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-- GOP proposal to raise minimum wage
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Originally posted by Dupz Raise tariffs... on a lot of products... Holy shit bro. Lets just knock our economy back a few decades. When you suggest such moves all you do is artifically distort markets.. Taking economic surpluses away from consumers and put them into the hands of small business.

Sorry if I sound like an ass, but the quick glance I took at your post makes it sound like you don't understand what a tariff is, a tax on something coming IN to our country (versus excise taxes on things going OUT). Maybe I didn't read it right, but I thought I should clarify just in case.

Anyway, I think he was trying to say that tariffs should be raised on things such as cars, to make it more attractive to by US automobiles rather than Japanese ones. That way the money spent would stay in the US and benefit US industry and workers. It'd be a good way to make the US more competitive versus countries that have really cheap labor.

Don't hold your breath on that ever happening though. Many southeast Asian countries are the ones financing out deficits, and they'd dump their reserves of our dollars in a heartbeat if we tried doing it, and them doing so would send our economy into another great depression that would make the Great Depression of the 30's look small in comparison.

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Originally posted by DJMaytag Sorry if I sound like an ass, but the quick glance I took at your post makes it sound like you don't understand what a tariff is, a tax on something coming IN to our country (versus excise taxes on things going OUT). Maybe I didn't read it right, but I thought I should clarify just in case.

No offence taken mate, it's all good . Rest assured though, I wrote my reply exactly how I intended. Tariffs are bad for even the domestic economy (as well as the economy that's exporting stuff to your country, obviously). There is a redistribution of economic surplus AWAY from the consumer, and given TO the producer. However, the loss of consumer surplus is ALWAYS greater than the gain by producers because of the existence of a what is called "dead weight losses". The economic impact of tariffs is show in a simple example, below:



To explain, we see that domestic production of the good increases from Q1 to Q2. yay for domestic producers. The quantity of the foreign good decreases from Q4 to Q3. boo for foreign producers. We have an increase in government revenue equal to the red-shaded area. BUT we have created a dead weight loss equal to the two triangles either side of the red-shaded rectangle (the triangles ACE and BDF). It is the existence of this that proves that the loss to consumers is ALWAYS greater than the gain to consumers, leaving society worse off.

The following link will give you an explanation of this (in plain english, without the economic jargon):
The Economics Effects of Tariffs

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Anyway, I think he was trying to say that tariffs should be raised on things such as cars, to make it more attractive to by US automobiles rather than Japanese ones. That way the money spent would stay in the US and benefit US industry and workers. It'd be a good way to make the US more competitive versus countries that have really cheap labor.

The auto industry (in any given country) behaves in a very similar manner. But rather than making the domestic market more competitive against cheaper foreign substitutes it will provide for a business environment that promotes the exact opposite. With the tariffs in place the domestic market is kept on-par (artificially) with the foreign producer and removes any incentive to 'catch up' with their foreign competitors. I dont mean 'catching up' in terms of dropping wages to those similar of the foreign producers, but it also removes incentive to produce higher quality produces.

Edit:
Just quickly, the link I added just before notes an interesting point. The World Bank estimates that if all barriers to trade such as tariffs were eliminated, the global economy would expand by 830 billion dollars by 2015. There's something to think about..

Whoa, hold on here! Here's what I'm discussing: Many here are arguing that the market sets wages at a fair price and a minimum wage should not be set. I find it difficult to see that someone working full time at $5.15 an hour, or even less if you eliminate minimum wage, with no annual increase to meet inflation is a decent amount for the work they put in and certainly not enough to support a family. I would argue that the same way it is being claimed that the minimum wage sets an artificially high wage, global trade with no labor standards and trade agreements life NAFTA set an artifically low wage for many production jobs that Americans cannot compete with.

Now since it is apparent that many disagree with providing citizens with national programs that ensure a minimum quality of life for these unemployed and underemployed Americans in the marketplace I am saying that we need more American jobs at reasonable wages to provide these people with the opportunity to earn these things themselves. The reality is we have a minute number of production and industrial jobs left in this country and I believe that in certain, but not all, instances tariffs along with business incentives should be used to help increase American jobs and diversify our economy. Does this set artificial domestic prices? Certainly, but in industries where there is a large trade gap and we have little domestic production. You're right it would make no sense to simply instantaneously install them, as was tried with steel several years ago, but we pull back somewhat as we renegotiate trade agreements and provide for more American employment.

