The Minimum Wage: What's the Big Deal?

#229
#229
Here comes the longest post in VolNation history, but it’s the last one I’m making in this thread and will hopefully answer any potential questions (although of course it won’t).

Reading this thread has been highly edifying. I admit I'm no expert on the matter of minimum wage and don't write checks, therefore my opinion is somewhat negated, according to the Volerazzi, as I like to think of some of you.

I've learned a lot by reading this thread, and some of my opinions have even been changed.

Still, when I look at something, say foreign policy, geopolitics, or economy, as little as I know about any of these things, I like to think macro. Not micro. I like to think about what are the costs accrued to us all and not just a McDonald's franchise owner with a 2.5 million per year business that assumes prices are static while wages only go up and s/he is jack out of ****. (Very unrealistic scenario but apparently scary to some self-proclaimed marketing professors.)

The fact of the matter is, our minimum wage earners (and this wasn't necessarily intended as a referendum on minimum wage increase as much as it was what the value of the minimum wage is…period, but leave it up to the “I don’t want to pay peons any more cents for my Big Mac” group to make it into that.) tend to consist of two groups: the young/uneducated/unskilled and the not necessarily so young (25 and beyond)/uneducated/unskilled. No neither one of these groups should earn much, certainly not more than a college graduate or a skilled, trained worker.

But consider the following when you think about minimum wage, despite all your micro-business, microeconomics “how will this affect my business if prices and wages remain static according to my economic overlords who make more than me?,” "how will this affect my summer home?" or “how will this affect how rich people have told me to think about such things, even though I don’t make much myself, but they sure sound purty?” sense:

(Keep in mind, this is all assuming prices and wages move according to demand and inflation, unlike what has happened in reality and what our economic overlords, “I write the check so I’m smarter than you, stupid” wealthy want you to believe.)

1. Youth (most likely 16-24 range) compose the majority of fast food service. Higher wages (and I'm not talking about $15/hour, as I've already specified) for this group will do at least one of the following:
a) Help them save and plan better for college, if they plan on attending. This means lower student loan debts and lower overall US debt.
b) Help them contribute more to the local economy. These are the kids who have no intention on going to college and, in turn, have to use to money they gain to put back into the local economy.
So, we have savings on one hand (which isn’t currently injected back into the economy but will eventually) and immediate spending on the other. Okay. So all the money goes back in one way or the other.
What’s the problem then? The wages aren’t immediately injected back into your business or franchise? I don’t get it.

2. Not so youthful compose a good deal, albeit the minority. Since neoliberals (savvy businessmen) sold our country out for their pocketbooks, we’ve lost our manufacturing base, so unskilled/uneducated labor is now in the fast food industry, predominantly. As my mother, who works in a DSS will tell you (and she’s no liberal by any means), the majority of clients are really only capable of working fast food. They’re either too dumb or too inhibited (too many children, etc. – often the two go hand in hand.) And, as we know, the service workforce needs these people, or else it could just as easily satiate itself on the youth (who never seem to lack a fast food job). Some can go on and get educated/skilled, but the majority will always be confined to low skill labor. These are, per capita, our biggest welfare pullers, save maybe the disabled or the elderly. But work-eligible, certainly.

So we’re paying them either in our tax dollars or in our prices. It’s your call. If you don’t like the entitlement system, that’s understandable. It’s certainly not perfect. But unless you welcome a somewhat substantial percentage of our population (maybe around 2-5 percent, which doesn’t sound like much, until you do the numbers) roaming around the streets and constantly begging for **** from you, than you need to decide whether you like higher minimum wages, the current welfare system, or Teenage Mutant Ninja Turtles. Just figured I’d throw that in there.
 
#231
#231
volprof said:
Here comes the longest post in VolNation history, but it’s the last one I’m making in this thread and will hopefully answer any potential questions (although of course it won’t).

Reading this thread has been highly edifying. I admit I'm no expert on the matter of minimum wage and don't write checks, therefore my opinion is somewhat negated, according to the Volerazzi, as I like to think of some of you.

