Manufacturing Confusion

I live in the state with the highest minimum wage -- over $7. The rate is tied to the cost of living and has been increased recently. This is also a state with one of the highest unemployment rates...

My daughter is looking for a summer job (she's in high school). She'd love a $5/hour job for pocket money and some to save... but she can't get one.

revel, you say


The reason this can't happen is IT'S ILLEGAL FOR ANYBODY TO PAY A WORKER LESS THAN $7.15 AN HOUR. Employers are forbidden to pay teens five bucks an hour. I suppose she could babysit or mow lawns for the neighbors, but she wants a job that pays wages. As do all the people responsible for themselves and their families.

By the way, did you hear that Bush wants fast-food jobs reclassified as "manufacturing"? That's so when the administration has to report the losses of manufacturing jobs in the US, it won't sound so bad...

OK, I concede that point. However I still stand behind keeping a minimum wage standard for all the reasons I stated on the many posts on this subject.

I am not surprised about Bush's rewording of things for a specific purpose. He has been doing that since day one. But oh, I forget when we say something that Bush has done we are just bashing. Personally I am reading to accept that label rather than remain mute to what is going on.

IT'S ALL RELATIVE

Is 5.6 percent a low figure, or a high one? Depends. If only 5.6 percent of hamburgers are discovered to contain meat, that's way low. But if 5.6 percent of teachers are using their students as drug mules in elaborate Asian heroin importing schemes, that's sort of high.

We're comparing apples and oranges here. Or junkies and burgers. What if we compare similar or identical figures on the same subject, and from the same source?

Here's CNN in July 1996, as the Clinton-Dole election approached:

Economists didn't expect June's unemployment rate to be much different from May's, which was an already-low 5.6 percent. But in fact, it did fall -- to 5.3 percent. The unemployment rate hasn't been that low since June 1990.

So 5.6 percent is "already-low". Now here's CNN in December 2001:

The U.S. unemployment rate jumped to 5.7 percent in November - the highest in six years - as employers cut hundreds of thousands more jobs in response to the first recession in a decade in the world's largest economy.

Can you "jump" to a figure 0.1 percent above that already defined as "low"? More from CNN, this time in March 2002:

The U.S. unemployment rate fell to 5.5 percent in February and businesses added jobs for the first time since last summer, the government said Friday, as the labor market began to recover from a downturn that led to more than a million job cuts in 2001.
The jobless rate fell from 5.6 percent in January as employers added 66,000 jobs to payrolls ...

That should read "fell from an already-low 5.6 percent in January", surely. In January, CNN's Mark Gongloff decided that an unemployment rate of 5.7 percent was bad news for Bush:

Though the unemployment rate posted a surprising decline, and many economists believe the job market will improve in 2004, Friday's report probably will keep Fed policy-makers on hold and may put some political pressure on President Bush.

A weak job market could prove tough for President Bush as the November election approaches.

Gongloff repeated his line about Bush's election chances earlier this month when a familiar number appeared:

The unemployment rate fell to 5.6 percent, the lowest level since January 2002, from 5.7 percent in December.

A weak job market could prove tough for President Bush as the November election approaches.

Why? It didn't for Clinton.

Revel - The problem isn't that I don't live in a vacuum, but that policies, laws, and well-intentioned governmental restrictions on personal liberty don't operate in one. Minimum wage laws do not protect people from being taken advantage of; they simply prevent people from choosing entry-level jobs that could allow those people to begin a career and take the first step on a road out of poverty and dependence on the government. People are not simpletons requiring constant protection from the government. (Or at least not all people are such.)

Government protection = a loss of freedom, and one of the most important freedoms we have (or should have) is the freedom to negotiate the value of our labor and enter into contracts with others without the government stepping in and preventing us from making choices we would like to make.

NOTE: If I argue my opinion strongly, please know that it is only because I feel strongly about it; I mean no disrespect by it. I appreciate your willingness to debate this issue without rancor.

I don't work myself, I haven't ever worked. My daughters are 17 and 20 and they both work and go to school. My husband works for the county so all this is important to me too. I also remember hearing stories when I was young about how the work force used to be. All my older relatives belonged to unions, either the coal miners union or iron workers or something like that. People like that fought hard to for fair wages and safe work places and I would hate to see it all have been for nothing.

I would like to return the compliment to you too. I have been in involved with debates about subjects that do not have near the importance in our lives as this one and they get really ugly really fast and stay that way.

revel - Let's try an experiment...

Go find yourself a job. Find an employer that's willing to hire you at a wage you are willing to accept, then come back to me and let me know the details and I'll tell you how much you are ALLOWED to accept for the job. Then you can go back to him and see if he's still ready to hire you.