The World Bank numbers mentioned before, who exactly those dollars are going to? Many of the countries, particularly in Africa, that World Bank has implemented its strategies in are actually in worse condition in terms of citizens' wages than when they began, even though technically trade was increased. NAFTA has made lots of money for many companies, but average Americans lose out, because production work leaves and the foreign workers who gain jobs don't make enough that it helps bring up their own country's economy. So while, yes, technically money is made through free trade as it is, American workers don't gain much of it and more Americans compete for service jobs. There is currently fast track legislation to spread NAFTA to Central America, so if tariffs are argued to be bad, CAFTA will be even worse for average Americans, because they will be competing with even more lower wage workers with labor standards lower than would ever be allowed here. With trade agreements like this, along with others, such as our MFN agreements with China, which also features large trade deficits, how is the market setting a fair wage for American workers at the lower end that provides for these workers' families to live above the poverty line self sufficiently?

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Originally posted by Dupz No offence taken mate, it's all good . Rest assured though, I wrote my reply exactly how I intended. Tariffs are bad for even the domestic economy (as well as the economy that's exporting stuff to your country, obviously). There is a redistribution of economic surplus AWAY from the consumer, and given TO the producer. However, the loss of consumer surplus is ALWAYS greater than the gain by producers because of the existence of a what is called "dead weight losses". The economic impact of tariffs is show in a simple example, below: To explain, we see that domestic production of the good increases from Q1 to Q2. yay for domestic producers. The quantity of the foreign good decreases from Q4 to Q3. boo for foreign producers. We have an increase in government revenue equal to the red-shaded area. BUT we have created a dead weight loss equal to the two triangles either side of the red-shaded rectangle (the triangles ACE and BDF). It is the existence of this that proves that the loss to consumers is ALWAYS greater than the gain to consumers, leaving society worse off. The following link will give you an explanation of this (in plain english, without the economic jargon): The Economics Effects of Tariffs The auto industry (in any given country) behaves in a very similar manner. But rather than making the domestic market more competitive against cheaper foreign substitutes it will provide for a business environment that promotes the exact opposite. With the tariffs in place the domestic market is kept on-par (artificially) with the foreign producer and removes any incentive to 'catch up' with their foreign competitors. I dont mean 'catching up' in terms of dropping wages to those similar of the foreign producers, but it also removes incentive to produce higher quality produces. Edit: Just quickly, the link I added just before notes an interesting point. The World Bank estimates that if all barriers to trade such as tariffs were eliminated, the global economy would expand by 830 billion dollars by 2015. There's something to think about..

Spot on. The primary role for government is to correct for market externalities. Tariffs and subsidies largely create inefficient markets. Next is fiscal and monetary policy to smooth the business cycle, but that's where the heavy debate ensues .

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Originally posted by wolverine16 Now since it is apparent that many disagree with providing citizens with national programs that ensure a minimum quality of life for these unemployed and underemployed Americans in the marketplace I am saying that we need more American jobs at reasonable wages to provide these people with the opportunity to earn these things themselves. The reality is we have a minute number of production and industrial jobs left in this country and I believe that in certain, but not all, instances tariffs along with business incentives should be used to help increase American jobs and diversify our economy.

Tariffs and subsidies are only economically efficient/warranted provided extraneous circumstances dictate that a temporary market intervention is required. One example is an underdeveloped industry that requires protections to give it some time to develop into a truly independant, competitive industry. Artificially sustaining inefficient American industries are ultimately counterprodoctive to the country and the global economy as a whole. Sometimes the labor force NEEDS to adjust in order to become more competitive to the global marketplace for goods. At least Greg Mankiw had the balls to speak his mind when he said outsourcing was ultiamtely good for the country. Too bad he had them cut off by the Bush administration for being "politically insensitive".

But how is an American industry inefficient if it is not competing not because of quality, but because of substandard working conditions and wages that are offered elsewhere? Also how is it good for us to have an entirely service-based economy and how do people at the lower end stay above the poverty line at minimum wage jobs in jeopardy of also being cut with the expansion of such trade agreements, along with a lack of available resources to become competitive in other industries?