I've learned a lot by reading this thread, and some of my opinions have even been changed.

Still, when I look at something, say foreign policy, geopolitics, or economy, as little as I know about any of these things, I like to think macro. Not micro. I like to think about what are the costs accrued to us all and not just a McDonald's franchise owner with a 2.5 million per year business that assumes prices are static while wages only go up and s/he is jack out of ****. (Very unrealistic scenario but apparently scary to some self-proclaimed marketing professors.)
Click to expand...

Aim small, miss small

If we treat the national economy like a smart household economy, then we will be in great shape.
 
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#232
#232
n_huffhines said:
Who said those were the reasons?

Holy hell dude, I can't even believe what I'm reading.
Click to expand...

I didnt say they were reasons. Just spitballin' ideas. I mean they could have a corporate book that says:

Step 1: Fire all black employees

Who knows. Science probably won't help us out.
 
#235
#235
Brave Volunteer said:
See that's what I'm getting at FLVOL. In too many cases, the ratio between what regular employees make and what corparate CEO's, VP's, etc make is too disproportionate. God forbid a CEO only take home 20 million a year instead of 35 so his or her employees can have benefits or a decent hourly wage. It woudln't affect his or her way of life in the slightest. They already have a life of lavish abundance as it is.



Agreed 100%. They are a beacon example of what the symbiot relationship between a company and it's employees should be.
Click to expand...

Not the CEO's fault. The board does the hiring and they set the salary. Most salary is based off stock options that they get. Is it excessive? Sure. But why do we complain? Every single person in this thread would not bat an eye at a 30 million dollar salary. Do you know how many jet skis you can buy with that? That's buying happiness.
 
#237
#237
Gramps said:
Sometimes it is not worth being correct and winning an argument. The prof is wanting to rant, not debate the minimum wage.
Click to expand...

I know it was long, but you're thinking too small picture. Think beyond the single small business bottom line.
 
#238
#238
volprof said:
To add explication to my inquiry, I too see the problems that some unions present. While I recognize the net-positive effect unions have had upon our country and our workers (although many on here refuse to), I admit that nowadays they can be problematic. If it takes tampering with union power to increase wage power among the general labor force, then that's fine with me.

I just don't get what the big deal is with some in our society (and I think it's a loudmouthed, over-opinionated minority, which always tends to be dicks about everything as a general rule) and some on here being so against a minimum wage or even raising it slightly. None of their arguments ever make sense. They just sound like rich boy lackeys everytime.

Look, I get why we probably shouldn't pay fast food workers $15/hour yet, but I'm not sure why we shouldn't pay them $10-12/hour as federal minimum wage.

I think if someone could finally convince these anti-poor folks that paying them a little more would decrease the amount of taxes said anti-poor folks have to spend on entitlement, then they'd probably drop the whole "but we will have to pay 2 cents more for that Big Mac" argument they've been shoving down our throats like we're a bunch of mindless gooberheads.
Click to expand...

The price of a Big Mac will not rise as a result of an increase in the FMW. What will happen is that fast food joints will becomes more mechanized (already happening) and that fewer people will be employed (already happening in places like Seattle and LA).
 
#239
#239
n_huffhines said:
Aim small, miss small

If we treat the national economy like a smart household economy, then we will be in great shape.
Click to expand...

I get what you're saying, but I disagree.

A smart household saves and worries only about it bottom line, much like a business.

A smart economy spends (but doesn't go into debt). An economy that only saves costs millions of jobs and goes kerplunk in a hurry.

Again, I'm no expert, so everyone is welcome to make fun of me (as per usual) but micro and macro are two entirely different organisms.

Okay, now I'm done.
 
#240
#240
KentheOrange said:
The price of a Big Mac will not rise as a result of an increase in the FMW. What will happen is that fast food joints will becomes more mechanized (already happening) and that fewer people will be employed (already happening in places like Seattle and LA).
Click to expand...

