Is a minimum wage necessary?

Unfortunately Bella even in this situation raising minimum wage is not a good long-term solution. It only increases the costs for running a business. So ultimately in the long-term, the average consumer is still where they were before in "real money term". They may earn more, but the cost of living increases or even worse less jobs if businesses have to pack up and leave due to higher costs. This also assumes that the businesses cannot absorb the higher costs. If the business is already pretty profitable and has a monopoly (like many small towns where most of the residents work for the same company), then prices will still increase, but not at the same rate as the salaries.

Unfortunately Snood, I am talking about economics, not simple fairness. Also, it actually has nothing to do with minimum wage going up proportionately - as the whole concept of minimum wage is that it disrupts the economy as a whole and does not help the economy. I am not speaking about whether you should increase or decrease minimum wage, I am talking about how useful it is.

If minimum wage were set at say $5. But the market economy (in the situation where there are plenty of jobs and businesses and plenty of workers) and the market dictates that the minimum wage to run below $5 (resulting from cost and profit/supply and demand), then business would have to charge higher prices to meet their profits to run their business. If the market were to dictate an amount higher than $5 then there would be no affect as businesses would continue paying their current salaries.

You stated that "If the cost of living rises consistently, the federal mimimum wage should as well." Well if the federal minimum wage were to raise and it is above the equilibrium market wage then prices will go up and the cost of living will rise again - then raise the minimum wage and this will cause a vicious cycle of inflation.

You want to be able to be fair to all, but raising minimum wage is not going to help - at least not to the extent most people want.

Like it or not it is a matter of economy. When you start increasing costs to businesses typically it is carried down to the consumer.

Do you think there should be a mandated federal minimum wage at all?

Snood, I resent Nader for his having helped that monster, Bush, win the election. But, regarding his political philosophy, Nader--and Dr. Kervorkian--will someday be seen as historical heroes.

Snood, I resent Nader for his having helped that monster, Bush, win the election. But, regarding his political philosophy, Nader--and Dr. Kervorkian--will someday be seen as historical heroes.

Right after that election, my sister told me she would "like to get Nader alone in a room for about 5 minutes." We were both so mad we coulda beat the crap out of that guy.

So Linkat, do you propose trashing min. wage altogether? What is it that you think is a better solution (or do you even see a problem)?

Increasing minimum wage doesn't necessarily have to increase costs of living. Perhaps it would or could in Mass. Other places too.

Of course you know I have no economics degree nor do I know a thing about the economy of Mass.

A lot of it depends on how much value a people put on economy over people. If business is always #1, and the increased costs for wages usually get pushed back down to the consumer - then I'd say the entire structure has a problem!
Min. wages are simply a paltry safeguard for the truly poor and hard-to-get-hired.
An alternative to welfare.
It's well known that many parts of US has mega-business' and (I am not eloquent, but you'll get my point) the little guys nearly always get f-ed. Small business, poorer people.

Instead of continuing the cycle; maybe it's time to stop and think "Well, I for one will not invest in Wal-mart and Super-Conglo. I will work to support small business. I'll work to change policies and business practices."

But of course; first the people with the luxury to 'pick n' choose' would have to be willing not to be so f-ing greedy. Values would have to questioned.

Take a pay-cut, Linkat?

Nahh, that's not the American way!

p.s. Nothing personal, L. This is simply the only way I know how to express my opinions. Perhaps someone else will help to state what I am trying to say clearly and without bias or emotion.

Is a minimum wage necessary? Only someone with a good job would ask that question.

Yeah, I see what you mean....

I feel like Gore defeated himself. First off, in the debates, he tried to intimidate Bush with his huffing and making noises as Bush spieled his rote answers, taking himself down several notches in the eyes of viewers. Throughout the campaign, running against the incomprehensibly dumb campaign of Bush, Gore failed to make himself attractive to voters. He should have won in a cake walk, but had to claw and scratch for every vote. I like Gore and feel he would have been a good president. I don't blame any of his failings on Nader, whom I respect. The fault should rest squarely on Gore.

On the topic of minimum wage, workers should have a living wage. Under the present system, I don't think we will achieve this.