Edit: Also, I should add that my economic ideology is driven greatly in by a belief that the economy is driven better by the demand of consumers, not by supply. The more Americans with employment and money to spend at the lower end, the more spending that occurs within the domestic marketplace, which is good for both workers and companies alike. Trade where the supply side is provided by people outside the consumer base, such as that with China and Mexico helps companies keep down costs, allowing them to provide their products at lower prices and make profits, but also collectively this takes away from the number of available consumers able to afford their products.

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Originally posted by wolverine16 Whoa, hold on here! Here's what I'm discussing: Many here are arguing that the market sets wages at a fair price and a minimum wage should not be set. I find it difficult to see that someone working full time at $5.15 an hour, or even less if you eliminate minimum wage, with no annual increase to meet inflation is a decent amount for the work they put in and certainly not enough to support a family. I would argue that the same way it is being claimed that the minimum wage sets an artificially high wage, global trade with no labor standards and trade agreements life NAFTA set an artifically low wage for many production jobs that Americans cannot compete with. Now since it is apparent that many disagree with providing citizens with national programs that ensure a minimum quality of life for these unemployed and underemployed Americans in the marketplace I am saying that we need more American jobs at reasonable wages to provide these people with the opportunity to earn these things themselves. The reality is we have a minute number of production and industrial jobs left in this country and I believe that in certain, but not all, instances tariffs along with business incentives should be used to help increase American jobs and diversify our economy. Does this set artificial domestic prices? Certainly, but in industries where there is a large trade gap and we have little domestic production. You're right it would make no sense to simply instantaneously install them, as was tried with steel several years ago, but we pull back somewhat as we renegotiate trade agreements and provide for more American employment. The World Bank numbers mentioned before, who exactly those dollars are going to? Many of the countries, particularly in Africa, that World Bank has implemented its strategies in are actually in worse condition in terms of citizens' wages than when they began, even though technically trade was increased. NAFTA has made lots of money for many companies, but average Americans lose out, because production work leaves and the foreign workers who gain jobs don't make enough that it helps bring up their own country's economy. So while, yes, technically money is made through free trade as it is, American workers don't gain much of it and more Americans compete for service jobs. There is currently fast track legislation to spread NAFTA to Central America, so if tariffs are argued to be bad, CAFTA will be even worse for average Americans, because they will be competing with even more lower wage workers with labor standards lower than would ever be allowed here. With trade agreements like this, along with others, such as our MFN agreements with China, which also features large trade deficits, how is the market setting a fair wage for American workers at the lower end that provides for these workers' families to live above the poverty line self sufficiently?

Just a question before I reply. Have you ever studied economics?

Okay then, NAFTA or any other free trade agreement is not 'artificial' in the sense that it creates lower wages for unskilled workers. Regardless of what the wage is, that is the market rate and is not artificial at all.

I'm also assuming that you didnt read the Solow and Romer links that I posted earlier, gathering from your suggestions that Americans competing for services jobs being bad, so I'm not going to rebut any further.

I actually do agree with you on one thing though and that has to do with labour standards. Yes, I completely agree that workers are entitled to work under safe conditions etc etc, but I dont agree that these workers should receive a free ride on the backs of minimum wages. You point out the fact that average workers have much to gain from minimum wages. The following graph refutes that to some extent, suggesting that minimum wages actually create unemployment.



Source:
http://www.swlearning.com/economics...se_minimum.html

If we increase the wage from the free market level of W* to Wmin then we put Ls-Ld workers out of a job. Again, the vast majority of labour markets behave in such a manner (although there are some exceptions, which are discussed in the link above, and actually provide basis where a minimum wage would be economically efficient).

Very similarly to how tariffs impact on the economy we see that minimum wages merely have a redistribution effect within the economy, and the distortions they create have an impact on the entire economy that makes everyone aggregately worse off.

Just remember this, my friend, the benefits of market intervention are very clear for everyone to see. Thats is why governements in even the most democratic of societies can get away with distorting markets, but the costs of such actions are indeed hidden, and FAR outweigh any benefits that are seen on the surface.

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Originally posted by wolverine16 But how is an American industry inefficient if it is not competing not because of quality, but because of substandard working conditions and wages that are offered elsewhere? Also how is it good for us to have an entirely service-based economy and how do people at the lower end stay above the poverty line at minimum wage jobs in jeopardy of also being cut with the expansion of such trade agreements, along with a lack of available resources to become competitive in other industries?

