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Bush Suspends Minimum Wage

quote:

Bush lifts wage rules for Katrina President signs executive order allowing contractors to pay below prevailing wage in affected areas. September 8, 2005: 9:42 PM EDT WASHINGTON (Reuters) - President Bush issued an executive order Thursday allowing federal contractors rebuilding in the aftermath of Hurricane Katrina to pay below the prevailing wage. In a notice to Congress, Bush said the hurricane had caused "a national emergency" that permits him to take such action under the 1931 Davis-Bacon Act in ravaged areas of Alabama, Florida, Louisiana and Mississippi. Bush's action came as the federal government moved to provide billions of dollars in aid, and drew rebukes from two of organized labor's biggest friends in Congress, Rep. George Miller of California and Sen. Edward Kennedy of Massachusetts, both Democrats. "The administration is using the devastation of Hurricane Katrina to cut the wages of people desperately trying to rebuild their lives and their communities," Miller said. "President Bush should immediately realize the colossal mistake he has made in signing this order and rescind it and ensure that America puts its people back to work in the wake of Katrina at wages that will get them and their families back on their feet," Miller said. "I regret the president's decision," said Kennedy. "One of the things the American people are very concerned about is shabby work and that certainly is true about the families whose houses are going to be rebuilt and buildings that are going to be restored," Kennedy said. The Davis-Bacon law requires federal contractors to pay workers at least the prevailing wages in the area where the work is conducted. It applies to federally funded construction projects such as highways and bridges. Bush's executive order suspends the requirements of the Davis-Bacon law for designated areas hit by the storm.

Source: http://money.cnn.com/2005/09/08/new...ina_wages.reut/

Bush is without a doubt the worst president in the history of the United States. When he is so blatently on the side of big business and religious idealogs its just sick.

Lets see the Republicans on this board defend this decision?

*shakes head in dismay*

i wonder how the prevailing wage is defined. i imagine it's at the least the federal minimum wage. in any case, it just looks bad politically even if it's economic impact is negligible.



OFF TOPIC

my god dj, 55 posts in 5 years. wow.

I dunno, I dont think this is something people should be overly too worried about. The business environment in the area is shot to pieces and manpower is a necessity. Minimum wages in this case just provide dissincentive for firms to hire enough people to get the job done.. No one will be forced to work at low wages. Lets remember that the workers are only there because they want to work, and not because they're slaves that are forced to work.. If NO ONE wants to work then the wage will naturally be pushed above the prevailing minimum wage. Its just supply and demand

I know, it's sad that businesses still have to put their bottom lines in front of getting such an important job done.. but such is life of the corporation.

quote:

Originally posted by Dupz The business environment in the area is shot to pieces and manpower is a necessity. Minimum wages in this case just provide dissincentive for firms to hire enough people to get the job done.. No one will be forced to work at low wages.

Exactly.
You'll only scare businesses away with a high min. wage; even new potential local businesses.

basic law of economics...The more something costs, the less you get of it.

Higher cost of labor = less workers (and more substitutes)

If you really cared about the poor and unemployed, you should support the abolition of the minimum wage as well as MAJOR tax reductions for all workers and employers in this country.

The government has never created a dime of wealth. When you advocate policies that get in the way of free markets, you are only hurting those you claim to care about.

quote:

Originally posted by Capitalizt basic law of economics...The more something costs, the less you get of it. Higher cost of labor = less workers (and more substitutes) If you really cared about the poor and unemployed, you should support the abolition of the minimum wage as well as MAJOR tax reductions for all workers and employers in this country. The government has never created a dime of wealth. When you advocate policies that get in the way of free markets, you are only hurting those you claim to care about.

Yea thats what the Tories said when Labour introduced the minimum wage in the UK, and do you know what? They were COMPLETELY wrong

Maybe you should spend your parents vast quantities of money on some economic lessons? I mean, you just dont have a clue!

Eg "Higher cost of labor = less workers"

Er no...if you wanna talk simple economic terms then 'Higher cost of labour' = higher prices

quote:

Originally posted by Capitalizt basic law of economics...The more something costs, the less you get of it. Higher cost of labor = less workers (and more substitutes) If you really cared about the poor and unemployed, you should support the abolition of the minimum wage as well as MAJOR tax reductions for all workers and employers in this country.

