Economics: Minimum Wage

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#1 Posted by dave123321 (34363 posts) -
Hello guys. So been hearing a lot about minimum wage lately. About increasing/decreasing/deleting, and it got me to wondering what this whole debate is about. So OT can have a nice and civil debate about the economic consequences of the minimum wage and how changing it will effect different groups(different workers and employers). So questions to think about: What is minimum wage? How does it effect a company's choices in terms of employing people? What is supply and demand all about? Benfits of minimum wage? Cons? How does this affect average wage? Hopefully our budding OTconimists can figure this out for us.
#2 Posted by JML897 (33133 posts) -
About increasing/decreasing/deletingdave123321
wtf are there seriously people who want to get rid of minimum wage :|
#3 Posted by Pirate700 (46465 posts) -

Who the hell would want to decrease or get rid of minimum wage? It's way too low as it is. Especially in certain states.

#4 Posted by Abbeten (3043 posts) -
nooo dave what have you done
#5 Posted by HoolaHoopMan (7877 posts) -
Paying your employees decent wages and covering them for healthcare is easily achievable, just look at Costco. Oh I'm sorry, I mean 'Raising the minimum wage will cost the economy jobs blah blah blah'. What do I know I'm not an old man sitting on a board with other old people.
#6 Posted by themajormayor (24201 posts) -
I guess decreasing it will lead to more jobs. But lower wage for people with minimum wage. Or something like that. And I have a bachelor in economics soon so I know what I'm talking about. Well not really. lol university.
#7 Posted by dave123321 (34363 posts) -

Who the hell would want to decrease or get rid of minimum wage? It's way too low as it is. Especially in certain states.

Pirate700
Will provide links as soon as I get home. Though google will likely provide a quick result.
#8 Posted by dave123321 (34363 posts) -
I guess decreasing it will lead to more jobs. But lower wage for people with minimum wage. Or something like that. And I have a bachelor in economics soon so I know what I'm talking about. Well not really. lol university. themajormayor
How did you do on that price theory final?
#9 Posted by Aljosa23 (25896 posts) -

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

#10 Posted by Wasdie (50596 posts) -

Aside from pretty right-wing and libertarian people, reducing or removing the minimum wage is never actually recommended. It's there for a reason.

Raising and lower a federal minimum wage has a lot of things associated. I personally believe minimum wage should be much more regional. Cities need to have higher minimum wages than the country and smaller towns. The people who are most affected by minimum wages are actually those in service industries that cannot just relocate.

I'm much more hesitant on blanketing federal minimum wage increases (though they too are necessary). I think right now federal minimum wage is just too low across the board though. I think it should be raised a bit and then states and cities need to adjust theirs up to meet the soaring cost of living in certain areas. 

Minimum wage is definitely necessary though. 

#11 Posted by themajormayor (24201 posts) -
[QUOTE="themajormayor"]I guess decreasing it will lead to more jobs. But lower wage for people with minimum wage. Or something like that. And I have a bachelor in economics soon so I know what I'm talking about. Well not really. lol university. dave123321
How did you do on that price theory final?

What. I haven't done such thing
#12 Posted by thegerg (15921 posts) -
Paying your employees decent wages and covering them for healthcare is easily achievable, just look at Costco. Oh I'm sorry, I mean 'Raising the minimum wage will cost the economy jobs blah blah blah'. What do I know I'm not an old man sitting on a board with other old people. HoolaHoopMan
It's not easily achievable for many employers, try not to generalize.
#13 Posted by pie-junior (2866 posts) -

Who the hell would want to decrease or get rid of minimum wage? It's way too low as it is. Especially in certain states.

Pirate700
It creates unemplyment, will say the friedmans, and harms specifically the weakest parts of employees. also DWL. I hope you're happy dave
#14 Posted by dave123321 (34363 posts) -
[QUOTE="dave123321"][QUOTE="themajormayor"]I guess decreasing it will lead to more jobs. But lower wage for people with minimum wage. Or something like that. And I have a bachelor in economics soon so I know what I'm talking about. Well not really. lol university. themajormayor
How did you do on that price theory final?

What. I haven't done such thing

Might be called Intermediate micro or something
#15 Posted by themajormayor (24201 posts) -
[QUOTE="dave123321"][QUOTE="themajormayor"][QUOTE="dave123321"] How did you do on that price theory final?