I can tell you why it is good for the economy to be 'service-based'. It's called specialisation in production. You specialise in the production of goods or services that you have a comparative advantage in over your foreign competitors. That includes industries that are labour intensive (ie. manufacturing and goods production). That is why we specialise in service industries, here in the western world, becuase that's what we're best at doing. Again, another link to look at discussing comparative advantage:

http://www.netmba.com/econ/micro/comparative-advantage/

The government needs to make sure that people at the lower end of the scale are taken care of in the short run (due to their displacement from NAFTA or eliminating minimum wages etc etc), and the government MUST also invest in these people to make sure that they're capable of entering the workforce in perhaps a service industry. In other words - EDUCATION. Education is all too underestimated nowadays, and it is the solution to all our problems in this thread (even if it is a longrun solution).

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Originally posted by occrider Spot on. The primary role for government is to correct for market externalities. Tariffs and subsidies largely create inefficient markets. Next is fiscal and monetary policy to smooth the business cycle, but that's where the heavy debate ensues .

I kinda gathered I wouldnt have to sway you to agree with me on these kind of issues

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Originally posted by wolverine16 But how is an American industry inefficient if it is not competing not because of quality, but because of substandard working conditions and wages that are offered elsewhere? Also how is it good for us to have an entirely service-based economy and how do people at the lower end stay above the poverty line at minimum wage jobs in jeopardy of also being cut with the expansion of such trade agreements, along with a lack of available resources to become competitive in other industries?

Minor labor shocks are common in American business history. You didn't see a collapse of American industry as thousands lost their job to automation in the early 20th century. The steel and textile industry have long gone the way of the dodo before the whole outsourcing "scare" ... largely for the better. In such instances the labor market retools and acquires the job skills necessary to provide competitive products to the global economy that less developed nations have the ability to compete with. We saw this with the finance and consulting industry in the 80's/90's. If an industry is uncompetitive for whatever reason, it serves no purpose to artificially sustain it and perpetuate a market inefficiency. It simply depreciates the global economy. Look at the EU and US agriculture subsidies.

At any rate, you're creating artificial imbalances to support the few at the expense of the many. Look at steel tariffs for example, by raising tariffs on foreign imports you impact every US consumer of steel products in the country. What happens when these steel consumers are forced to buy more expensive steel? They then have to raise their prices. Then they have to compete with every other foreign competitor that has access to cheaper steel. And the vicious cycle goes on until you get to the final end product that the consumer shuns in favor of cheaper, foreign goods. The shocks perpetuate among a multitude of industries All this to help save a one relatively small inefficient industry, in the grander scheme of the economy as a whole, that will continue to be inefficient and perpetuate the imbalance.

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Originally posted by Dupz The government needs to make sure that people at the lower end of the scale are taken care of in the short run (due to their displacement from NAFTA or eliminating minimum wages etc etc), and the government MUST also invest in these people to make sure that they're capable of entering the workforce in perhaps a service industry. In other words - EDUCATION. Education is all too underestimated nowadays, and it is the solution to all our problems in this thread (even if it is a longrun solution).

See, here's where the confusion has been. I have been trying to make the point that you have many unskilled workers who don't have the education to compete with those who do. When this is the case, you need unskilled positions or else these people are in trouble. Under current conditions far too many people in the U.S. do not have the education to compete for service jobs and I'm under the impression that many people here do not think that greater access to higher education should be made available, therefore I was suggesting an alternative route to provide these people with employment. If you think that there should be an increase in educational resources in addition to expansion of the service economy, then we're not so far off on this and it greatly changes the debate.

I stil maintain though that it is ridiculous to expect someone to live off $5.15 an hour, or even less if there were no minimum wage. Maybe the market sets such a price and jobs are lost by setting such a wage, but it is nowhere near the poverty line and it is what many unskilled workers currently face as potentially their only option given current conditions. This is basically why I tend to favor more of the European economic models though and what I was trying to explain originally, as I believe the free market fails to provide a reasonable wage for many workers (e.g. the working poor) which is a growing segment of the U.S. population.

Also on a side note my comments that trade agreements such as NAFTA create artificial wage levels was regarding the unrealistic numbers they provide compared to what competition would be within the domestic marketplace between competing American workers.