Yeh so America can turn into 3rd world country like INDIA and pay everyone $2/hour and have the few large corporations control 90% of wealth distribution. If they abolish the minuimum wage in America people wont have Walmart to worry about, but every freaken employer of blue color labor would exploit the system. One thing we learn from human nature is you give the person the carrot he is always going to take it.

I wonder if Haliburton will take over reconstruction? will they pay them 3 dollars a day? someone will make big money off the diaster ,just not the people who lost everything.imho vote these republicans out in 2006 save america from another diaster !!!

-On a side note: Yeh I have 55+ posts in 5 years.. I'm batting a good average where I wanna avg about 10-15 posts a year.

quote:

Originally posted by dj -On a side note: Yeh I have 55+ posts in 5 years.. I'm batting a good average where I wanna avg about 10-15 posts a year.

I think you just exceeded your post limit for this quarter.

quote:

Originally posted by George Smiley Yea thats what the Tories said when Labour introduced the minimum wage in the UK, and do you know what? They were COMPLETELY wrong Maybe you should spend your parents vast quantities of money on some economic lessons? I mean, you just dont have a clue! Eg "Higher cost of labor = less workers" Er no...if you wanna talk simple economic terms then 'Higher cost of labour' = higher prices

ACTUALLY...when minimum wage increases, so does the unemployment rate. Higher cost of labor will in fact lead to a higher COST OF DOING BUSINESS. Companies can not just raise prices everytime their costs of doing business increase, so in order to compensate for the higher costs, they use less workers. Read any economics text book and you'll see.

For example, say you have five employees at McDonald's that make $5 an hour. The company is paying $25 per hour for these five workers. The gov't then comes along and raises the minimum wage to $6 an hour. Now McDonald's must pay $30 for the same amount of labor. It's ridiculous to think that a McDonald's restaurant will go through all the trouble of changing all their prices on the menu just because their costs went up. It's more realistic, and much easier, to lay off one employee and pay four workers $6 an hour for a total cost of $24 an hour. See...minimum wage goes up and so does unemployment.

And dj, just because he temporarily suspended the minimum wage in the affected areas does not mean we're turning into a third world country...get a grip. He's merely doing it to stimulate business and reconstruction in the area. Companies still will have to pay a good price for premium labor. A guy with an engineering degree who's supposed to help reconstruct rigs isn't going to be paid $3 an hour, nor are the actual construction workers.

quote:

Originally posted by Vyper0987 ACTUALLY...when minimum wage increases, so does the unemployment rate.

And like I said, not proven to be the case...

quote:

Originally posted by George Smiley And like I said, not proven to be the case...

It's an older study (five years ago), but the case hasn't changed.

http://www.ncpa.org/hotlines/min/employ.html

http://www.ncpa.org/studies/s190/s190c.html

quote:

Originally posted by Vyper0987 And just because he temporarily suspended the minimum wage in the affected areas does not mean we're turning into a third world country...get a grip. He's merely doing it to stimulate business and reconstruction in the area.

I wasnt saying we are turning into a third world country because of temporarily suspending the minumum wage in hurricane hit areas. What I was commenting on is "Capitalizt" post about advocating eliminating minimum wage to somehow decrease poor in this country.

All that will do is drive a large wage gap between rich and poor. There is already a problem in America with the shrinking middle class. The problem is that the wage distribution in America is so far off tilt with fairness. Why does a CEO deserve 100x times the average employees salary of the company he works for? CEO's play dumb when shit hits the fan like ENRON or WORLDCOM, but when things go right like @ GE Jack Welch becomes some sudo American Business Icon. Its really the problem of a greedy capitalist culture.

/dj

(I know I said I was leaving but I've been checking back every so often and this seems weird to me..)

Ok lets look at this.... what has happened in the affected areas?

People have lost their homes, yes? Thouse include skilled workers yes? For example the people who can rebuild the place.

Now to attract them back to rebuild the place do you:

A) pay them more, because they have nothing to tie them to the area now and you need them to come back and rebuild everyones homes (includeing thouse who work in oil....)

