dontlettodaygotowaste asked: When you say that you've failed at living if you're an adult making minimum wage, what about immigrants? They didn't "fail" by coming to this country, where they can at least get a job, than by staying in their home country where there was no chance for them. Or are you making the assumption that they're going to get raises?
Well, when you bring up immigrants, you bring up a good point. If these immigrants came here to work for these “starving wages,” are they really that bad? That must mean that a) there is an opportunity in this country, b) they’re better wages than what was offered in their home country, c) they’re able to make a living here off of these wages, and d) they believe in income mobility and the chance for an even better living.dontlettodaygotowaste said:Also, another question: (Which ok is actually probably pretty dumb but still bear with me) when you say that prices have to go up to make up for the hikes in labor costs, is this just to make the company have the same profits? Because idk I think it’s kind if selfish of the CEO to raise all the prices and take away the point of raising the minimum wage just so they could have a bigger paycheck. Or is this just liberal crap I’ve been told with no actual basis?
Nonsense, these are good questions. Well, for a big jump in minimum wage such as the ridiculously proposed $15, there would need to be some very drastic changes in the company’s operations. This would be a combination of shedding workers, raising costs, and/or reducing hours. You see, despite the negative aspect some people get, the entire point of running a business, large or small, is to earn a profit.
These profits help the business grow, hire more workers, grow value, expand, pay worker bonuses, invest in new technology, give worker’s raises…the list goes on and on. If a business worked at a model to only break even, not only would that business inevitably fail it would be the most dull company in the world. Remember, despite this negative connotation out there, CEOs and owners do not just pocket all these profits. I’ve outlined before how if the CEO Walmart donated his entire income back into the company it wouldn’t make a lick of difference to the employees.
I suggest everyone take a simple business class, no matter what their major, in college at some point or just ask their own manager or boss how their business’s profit margin operates. It may shed some light on this false narrative being thrown around.
Although I think raising minimum wage to $15.00/hr would probably not be ideal, it cannot be ignored that the wage rate must increase.The wage rate in the US has stagnated at around $7.00/hr since the 1980’s, it hasn’t kept up with inflation and by today standards it is inadequate to provide a good quality of life for most Americans and remains low by international standards. The rhetoric being thrown out there by conservatives such as yourself can be proven incorrect; raising the minimum wage will not necessarily lead to job loss. Most states who have raised the minimum wage at the beginning of this year have experienced a faster job growth within six months. This is because raising the minimum wage will not hurt the private sector. Raising the minimum wage will also raise the disposable income of households (which are your customers) and will allow them to consume more. If you are any type of business, it is likely that you will see an increase in purchases which will offset the costs of paying a higher and reasonable minimum wage.
The country as a whole would also benefit. About 70% of our GDP is composed of consumption by households and, if I’m not mistaken, businesses do benefit from a reinvigorated economy and an eventual increase in infrastructure, don’t they?
It is true that CEOs are not taking all the profits, but it is undeniable that they do get paid ridiculously high salaries (they even increased during the recession in 07-08 while everybody else was getting screwed over). Although at times these high salaries are merited, there is a big problem with wealth accumulation in this country, specially because wealth does not “trickle down” or circulate back into the economy as quickly. As your income becomes higher, the marginal propensity to consume becomes smaller than your marginal propensity to save. Meaning, people in the upper class tend to contribute less into consumption and save more money. It is also getting increasingly hard for people to participate in this ideal scenario of upward mobility, specially if you are starting a job with a wage that has barely changed over the last thirty years, a job market that requires more adaptability and more specialization than ever before, a higher cost to acquire the skills needed, and higher cost of living.
I do not support automatically raising the $/hr to $15.00 as I believe this would be a shock to the economy that wouldn’t be beneficial. In my humble opinion, the proposed $10.10/hr is a good place to start and it should be adjusted yearly to inflation.
I do recommend that everyone, regardless of their major, should take at least the introductory economics courses, that way they won’t fall prey to false narratives. However, they should also take the most basic business courses to understand how business works. As both an economist and a business owner I can see both sides of the argument and in my opinion we should try to not be so one sided.
and btw, Gordon Gekko was the villain so talk about negative aspects…
It’s not “conservative rhetoric”; it’s basic economics and common sense. Most of your talking points on the other hand have been thrown around so much, they’re like bad jokes. Unfortunately, the punch line is on you. Lucky for me, people can lie, but numbers do not.
Claim 1:“Most states who have raised the minimum wage at the beginning of this year have experienced a faster job growth within six months.”
