Senate Kills Minimum Wage Bill

So Hippie Hunter, you think its ok for Congress to vote to give themselves a raise, because you know that summer home is getting expensive and all but cant raise the minumum wage a freaking #1. Yes, I heard all your points already, but at some point the minumum wage has to be raised and let the economy stabilize itself.
 
Fred_Fury said:
oh, and you do?

Actually, yes, I do, which is why I don't make marble-mouthed, simpleton-esque commentary regarding it like certain individuals who run away and join the armed forces so that they don't have to try and make it in the free market.

Wikipedia has a good primer on minimum wage and the pros and cons of it, and there ARE a lot of pros and cons to minimum wage. My biggest problem with the way minimum wage increases are handled in this country is that they are extremely reactionary and only considered when the problem has already become highly pronounced. I'd rather see these increases tied to the Consumer Price Index and handled more like smaller, more regular COLA increases like most businesses provide to their employees. It would keep some of the more negative aspects of larger minimum wage increases at bay and allow for the more positive aspects to take hold. There's a lot of debate over even that, but that's the perspective I share with some of the more progressive economists.

jag
 
higher minimum wage = higher priced **** = i spend more money = **** that
 
Fred_Fury said:
higher minimum wage = higher priced **** = i spend more money = **** that

Not necessarily. There are a lot of factors that figure into that equation. The way our government implements minimum wage hikes lends itself to an increase in cost of goods, but it doesn't always happen that way.

jag
 
Darthphere said:
So Hippie Hunter, you think its ok for Congress to vote to give themselves a raise, because you know that summer home is getting expensive and all but cant raise the minumum wage a freaking #1. Yes, I heard all your points already, but at some point the minumum wage has to be raised and let the economy stabilize itself.

No I do not think that it is okay for Congress to give themselves multiple pay raises. It just shows that they are a bunch of greedy f**kwads :o
 
Mythology of the Minimum Wage
by DW MacKenzie
[Posted on Wednesday, May 03, 2006]

Once again politicians and pundits are calling for increases in the legal minimum wage. Their reasons are familiar. Market wages are supposedly immoral. People need to earn a "living wage." If the minimum wage went up at least to $7, or better still to near $10 an hour, millions would be lifted out of poverty.[1]

The economic case against minimum wage laws is simple. Employers pay a wage no higher than the value of an additional hour's work. Raising minimum wages forces employers to dismiss low productivity workers. This policy has the largest affect on those with the least education, job experience, and maturity. Consequently, we should expect minimum wage laws to affect teenagers and those with less education. Eliminating minimum wage laws would reduce unemployment and improve the efficiency of markets for low productivity labor.

There are a few economists who have been leading the charge for higher minimum wages. Some of these economists have obvious ideological leanings. Economists connected with the Left -orientated Economic Policy Institute and the Clinton Administration have concocted a rational for minimum wage increases. According to these economists higher wages make employees more content with their jobs, and this leads to higher worker productivity. Thus workers will be worth paying a minimum wage once their employers are forced to pay these wages. Of course, if this were true — if employers could get higher productivity out of less educated and experienced workers by paying higher wages — they would be willing to do this without minimum wage legislation. But the economists who make this case claim to have empirical evidence that proves them right. Economists David Card and Alan Krueger have published studies of the fast food industry indicated that small increases in the minimum wage would cause only minor job losses, and might even increase employment slightly in some instances. These studies by Card and Krueger show only that a small increase in minimum wage rates might not cause much of an increase in unemployment. Such studies ignore the fact that the current level of minimum wages are already causing significant unemployment for some workers.

The economic case for minimum wage increases has gained some ground with public and even professional opinion. Even some free market leaning economists, like Steven Landsburg, have conceded that minimum wages increases do not affect employment significantly.[2] Landsburg notes that critics of minimum wage laws emphasize that they have a disproportionate effect on teens and blacks. But he dismisses these critics because "minimum wages have at most a tiny impact on employment … The minimum wage kills very few jobs, and the jobs it kills were lousy jobs anyway. It is almost impossible to maintain the old argument that minimum wages are bad for minimum-wage workers."

Real statistics indicate that the critics of minimum wage laws were right all along. While it is true that minimum wages do not drive the national unemployment rate up to astronomical levels, it does adversely affect teenagers and ethnic minorities. According to the Bureau of Labor Statistics the unemployment rate for everyone over the age of 16 was 5.6% in 2005. Yet unemployment was 17.3% for those aged 16-19 years. For those aged 16-17 unemployment was 19.7%. In the 18-19 age group unemployment was 15.8%. Minimum wage laws do affect ethnic minorities more so than others.[3] The unemployment rate for white teens in the 16-17 age group was 17.3% in 2005. The same figures for Hispanic and black teens were 25% and 40.9% respectively. Of course, these figures decrease for older minorities. Blacks aged 18-19 and 20-24 had 25.7% and 19.9% unemployment in 2005. For Hispanics unemployment was slightly lower — 17.8% at age 18-19 and 9.6% at age 20-24.

