Minimum Wage

[Johnfromokc]

I'm in favor of helping the unskilled but I'm not sure if minimum wage is the best way to help them. I'm not an economist but I've heard increasing minimum wage drives inflation which requires another increase. It's like a tiger chasing its tail.

This is a fallacy perpetuated by libertarian and conservative economists. It has been repeated so many times, even reasonable people have come to believe it. Here is my post from earlier in this thread on the subject:

I have a good working knowledge of two nations with minimum wage laws. I know there are minimum wage laws in Europe, but I'm not familiar with them. However, I have spent time in Australia, and have family there, and have studied their economic system quite a bit. Australia's MW is $15 per hour, they typically get 4 weeks paid vacation plus additional vacation pay and universal heath care coverage via a two-teired system. Their economy is plugging right along with low unemployment as the United States struggles through what is being called the "Great Recession".

Compare Australia to the United States MW of $7.25 per hour, zero benefits, period. Even many mid level occupations do not have health care coverage or any paid vacation time at all.

In the United States, the privileges and benefits tend to go to the wealthier, although many here have been convinced by the corporate media that the lower working class and the welfare class are recieving unearned benefits. I challenge any of those type thinkers to give up their current lifestyle and enter the welfare ranks if they really believe this.

For me, I will never begrudge giving a fair shake to the working class. A broad middle class is required for a healthy economy. Living wage laws and universal health care contribute greatly to a vibrant middle class. By my estimation, Australia has it right, and we, the U.S. have it wrong where the minimum wage and health care are concerned. The worst thing any society can have is the working class being divided against itself while the wealthy and privileged get richer and richer from the higher profits from low working class wages.

Perhaps the best way to help the unskilled is to teach them a skill. That does not necessarily mean university. Some people are not cut out for that. Trade schools are a good option for some. Maybe in extreme cases the government should pay part of a person's wage. I've heard of that working with retarded people.

All unskilled workers do not have the aptitude for the trades either. I know this to be absolute fact because I am a tradesman and an instructor. So "skills" vary widely. Do you want a retarded electrician wiring your home?

 

[sexysadie]

I would argue, that as a society, if we are dependent on minimum wage our country is doomed. If you are over 25 and still earning minimum wage you need to have someone smack you in the back of the head because there is no excuse (in the US) why your ass can't go to school. There is tons of free money or student loans you can get to better your career choices. Some would make excuses for why they can't go to school, and that's fine, but remember, its just an excuse.

You cannot get far in today's world without a degree, better yet, the right degree. Pick one. I'm not being an ass, just truthful. Take charge of your own life and don't depend on your government (minimum wage, etc) to bail you out. I was poor when I was in my 20s. Dirt poor. I know the realities of both extremes.

When I was in my twenties I found myself all alone to raise my child and with 21/2 jobs I made ends meet and was soon able to get the help I needed to finish my education, and now I'm doing ok and I even own my own home. But not everybody is as fortunate. In my line of work I run into cases every day where people put their homes on the line just to pay the bills and keep their heads above water. I know people who've gone to school and spent some of their own hard earned burger flipping money only to one day become a 35yr old unemployed teacher.....it's unfortunate but it happens every day. Most of the folks i know who earn mim wage, really earn it and then some.....and believe me when I say that if they had any other choice they wouldn't be doing what they're doing. What bugs me is when parents allow their children to quit highschool because they don't have the energy or the know how to deal with them...please. I didn't have a choice when I was that age and neither did either of my kids, a half decent education is the least I can provide them with in a world where jobs are so hard to come by without one.

I'd like to see you stand in front of some of these people and say to them what you just said here.......and see who gets slapped..lol

 

[darkcgi]

i could live off minimum wage
if i had 4 jobs and lived by my self

 

[BornReady]

This is a fallacy perpetuated by libertarian and conservative economists. It has been repeated so many times, even reasonable people have come to believe it.

I really wouldn't know what libertarian and conservative economists say. I took one economics class in college and that's it. Am I to believe the connection is a fallacy because you said so or can you explain why increases to minimum wage don't drive inflation?

All unskilled workers do not have the aptitude for the trades either.

I didn't say all unskilled workers should go to trade school. Maybe you're looking for an easy answer when there aren't any.