What. I haven't done such thing

Might be called Intermediate micro or something

Ah yes. I got a D. Proud.
#16 Posted by comp_atkins (31971 posts) -

Hello guys. So been hearing a lot about minimum wage lately. About increasing/decreasing/deleting, and it got me to wondering what this whole debate is about. So OT can have a nice and civil debate about the economic consequences of the minimum wage and how changing it will effect different groups(different workers and employers). So questions to think about: What is minimum wage? How does it effect a company's choices in terms of employing people? What is supply and demand all about? Benfits of minimum wage? Cons? How does this affect average wage? Hopefully our budding OTconimists can figure this out for us. dave123321
   you new here?

#17 Posted by limpbizkit818 (15044 posts) -

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

Aljosa23
One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........
#18 Posted by pie-junior (2866 posts) -
[QUOTE="Pirate700"]

Who the hell would want to decrease or get rid of minimum wage? It's way too low as it is. Especially in certain states.

pie-junior
It creates unemplyment, will say the friedmans, and harms specifically the weakest parts of employees. also DWL. I hope you're happy dave

I am too tired to be posting, apparently.
#19 Posted by themajormayor (24201 posts) -
Minimum wage should increase with age. That would be good
#20 Posted by Pirate700 (46465 posts) -

[QUOTE="Aljosa23"]

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

limpbizkit818

One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........

Right but you should should still get paid fairly for the amount of work you do. A large pecentage of minimum wages jobs are some of the hardest working.

#21 Posted by dave123321 (34363 posts) -

[QUOTE="dave123321"]Hello guys. So been hearing a lot about minimum wage lately. About increasing/decreasing/deleting, and it got me to wondering what this whole debate is about. So OT can have a nice and civil debate about the economic consequences of the minimum wage and how changing it will effect different groups(different workers and employers). So questions to think about: What is minimum wage? How does it effect a company's choices in terms of employing people? What is supply and demand all about? Benfits of minimum wage? Cons? How does this affect average wage? Hopefully our budding OTconimists can figure this out for us. comp_atkins

   you new here?

What do you mean by that?
#22 Posted by thegerg (15921 posts) -
There certainly is a role for the minimum wage, but I don't think that increasing it to $10+ as some have suggested is very reasonable.
#23 Posted by Aljosa23 (25896 posts) -

[QUOTE="Aljosa23"]

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

limpbizkit818

One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........

Of course but I still don't see a reason why it shouldn't be higher to match rising prices.

#24 Posted by coolbeans90 (21305 posts) -

Well, obviously it should theoretically increase unemployment, but that doesn't necessarily seem to actually happen.

#25 Posted by Pirate700 (46465 posts) -

[QUOTE="limpbizkit818"][QUOTE="Aljosa23"]

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

Aljosa23

One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........

Of course but I still don't see a reason why it shouldn't be higher to match rising prices.

Exactly. I don't think people are asking for it to be raised to $50/hour but realistically it should be at least $10-12 in the majority of the country. Maybe $15ish in states like CA and NY.

#26 Posted by HoolaHoopMan (7877 posts) -
[QUOTE="HoolaHoopMan"]Paying your employees decent wages and covering them for healthcare is easily achievable, just look at Costco. Oh I'm sorry, I mean 'Raising the minimum wage will cost the economy jobs blah blah blah'. What do I know I'm not an old man sitting on a board with other old people. thegerg
It's not easily achievable for many employers, try not to generalize.

To what extant? Raising it a buck or two? Sure they could. I'm not saying raise it to 20 dollars an hour. There's obviously a gray area involved.
#27 Posted by nooblet69 (5162 posts) -

I think 10 dollars an hour would be reasonable.  Would make the workers happier and the customers happier as they are dealing with happier workers.

#28 Posted by dave123321 (34363 posts) -
[QUOTE="themajormayor"][QUOTE="dave123321"][QUOTE="themajormayor"] What. I haven't done such thing

Might be called Intermediate micro or something

Ah yes. I got a D. Proud.

at least you passed
#29 Posted by Chemistian (635 posts) -

[QUOTE="limpbizkit818"][QUOTE="Aljosa23"]

The arguments against minimum wage are mostly retarded and seem to ignore that even though cost of living and food have risen, the minimum wage has remained stagnant.

Aljosa23

One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........

