 PM »
Quote from: AJ Dual
You're contradicting yourself here. You recognize the damage a minimum wage law does, then turn right around and say a single mother with two kids should be able to live off of it? You can't have both.
Sorry, somehow I managed to loose the 'not' when I was editing.  Fixed now.  Sorry if I ruined a good rant.

True wage gains are achieved through creating a labor shortage.  The easiest way an individual can do this to to go ahead and get qualifications/training for job fields with shortages.

And yes, our giving aid to people who don't work does effectivly create a minimum wage, except that you'll still have otherwise ineligable people taking them, such as teenagers, spouses of higher earners, and as second jobs.   Still means that there's limited amounts of people willing to work at that low of a wage.

Even here in Minot, ND there are a very limited number of businesses that can get workers while paying minimum.

Quote
Anyone who's actualy interested in fixing the unemployment/underemployment problem should be filling the streets, torches and pitcforks in hand, to demand the repeal of the payroll tax. Doing so would have a positive impact in many areas, illegal immigration, because legal labor would suddenly get a big boost in competitivness, and the same thing would even help the trade imbalance with places like China.
Agreed. If you lower the cost of employment, lower the cost of living, etc, american labor becomes cheaper in comparison to foreign labor, and suddenly we're not outsourcing as much.  Do you think that we'd be moving all the auto factories overseas & down to mexico if the unions hadn't forced auto companies to pay $20 or better an hour for american workers?  I'm sorry, but if a trained monkey or robot can do your job, dont' expect to get paid much.  With shipping costs and other hassles, it'd happen quicker than people think.

Personally, I'd like to get people to concentrate a bit more on quality.  There's plenty of potential jobs out there, if you're willing to look&train.

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Convince me I'm wrong - minimum wage
« Reply #9 on: May 25, 2006, 12:38:02 PM »
Anyone who believes that minimum wage is a good thing needs to take Economics 101 instead of watching daytime TV. Minimum wage is just another way to financially subsidize people that generally do not make decisions, or efforts, to help themselves. This is of course at the expense of everyone in a given society from the employer to the people that buy the goods to even the minimum wage workers themselves. Minimum wage is Feel-good-ism at its finest.

Edited to add: I once got into an e-mail flame war with a "Women's Studies" professor about a comment she made in my wife's class. My wife was trying to explain to her why minimum wage was bad but she didn't understand the economics behind it completely. The teacher then proceeded to belittle my wife's opinion so I sent the "Women's Studies" professor an e-mail complete with diagrams. Needless to say, in the face of all the logical proof in the world, the teacher still told me I was an idiot and an arrogant ahole for e-mailing her in the first place. She also reminded me that she held a PhD and that a B.S. candidate should never question a PhD's "professional" judgement. To which I replied, "If you think having a PhD in a pseudo-study is any better than having an Associate's Degree in Miniature Golf, you're sorely mistaken." She didn't like that for some reason...

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Convince me I'm wrong - minimum wage
« Reply #10 on: May 25, 2006, 01:04:37 PM »
Quote from: Daniel Flory
Needless to say, in the face of all the logical proof in the world, the teacher still told me I was an idiot and an arrogant ahole for e-mailing her in the first place. She also reminded me that she held a PhD and that a B.S. candidate should never question a PhD's "professional" judgement. To which I replied, "If you think having a PhD in a pseudo-study is any better than having an Associate's Degree in Miniature Golf, you're sorely mistaken." She didn't like that for some reason...
I may only have an associates degree(well, it's pending until octobor, gotta love distant-learning), but I've taken and passed courses in microeconomics, macroeconomics, accounting, as well as sociology, and psychology.  I've also taken mathematics courses up to calculus*.

I know full well how business works, how margins and profits work, and I'm perfectly willing to argue with professors about it.  At the same time, I'm willing to listen and ask question to learn things I don't know, like an electrician, plumber, mechanic, etc...  Just because you don't have a degree doesn't mean that you know nothing, and having one doesn't mean that you know everything.

*Funny story:  I had to retake algebra in college because they wouldn't take any high school math credits, nor let me test out.  Never could remember the quadratic equation, so every test the teacher got me re-deriving it on the workpaper.  After the first test he kinda figured out that I didn't need the course, and I basically tutured the other students.  Pissed me off when the main one I was tuturing dropped out.