And then there will be more people unemployed that can't afford a Bid Mac. To offset their losses the burger cost rises.
 
#241
#241
volprof said:
I get what you're saying, but I disagree.

A smart household saves and worries only about it bottom line, much like a business.

A smart economy spends (but doesn't go into debt). An economy that only saves costs millions of jobs and goes kerplunk in a hurry.

Again, I'm no expert, so everyone is welcome to make fun of me (as per usual) but micro and macro are two entirely different organisms.

Okay, now I'm done.
Click to expand...

Why would an economy do that? What do you even mean by this?
 
#244
#244
volprof said:
Still, when I look at something, say foreign policy, geopolitics, or economy, as little as I know about any of these things, I like to think macro. Not micro. I like to think about what are the costs accrued to us all and not just a McDonald's franchise owner with a 2.5 million per year business that assumes prices are static while wages only go up and s/he is jack out of ****. (Very unrealistic scenario but apparently scary to some self-proclaimed marketing professors.)
Click to expand...

Since you referenced in the last sentence (not sure what the self-proclaimed refers to) I'll answer this part. The McDs example was simply to show counter the fallacy that big, bad business owners are greedy and they can easily raise wages with no consequence. It's fine to think macro but in the end macro is made up of all the micros so you can't simply ignore the impact at the micro level.

volprof said:
The fact of the matter is, our minimum wage earners (and this wasn't necessarily intended as a referendum on minimum wage increase as much as it was what the value of the minimum wage is…period, but leave it up to the “I don’t want to pay peons any more cents for my Big Mac” group to make it into that.) tend to consist of two groups: the young/uneducated/unskilled and the not necessarily so young (25 and beyond)/uneducated/unskilled. No neither one of these groups should earn much, certainly not more than a college graduate or a skilled, trained worker.

But consider the following when you think about minimum wage, despite all your micro-business, microeconomics “how will this affect my business if prices and wages remain static according to my economic overlords who make more than me?,” "how will this affect my summer home?" or “how will this affect how rich people have told me to think about such things, even though I don’t make much myself, but they sure sound purty?” sense:

(Keep in mind, this is all assuming prices and wages move according to demand and inflation, unlike what has happened in reality and what our economic overlords, “I write the check so I’m smarter than you, stupid” wealthy want you to believe.)

1. Youth (most likely 16-24 range) compose the majority of fast food service. Higher wages (and I'm not talking about $15/hour, as I've already specified) for this group will do at least one of the following:
a) Help them save and plan better for college, if they plan on attending. This means lower student loan debts and lower overall US debt.
b) Help them contribute more to the local economy. These are the kids who have no intention on going to college and, in turn, have to use to money they gain to put back into the local economy.
So, we have savings on one hand (which isn’t currently injected back into the economy but will eventually) and immediate spending on the other. Okay. So all the money goes back in one way or the other.
Click to expand...

You said it yourself above, wages and prices move in relation to demand. If labor costs go up then prices are likely to go up. The correlation isn't perfect but the magic non-impact you suggest simply doesn't occur. If #1 holds then why wouldn't we raise the minimum wage to 20, 50 or 100 bucks and hour - it all comes back in anyway amirite? Plenty of economists can show that raising the MW will in fact increase inflation and reduce jobs. Guess they deserve the insults you are throwing around.

volprof said:
What’s the problem then? The wages aren’t immediately injected back into your business or franchise? I don’t get it.
Click to expand...

The problem is that when my business operates on thin margins and cash flow is variable an increase in costs that cannot be offset by price increases puts my business at risk. Sorry it works that way but it does. You can wish it didn't at a macro level but that's fantasy.

