Should the minimum wage be increased to allow for inflation

A decent living based on what? On the cost of living in LA or NYC?

People seem to forget that this is the NATIONAL minimum wage and you can still live fairly cheaply in many parts of the country. There is nothihg that prevents states or cities from setting their own higher minumum wage level if their area is costly.

If you don't like minimum wage, Get a better job.... Right! Then there would be no one to take your order at McDonalds. No one to ring you up at Target. No one to greet you at Walmart. No one to...

The minimum wage should adjust for inflation. They oughta just set it at 2-3% yearly increase each January and not have to revisit it every 10 years.

Squinney
I agree completely!

So which is better? 5 employees at $6 each, or 3 employees at $10 each?

McGentrix
These people do necessary work. There will continue to be 5 employees even at $10 an hour.
Were it not for the illegal aliens who are willing to work off the books and accept any wage they are offered it would be no issue. The wage would be as it should be adjusted based upon supply and demand.

It's not a matter of doing necessary work, it's a matter of overhead and profit. When minimum wage is raised, that money has to come from somewhere.

McG
It is a matter of supply and demand. In order to get the help required employers will have to deal with the forces of supply and demand.
Where will the get the money? They will get it in the same way every business does. From their customers.

Which means higher prices which causes inflation which causes minimum wage to go up.... quite the cycle.

C.I. Knew that.

(Though, based upon some of the posts here, I'm thinking there are people who actually do feel that way.)

Here's an excellent explanation pf why raising the minimum wage doesn't mean loss of jobs:

http://www.nathannewman.org/log/archives/001104.shtml

squinney, Good link. More money by workers mean they will spend more - which translates into more jobs to meet the demand of the increased purchases of goods and services. Some people talk about economics like they know what they're saying, but I'll bet you a dollar (or two) they've never even studied economics.

Oh, the money is there. Don't kid yourself with this argument.

For example, I recently read Fast Food Nation, in which it is revealed that McDonald's found that by raising the price of each item by 2-3 cents, they could afford to pay all their employees 2 dollars an hour more than they do right now.

So, did they raise the prices slightly in order to give people a fair wage? What do you think?

Cycloptichorn

That's a pretty simplistic economic assesment on your part as well. The CK economic model has it's own critics in economic circles.

http://www.frbsf.org/econrsrch/wklyltr/el96-29.html
http://wueconb.wustl.edu/~tchecndg/archive/1995b/0253.html
http://gsbwww.uchicago.edu/labor/wessels.pdf

fishin, The CK research is just so much research. It's impossible to measure the impact of minimum wage increase in isolation to the total environment. There are too many dynamics that are unmeasurable. Very simply put, if I was earning $5/hour, and my wage was incrased to $6/hour, I will not only pay more (sales) taxes but make more purchases. If there are x number of product As to be sold in the market place, my $1 dollar/hour increase will now allow me to purchase more of product A or buy product B and/or C. Those products are being produced by Company Z, and when they see that their demand is outstripping their capacity to produce, they will hire more workers to produce it. That $1 dollar/hour increase increases the circulation of that $1 to other workers - which in turn spends and creates more demand for products and services. If we keep the wage at $5, the same worker must buy less and less, because $5 today does not keep it's value tomorrow or next week/year. Demands falls, so companies must now reduce it's workforce to meet demand.

And the problem with your very simple example is that the person who was making minumum wage in 1995 when it was set isn't likely to still be making minimum wage now nor will the person who starts making minumum wage now be likley to still be earning that in a year.

We aren't discussing keeping a set wage forever here. We are talking about the level of the minimum wage. The worker doesn't stay at the minimum. Most people get raises or move on to better paying jobs and new people come in at the minimum level so your "same worker" scenario doesn't hold for long. And for those who are stuck in a minumum wage job - they usually also get shafted because when the minimum goes up their employer tells thenm that that was their raise so they don't get any raise that they would have had coming to them to begin with.

You've also ignored any/all inflationary aspects of and increase of money in circulation. When the minimum wage goes up so does the Federal poverty level. Rent Subsidies decrease, and minumum income standards to qualify rise. The same thing happens with food stamps and many of the items they'll be buying to live their daily lives.

What someone may get as increased wages can easily be wiped out by decreased government support that they might have qualified for previously and increased prices on the other.

Your scenario also ignores that the items being produced are necessarily creating jobs here. While people may spend more the items they are buying are more likley to be mad ein China, Malasyia, Thailand or Mexico then they are here. Those other counttries are who will see the bulk of new jobs created.

It seems you haven't noticed how hard it is to find a job now days. Even if the products are being produced offshore, when it comes into this country, it creates jobs. Who do you think ships it to the stores and sells it?

I doubt you'll find many longshoreman or truckers making minimum wage c.i.! You don't hit the minimum wage end of the employment trail until you get to shelf stockers and cashiers at the local retail outlet.

Been shopping lately? Have you noticed all those fancy self-checkout systems? Do you think they pay those computers minimum wage?

C.I.
This a should explain why in our expanding economy jobs are hard to come by.


Why the new jobs go to immigrants

By David R. Francis

Wall Street cheered and stock prices rose when the US Labor Department announced last Friday that employers had expanded their payrolls by 262,000 positions in February. But it wasn't entirely good news. The statisticians also indicated that the share of the adult population holding jobs had slipped slightly from January to 62.3 percent. That's now two full percentage points below the level in the brief recession that began in March 2001.
In the Monitor
Thursday, 03/10/05
Why the apparent contradiction? Reasons abound: population growth, rising retirements. But one factor that gets little attention is immigration.In the past four years, the number of immigrants into the US, legal and illegal, has closely matched the number of new jobs. That suggests newcomers have, in effect, snapped up all of the new jobs.

Correction

http://csmonitor.com/2005/0310/p17s01-cogn.html

au, Immigration is a topic with it's own pros and cons that can have its supporters and detractors; especially about illegal immigration.

BTW, this country needs the younger work force from immigration to keep our economy popping at 3 to 5 percent/year.