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Convince me I'm wrong - minimum wage
« Reply #11 on: May 25, 2006, 02:16:11 PM »
Quote from: Firethorn
True wage gains are achieved through creating a labor shortage.  The easiest way an individual can do this to to go ahead and get qualifications/training for job fields with shortages.
No, true wage gains are achieved by increases in productivity.  That is Econ 102.
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Convince me I'm wrong - minimum wage
« Reply #12 on: May 25, 2006, 03:29:59 PM »
Quote from: The Rabbi
No, true wage gains are achieved by increases in productivity.  That is Econ 102.
Profits are gained by increased productivity, which can then be used to increase wages, but increased productivity doesn't automatically translate to increased wages.

It doesn't matter much how productive you are if every joe can do it as well.  Now, increasing your individual productivity makes you a more valuable worker and they'll generally pay you more, but it's not guarenteed.

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Convince me I'm wrong - minimum wage
« Reply #13 on: May 25, 2006, 03:40:56 PM »
Yes.  There are no guarantees in life.  Thanks for reminding us.
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Convince me I'm wrong - minimum wage
« Reply #14 on: May 25, 2006, 04:58:22 PM »
Firethorn - I wasn't dogging the Associates, but rather the one in Miniature Golf Wink Sounds like you're doing good work!

Rabbi and Firethorn - Wages aren't determined by just one factor. There are five that I can name offhand:

1. Inflation/Expected Inflation
2. Profitability of the employer
3. Supply of Labor
4. Productivity of Labor
5. Societal views on certain job positions

Edited because I can't spell "one".

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Convince me I'm wrong - minimum wage
« Reply #15 on: May 25, 2006, 04:59:26 PM »
Quote from: The Rabbi
Yes.  There are no guarantees in life.  Thanks for reminding us.
Do you have it in you to admit that another person could have a point?

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Convince me I'm wrong - minimum wage
« Reply #16 on: May 26, 2006, 03:39:12 AM »
Quote from: Daniel Flory
Quote from: The Rabbi
Yes.  There are no guarantees in life.  Thanks for reminding us.
Do you have it in you to admit that another person could have a point?
When they make them, yes.

What was the point of YOUR post, btw?
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Convince me I'm wrong - minimum wage
« Reply #17 on: May 26, 2006, 04:08:10 AM »
Quote from: The Rabbi
Quote from: Daniel Flory
Quote from: The Rabbi
Yes.  There are no guarantees in life.  Thanks for reminding us.
Do you have it in you to admit that another person could have a point?
When they make them, yes.

What was the point of YOUR post, btw?
I truly find it hard to believe that you are an adult. Sometimes you actually give good advice but most of the time it is tainted with BS like this. Regardless, my point was that you and Firethorn were both correct, but there are also other factors that contribute to wage setting. Of course you didn't see that post because you were probably working on your Nobel acceptance speech. All hail the Rabbi!

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Convince me I'm wrong - minimum wage
« Reply #18 on: May 26, 2006, 05:41:27 AM »
So the point of your post was to engage in off-topic, ad hominem attacks.  Noted.
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Convince me I'm wrong - minimum wage
« Reply #19 on: May 26, 2006, 05:59:11 AM »
Quote from: Daniel Flory
Firethorn - I wasn't dogging the Associates, but rather the one in Miniature Golf Wink Sounds like you're doing good work!
Edited because I can't spell "one".
Heh, I have enough credits(124 at last count) for a four year degree, but alot of them are duplicates due to my moving around and one place not taking the credits from another.  Have no clue what I want to do for my four year degree, as I don't need one in my current job, and I'm making all the money I need.  

Quote
Rabbi and Firethorn - Wages aren't determined by just one factor. There are five that I can name offhand:
Good point.  I generally concentrate on the supply side.  Productivity/employer profit gives you the potential maximum pay(without the employer eventually going out of business and having the worker loose his job), but in a open market, the worker either has to be the business owner or at least somewhat difficult to replace in order to profit from it.  Thus my belief that supply of labor is the most important part, at least for the employee.  It's the one he has the most control over.