Of course but I still don't see a reason why it shouldn't be higher to match rising prices.

It should. Obama called for exactly that in his state of the union speech. Increasing the minimum wage to $9.00 an hour would equate that wage to the minimum wage in 1979, adjusted for inflation. It won't happen, though. Few if any major items are likely to pass through this or the next congress, and the only major issue likely to see a serious advancement is immigration.
#30 Posted by Pirate700 (46465 posts) -

[QUOTE="Aljosa23"]

[QUOTE="limpbizkit818"] One should not expect the minimum wage to support a family with shelter and food. It was never intended to do so. 5% of current hourly-paid workers make $7.25 or less. I'm pretty sure a large percentage of that 5% are teenagers.........Chemistian

Of course but I still don't see a reason why it shouldn't be higher to match rising prices.

It should. Obama called for exactly that in his state of the union speech. Increasing the minimum wage to $9.00 an hour would equate that wage to the minimum wage in 1979, adjusted for inflation. It won't happen, though. Few if any major items are likely to pass through this or the next congress, and the only major issue likely to see a serious advancement is immigration.

$9 is still a complete joke for minimum wage. I think the bigger issue though is way too many jobs markets are at or around the minimum which is a whole different issue.

#31 Posted by thegerg (15921 posts) -
[QUOTE="thegerg"][QUOTE="HoolaHoopMan"]Paying your employees decent wages and covering them for healthcare is easily achievable, just look at Costco. Oh I'm sorry, I mean 'Raising the minimum wage will cost the economy jobs blah blah blah'. What do I know I'm not an old man sitting on a board with other old people. HoolaHoopMan
It's not easily achievable for many employers, try not to generalize.

To what extant? Raising it a buck or two? Sure they could. I'm not saying raise it to 20 dollars an hour. There's obviously a gray area involved.

Raising wages and providing healthcare. I'm a fan of the little guy, the working man. I don't want to see him, the small business owner, be forced out of the labor market because of state mandated minimums.
#32 Posted by HoolaHoopMan (7877 posts) -
[QUOTE="thegerg"][QUOTE="HoolaHoopMan"][QUOTE="thegerg"] It's not easily achievable for many employers, try not to generalize.

To what extant? Raising it a buck or two? Sure they could. I'm not saying raise it to 20 dollars an hour. There's obviously a gray area involved.

Raising wages and providing healthcare. I'm a fan of the little guy, the working man. I don't want to see him, the small business owner, be forced out of the labor market because of state mandated minimums.

Yet small businesses survived just fine decades ago when minimum wages were much higher when adjusted for inflation. And of course the health care provision doesn't force employers with under 50 employees to cover them.
#33 Posted by osirisx3 (2024 posts) -

The far right hates the worker and wants to allow companies to hire at slave wages. If you took away min wage it would hurt every worker because the min wage is the base for all wages. if you work for wal mart prepare to lose your job because there will always be someone more desperate then you and will offer your boss that they will work for half your wage.

Its all about giving more and more to big companies. Its the libertarian answer for everything! They act as if the private sector is run by saints and the government is evil. The private sector has an awful record at human rights. Have you seen china? working at fox con is so bad 14 people killed them self's in one year! Its so bad it makes people not want to live anymore.

They chain people to toilets if they need a extra bathroom break. They force women to sign contracts saying they wont date so they can't get knocked up and take time off work.

The private sector does not care about you. It wants to suck you dry and leave you with nothing.

#34 Posted by thegerg (15921 posts) -

[QUOTE="thegerg"][QUOTE="HoolaHoopMan"] To what extant? Raising it a buck or two? Sure they could. I'm not saying raise it to 20 dollars an hour. There's obviously a gray area involved. HoolaHoopMan
Raising wages and providing healthcare. I'm a fan of the little guy, the working man. I don't want to see him, the small business owner, be forced out of the labor market because of state mandated minimums. [/QUOTE Yet small businesses survived just fine decades ago when minimum wages were much higher when adjusted for inflation. And of course the health care provision doesn't force employers with under 50 employees to cover them.

]What you said was providing healthcare is "easily obtainable" for employers. That's simply not the case for many employers. Try not to generalize.

