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View Diary: Missouri Republican Senate candidates don't know what the minimum wage is, but wouldn't raise it (69 comments)

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  •  Should we raise the minimum wage? (1+ / 0-)
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    I don't know.

    The reality is that when the minimum wage is raised, some potential jobs are eliminated.  For modest raises in the minimum wage, this effect seems small although  I've never seen good data on the magnitude of this effect, which is not surprising given the number of potential confounding variables.

    What we are saying in part by having a minimum wage is that we are better off as a society without jobs that don't pay enough to live on.  This only makes sense where we have an adequate social safety net.  To the extent we don't that is not an argument against the minimum wage but an argument for improving the safety net.  It may be an argument against raising the minimum wage without improving the safety net.  However, it is important to keep in mind that it may be easier and more beneficial to raise the minimum wage.

    The final question is how should we think about jobs we want eliminated?  The logical answer is that it should be based on the poverty level (we don't want jobs which still leave people poor).  

    Then the question is poverty level for whom?  If you use the poverty level for one person you get a minimum wage of $5.45.  For two people you get $7.35.  For one half the poverty level for a family of 4 (assuming two working adults), you get $5.55.  On the other hand, two full time working adults may not be a reasonable assumption.  If you assume one full time and one half time, you get a minimum wage of about $7.45.  

    This suggests to me that there should be an increase, but it should be a small one: to about $7.75 to take account of the fact that increases are periodic.

    •  Another problem with raising the minimum wage (0+ / 0-)

      is that you've now have people who worked to get above minimum wage now making minimum wage. And like it or not, that leads to resentment among workers.

      So unless everyones' wages are raised, you're just ensuring more people make the minimum wage.

      Money doesn't talk it swears.

      by Coss on Sat Mar 17, 2012 at 10:17:56 AM PDT

      [ Parent ]

      •  no, it isn't a problem. (1+ / 0-)
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        again, econ. 101. if employers are hiring to meet demand, they also want to retain those currently in their employ. they will do this by raising the pay of those currently earning what becomes the new minimum wage. it is far cheaper to retain trained employees, than it is to hire and train new people.

        these are fundamental facts of economics. i suggest all of you go read a basic economics textbook, before making any more ignorance based comments.

        •  You have never run a business. (0+ / 0-)

          Why would I raise a guy's wages, if he has already shown that he will work for a low wage?

          The only thing that would make me raise wages would be if he threatened to quit.

          This is unlikely.If he threatens to quit, he takes a huge risk because if I fire him he loses all income, plus the firm-specific knowledge he has spent time building.

          This is part of game theory which you will learn when you take "Econ 201".

          In the meantime, I will give you a handy tip on how to tell which parts of Econ 101 are Bullsh-t. If the graph has no numbers on the axis, it is Bullsh-t.

          Now, armed with that knowledge, go learn about the Real World Works...

      •  I would gladly work for... (1+ / 0-)
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        ...minimum wage. IF:

        - I got free healthcare
        - The inner-city public schools were good enough that I didn't need to move to the suburbs
        - I was guaranteed that as long as I worked hard, the job would not be outsourced
        - There was a strong mass transit system that took me to my job
        - If I got hurt on the job, there was a safety net that insured my family wouldn't lose income.
        - The wages were tax-free.
        - i worked exactly 40 hours/week -- leaving me time to spend with my family or to make more (non-minimum wage) money on the side.

    •  your arguments are tried, and wrong. (1+ / 0-)
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      these are the same standard arguments the republicans have been using, since the minimum wage was first enacted into law. and they cart them out, every time raising the minimum wage, at either the federal or state level, is discussed. and every time they are proven wrong;

      simply put, employers will hire people that they need, to meet demand, regardless of what the minimum wage is. historically, raising the minimum wage has a nearly zero impact on hiring, whether adults or teens, because of the basic laws of economics.

      employers don't hire just because, regardless of what the minimum wage is or isn't. they don't acquire new plant/eqpt., just because. they do both of these things when demand exceeds their ability to supply the market, with the employees/plant/eqpt. they currently have.

      see: economics 101

      •  My arguments lead to raising the minimum wage (0+ / 0-)

        Not sure why you think that is wrong.

        Your statements are only partially true.  That is employers hire when hiring will be profitable.   They do not expand simply when demand exceeds their ability to supply the market, but only when they can also meet the new demand profitably.

        Raising the minimum wage has limited effects on overall demand and therefore neither increases demand nor pricing power for most employers.    

        It does increase costs and reduces profits.   More importantly, it will cause cost to exceed marginal product for some workers who will therefore not be hired.  

        As indicated, therefore there will be a negative effect on hiring/jobs.  To conclude otherwise, you would have to conclude that low wage labor is one of those rare goods where there is higher demand at higher prices.
        No one has seriously suggested that and, I doubt, on reflection, that you would either.

        As I also indicated I think the effect is small for small increases in the minimum wage.  (Your arguments would mean that you could set the minimum wage arbitrarily high; I think, upon review, you will realize that doesn't work).

        Finally, I concluded, if you read to the end of my comment, that the minimum wage should be modestly increased. from $7.25 to $7.75.  I rather doubt many conservatives would be agreeing.

        I am unsure what you are advocating.

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