Turnover is a huge and costly problem for businesses; particularly ones relying on low wage workers. If paying employees above minimum wage would mitigate the turnover costs the smart ones would do it in a heartbeat.

volprof said:
2. Not so youthful compose a good deal, albeit the minority. Since neoliberals (savvy businessmen) sold our country out for their pocketbooks, we’ve lost our manufacturing base, so unskilled/uneducated labor is now in the fast food industry, predominantly. As my mother, who works in a DSS will tell you (and she’s no liberal by any means), the majority of clients are really only capable of working fast food. They’re either too dumb or too inhibited (too many children, etc. – often the two go hand in hand.) And, as we know, the service workforce needs these people, or else it could just as easily satiate itself on the youth (who never seem to lack a fast food job). Some can go on and get educated/skilled, but the majority will always be confined to low skill labor. These are, per capita, our biggest welfare pullers, save maybe the disabled or the elderly. But work-eligible, certainly.

So we’re paying them either in our tax dollars or in our prices. It’s your call. If you don’t like the entitlement system, that’s understandable. It’s certainly not perfect. But unless you welcome a somewhat substantial percentage of our population (maybe around 2-5 percent, which doesn’t sound like much, until you do the numbers) roaming around the streets and constantly begging for **** from you, than you need to decide whether you like higher minimum wages, the current welfare system, or Teenage Mutant Ninja Turtles. Just figured I’d throw that in there.
Click to expand...

In scenario 2 these people can still rise above the minimum wage while remaining with low skills. Assuming they cannot are you suggesting minimum wage should be sufficient to cover the bills of a family?

I'd much prefer a higher minimum wage and reduction in entitlements but somehow I don't get the feeling that is what people are pushing for.

Finally, I'll ask you again. What do you think the MW should be and how do you arrive at that number? No one here who's advocating a rise seems to be able to answer.

As a side note, if you read the thread you'll see that many of us (most?) are not suggesting there shouldn't be a minimum wage; just questioning how high it should go and what the purpose of the MW should be.
 
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#245
#245
volinbham said:
Also, if I show you the poverty rate at the beginning of the War on Poverty and now would you agree its proof positive that government handouts don't work?
Click to expand...

No, he wouldn't. Afterall, 50 years is not long enough to see if it works, that's why the One is cancelling sanctions against Cuba. Wait a minute.....
 
#247
#247
agent|orange said:
My thoughts:

- National minimum wage is a horrible idea and should never be fielded. $14/hour in Manhattan, NYC is not the same as $14/hour in Manhattan, Kansas. This would destroy economies in lower COL areas.

- I don't really care about R or D. So long as manufacturing jobs are brought back to the US, I'm happy. I have enormous issues with many things Obama has done but he has overseen (but is not the direct cause of) a reverse course in major domestic and international industries bringing manufacturing jobs to the US.

And, finally, off-topic but I've said it 1,000 times. The US must seize a huge market in manufacturing renewable energy generation products. We cannot allow China to dominate this market.
Click to expand...

Taxation. It is THE answer. Companies in Minnesota are leaving for Ireland because of onerous taxes. Companies in New York are going to Tennessee. Liberals are stupid.
 
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#248
#248
CBO estimates on the 10.10 and 9.00 option.

https://www.cbo.gov/publication/44995

Summary, loss of jobs under both (500K/100K), increase in real income under both (2bn/1bn). I found it interesting that only 19% of the income growth goes to families below the poverty line (the ones this is supposed to help) while 29% goes to families over 3x the poverty line.
 
#249
#249
SpaceCoastVol said:
Taxation. It is THE answer. Companies in Minnesota are leaving for Ireland because of onerous taxes. Companies in New York are going to Tennessee. Liberals are stupid.
Click to expand...

Actually if you look at NY's big push to attract/keep companies it is straight out of the fiscal conservative playbook: lower/eliminate taxes, reduce regulation.

Funny how they know that works yet we can't get it through our heads that it might work in a global economy too...
 
#250
#250
volinbham said:
Actually if you look at NY's big push to attract/keep companies it is straight out of the fiscal conservative playbook: lower/eliminate taxes, reduce regulation.

Funny how they know that works yet we can't get it through our heads that it might work in a global economy too...
Click to expand...

Yeah I laugh whenever I see those start up New York ads. Free for 10 years then it's taxation out the azz. I'm based there, but I would never live in that cess pool.
 
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