And when he isn't, multiply that instance by thousands and you'll begin to see what's wrong with artificial labor prices.

NOTE: This is NOT intended as a stab at you for never having worked. I assume you committed your time to raising a family and running a household, both difficult and important tasks. I would not disparage you or anyone for making that choice.

scrat

thanks, I have worked hard at being a stay at home mom and grandmother. I didn't really make a choice, it is just that I got pregnant at 17 and then married my high school sweet heart and it was just assumed that I would stay at home and take care of the baby while he worked. We live in the country and things were different then they are now. Now my daughter chose to not marry the father of her baby and she is going to school and working while I am watching the grandbaby.

Anyway, the situation you describe wouldn't happen, why would an employer offer you a job at a wage that he can't legally pay in the first place? So you wouldn't be at first getting a job then turning out not to be getting a job. Either he would offer you the legal wage or give you an illegal wage and hope that he don't get caught and you would have the job until you both got caught. Meanwhile you took the job that another could of have legally had at a wage that workers for years have fought to get themselves. It wasn't as though some faceless government official decided out the blue to assign job rates on workers. Workers fought for the minimum wage act.

revel - Come on, think outside the box a little, will you? Forget what is or isn't legal right now and think.

Try this: pretend that each state can set its own minimum wage. You live right on the border of your state and the minimum wage there is $8/hour, and the minimum right across the border is $7.50/hour. You need a job and are willing to start at the bottom and work your way up. What if there were a job opening at minimum wage across the border where they can pay you $7.50/hour, and no job in your area in your state. Would you take the job at $7.50/hour? Even if you wouldn't, don't you think you ought to have the right to make that choice?

Consider the same example of allowing states to set their own minimum wage. What if two bordering states had the same minimum wage, and both had sluggish economies and stagnant job growth. Then, imagine what would happen if one of the two states lowered its minimum wage. Wouldn't some employers be able to add positions that they could not have afforded at the higher rate? Wouldn't companies consider relocating to that state in order to capitalize on the lower labor costs there? Wouldn't that likewise create more jobs in that state? Given time, is there any question that the economy in that state would begin to improve and outperform the economy of the neighboring state whose minimum wage was higher?

Give it some thought, and if you think I am wrong, please explain in specific detail how. Thanks.

I think a little light needs to be shed on this situation.

I am one of the 2.3 million unemployed, since last June, after losing my position so that the small company I worked for could save on its overhead because it wasn't, and still isn't winning bids. I was making 42.5 K annually, with lousy benefits and a labor contract always shifting toward more duties without corresponding increases in my salary.

I have been scouring want ads for months now, and little has changed. While there seems to be somewhat more opportunities out there, the "recovery" is far from spectacular. Competition is still fierce. What went for $20 an hour is now going for $10 an hour. I was asking for $15 an hour and getting wide-eyed responses...as if what I was asking for was outrageous. I didn't get the jobs either. They have us over a barrel and they know it.

Health benefit costs for the single person jumped from about $12 a week to about $30 a week.

More and more employers are drug-testing ( not a problem for me ) for lower and lower wages and responsibilities.

Labor is being devalued in this country, and sure, if there were alternatives here to move into to, outsourcing wouldn't be a problem, but the new places to call home do not exist, and I have been breaking my head open trying to find even one.

I think I did, actually, last Thursday, but I won't know until sometime this week coming. I'm almost positive I did, but of course, you never know...I asked for $12 - $15 an hour, and they said they are still wrapping up the buget for the new position. I also said wage wasn't the issue here for me, and I am perfectly willing to consider any offer or undercut any competition.

This after nine months. It's a choice job for me too, and of those choice jobs available since last June, this is number 6.

The kick here is that I am single, froma poor family, with no safety net to fall back on, and no place to hole up in with a relative if I need to since they are all in a state of flux themselves and already all piled into one house, with no room for me, except the moldy New England basement maybe. I'd rather cut and run and live in my jeep.

I've been holding on all this time, paying my bills instead of going out, and definitely going without all through this. It's maddening the longer it goes on, and I want my life back. But I still stand on the precipice of bankruptcy without the money to hire a lawyer, homelessness and loss of what few possessions I have, a jeep, an apartment, and only so much I can stuff in the jeep to take with me when I hit the skids and drive off to Florida or something, and let them catch me if they can.

I've never had a problem finding a job in my life - not ever, and I have been working since the age of 15. I'm 42 now, and it's like the last 20 years of my life were stripped away from me and now I have to start over again.

I don't deserve this, and I've landed on my feet more than once before. But the Bush administration has proven to be by far the worst and most difficult obstacle for me to overcome. Whenever I have approached despair in my life, a door would open and allow me to escape it. It seems to be happening again, since I have $1600 coming in for unemployment benefits after the extension in MA, and that's it.