#35 Posted by Fightingfan (38011 posts) -
I think people fail to realize increasing minimum wage does nothing. You can get a trillion dollars a day, but if hyper inflation kicks in like Zimbabwe there's no point in a trillion dollars. We need to stop printing money, and go back to a currency backed by a rare, or useful commodity. america's Constitution says only Gold and Silver shall be our money because the founding fathers knew first hand fiat doesn't work; they saw what the constitutional dollar did, and wanted the future to avoid that.
#36 Posted by mattbbpl (10906 posts) -
Paying your employees decent wages and covering them for healthcare is easily achievable, just look at Costco. Oh I'm sorry, I mean 'Raising the minimum wage will cost the economy jobs blah blah blah'. What do I know I'm not an old man sitting on a board with other old people. HoolaHoopMan
I love Costco as a consumer and as a business case study - they have a pretty incredible business model.

That being said, their model doesn't work if all of their competitors adopt the same model. Their relatively high wages actually keep their employment costs because their employees simply don't want to leave.
#37 Posted by GamingGod999 (3134 posts) -

Hello guys. So been hearing a lot about minimum wage lately. About increasing/decreasing/deleting, and it got me to wondering what this whole debate is about. So OT can have a nice and civil debate about the economic consequences of the minimum wage and how changing it will effect different groups(different workers and employers). So questions to think about:

What is minimum wage?

It's the lowest amount of pay that an employee must recieve for performing labour. Minimum wages are set by a contract and/or law. It's illegal for firms to pay their workers below the minimum set.

How does it effect a company's choices in terms of employing people?

Many International companies, such as Nike and Apple, have moved their production to countries where the minimum wage act isn't a major hurdle (think Pakistan, India & China). I mean, these companies want to maximise profits, and will do so by any means.

What is supply and demand all about?

Demand is the quanitity of goods or services that will be bought at any given price over a period of time. In economics, supply is known as the quantity of goods that sellers/businesses are prepared to sell at any given price over a period of time.

Below is a diagram we use when talking about demand and supply:

economics5.gif

Benfits of minimum wage? Cons? How does this affect average wage?

Cons:

- Even if a minimum wage is set, workers could still be struggling to provide a basic living for themselves and families (I.E. poverty still occurs in many countries).

- Many businesses exploit/ignore the minimum wage act.

- If minimum wages for unskilled labour were to increase, then firms will be faced with the issue of their skilled workers seeking a pay rise.

Hopefully our budding OTconimists can figure this out for us. dave123321

There's some basic stuff.

#38 Posted by celebar (14 posts) -

The far right hates the worker and wants to allow companies to hire at slave wages. If you took away min wage it would hurt every worker because the min wage is the base for all wages. if you work for wal mart prepare to lose your job because there will always be someone more desperate then you and will offer your boss that they will work for half your wage.

Its all about giving more and more to big companies. Its the libertarian answer for everything! They act as if the private sector is run by saints and the government is evil. The private sector has an awful record at human rights. Have you seen china? working at fox con is so bad 14 people killed them self's in one year! Its so bad it makes people not want to live anymore.

They chain people to toilets if they need a extra bathroom break. They force women to sign contracts saying they wont date so they can't get knocked up and take time off work.

The private sector does not care about you. It wants to suck you dry and leave you with nothing.

osirisx3
yeah private $ector dont care about u at all unlike obama who care. obama increasing minimum wage bc he care about u.
#39 Posted by mattbbpl (10906 posts) -
[QUOTE="Fightingfan"]I think people fail to realize increasing minimum wage does nothing. You can get a trillion dollars a day, but if hyper inflation kicks in like Zimbabwe there's no point in a trillion dollars. We need to stop printing money, and go back to a currency backed by a rare, or useful commodity. america's Constitution says only Gold and Silver shall be our money because the founding fathers knew first hand fiat doesn't work; they saw what the constitutional dollar did, and wanted the future to avoid that.

You're mixing theories, causes, and affects here. The Federal Reserve's monetary policy is largely independent of the minimum wage laws (nevertheless reverting back to the gold standard).
#40 Posted by osirisx3 (2024 posts) -

[QUOTE="osirisx3"]

The far right hates the worker and wants to allow companies to hire at slave wages. If you took away min wage it would hurt every worker because the min wage is the base for all wages. if you work for wal mart prepare to lose your job because there will always be someone more desperate then you and will offer your boss that they will work for half your wage.