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Originally posted by occrider Minor labor shocks are common in American business history. You didn't see a collapse of American industry as thousands lost their job to automation in the early 20th century. The steel and textile industry have long gone the way of the dodo before the whole outsourcing "scare" ... largely for the better. In such instances the labor market retools and acquires the job skills necessary to provide competitive products to the global economy that less developed nations have the ability to compete with. We saw this with the finance and consulting industry in the 80's/90's. If an industry is uncompetitive for whatever reason, it serves no purpose to artificially sustain it and perpetuate a market inefficiency. It simply depreciates the global economy. Look at the EU and US agriculture subsidies. At any rate, you're creating artificial imbalances to support the few at the expense of the many. Look at steel tariffs for example, by raising tariffs on foreign imports you impact every US consumer of steel products in the country. What happens when these steel consumers are forced to buy more expensive steel? They then have to raise their prices. Then they have to compete with every other foreign competitor that has access to cheaper steel. And the vicious cycle goes on until you get to the final end product that the consumer shuns in favor of cheaper, foreign goods. The shocks perpetuate among a multitude of industries All this to help save a one relatively small inefficient industry, in the grander scheme of the economy as a whole, that will continue to be inefficient and perpetuate the imbalance.

My concern is the general welfare of average workers, particularly those on the lowest rungs of the economic ladder. I was trying to somehow argue a way to possibly maintain employment at a decent wage for these people in the case that nothing is done to help them adjust as markets change and nothing is done in termsof government intervention. Right now there are few available resources to adjust many unskilled workers and there is a living wage gap. This helps to provide an employer's job market, which allows them to offer less wages and benefits for a position. To me this is a serious flaw in the argument that the free market provides an appropriate level of pay, but if this is not of concern to anyone else, I'll just leave it at a disagreement of ideology.

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Originally posted by wolverine16 Right now there are few available resources to adjust many unskilled workers and there is a living wage gap. This helps to provide an employer's job market, which allows them to offer less wages and benefits for a position. To me this is a serious flaw in the argument that the free market provides an appropriate level of pay, but if this is not of concern to anyone else, I'll just leave it at a disagreement of ideology.

How the hell could this not be a concern to anyone else, regardless of ideology? IF the current situation we see today is a major income gap in comparison to historical standards, which from what I�ve read is seemingly the case (i.e. CEO and executive salaries increasing exponentially in comparison to the common worker), how could this not be a bit disturbing to anyone else?

And aside of these posts that were a bit tangential albeit very interesting in regards to tariffs and NAFTA, I still haven't seen a very good argument as to why one believes that $5.15/hr is a worthy, sustainable living wage for anyone, ESPECIALLY in comparison to inflation.

***throws some more peanuts from the peanut gallery***

We have had these arguements in my own country about the minimum wage and the biggest objectors are usually employer lobby groups(you wanna hear these guys,they are really good,you would feel like working for free after listening to the hardships they endure )

Anyway to go back to the point.....you pay a guy $5.15 per hour minimum.....and that guy works 40 hours per week,so he ends up with $206 as his paypacket before tax(i dont know if he would be exempt at this wage from taxation)now how does anybody have a decent standard of living from that wage......presumably the guy is renting,and im sure half his wage is gone allready....he must be renting because he couldnt repay a bank loan on a property....

Now lets imagine the guy works 80 hours a week,really breaking his balls,and now the guys paycheck is $406 and surely tax kicks in at this level,so he probably ends up with $300 per week and still has to pay the rent(he will need a nice bed because he will so f*cked from working)and then there are the usual bills to pay.....ow yeah and i forgot the guy has to feed himself.

I agree with Opus when you look at the figures nobody can live on this wage in a sustainable way.....and i havnt read any good arguements as to why $5.15 an hour is acceptable......

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Originally posted by zig We have had these arguements in my own country about the minimum wage and the biggest objectors are usually employer lobby groups(you wanna hear these guys,they are really good,you would feel like working for free after listening to the hardships they endure ) Anyway to go back to the point.....you pay a guy $5.15 per hour minimum.....and that guy works 40 hours per week,so he ends up with $206 as his paypacket before tax(i dont know if he would be exempt at this wage from taxation)now how does anybody have a decent standard of living from that wage......presumably the guy is renting,and im sure half his wage is gone allready....he must be renting because he couldnt repay a bank loan on a property.... Now lets imagine the guy works 80 hours a week,really breaking his balls,and now the guys paycheck is $406 and surely tax kicks in at this level,so he probably ends up with $300 per week and still has to pay the rent(he will need a nice bed because he will so f*cked from working)and then there are the usual bills to pay.....ow yeah and i forgot the guy has to feed himself. I agree with Opus when you look at the figures nobody can live on this wage in a sustainable way.....and i havnt read any good arguements as to why $5.15 an hour is acceptable......