I have a healthy ego, and I have been holding out for a decent job all through this because I don't want to go back to the college days of working three lousy jobs just to have food for the week. Sure, I have been gambling big time, and I might lose yet. And being a poor white boy, I won't be able to get on welfare, since I have no kids. I have medical issues also that can't be addressed because I can't afford the medicine or the testing, etc..as it is I owe about $600 for medical attention that got cut off last June.

What am I supposed to do. Walk off into the woods and let myself starve to death after trying to survive homelessness?

You are all talking about a bleak situation, but you all seem to miss all the ramifications behind it all. What if I had a wife and little children, and my wife couldn't work? It wouldn't be just me taking a tumble here so that my former boss could save on his overhead. The government has helped me (with MY money for my own safety net collected by them for over 25 years...) but I doubt they will be doing much more for me.

I've networked and searched and begged and searched again for months now. I have a BA, a good resume, years of experience, a strong intelligence, talents and skills, but I can't find a decent "shelter" that will allow me to pay my bills and have a little left over for myself.

I used to think America was great. I don't anymore. I am not a bum. I worked hard all my life to climb up out of the hole I found myself in, and I succeeded in doing that too, all on my own, with no help from parents or relatives or anyone in monetary terms. Now I find myself back in the hole and having to start all over again if I don't get the call next week saying come on down...the job is yours!

I'll have to go back to retail and flipping burgers 70 hours a week in three or four locations without health care I need only to go bankrupt anyway while clinging to an apartment and a vehicle.

What a life. What kind of country do we have when suicide is one way to solve all the problems? Not that I would do such a thing, but I don't deserve to suffer like this either. This is a country based in selfishness, not compassion, and my plight is going to become all your plights too in various degrees. Ignore MY message now and pay the price later.

And I would add that anyone comfy in their home with every expectation to continue raking in cash every week is in no position to be a judge in this situation. You don't have the proper insight or perspective to form a valid dismissal of this problem. You might as well call a starving person lazy, and then let them starve to death for all the meaningful contribution you have for this problem.

It's like some of my former poor friends who made out well as adults. They actually FORGOT what the poverty was like and actually LOOK DOWN on those who are still poor. They lost their perscpective, and now they block it out because of their arrogance and selfishness, not their compassion, which is curiously lacking when you would think if anyone, they would have retained some.

And how quickly they turned on me too. They used to admire my ability to find solutions during my struggle to rise up on my own. Now I am just another lazy bum as far as they are concerned. Needless to say, I ended the friendships with some harsh judgments against them, and they were absolutely appalled over the implication that they are reptiles now, and their material success is countered by a spiritual pit of blackness they call their hearts.

So be it. Decline is settling in now, a little more with each passing decade, and once it hits critical mass, collapse won't be too far behind.

And you ar going to be shocked how quickly and how easily your entire life can fall to pieces on the ground.

Good luck. You are going to need it.

I understand. I hope you do not see suicide as a real option!
I'm 37, and enrolled in a PhD program, where I get a tuition waiver, and next year will have a stipend. I've doen teh part time "lecturer" thing this year at a differetns chool, with no benefits. I am living with my Sister and her husband (who raised me from aged 13-18), so I don't have to worry about shelter, food, etc...
I am typing on their computer, using their broadband connection, having not had anything other than university sponsored net connections and cheap, cobbled togehter computers before.
If I were not living this life, I would probably be working for a private ambulance, making a whopping $12.00/hr, and living from paycheck to paycheck. AS it is, I'm gambling that when I finish the degree, hopefully in about five more years, there will be faculty spots available somwhere, hopefully nearby, since my brother-in-law has MS and is bedridden, and my sister is diabetic. The temptation has been quite heavy to drop from the PhD program and go into a quickie "post-bac" RN program, purely for the salary. I haven't been pushed to that option yet, but who knows what will come in a few years?

That seems to be the tone from the far-right.

scrat, you are not being logical in saying that I am thinking in my own little box. You used the situation of someone loosing a job because the government dictates (at the behest of its citizens!) their wages. I understand that what you say might be is if the employer either does not hire anyone at all or hires less people and you might be one of the less people and that would be a loss of a potential job or the employer offers someone an illegal wage and you are not willing to commit a crime in order to qualify for the job. But the situation of an employer offering you a job then turning around and saying you can't work after all because of the government or someone else saying that you can't work for that agreed upon wage that you used in your previous post does not happen. If it does not happen then it cannot be used as evidence in favor of your argument of the reasons why minimum wage is not a good program. You have to come up with actual situations that can actually happen as a direct result of the minimum wage act.