This was based on a “simplistic” survey of those 13 states (4 of which that actually increased the minimum wage) conducted by Goldman Sachs. It was then taken out of context by the Center for Economic and Policy Research (CEPR), a liberal economic think tank center brought to you by “economists” Dean Baker (lib) and Mark Weisbrot (lib). They posted this chart recently:
What they did was take the average Oct/Nov/Dec of 2013 and compared it to the average of Jan/Feb/Mar 2014. Seems like pretty odd way of sampling; not to mention after running all the same numbers I got drastically different results. California has a much higher percentage of increase then they allude to: up 4% according to their formula calculated by Table 5 of BLS Database. Either way their claim that “the average change in employment for the 13 states that increased their minimum wage was +0.61%, while for the remaining states (all of which did not change their minimum wage) the average employment change was +0.27%" is a complete load considering states without an increase are obviously a much larger sampling. I expected no less from slimy leftist economists. I’m not the only person to figure this out either.
I also want to note that the majority of these states who foolishly raised their wages, only did so +.01-.03%. Only New York and New Jersey went up 1%. That’s a sharp contrast from Obama’s $10.10 (+39.31%) and the other prevailing nutjob idea of $15 (+106.8%). If it wasn’t obvious, a leap of .01 to 1% is slightly easier for businesses to compensate and adjust to compared to 40%-106%. Anyone that has had to forecast a profit plan understands the drastic changes to how these extreme labor costs would alter their business model. That’s precisely why the majority of business owners don’t want an increase.
Claim #2: “The wage rate in the US has stagnated at around $7.00/hr since the 1980’s, it hasn’t kept up with inflation”
Oh, one of my favorite Robert Reich progressive talking points. Well, why respond to a ridiculous claim recycled from an obvious propaganda video paid by unions, when I can counter it with a video that already does that better:
Claim #3: “Raising the minimum wage will also raise the disposable income of households (which are your customers) and will allow them to consume more.”
As I’ve said numerous times before, raising the minimum wage does not stimulate the economy by increasing disposable income. When you drastically increase labor costs, and you cannot eliminate anymore needed employees, prices will go up. That’s your basic economics. In doing so, those workers (still employed) who have seen their wages increase will most likely correlate to the increases in cost. It will most likely not improve their spending power, however those that didn’t see their wages increased will now see the burden of that increase in prices as a result.
Claim #4: “It is true that CEOs are not taking all the profits, but it is undeniable that they do get paid ridiculously high salaries (they even increased during the recession in 07-08 while everybody else was getting screwed over).”
As I linked to in the post above, I’ve also debunked this stupid class warfare argument. Regardless of how much a CEO or owner earns from the company they run or own, they still don’t make enough to affect employees wages, especially in big corporations.
Claim #5: "…there is a big problem with wealth accumulation in this country, specially because wealth does not “trickle down” or circulate back into the economy as quickly."
Another preposterous class warfare statement. Of course the higher quintile earners spend just as much of their money, if not more. They just spend it on different things. Not only does the
wealthincome of those wicked evil, rich, no-good CEOS trickle down in the form of high-priced luxury commodities and services, it is also given away in charity and not to mention redistributed heavily in our crooked progressive tax system. Don’t forget who pays the majority of the taxes pal.
Claim #6: “As your income becomes higher, the marginal propensity to consume becomes smaller than your marginal propensity to save.”
It’s called earning wealth. That’s a good thing. You want to get to the point where you can save up for things like, I don’t know, your kid’s college education, a rainy day fund, and your retirement. You’re also being selective in your characterization because just as for the man that works his way up to CEO of a company may start to save more of his $500,000 salary, a multi-million dollar sports star may blow his entire $6 million dollar salary in a couple of years. It’s a relative on the individual.
Claim #7: “It is also getting increasingly hard for people to participate in this ideal scenario of upward mobility, specially if you are starting a job with a wage that has barely changed over the last thirty years,”
If you are still stuck in the same rotten paying job for 30 years…
Upward Mobility is still occurring whether you like it or not. It’s time for you and your ilk to stop spreading this pessimistic disinformation. Millions of people in this country have worked their way up from low-paying minimum wage jobs to higher paying jobs. That’s why the majority of American households make well over minimum wage yearly income as well as enjoy a better lifestyle than even as early back as 25 years ago.
If you had a clue about even basic economics and actually own a legitimate business with real employees, I’d be truly shocked. All I’ve heard from you are the typical progressive talking points spewed by the likes of whitebeard pseudo-economists like Robert Reich and Paul Krugman.
The explanation of how artificially increasing the minimum wage affects young and unskilled workers is the most primitive of economic lessons:
Before you rush off to try and explain economics to someone else, you may need to learn the very simple basics and work your way back.
…oh, and despite Gecko being the “villain” of Wall Street, his point was very much virtuous.