And not only that, when this wage remains constant the following year, the worker is making less, as it does not increase to match inflation.

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Originally posted by wolverine16 My concern is the general welfare of average workers, particularly those on the lowest rungs of the economic ladder. I was trying to somehow argue a way to possibly maintain employment at a decent wage for these people in the case that nothing is done to help them adjust as markets change and nothing is done in termsof government intervention. Right now there are few available resources to adjust many unskilled workers and there is a living wage gap. This helps to provide an employer's job market, which allows them to offer less wages and benefits for a position. To me this is a serious flaw in the argument that the free market provides an appropriate level of pay, but if this is not of concern to anyone else, I'll just leave it at a disagreement of ideology.

I'm not arguing with respect to minimum wage. Obviously some governemnt intervention is required to maintain minimum standards in places of employment. I don't get into the minimum wage argument because it's too difficult to discern any tangible effects from raising or lowering the minimum wage. If you raise it $1 is that going to result in x amount of people losing their jobs? Will it cripple the growth of businesses? Nobody really knows. But what I'm arguing is that there is certainly no US industry that requires trade protections whether it be in the form of subsidies or tariffs. It simply doesn't make sense to protect and foster inefficient industries at the expense of tax payers, the consumers, and the aggreggate economy. If an industry can't compete, it either changes until it can compete or it simply goes the way of the dodo. The role of the government should be to provide employment insurance and education opportunities to retool the temporary labor surplus.

Some argue that an agricultural subsidy should be maintained in order to ensure a permenant food source to the nation in the event of an emergency, however, the argument becomes poltiical at that point rather than an argument in economics.

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Originally posted by occrider I'm not arguing with respect to minimum wage. Obviously some governemnt intervention is required to maintain minimum standards in places of employment. I don't get into the minimum wage argument because it's too difficult to discern any tangible effects from raising or lowering the minimum wage. If you raise it $1 is that going to result in x amount of people losing their jobs? Will it cripple the growth of businesses? Nobody really knows. But what I'm arguing is that there is certainly no US industry that requires trade protections whether it be in the form of subsidies or tariffs. It simply doesn't make sense to protect and foster inefficient industries at the expense of tax payers, the consumers, and the aggreggate economy. If an industry can't compete, it either changes until it can compete or it simply goes the way of the dodo. The role of the government should be to provide employment insurance and education opportunities to retool the temporary labor surplus. Some argue that an agricultural subsidy should be maintained in order to ensure a permenant food source to the nation in the event of an emergency, however, the argument becomes poltiical at that point rather than an argument in economics.

I'll agree with you that an industry such as automobile manufacturing is inefficient in comparison to production by other industrialized nations that have labor and wage standards in place. A number of materials though are not lost due to inefficient American production, but from the exploitation of labor elsewhere. Since you have stated you believe in some government intervention, it's a little different, but in reality adult education funding has been cut within the new federal budget, when it should increase if we face more workers needing higher training. I'd also add that we are one of the lowest countries in terms of educational standards amongst the major industrial powers we compete against in this fashion. I'm not stating necessarily you, but many of the same people who say that the market sets a fair wage also oppose any government programs that would readjust workers or provide any economic aid to them whatsoever while they are in transition.



(Not directed at Occrider)On minimum wage, if you factor in inflation and put the amount in constant dollars, a $1 increase is quite modest since the current rate was set in 1996. Otherwise the price increases of the economy outperforms the income of the people who make minimum wage and they perpetually fall further behind at the same job. By claiming that a $1 or $2 increase comes at the expense of the number of available jobs, why would it be better to have more jobs at $4/hr continually being worth less with each passing year when that is even further from reaching the poverty line? Shouldn't the businesses that employ these people be keeping up with the rate of inflation? They're doomed to ultimately fail or else continually decrease their costs, including worker's wages, in order to stay in buisness if they don't . If people at the lower end see their wages in constant dollars decrease, I'm not sure why the economic growth is considered beneficial to them at it's current pace if their incomes cannot keep up and they are not receiving proper re-education to gain higher skilled employment.