B) pay them the same, because thats what they always got paid and should expect and can probebly expect to get in other areas of the US...

C) try to fuck them... just cos you can (the business way...) having the effect of pushing them away from the area and slowing the rebuilding...

Now if I was a business I'd want C but if I was wanting to rebuild a wreaked area I'd do either A or B personally.... especially if the oil workers and dock workers in one of the US most important area all lived there....

maybe it is just me

quote:

Originally posted by Vyper0987 It's an older study (five years ago), but the case hasn't changed. http://www.ncpa.org/hotlines/min/employ.html http://www.ncpa.org/studies/s190/s190c.html

Thats not a study (unless I missed something?) thats just a collection of articles doing the same as what you're doing - merely predicting

quote:

Nine out of 10 (89.1 percent) of the small businesses surveyed said the last increase did not have an effect on their employment or hiring decisions

http://www.aflcio.org/mediacenter/r...factbooklet.pdf

I said (this is three times now) that the Conservatives (ie right wing economists) said the minimum wage in the UK would result in unemployment - they were wrong. It had no effect whatsoever. As the study above shows, it had negligable effects in America as well. Take a look through the rest of that article might be interesting!

Just to add...

I'm particularly surprised that people in America are still against initiatives like this after the hurricane in New Orleans. Didn't the complete break down in society caused by people being poor as shit teach you anything? What happens when this spreads? The poorer get poorer every day. In NO you saw what happens when poor people become desperate. The poorer they become, the more desperate they will become and sooner or later you're gonna have shit like that to put up with in your own middle class neighbourhoods...

quote:

Originally posted by dj I wasnt saying we are turning into a third world country because of temporarily suspending the minumum wage in hurricane hit areas. What I was commenting on is "Capitalizt" post about advocating eliminating minimum wage to somehow decrease poor in this country. All that will do is drive a large wage gap between rich and poor. There is already a problem in America with the shrinking middle class. The problem is that the wage distribution in America is so far off tilt with fairness. Why does a CEO deserve 100x times the average employees salary of the company he works for? CEO's play dumb when shit hits the fan like ENRON or WORLDCOM, but when things go right like @ GE Jack Welch becomes some sudo American Business Icon. Its really the problem of a greedy capitalist culture. /dj

That's because unions make it extremely difficult for companies to operate efficently. So they outsource in order to obtain cheaper labor. Unions want their workers to make $20 an hour. The company can only afford to pay them $17 an hour. Union says we want $20. Company outsources and many people lose their jobs. Unions ruin the middle class, not minimum wage. Minimum wage has no effect on people that make more than it.

quote:

Originally posted by George Smiley Thats not a study (unless I missed something?) thats just a collection of articles doing the same as what you're doing - merely predicting

And a large part of economics is predicting...predicting how a certain economic policy will effect the economy. You have to predict because you're not certain. You predict that if you do something, that it will turn out this way....but if it doesn't, then you predicted wrongly in that situation. Just because it didn't happen last time doesn't mean it won't happen the next time.

quote:

Originally posted by Vyper0987 That's because unions make it extremely difficult for companies to operate efficently.

Is efficent another word for greedy?

If an oil company makes 20 billion per quarter and say they can lower the prices to the supplier by 20% which will cut profits by 20% per qtr but have a huge effect on Americans and the economy. Is that a fare thing for them to do in this time when gas prices shot through the roof. Oil companies are a monoply that manipulates market prices (not raw crude prices).

quote:

Originally posted by Vyper0987 And a large part of economics is predicting...predicting how a certain economic policy will effect the economy. You have to predict because you're not certain. You predict that if you do something, that it will turn out this way....but if it doesn't, then you predicted wrongly in that situation. Just because it didn't happen last time doesn't mean it won't happen the next time.

How about this study imagine you are a skilled work man:

Work in location A get paid less.

Work in location B get paid more.

Which one do you pick?

We all know which one is the one which has been "affected" don't we? Correct A. Where do you go to work... B

In effect A gets left to rot.