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Convince me I'm wrong - minimum wage
« Reply #20 on: May 26, 2006, 06:22:36 AM »
Quote from: Firethorn
Good point.  I generally concentrate on the supply side.  Productivity/employer profit gives you the potential maximum pay(without the employer eventually going out of business and having the worker loose his job), but in a open market, the worker either has to be the business owner or at least somewhat difficult to replace in order to profit from it.  Thus my belief that supply of labor is the most important part, at least for the employee.  It's the one he has the most control over.
That point is the most salient.  There is the macro perspective and the micro perspective.  For the individual, seeking out jobs where shortages exist is usually a good way to increase pay.  But on a macro perspective that doesnt work too well, because everyone gravitates to the same field.  So I have seen the nursing market go through various ups and downs.  Same with engineers.  On the macro level with the entire economy, wages rise when productivity goes up.  If wages rise and productivity does not go up then you have a classic case of inflation.
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Convince me I'm wrong - minimum wage
« Reply #21 on: May 26, 2006, 08:53:43 AM »
Quote from: The Rabbi
Quote from: Firethorn
Good point.  I generally concentrate on the supply side.  Productivity/employer profit gives you the potential maximum pay(without the employer eventually going out of business and having the worker loose his job), but in a open market, the worker either has to be the business owner or at least somewhat difficult to replace in order to profit from it.  Thus my belief that supply of labor is the most important part, at least for the employee.  It's the one he has the most control over.
That point is the most salient.  There is the macro perspective and the micro perspective.  For the individual, seeking out jobs where shortages exist is usually a good way to increase pay.  But on a macro perspective that doesnt work too well, because everyone gravitates to the same field.  So I have seen the nursing market go through various ups and downs.  Same with engineers.  On the macro level with the entire economy, wages rise when productivity goes up.  If wages rise and productivity does not go up then you have a classic case of inflation.
Good points all around but it is important to note that while people may gravitate towards a field with a supply shortage, they might not make it. This is because there are barriers to entry that prevent most people from obtaining employment in a given field, regardless of their ambition or intent. These barriers could be created by employers/society to maintain quality standards or from the group itself to maintain exclusivity.

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Convince me I'm wrong - minimum wage
« Reply #22 on: May 26, 2006, 03:52:09 PM »
Minimum wage could better be described as "Federally Mandated Minimum Level of Productivity".  If you can't produce goods and services equal to the FMMLP you don't get the job, pure and simple.  Who loses?  Those entering the workforce and those who get fired from their low paying jobs to pay those who are employed at the new FMMLP.

The better way to fix the problem is to permit the worker the privilege of opting out of social security, workmans comp, vacation, healthcare, disability, etc.
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Convince me I'm wrong - minimum wage
« Reply #23 on: May 26, 2006, 04:41:57 PM »
Quote from: Daniel Flory
Good points all around but it is important to note that while people may gravitate towards a field with a supply shortage, they might not make it. This is because there are barriers to entry that prevent most people from obtaining employment in a given field, regardless of their ambition or intent. These barriers could be created by employers/society to maintain quality standards or from the group itself to maintain exclusivity.
That leads into another point, I feel that there's generally three factors that determine how much a job tends to pay.

1.  Difficulty - How hard the job is.  Do you really need to be smart to do it, do you need to be strong, fast, whatever?  Sports are difficult, because you have to beat out everybody else.  Acting is a great example, because it's difficult to be known as the best, who command premium pay, compared to the thousands of lesser actors who usually make next to nothing.
2.  Training - The more education/training it requires, the more pay.  After all, passing courses, attaining a degree is difficult in and of itself.
3.  Hazardous/Nasty - Garbagemen, nuclear power plant workers make more in order to attract people to those positions.  Perception is sometimes more important than reality in this.

This is a general career field guide.  Factory workers are very productive on average, but it also tends to be relativly unskilled work, thus their pay will tend to be less than somebody like a repairman, who's work is more complicated, but less productive overall.  There's always going to be problems getting enough doctors, for example, because the sheer amount of difficult training required makes them scarce, thus they make lots of money, making more people at least consider the field.  It's a major reason why getting your bachelor's degree.

Professional athletes, actors, CEO's are explained by an industry obsessed with getting the 'best'.  While there are many people in these fields, the category of 'elite' or 'best' ones is much, much smaller.  If you survey a large number of football fans and ask them who they think the best quarterback is, odds are you'll end up with only a half dozen names.  Having Arnold, Chuck Norris, Steven Segal, Sean O'Conner in a film virutally guarentees millions at the box office, allowing them to command extreme wages.