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Originally posted by zig I agree with Opus when you look at the figures nobody can live on this wage in a sustainable way.....and i havnt read any good arguements as to why $5.15 an hour is acceptable......

Maybe because a very large majority of those who are working for minumum wage are high school kids and college students that don't have a ton of bills? (ok, ok, keggers DO add up when you're in college... LOL)

This was definitely the situation for me and almost all of my friends when we were in HS, and that's where we built up job references and experience so we could move up. I'm a bit worried that a rising minimum wage would exclude some from getting this experience to be able to move up in the working world.

Although I am fundamentally against minimum wage laws AT THE FEDERAL LEVEL (if the States should choose to do so, that's their business per the Bill Of Rights, NOT the Federal government's), I'd be interested in hearing some thought about age restrictions on minimum wage that would allow older workers to earn a higher minimum wage than say, anyone under 18 or 22. Younger people in that age bracker have less worry about living in poverty since they're likely in school and/or living at home rent-free, don't have to worry about feeding themselves (except maybe for fast food, beer, etc).

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Originally posted by wolverine16 I'll agree with you that an industry such as automobile manufacturing is inefficient in comparison to production by other industrialized nations that have labor and wage standards in place. A number of materials though are not lost due to inefficient American production, but from the exploitation of labor elsewhere. Since you have stated you believe in some government intervention, it's a little different, but in reality adult education funding has been cut within the new federal budget, when it should increase if we face more workers needing higher training. I'd also add that we are one of the lowest countries in terms of educational standards amongst the major industrial powers we compete against in this fashion. I'm not stating necessarily you, but many of the same people who say that the market sets a fair wage also oppose any government programs that would readjust workers or provide any economic aid to them whatsoever while they are in transition.

And in the event that a country has gross violations of human rights, the US and any other country has the ability to invoke trade sanctions. However, to expect that every country must adhere to similar labor laws as the US is to committ economic suicide (I think Dean had that crazy idea). Furthermore the primary reason why countries can out compete with the US is not because they're exploiting workers, but simply because manual labor is naturally cheaper in other countries. Raising tariffs to compensate for over-priced American workers once again perpetuates economic inefficiency that affects the economy as a whole. Simply put, if you're concerned with the plight of the workers, you would find a more meaningful solution in expanding worker education as opposed to trade protections.

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Originally posted by DJMaytag Maybe because a very large majority of those who are working for minumum wage are high school kids and college students that don't have a ton of bills? (ok, ok, keggers DO add up when you're in college... LOL) This was definitely the situation for me and almost all of my friends when we were in HS, and that's where we built up job references and experience so we could move up. I'm a bit worried that a rising minimum wage would exclude some from getting this experience to be able to move up in the working world. Although I am fundamentally against minimum wage laws AT THE FEDERAL LEVEL (if the States should choose to do so, that's their business per the Bill Of Rights, NOT the Federal government's), I'd be interested in hearing some thought about age restrictions on minimum wage that would allow older workers to earn a higher minimum wage than say, anyone under 18 or 22. Younger people in that age bracker have less worry about living in poverty since they're likely in school and/or living at home rent-free, don't have to worry about feeding themselves (except maybe for fast food, beer, etc).

Sure a lot of students and school kids work for the minimum wage and probably dont have a lot of overheads or bills to pay,but obviously that doesnt include everybody that gets paid the minimum wage.As for your worries about a rising minimum wage excluding people from getting experience at work...well that doesnt really make sense as surely if a minimum is set then it has to be paid regardless,and if employers need workers then thats what they have to pay,and if they pay less then they are breaking the law.
Basically my point is if a minimum is set,well then all employers are in the same boat and therefore it shouldnt exclude anybody from getting a break or gaining work experience.

Your point about age restrictions,age restrictions apply in Ireland as regards the minimum wage....certain rules apply....

Anybody working under the age of 18 must be paid 70% of the minimum wage (7.65 Euro is the minimum wage here=10.25 US Dollars)

Anybody taking up their first employment after the age of 18 can still be paid 70% of the minimum for 2 years.

Or anybody taking some form of structured training (Electricians,Carpenters,Plumbers etc)can also be paid 70% of the minimum wage...these people usually go to college 1 day a week and get on the job training the rest of the time.