Now you are an oil worker you are from location A and work near location A:

A) ... was gonna say go home and start working but everyone has left and gone to location B.... there is no one left to rebuild you home... so you don't have one

B) leave the area, hence fucking the oil industry

No option it has to be B this time.

quote:

Originally posted by dj Is efficent another word for greedy? If an oil company makes 20 billion per quarter and say they can lower the prices to the supplier by 20% which will cut profits by 20% per qtr but have a huge effect on Americans and the economy. Is that a fare thing for them to do in this time when gas prices shot through the roof. Oil companies are a monoply that manipulates market prices (not raw crude prices).

Supply and demand. We need it, they'll profit from it. And if they cut the price by 20% to the supplier, who says that the supplier won't put a higher price on it when they sell it. And how can companies be a monopoly? I think that the correct word you're looking for is cartel.

While economics does indeed base itself on prediction, it also largely bases itself on past trends. So with that, what's some evidence of increasing minimum wage and business impact?:

quote:

A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates). Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment. New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale. A recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses. http://www.epinet.org/content.cfm/i...ge_minwagefacts

and

http://www.epinet.org/content.cfm/briefingpapers_bp150

and

quote:

The 1996 and 1997 minimum wage increases raised the wages of almost 10 million workers. About 71% of these workers were adults and 58% were women. Just under half (46%) worked full time and another third worked 20 to 34 hours per week. The average minimum wage worker is responsible for providing more than half (54%) of his or her family's weekly earnings. The two-stage increase disproportionately benefited low-income working households. Although households in the bottom 20% of the income distribution (whose average income is $15,728) receive only 5% of total family income, they received 35% of the benefits from the minimum wage increase. Four different tests of the two increases' employment impact - applied to a large number of demographic groups whose wages are sensitive to the minimum wage - fail to find any systematic, significant job loss associated with the 1996-97 increases. Not only are the estimated employment effects generally economically small and statistically insignificant, they are also almost as likely to be positive as negative. http://www.epinet.org/content.cfm/studies_stmwp http://www.dol.gov/dol/topic/wages/minimumwage.htm

and

http://www.ocpp.org/1999/es032399.htm

and

http://www.ocpp.org/1999/es990602.htm

and

http://www.levy.org/docs/pn/99-6.html

To conclude, there is no direct evidence that raising minimum wage has any overall negative impact on jobs, small businesses, or the economy in general. If anything, evidence points towards the opposite.

In a time when we are waayy behind on increasing the minimum wage to keep up with inflation, Bush takes that away to essentially fuck the people that need $ the most. That is unbelievable.

Edited for Shakka

quote:

Originally posted by MisterOpus1 While economics does indeed base itself on prediction, it also largely bases itself on past trends. So with that, what's some evidence of increasing minimum wage and business impact?: and http://www.epinet.org/content.cfm/briefingpapers_bp150 and and http://www.ocpp.org/1999/es032399.htm and http://www.ocpp.org/1999/es990602.htm and http://www.levy.org/docs/pn/99-6.html To conclude, there is no direct evidence that raising minimum wage has any overall negative impact on jobs, small businesses, or the economy in general. If anything, evidence points towards the opposite. In a time when we are waayy behind on increasing the minimum wage to keep up with inflation, Bush takes that away to essentially induce slave labor. That is unbelievable.

Quick, draw a graph. Minimum wage is a price floor, which theoretically creates a supply/demand mismatch, much like rent controls are a price ceiling, generally creating a supply/demand mismatch. Whether or not it ultimately manifests itself as greater unemployment or what have you, it no doubt creates inefficiency in the system at a time when maximum efficiency is desireable in order to rebuild the city as quickly and cost effectively as possible. If a person doesn't want to work for an hourly wage that they feel is unacceptable, nobody's gonna hold a gun to their head and make them do it. YAY FREE MARKET ECONOMICS! YAY LAISSEZ FAIR! YAY INVISIBLE HAND!


Take off your tin foil hat and try to see it from a different perspective. I don't think the motive is to enslave black people in New Orleans.