Its all about giving more and more to big companies. Its the libertarian answer for everything! They act as if the private sector is run by saints and the government is evil. The private sector has an awful record at human rights. Have you seen china? working at fox con is so bad 14 people killed them self's in one year! Its so bad it makes people not want to live anymore.

They chain people to toilets if they need a extra bathroom break. They force women to sign contracts saying they wont date so they can't get knocked up and take time off work.

The private sector does not care about you. It wants to suck you dry and leave you with nothing.

celebar

yeah private $ector dont care about u at all unlike obama who care. obama increasing minimum wage bc he care about u.

A non rebuttle i see

#41 Posted by Fightingfan (38011 posts) -
The Federal Reserve's monetary policy is largely independent of the minimum wage laws (nevertheless reverting back to the gold standard).mattbbpl
The Federal reserve does control minimum wage-- not directly, but with inflation they do. the dollar loses value annually, but people don't get raises to counter-react that inflation.
#42 Posted by mattbbpl (10906 posts) -
[QUOTE="mattbbpl"] The Federal Reserve's monetary policy is largely independent of the minimum wage laws (nevertheless reverting back to the gold standard).Fightingfan
The Federal reserve does control minimum wage-- not directly, but with inflation they do. the dollar loses value annually, but people don't get raises to counter-react that inflation.

Are you referring to the target 2% to 3% inflation? A slight amount of inflation is good for the economy. Granted, I'd prefer that they use NGDP targeting rather than inflation targeting, but that idea is slowly gaining traction.
#43 Posted by sonicare (53607 posts) -

Minimum wage should keep up with inflation, I guess.

#44 Posted by Fightingfan (38011 posts) -

[QUOTE="Fightingfan"][QUOTE="mattbbpl"] The Federal Reserve's monetary policy is largely independent of the minimum wage laws (nevertheless reverting back to the gold standard).mattbbpl
The Federal reserve does control minimum wage-- not directly, but with inflation they do. the dollar loses value annually, but people don't get raises to counter-react that inflation.

Are you referring to the target 2% to 3% inflation? A slight amount of inflation is good for the economy. Granted, I'd prefer that they use NGDP targeting rather than inflation targeting, but that idea is slowly gaining traction.

I was referring to "target", though I hate that word since realistically the central bank doesn't control that target they simply accommodate interest rates to it.

*The bad part is unless you have money you can't take advantage of the downward spikes of interest rates. Only helps the already rich, or financially established.

#45 Posted by Ace6301 (21389 posts) -
It obviously shouldn't be increased to something ridiculous but it should be raised a little bit as is. It's kind of disturbing that there's so many people working for the bare minimum at the moment that some people say raising the minimum would be a terrible thing to do economics wise.
#46 Posted by k2theswiss (16599 posts) -

It's a short term solution to nothing that leads to hire prices...

 

I don't know much in the field but i think every company needs be looked at individually. Don't get me wrong I don't mind owners making couple million since they are the ones risking. (only people who don't deserve what they get most of the time is celbs) 

#47 Posted by Rapporteur (95 posts) -

Well, obviously it should theoretically increase unemployment, but that doesn't necessarily seem to actually happen.coolbeans90

I'd imagine that's based on what market model (competitive v dynamic monopsony) you use to theorize about the labour market

caveat to myself: generally a minimum wage above a certain threshold should be expected to increase unemployment in both models 

#48 Posted by guynamedbilly (12967 posts) -
Minimum wage has to exist so long as inflation exists. Otherwise the poor people and less connected parts of the country would starve every time our money decreased in value. Cons are that you have fewer jobs available, but again that would only be a con until the people starved and died out because they couldn't afford food and healthcare.
#49 Posted by thegerg (15921 posts) -
Minimum wage has to exist so long as inflation exists. Otherwise the poor people and less connected parts of the country would starve every time our money decreased in value. Cons are that you have fewer jobs available, but again that would only be a con until the people starved and died out because they couldn't afford food and healthcare.guynamedbilly
So if inflation stops there should be no minimum wage?
#50 Posted by gamerguru100 (11151 posts) -
[QUOTE="dave123321"]About increasing/decreasing/deletingJML897
wtf are there seriously people who want to get rid of minimum wage :|

Or decrease it too. My French teacher told us that minimum wage in France is like $16 or something and that it's a livable wage. And then there's MURRICA! We're #1 ! We're #1! HUR HUR HUR with $7.25 as minimum wage, which is not livable. WTF, America?