But the reality is in Ireland that the labour market is bouyant at the moment,and has been for quite a number of years now...there are more jobs than there are workers to fill them,particularily at the lower end of the market where the minimum wage exists...and because of this virtually all employers have to compete to get workers and hardly anybody pays the minimum wage(but some still do..Hotels and fast food outlets are notorious for bad pay)but most pay way above the minimum to hold onto employees....i know for instance in my local supermarket they pay a minimum of 10 Euro per hour($13.20)for people stacking shelves and doing the checkout.
But these are good times economically and hopefully this will last for many years to come,but a downturn will come eventually as it allways does and thats why a minimum wage is a good thing imo,as it gives some sort of protection to employees.....they may lose their jobs but when they do get one again it will have a minimum rate of pay.

Re: GOP proposal to raise minimum wage

quote:

Originally posted by MisterOpus1 Long, long overdue, and way below inflation and standards of living. So it was a nice surprise to initially read Sen. Rick Homosexual-Marriage-Will-Lead-To-Fucking-Animals Santorum (R-PA) lead the charge in raising the minimum wage $1.10 to $6.25/hour. This will all be added to that lovely bankruptcy bill (which is in another thread): http://www.kansascity.com/mld/kansa...cs/11061008.htm (Knight Ridder free subscription req'd) But those darn GOPers always have catches don't they? Welp, here ya go!: Economic Policy Institute's analysis can be found here: http://www.epinet.org/newsroom/rele...inimum_Wage.pdf Corporate welfare anyone? Class warfare anyone?

Since a family cannot live above the poverty level on minimum wage, I believe we probably need to increase it over the amount it was last increased about five years or more ago.


[[[smoke]]]

Hell we could eliminate all poverty if we raised the wage to $25 an hour. Why not?

Forget for a moment the 50% jump in unemployment overnight...

What other reason is there we shouldn't act on this noble goal?

quote:

Originally posted by Capitalizt Hell we could eliminate all poverty if we raised the wage to $25 an hour. Why not? Forget for a moment the 50% jump in unemployment overnight... What other reason is there we shouldn't act on this noble goal?

why stop there? make it $100, then we'd have a utopia where everyone would be making $200k a year!

quote:

Originally posted by Capitalizt Hell we could eliminate all poverty if we raised the wage to $25 an hour. Why not? Forget for a moment the 50% jump in unemployment overnight... What other reason is there we shouldn't act on this noble goal?

Would you work for the minimum wage?

quote:

Originally posted by DJMaytag Maybe because a very large majority of those who are working for minumum wage are high school kids and college students that don't have a ton of bills? (ok, ok, keggers DO add up when you're in college... LOL) This was definitely the situation for me and almost all of my friends when we were in HS, and that's where we built up job references and experience so we could move up. I'm a bit worried that a rising minimum wage would exclude some from getting this experience to be able to move up in the working world. Although I am fundamentally against minimum wage laws AT THE FEDERAL LEVEL (if the States should choose to do so, that's their business per the Bill Of Rights, NOT the Federal government's), I'd be interested in hearing some thought about age restrictions on minimum wage that would allow older workers to earn a higher minimum wage than say, anyone under 18 or 22. Younger people in that age bracker have less worry about living in poverty since they're likely in school and/or living at home rent-free, don't have to worry about feeding themselves (except maybe for fast food, beer, etc).

2002 Bureau of Labor figures state 53% of minimum wage earners or lower were 25 or younger. Not all 53% of that group are just looking for side money and job experience while their parents are paying for college, as there are a significant number of people 25 or under that do not go to college and have families to support, so in my opinion it's not a very large majority of minimum wage earners that fit that description.

Also the 1968 minimum wage of $1.60 was worth $7.36 in 1997 constant dollars, when the $5.15 rate was just being put into effect. In 2005 dollars the $5.15 rate is about $4.28. Next year it will be approximately worth another 10 cents less baed on CPI conversion.

The age idea was discussed in the 80s of a sub-minimum wage. In some ways it might be workable, but wouldn't it encourage hiring younger workers who might fit the description you discussed over older workers who need employment more?

My state has a living wage, yes to some degree it is subsidized, but I'm fine with the state providing standards higher than the current rate that continually is in decline. Interestingly enough though the original post in this thread notes that "State's Rights" Santorum wanted to set a federal rate that would prevent states from setting their own higher rates.

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