 

[Johnfromokc]

I really wouldn't know what libertarian and conservative economists say. I took one economics class in college and that's it. Am I to believe the connection is a fallacy because you said so or can you explain why increases to minimum wage don't drive inflation?

Although you have taken only one economics class, you stated you "have heard" minimum wage drives inflation. You even used the phrase "It's like a tiger chasing its tail." That you repeat this oft quoted phrase speaks to the effectiveness of that school of thought, and to the effectiveness of the think tanks that have been funded to disseminate that message to the general public. One can't help but stand in awe of how well they have educated the general population.

The minimum wage does NOT drive inflation. Does it have an effect on price increases? Yes, of course it does. Again, as I stated of my first-hand knowledge of Australia, it works extremely well there. Prices in Australia are comparable to where I live in Oklahoma City on average. Prices in Sydney are comparable to prices in San Francisco, Seattle, Boston or any large U.S. city. Now ask yourself how that could possibly be if minimum wage was the primary driver of inflation. Not only that, how in the world does Australia provide universal health care to 100% of its citizens and still have comparable consumer prices to the U.S.? Oh yeah. and Australia's unemployment rate is currently 4.9%....How's that compare to the United States with our $7.25 per hour MW with no benefits or health care coverage?

It is simple common sense.

Another important feature of a living minimum wage is redressing the balance between high earners and low earners. For example, the average CEO in the U.S. earns 355 times that of the average American worker - $11,358,445 for the average CEO divided by the average workers salary of $32,000. How bad could it be for the economy if CEO's only earned say 300 times the average worker? In 1970, the average CEO earned 28 times as much as the typical worker. Let's compare the typical pay of a Navy Seal, which is very close to that of a teacher today with CEO pay:

The only downside to a living wage is for the super rich and the investor class that makes it's profits from the low wages paid to the average American worker. That's not much of a drawback in my book.

I didn't say all unskilled workers should go to trade school. Maybe you're looking for an easy answer when there aren't any.

How you conclude I'm "looking for the easy answer" is a mystery to me. I'm not "looking" for anything. I'm stating some of what I've learned in my admittedly short 47 years so far on this planet.

 

[Kyle B]

I haven't lived in Australia but I've heard that it's much more expensive to live there. Plus, I'm betting taxes are insanely high to pay for all those nice government programs. A high minimum wage will also lower the demand for labor.

Like it or not, it all balances out.

 

[Johnfromokc]

I haven't lived in Australia but I've heard........

You "heard" wrong. Instead of listening to others who do not know what they are talking about and then repeating it, why don't you research it for yourself? There are several Australians on this board. Ask some Australians! (What a concept ) Go to "Google AU" and search the Australian government data sets and compare them to the U.S.

..................... that it's much more expensive to live there. Plus, I'm betting taxes are insanely high to pay for all those nice government programs. A high minimum wage will also lower the demand for labor.

You'll lose that bet my friend.

Like it or not, it all balances out.

What balances out? Let's see...Australia with 4.9% unemployment, $15.00 per hour minimum wage, universal health care, 4 weeks paid vacation with vacation premium pay compared to the U.S. with $7.25 MW, zero benefits, no health care and no vacation and 10% unemployment.

Sorry...doesn't "balance" at all.

 

[freakofnature]

I would argue, that as a society, if we are dependent on minimum wage our country is doomed. If you are over 25 and still earning minimum wage you need to have someone smack you in the back of the head because there is no excuse (in the US) why your ass can't go to school. There is tons of free money or student loans you can get to better your career choices. Some would make excuses for why they can't go to school, and that's fine, but remember, its just an excuse.

You cannot get far in today's world without a degree, better yet, the right degree. Pick one. I'm not being an ass, just truthful. Take charge of your own life and don't depend on your government (minimum wage, etc) to bail you out. I was poor when I was in my 20s. Dirt poor. I know the realities of both extremes.

I used to think like you do and went so far as to do 2 years of a 4 year bachelors degree. Then I quit because it was too expensive to stay in school and in the end a degree would have been pointless for my line of work. What I needed was hands on experience, which I went out and got. I do not have a degree now and I'm doing just fine.

It's not people's schooling that's the problem. It's their attitudes. The right attitude can get you just as far as a degree, IMO.

 

[All Else Failed]

It is a hard market right now. So, you'll find qualified college graduates flipping burgers and waiting tables simply because they HAVE to. Job market is horrendous right now.