No, I'm asking you to back up points you've asserted but not supported.
So... you won't back up what you say because it's too boring to compete with the alternatives? That's your prerogative, I guess.
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Should minimum wage be a liveable wage?
- Thread starter MoonWater
- Start date
But I have....to my satisfaction.
Just try to fight less, & converse more.
But tick tock....the shows start in 1 minute.
Gentlemen, if I can disrupt your bickering, I tend to see both sides of the arguement here. Labor is no different than any other commodity, if I make doughnuts and the price of sugar goes up, I will have to raise the price of doughnuts just as if I run a minimum wage enterprise and labor goes up, I will have to sell what ever I produce at a higher price.
I believe Mestemia made this point earlier, if wages go up so will everything else.
You cannot expect the business to absorb these higher costs so the business will either fly with higher prices or close.
The point Jeff made here that another company will replace the current one is flawed especially when you consider the expense of start up costs vs running an existing business that is in place.
What will happen is, an employee will be able to meet their expenses with the higher wage for a little while until inflation takes those gains back from them.
Employees usually reject taking a pay cut when faced with a business that is in the red and going into receivership which is understandable, why on earth would a business absorb higher wage costs?
To run a sucessful business your labor costs have to be in a certain percentage range just as a trucking company has to charge a fuel surcharge whenever fuel prices rise sharply.
It is all cause and effect, there is no getting around it. Only a fool would put a new business in a pace where a similar business went broke unless you saw an angle that the previous business did not. It would be insane repeating what a failed business just did and expecting to see a different result especially when you factor in the increased start up costs.
I believe Mestemia made this point earlier, if wages go up so will everything else.
You cannot expect the business to absorb these higher costs so the business will either fly with higher prices or close.
The point Jeff made here that another company will replace the current one is flawed especially when you consider the expense of start up costs vs running an existing business that is in place.
What will happen is, an employee will be able to meet their expenses with the higher wage for a little while until inflation takes those gains back from them.
Employees usually reject taking a pay cut when faced with a business that is in the red and going into receivership which is understandable, why on earth would a business absorb higher wage costs?
To run a sucessful business your labor costs have to be in a certain percentage range just as a trucking company has to charge a fuel surcharge whenever fuel prices rise sharply.
It is all cause and effect, there is no getting around it. Only a fool would put a new business in a pace where a similar business went broke unless you saw an angle that the previous business did not. It would be insane repeating what a failed business just did and expecting to see a different result especially when you factor in the increased start up costs.
... if all else is equal. But when we're talking about economy-wide changes to the minimum wage, I don't think we can assume that all else IS equal.
If a big chunk of your customers suddenly make more money (and therefore have more money to spend on donuts), then maybe you can make up the difference on volume. With people buying more of your product, your fixed costs are spread over more donuts.
Again: why would prices necessarily go higher? Money given to minimum wage employees doesn't just disappear; it gets spent. There are two effects going on here:
- minimum wage employees will cost more per hour.
- minimum wage customers will have more money to spend on the things they want to buy.
Both effects are happening, so why are you assuming that only one of them will dominate the outcome?
I didn't say that it would necessarily be a startup that picks up the slack; it could be growth at an existing company... one that's already set for growth but just lacks capital.
Earlier, you were claiming that there are all sorts of companies in this situation. Were you wrong?
Why on Earth wouldn't a company want its customers to have more money to spend on its products?
I never said that the company that picks up the slack for job growth would necessarily be in the same line of business as the previous company.
I thought the whole idea was to pay these folks just enough to have the basics and now they are going to be the economic engine that drives the economy?
I thought the whole idea was to pay these folks just enough to have the basics and now they are going to be the economic engine that drives the economy?
They're not the whole story, but I did explain earlier how raising the minimum wage would have a stimulus effect.
But that's not actually the point I was making there. IMO, it's common sense that if minimum wage workers make more, they'll spend more. Do you disagree?
Giving broke people another buck or two is not even going to be a blip on the screen except at the movie theatre or the cell phone store perhaps.
So you think the business owner is going to work for less and not pass on the expense?
Running a business is not a charity, if you don't reap a certain profit margin, you close the doors. :sorry1:
There is a corollary to Murphy's Law, "the perversity of inanimate objects".I just lost a very long post.
So now in short...
Rearranging, deck chairs, Titanic.
Computers sense when the most damage can be done, & then they strike.
I can feel their smug self-satisfaction with the carnage they hath wrought.
I agree with this general trend.
However, in the short run, businesses will sometimes operate at no profit when prices cannot be raised, which happens in general economic downturn.
It's an investment in the future, or when debt load is such that making no profit is cheaper than shutting down, which has catastrophic costs.
Such is competition under capitalism in both good & bad times.
This all makes sense too. But the OP poses an entirely different proposition, ie, raising the min wage to a "liveable wage", rather than
a mere small increase. The federal min wage for covered nonexempt employees is $7.25/hr. I presume that a liveable wage would not
be any mere 10% or 20% increase from this base line. Some have suggested a min wage in the $10 range. As low as this seems, it's
still in the range of a 40% increase. Fast food workers in NYC are now talking about $15/hr, which would be around a 100% increase.
At this level, there is the very likely possibility that markets could not employ some low skill workers at all. What happens to the employee
who cannot produce as much income as he costs? Will he be replaced by another worker?
Suppose:
A company has a worker at $8/hr. The worker is worth that much, but not more.
A company also has workers at $12/hr, $15/hr & $20/hr, & they too are worth what they earn.
Workers at all these wage levels are readily available on the market, so any job opening can be filled.