Now there's a sentence that resonates with me -
"If business is always #1, and the increased costs for wages usually get pushed back down to the consumer - then I'd say the entire structure has a problem!
Min. wages are simply a paltry safeguard for the truly poor and hard-to-get-hired."

Ooooooh, yeah, I've thought that many times, also with this thread.

I'm with snood and Nader here. And Nader can be passionate and dumb about running for prez but spot-on about other things.

Here in NC, we are about to raise the minimum wage one dollar, to $6.15. If all that does is give one single parent raising a child a chance to get through the week, I'm all for it. I wish I could look at it as a large economic issue country-wide, but it ends up being a local issue.

I work in a local community kitchen where the size of the group being fed has grown exponentially in recent years. When I ask individuals why they are coming for meals, they say "I can pay for rent or food. I need a place to stay, an address, so I come here for food."

I heard on NPR today that NC is raising teacher pay 8% and state worker pay 5%.

According to the arguments being made here against minimum wage increases, won't that just make the cost of education and government increase? Doesn't that mean we, the tax payers will have to pay more to cover the increased pay of teachers and state workers? Doesn't that take more out of my "small business" pocket and eventually put me out of business?

Why is it that when we talk about minimum wage increases for those that really need more money just to survive, we end up in this cycle of how it won't matter because the cost of the product they make will then increase, but we don't apply the same to argument against raising the pay of CEO's, Senators, or anyone else.

If you're a CPA and the cost of your training, office rent and advertizing increases because each of those industries gave pay raises to their employees, you are going to pass that cost onto your business clients, who in turn will pass it on to their customers, etc.

So the CPA schools, landlords and advertising companies shouldn't be giving their employees raises, right? Cause it'll just mess up the economy and end up costing everyone more.

I swear to God squinney - you've said almost my feelings to the letter. Thank you - I can't hardly express how frustrating it is to hear all these hoity-toity explanations about why it doesn't make sense to pay the poorest of us the minimum amount it takes to SURVIVE.

just booking this fror reference this tomorrow

It would hurt their situation if their employers laid off one or both of them because they no longer found them worth employing at the new, higher wage.

I agree Linkat's response to you was unpersuasive. To the extent that the minimum wage merely redistributes dollars -- employers and customers pay more, minimum wage earners get more -- it's a net wash for society in dollar terms, and may well be a net gain for society in quality of life. The main problem with raising the minimum wage is that redistribution isn't the only thing it does. It also puts people out of work.

How does it put people out of work? McDonalds still needs X number of people per shift. And, if minimum wage is minimum wage, then they can't hire someone cheaper.

Look at what these corporations spend on advertising and tell me they can't afford $4000 a month in salary increases at $1 an hour for 100 employees. But, an extra $160 a month for the employee would be a lot of food on the table.

I currently have a young lady (Acoma pueblo) who helps the Lady Diane with house cleaning and her young brother (aged 15) help me around the yard. We pay her 4 x the minimum and her brother 3 x the minimum because that is what they are worth to us. Makes sense to me.

This is probably true from this month to next month. But in the long run, employers can substitute minimum wage workers with machinery, or with higher-paid, better educated, and fewer workers. Or they can decide that their customers need to make do without the service the minimum wage worker is providing.

By "they", I don't necessarily mean Mc.Donalds. But take retail for example, which is another major employer of low-skilled workers. If you compare American retail stores with French or German ones, you will notice that low-wage workers like bag-packers are simply absent, and that more cash registers are closed more of the time here than they are in America. The difference between America on the one hand and France and Germany on the other is that France has a minimum wage of about $10/hour, and Germany has strong trade unions and a generous welfare state, which have the same effect as a high minimum wage.

More generally, it is a very well-established rule of economics that if you make something more expensive, people will find a way to buy less of it. (The technical term is `downward sloping demand curves'.) This rule applies to labor as much as it applies to apples, oranges, or homes.


It is irrelevant whether they can afford it. If they have alternatives that give them better value for their money, they will not want to afford it. And since America is a free country, you can't force anyone to employ anyone. You have no way of preventing the employer from laying off minimum wage workers and replacing them with other people or equipment.

If you want to put food on poor people's table, just give them money. And if you want to do this through the state, expand the Earned Income Tax Credit and raise taxes on non-poor people to finance it. That achieves the same end as raising the minimum wage, but avoids most of its side effects.