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interests. I have never known much good done by those who affected to trade for the public good." - Adam Smith
Anonymous asked: Okay, I don't personally believe in many of the things that are on your blog, especially with the "homeless spikes" and being against raising minimum wage. 1. How is putting spikes anywhere helping the homeless? We should be trying to get them off the street not sweeping them under the rug. 2. The economy works by giving people enough money to spend on goods and services so that or can be put back into the economy. Raising minimum wage would actually be beneficial as more people can buy things.
Oh wow. You really have no idea how the real world works, do you? Ok, lemme break it down a bit:
1. The spikes are not to help the homeless. They are to help the property owner who has invested what would probably amount to their entire life’s fortune in their business/building. They are there to discourage anyone, not just the homeless, from loitering and damaging the property. There are countless programs, charities and shelters for the homeless in particular, so the spikes are really an excuse to bitch. Instead of complaining about a private property owner protecting his investment, how about you put your money and time where your mouth is and volunteer/donate to a homeless shelter or food kitchen. It would go a lot farther than your phony internet activism that feeds and houses exactly zero people.
2. You could not be more wrong about the economy. Wages are a by product of the economy, not it’s engine. Think of it like this: You are making paper clips. After you factor in manufacturing costs, overhead, labor costs and the like, you can sell your paper clips for .10¢ a piece. Now let’s say some government official comes and tells you that you have to raise your labor costs from $8/hr to $15/hr. This raise is not due to increased efficiency, but just some arbitrary increase because it makes people feel better and can get a politician re-elected. What do you think happens? Do you, as a manufacturer, eat the extra cost? You already only make a paltry 10-15% per sale. No, what you do is raise the price per paper clip to .20¢. Of course, the wage increase is not for paper clip manufacturers alone, so EVERYTHING goes up in cost. .99¢ hamburgers? Now $2. $3 gallon of milk? Now $6. What this wage increase does is simply raise prices for EVERYTHING.
What good is doubling your income if everything doubles in price? You “purchasing power” does not increase in the long run when you arbitrarily raise the minimum wage. Production, profit and efficiency mandate what wages are. Not the other way around.
Don’t break out the champaign. The jobs report is nothing to cheer about.
Today, you’ll likely hear talking heads on TV crowing about how we’ve now fully recovered from the job market crash. We’ve discussed it many times at this website: this is all fluff.
from James Pethokoukis:
Thanks to 217,000 net new jobs created in May, US employment is now at an all-time peak. All the 9 million jobs lost during the Great Recession have been recovered.
But while the milestone is certainly worth noting, its importance pales next to the current state of the “jobs gap.” The US economy now has 113,000 more jobs than in December 2007, but the working-age population today is 16 million larger. When you factor in population growth, as the Economic Policy Institute has, you find the recession has left a remaining shortfall of nearly 7 million jobs or “missing workers.”
More context: the share of adult Americans with any sort of job — what I like to call the employment rate — was 58.9% last month vs. a prerecession peak of 63.4%. And as the Wall Street Journal notes, “Since the economy emerged from recession five years ago, wage gains have barely managed to keep ahead of inflation.”
Americans should be happy the economy is growing and adding jobs. A glacial recovery is better than nothing — or whatever you want to call what the eurozone is suffering through right now. But they shouldn’t be satisfied or accept the “new normal” as the best that can reasonably be expected. Because it isn’t.
If we were still counting the labor force the same way we were before Obama took office, the US is 7 million jobs short. The "real" U-6 unemployment number is 12.2%, about twice what the people on TV are gushing about. The labor force participation rate for 25-29 year olds is still at an all time low.
Anonymous asked: The point of that post is to show that 7 dollars an hour is *not* sufficient for a person to raise a child, as well as to properly come by. We want people to be able to survive and sufficiently raise children. Besides it isn't that easy for people to get jobs, often not for people in such situations. Discrimination and prejudice often plays role into job decision making - and even if getting the job it's usually bad jobs - minimum wage jobs.
Well bummer. If you have a child maybe you should try to find a different job that pays better.
where are people supposed to get a job from if they cant even afford to have their kid babysat?
Oh come on.
im asking you a serious question, where do you expect these people to get other jobs?
what do they do with their kids then?
So you have time to work full time at mcdonalds but not enough time to apply for other jobs?
Paying people more doesn’t just magically make them wealthier. After a short time prices of all goods and services rise to compensate for the higher wages being paid to employees, thus making those people’s purchasing power about the same as before they got the “raise.” That is why milk in SE AL. is half that of milk in NYC.
But hey, when people realize they don’t have any more purchasing power, you can always buy their vote with more pormises of higher pay, huh?