Jan 1, federal law sets the min wage at $15/hr.
I'd can the $8/hr worker, & replace him with a pre-Jan-1 $15/hr worker.
The $12/hr worker is also at great risk of being canned & replaced.
I don't think a minimum wage which is "liveable" would be good for those who fall thru the cracks.
There would also be inflationary pressure on the company's prices.
But then, we've no number to put to this wage.
(Mostly Penguin doesn't like my $15/hr or $20/hr, or Dawny's $26, but there are certainly areas
in the country where these would seem a reasonable living wage.)
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Is there some reason why you can't give straight answers to my questions?
I think you're exaggerating how sensitive businesses are to price volatility, and you're presenting a simplistic (and ultimately wrong) model of how the economy works.
The minimum wage in Australia is $15.96 Australian ($16.63 US at current exchange rates). Do they have fast food restaurants in Australia?
I expect that they do.
But this rhetorical question evades my real questions.
What would happen to workers who aren't worth that new higher cost, when other workers who are worth it are available?
(We have a glut of low wage workers in our dismal economy. Anyone can be easily replaced.)
How much is a liveable wage?
To quote another poster.....
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I'm not going to answer your question until you answer the questions that yours is begging: do any workers actually fall into the class you describe? Workers who are gainfully (albeit deficiently) employed in minimum wage jobs who would be out of work if the minimum wage was raised?
Australia has a minimum wage that's even higher than the figures you throw around in your worst doom-and-gloom scenario. If your point has merit, then you should be able to point to some group of people in Australia who are worse off because of their country's high minimum wage. Can you do this?
I've already explained how your assumptions are on shaky ground logically, but really when it comes right down to it, the proof is in the pudding: there exist plenty of countries with minimum wage rates as high as the ones that you claim are bad for businesses and workers, so there should be no shortage of evidence that your position is correct.
... if it actually is correct, of course.
So... how about it? Are you going to actually back up your claims? Can you show us some examples of people who are out of work because of high minimum wages? If you're right, there should be plenty of examples for you to use. Where are they?
I don't understand your consternation.
I maintain that these workers do exist.
Their numbers would be a function of how much the min wage is raised.
Perhaps if one doesn't run a business, it might not be apparent that there are workers who are barely worth what they're paid, that they
could easily be replaced, & that higher value workers could be gotten for the same price in the scenario of a much higher min wage.
No. I'm unfamiliar with Australia's economy.
The OP proposes a min wage hike which is perhaps on the order of 100%?
Did the Aussies do that?
I've yet to see logic employed.
I never said it would be bad for business. It might be for some, but I didn't say it.
Moreover, I don't claim it would be bad for all workers, just those at the bottom.
If you want to argue, please stick to what I actually say....no need to invent claims.
Your "Shield of Research" award makes me think you'd read my posts more carefully.
You miss my point. The proposed drastic increase in min wage to a liveable wage has not happened, so I cannot offer any evidence for my
claim that low wage workers would suffer. But neither have you offered any evidence that such a large min wage increase wouldn't have
deleterious effects. (To merely point to highly paid Aussies offering to super size my order is irrelevant to the proposed change for the US.)
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What I can't understand is why you wouldn't replace these marginal employees when better ones come along if the minimum wage stays where it is. Unemployment's high - the labour market is a buyer's market right now. Why would an employer keep someone on staff at $7.25/h if someone else could be more productive for the same $7.25/h?
Maybe this is one of those things I can't understand because I'm not a business owner.
Why would that matter? Is the cost-benefit of an employee's labour dependenton what the employee's wage *used* to be?
The ironyis palpable.
Wait...your issue is with the rate of change of the minimum wage, not the actual wage level?
If that's the case, then I think you're arguing against an argument that noody here has made. Most of the people here have been talking about the final result, not how long it takes to get there. The posters who have suggested a timeline for the increase have only suggested things like "make the increase gradual."
Because better workers cost more. It's only when the cost for an entire range of
workers is raised to some higher level, that the lesser value ones are jettisoned.
I currently see companies doing just that, ie, replacing less productive workers with more productive ones.
It isn't a matter if inability, but lack of familiarity with how we respond to economic pressures.
Economics can be very different in practice & in theory.
You appear to be using Oz as analogy. To be analogous would matter.
No. But the old wage would be a market based wage. Under a higher min wage law, workers of various values would now have the same cost.
You can't just gussy up your opinions by saying that you're employing logic, but I'm not. I see no evidence or logic in your argument.
I'd rather avoid harsh personal commentary, but this is what happens when you attempt to argue by ad hominem. Let us stick to
the issues instead.
I say both are significant.
If you re-read the OP, you'll see that we're talking about a "liveable wage". Do we bump up the present min wage to that level or not? If you want to propose a long time frame to do so, then be my guest.
I've been clear about my alternative of a liveable wage vs the status quo.
But stretching out the time frame will still leave low productivity workers in the lurch if the min wage rises faster than inflation.
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Another wrinkle in the in wage controversy is how different industries react. Fast food looks to always be local, & not subject to foreign competition.
But what of manufacturing & farming, which can be outsourced overseas if domestic costs rise? In the below article, we can see what happens if
our competitiveness declines. (At least US soybean farmers are benefiting.)
News from The Associated Press
But what of manufacturing & farming, which can be outsourced overseas if domestic costs rise? In the below article, we can see what happens if
our competitiveness declines. (At least US soybean farmers are benefiting.)
News from The Associated Press
PolyHedral
Superabacus Mystic
I would be surprised if manufacturing were minimum wage, for precisely the reason you say - if the minimum wage were a limit, it would have already been outsourced.