Landsburg might maintain that most of these lost jobs are lousy jobs that teens will not miss. DeLong thinks that minimum wage laws can help to avert poverty — workers who keep their jobs at the minimum wage gain much, while unemployed workers lose little. Part of the problem with this argument is that it involves arbitrary value judgments. According to mainstream economic theory, we achieve economic efficiency when markets clear because this is how we realize all gains from trade. With teen unemployment in double digits — running as high as 40.9% — it is obvious that some labor markets are not clearing. If labor market imperfections led to such levels of unemployment, economists like DeLong, Card, and Krueger would call for government intervention to correct these "market failures." Yet they find double digit teen unemployment acceptable when it derives from government intervention. Why? Because they want to use such policies to redistribute income.[4]

Mainstream economic theory lacks any basis for judging the effects of income redistribution. According to textbook economics we attain the highest level of economic efficiency when markets clear, when we realize the maximum gains from mutually advantageous trade. Income transfers benefit some at the expense of others. Economists have no scientific methods for comparing gains and losses through income transfers.[5] Once economists depart from discussing efficiency conditions and begin to speak about income redistribution, they become advocates of a political agenda, rather than objective scientists. The jobs lost to minimum wage laws might not seem worthwhile to DeLong or Landsburg, but they obviously are worthwhile to the workers and employers whom these laws affect. Why should the value judgments of a few armchair economists matter more than the interests of would be employees and employers? These jobs may be "lousy jobs," but one could also argue that these jobs are quite important because they are a first step in gaining job experience and learning adult responsibility.

A second problem with the case against minimum wages is that they affect older workers too. As already noted, workers in the 20-24 age group appear to be affected by minimum wage laws. Unemployment rates in the 25-34 age group are higher than for the 35-44 age group. The unemployment rate for blacks and Hispanics aged 25-34 were 11.1% and 5.8% in 2005. Unemployment for whites and Asians in this age group were 4.4% and 3.5%. In the 35-44 age group the unemployment rates for these four ethnicities were 7.2%., 5.1%, 4.4%, and 2.7%. A comparison of black to Asian unemployment is revealing. In the United States, Asians tend to attain higher levels of education than blacks. Thus minimum wage laws are relatively unimportant to Asian Americans. Consequently, Asians are able to attain unemployment as low as the 2-3% range. For Asians aged 16+ the unemployment rate was only 3.3% in 2005. For Asians in the 20-24 age group unemployment was 5.1%. These figures are only a fraction of the unemployment rates experienced by blacks in 2005. There is no reason why white, Hispanic, and black Americans cannot also reach the 2-3% range of unemployment.

Supporters of minimum wage laws do not realize that prior to minimum wage laws the national unemployment rate did fall well below 5%. According to the US Census, national unemployment rates were 3.3% in 1927, 1.8% in 1926, 3.2% in 1925, 2.4% in 1923, 1.4% in 1919 and 1918, 2.8% in 1907, 1.7% in 1906, and 3.7% in 1902.[6] Even today, some states have unemployment rates as low as 3%. Virginia now has an unemployment rate of 3.1%. Wyoming has an unemployment rate of 2.9%. Hawaii has an unemployment rate of 2.6%. National unemployment rates seldom drop below 5% because some categories of workers are stuck with double digit unemployment. Given these figures, it is quite arguable that minimum wage laws keep the national unemployment rate 3 percentage points higher than would otherwise be the case.

Economist Arthur Okun estimated that for every 1% increase in unemployment GDP falls by 2.5-3%. If minimum wage laws are responsible for keeping the national unemployment rate 3 percentage points above where it would otherwise be, then the losses to minimum wage unemployment are substantial. Since Okun's law is an empirical proposition it is certainly not constant. Eliminating minimum wages might not increase GDP as much as this "law" indicates. However, the elimination of minimum wage laws would surely have a positive effect on GDP. In any case, economic theory and available data indicate that minimum wage laws do result in economic inefficiency. The implementation of a "living wage" would only increase these losses. Do proponents of living wages really want to see unemployment rates among ethnic minorities and teens climb even higher?
The economic case for a living wage is unfounded. Current minimum wage rates do create high levels of unemployment among low productivity workers. Higher "living wages" would only make these problems worse. The alleged moral case for a living wage ignores the fact that minimum wage increases adversely affect the very people whom advocates of living wages intend to help. If politicians wish to pursue sound policies, they should consider repealing minimum wage laws, especially where teens are concerned. Unfortunately, most politicians care more about political expediencies than sound economic policy. This being the case, minimum wages will increase unless public opinion changes significantly.



--------------------------------------------------------------------------------


D.W. MacKenzie teaches economics at SUNY Plattsburgh.


[1] See Dreier and Candeale A Moral Minimum Wage, April 27 2006 and Cauchon States Say 5.15 too little April 27 2006.