Rock over London, Rock on Chicago. Wheaties, the Breakfast of Champions.

quote:

Originally posted by Shakka Quick, draw a graph. Minimum wage is a price floor, which theoretically creates a supply/demand mismatch, much like rent controls are a price ceiling, generally creating a supply/demand mismatch. Whether or not it ultimately manifests itself as greater unemployment or what have you, it no doubt creates inefficiency in the system at a time when maximum efficiency is desireable in order to rebuild the city as quickly and cost effectively as possible. If a person doesn't want to work for an hourly wage that they feel is unacceptable, nobody's gonna hold a gun to their head and make them do it. YAY FREE MARKET ECONOMICS! YAY LAISSEZ FAIR! YAY INVISIBLE HAND! Take off your tin foil hat and try to see it from a different perspective. I don't think the motive is to enslave black people in New Orleans. Rock over London, Rock on Chicago. Wheaties, the Breakfast of Champions.

Stupid word on my part. I'll edit my post after this one. No I don't think it's enslavement of the po blacks. I do think it's bad business, however. To me this is Bush's way of saving a few $ here and there by cutting corners.

Well here's another thought on saving a few bucks to help pay for the rebuilding - roll back the tax cuts on the top 1%. What would that give - some $600 billion? And you wouldn't have to hurt the people that make the country's economic boost the most - the middle class. They can keep their cuts.

So there's a thought that might need a little more digesting. Rather than cut the pay of people who don't earn shit in the first place - we can keep their pay normal, WATCH Halliburton a bit more closely (for obvious reasons on their record in Iraq), and roll back the taxes on those who need it the least.

Just a thought.

OMFG I'm laughing so much I'm crying...

MisterOpus1 if you don't change your sig soon I'll never take you seriously again....

I notice that the word "fairness" comes up a lot in these type of discussions. Minimum wages are 'fair' apparently. I mean, it is a bit of a joke. It might be 'fair' to the lower paid workers who are on this wage when they're labour is really worth fcuk all (lets face it, some people cant work for shit), but is it fair on everyone else in society supporting this celebration of mediocrity?

Before you start firing up I currently have 2 part time jobs, one on the minimum wage and one well above the minimum wage. This includes working at the local cinema as an usher (something i've done since i started uni), and I also tutor classes at uni (which pays a bucket load per hour).. Now, of course I'm better off under the minimum wage scheme, but it's really not fair on the business i work for. Are they making millions of dollars a year in the business??? probably.. but that's not the point, it's still unfair on them. Besides what should i give a fcuk what someone else earns anyway? (that includes businesses and/or individuals)..

People are obsessed with equality in wages where it holds no grounds in efficiency and/or fairness... I get paid fcuk all in my cinemas job because i do NOTHING!!, for a bunch of customers that pay a few bucks for a ticket. I get paid 6 times that wage in my tutoring job because I'm teaching students who are paying thousands of dollars to sit there and learn of topics MUCH more productive. Seems pretty fair to me. Does that mean the CEO of the cinema/university (or whatever company for that matter) should earn more than me?? By a substantial amount even?? probably... but really, who gives a shit anyway?? This guys wage has absolutely nothing to do with me. I mean, we do have to pay them a lot anyway, otherwise other companies snatch up their productive services by paying them more. But hey, lets give the CEO a pay cut, so we can redistribute his wage amongst the 20,000 minimum wage workers under him.. yay, I get a 2 cent payrise and now we've created a system that's unfair to the CEO's of this world, and AGAIN rewards mediocrity (even if it is by 2 cents )

Do minimum wages create unemployment?? In theory, yes. In practice, yes/no. What is for certain though, is that with any increase in the price of the productive process the end result would mean an increase in prices.. Yay!! more fairness for the workers at the expense of the consumer!! Oh, and lets not forget that profits go down as expenses go up. Yeah, that's fair for shareholders (which are often you mum and dad investors lets not forget). Lets just remember that minimum wages are merely a form or redistributing money away from businesses and consumers into the pockets of workers. You hurt two parties in order to benefit one. But companies make billions of dollars a year, you say. SO? We're talking about fairness, true? and the only way we can achieve fairness is that we have outcomes that are both mathematically efficient and do NOT hurt any single party at the benefit of another.

Oh, and if you're going to whinge about petrol prices you dont get any sympathy from me. Sure we have a problem with monopoly power, but hey, if you dont like the price, DONT BUY IT!! It's your own fault for living a life that's unsustainable anyway..

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