I don't agree with the above quote either. I will try my best to explain why (again).

If people accept lower wages then they will have less money than they would have if they had a fair wage that kept up with the cost of living and left them some money to save for a rainy day, go on vacations, their kid's education ect... If all employers began to do that then the middle class as we know it will cease to exist. There will not be a large class of people buying as much of the goods and services that companies make so their retail revenue and other revenues will suffer a profit loss and soon there will be less companies. Our whole country will be poorer and all our services such as education and social programs will suffer. Eventually even the rich fat cats will start to suffer as well and we will be like a lot of other countries that are poor without some kind of government standard in place to ensure that the working class have decent wages.

You said something about entry level jobs as being a reason to have flexible wages. Why would an employer ever offer anything other than entry level wages? The less you pay a person for labor the more net profit you make, so of course unless they are benelvant they are going to offer as less a wage as they possibly can. Then that would be all that would be out there and you would be stuck in a entry level pay for every job and who knows what the entry level pay would be, probably 20 cents an hour like in places like China or something.

I have been as specific as I know to be and have fully explained my position to the best of my ability and I am personally satisfied with it. If you still feel that I haven't explained my position but I am just saying, "I disagree" without saying why, then so be it. I can say nothing more and if you disagree that is ok with me and you don't even have to explain it all again because I have understood your explanation I just simply disagree with you for all the reason that I explained in full specific detail to my own satisfaction.

No hard feelings.

the concept of an "entry level job/wage" is pure nonsense anyway. Too many people, either due to geography, lack of education, or circumstance remain in such "entry level" positions their whole lives.

... and the demand for labor would be higher, and the resources available to employers would be higher (because of the money the've saved on wages). As a result, wages will rise as the result of employers competing for employees. The immediate effect you describe is real, revel, but it is also self-limiting. And it self-limits way before you lose the middle class.


'Decent wages' are not ensured by government standards. They are ensured by high labor productivity, which is itself a result of good education, peace, functioning legal institutions and other factors. I challenge you to find a country that got rich because the government legislated a high minimum wage.

Prove it. (I bet you can't.) I know of no study or data that suggests any such thing, and I suspect that you do not either. Please prove me wrong. Cite data that supports your claim.

Thomas

I don't agree with you at all because history has shown us otherwise. When companies got a tax break they got more money and they let employees go instead of hiring more employees so just because a company has more money does not automatically mean that they will hire more labor. They will just simply pocket the profits. In this day and age we really don't need a huge work force to keep up with demand with all the technology advances and besides if the consumers don't have money they will not be buying the products in the first place to drive the demand up.

revel - I suspect you could not offer a single historical example of what you claim "history has shown us". The notion that companies lay off workers as a result of having greater capital resources available is simply foolish, and bespeaks an ignorance of economics and the actual history to which you refer. Companies simply do not behave in the manner you suggest.

The following is old nevertheless it "offer a single historical example of what you claim "history has shown us"."

http://www.ctj.org/html/layoffs.htm

President Bush said when he was gunning for the tax breaks that companies could then hire more workers then the unemployment went up. That is a fact and when I have more time I will try to search out statics to prove the obvious. However as I have shown above, I have showed that history has shown us that just because companies have more money they don't necessarily hire more workers or offer a pay raise.

If your point is that George Bush will use any excuse to push through ill-designed tax cuts, I more or less agree with you, and your link appears to make a reasonably good case for it. I say "appears to", because I didn't take the time to read it thouroughly enough to be sure.

But this is not the point you made, unless I misunderstood you very badly. Your point, as I understood it, was that government intervention is needed to secure a reasonably high level of wages, especially for poor people. As it happens, the Frazer Institute and the Cato Institute, two libertarian think tanks, have compiled evidence about your claim under the supervision of Milton Friedman, a nobel prize winner in economics. It is published in their Economic Freedom of the World Index.

The "Economic freedom" of a country, as defined in this report, reflects the extent to which economic decisions are made by the market place, as opposed to government intervention. This includes free labor markets as an important component, though it is not limited to it. (It also includes free trade, low government spending, access to sound money, and similar measures.)

If your economic theory is right, we should expect that poor people are doing worse in countries with a high degree of economic freedom. They should either be poorer, or at least their share of the national income should be lower. The actual findings contradict this prediction: Poor people in economically free countries are consistently richer than in less free ones, and their share of the national income is about the same regardless of economic freedom. (see page 21 of this PDF document.) In other words, the cake is larger in economically free countries, and the poor people's share of the cake is about the same as in less free ones.

I'm sorry, revel, but as far as we can judge from easily accessible data, the economic reality of the world is the exact opposite of your economic theory.