[2] See "The Sin of Wages" by Steven Landsburg and "The Minimum Wage and the EITC" by J. Bradford DeLong.

[3] This is likely due to the poor quality of many inner city public schools.

[4] It is worth noting that Landsburg opposes redistribution via minimum wage laws.

[5] This would require interpersonal comparisons of welfare. Robbins (1933) proved that such comparisons are unscientific.

[6] US Bureau of the Census Historical Statistics p135.
 
Good article, Lackey. It really demonstrates how divided even the economists are on this. The most valuable point the article made, IMHO, was this, though:

From article Lackey posted said:
Yet they find double digit teen unemployment acceptable when it derives from government intervention. Why? Because they want to use such policies to redistribute income.[4]

I think we've seen A LOT of that going on in the last six years or so, where the real fiscal advantages of government policy have been given to those that are already wealthy for the most part. I agree that, in a cleaner economic environmnet, minimal to no minimum wage laws would be ideal. However, things are so broken to the point that not having any in place at this point in time would only serve to amplify the damage that's been done.

jag
 
The rich get richer, "we should'nt fear the Government the government should fear us" .............greedy sons of *****es
 
hippie_hunter said:
I'm glad this bill failed. I'm opposed to raising the minimum wage and now is the time not to cut taxes.
or give a break to the wealthy w/ estate tax cuts.....WFT?!
 
Fred_Fury said:
lol how many of you are unemployed?

It's not strictly about unemployment, but about the overall health of the U.S. economy, of which this is a component. It's not nearly as simple to break down as you would like for it to be. Of course, it's easy for you to throw stones since you ran away and joined the armed forces so that you wouldn't be forced to try and survive in the free market on your own, isn't it?

jag
 
comicgirl said:
or give a break to the wealthy w/ estate tax cuts.....WFT?!

As I said in that same comment, now is not the time to cut taxes which includes the estate tax. So yes, I am opposed to cutting that tax
 
Lackey said:
Mythology of the Minimum Wage
by DW MacKenzie
[Posted on Wednesday, May 03, 2006]
Raising minimum wages forces employers to dismiss low productivity workers.
Low productivity workers are already dismissed. I've sacked a few workers because they fail to grasp the simple concept that you do your job when you work.

I've no sympathy or concern for those who dick around on the clock
 
I really don't know much about economies and how they work.

I know there are all sorts of complications and stuff.

But isn't it true that the minimum wage in the US hasn't been raised in, what is it, over 15 years?? That's crazy!!

There is one thing I do know. The gap between the rich and the poor gets bigger and bigger. The poor always end up poorer.

Maybe the minimum wage is part of the reason.
 
The only thing I'm trying to wrap my head around is why anyone would think that someone who is unemployed and refuses to work for minumum wage would work for less if they removed it. You would still have unemployed workers.
 
for the people in favor of keeping the minimum wage where it is, when do you propose we do raise it? it's been 9 years since it was last raised, do we just keep it at $5.15 forever?
 
Son Of Logan said:
The only thing I'm trying to wrap my head around is why anyone would think that someone who is unemployed and refuses to work for minumum wage would work for less if they removed it. You would still have unemployed workers.


wow...just wow :dry:
 
sinewave said:
for the people in favor of keeping the minimum wage where it is, when do you propose we do raise it? it's been 9 years since it was last raised, do we just keep it at $5.15 forever?


What is that in pounds?? That's like... £3, maybe less!

HOLY CRAP! That's hardly anything!
 
kainedamo said:
What is that in pounds?? That's like... £3, maybe less!

HOLY CRAP! That's hardly anything!

exactly. it's below the poverty line here in america.
 
Where I live in eastern North Carolina, medium wage is like 5.15 or 5.25. The South needs the medium wage to go up.

And so does rest of america...
 
kainedamo said:
I really don't know much about economies and how they work.

I know there are all sorts of complications and stuff.

But isn't it true that the minimum wage in the US hasn't been raised in, what is it, over 15 years?? That's crazy!!
Yes that is pretty much true. The minimum wage hasn't been raised in a long time. But that's a good thing in my opinion for reasons I have already stated. Politicians raising the minimum wage don't do it to help people, they do it for votes.

There is one thing I do know. The gap between the rich and the poor gets bigger and bigger. The poor always end up poorer.
Actually the poverty level in the United States has been staying right around the same level for quite some time. But yes, the income gap between the EXTREME poor and the EXTREME rich (notice the extreme, people often classify people as poor or rich technically aren't poor or rich) it is getting wider.

Maybe the minimum wage is part of the reason.
No it is not. Actions by the government such as Bush's tax cuts and cutting taxes such as the estate tax are what is making the rich get richer. The poor, while not getting poorer, are pretty much going to remain the same. That is why the gap widens.
 
enterthemadness said:
Where I live in eastern North Carolina, medium wage is like 5.15 or 5.25. The South needs the medium wage to go up.

And so does rest of america...

What is medium wage
 

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