Should minimum wage be increased?

[Coolwhip]

But his pithy interjection was (I presume) predicated on points roughly similar to the ones I made above. What about the statement, "Other things equal, an increase in the minimum wage tends to increase unemployment," eludes you?

What eludes me is any actual real world information to support it. While having quite a bit of history to look at which shows no relation between modest increases in minimum wage and the unemployment rate because the unemployment rate is much more dependent on other macroeconomic conditions. While the benefit to low wage workers can't be argued. Any tiny increase in unemployment that occurs from raising the minimum wage too quickly is far outweighed by the benefit to the working poor, and will generally be good for the economy as a whole because of the long term increase in demand.

I don't know about you, but I generally consider making patently false assertions pretty "retarded".

 

[Joeof1]

The is a retarded statement.

Do you want to work for a dollar an hour?

Having a minimum wage that is livable increases the motivation to be employed.

Minimum wage laws price unskilled workers out of the market, it reduces the available supply of jobs for people whom are looking for employment.

So do you care to actually be civil and discuss this like an adult, or continue with the Ad-Homs? You seem to have this idea that what I want is what reality is, and that is simply not the case. It doesn't matter what you or I consider a 'livable wage', which is a ridiculous notion in the first place.

 

[P A]

Business seems to be running pretty inefficient if they can get rid of workers and yet maintain the same production.

If this is the case, wouldn't the economy be better off if we didn't tie up people in jobs where it's effectively busywork?

I never said anything about maintenance of current productive output. Any firm willing to risk layoffs and unable to mechanize/outsource will reap their reward. But since we're talking largely about unskilled laborers performing (mostly) menial, easily automated/outsourced tasks, I fail to see what keeps businesses from doing just that (in theory). Firms don't need their unskilled wage slaves anywhere near as much as some people seem to think.

What eludes me is any actual real world information to support it. While having quite a bit of history to look at which shows no relation between modest increases in minimum wage and the unemployment rate because the unemployment rate is much more dependent on other macroeconomic conditions. While the benefit to low wage workers can't be argued. Any tiny increase in unemployment that occurs from raising the minimum wage too quickly is far outweighed by the benefit to the working poor, and will generally be good for the economy as a whole because of the long term increase in demand.

I don't know about you, but I generally consider making patently false assertions pretty "retarded".

Since only three sizable, (relatively) high-quality empirical studies have been conducted on the subject, one of which supported your conclusion (Card and Krueger), one of which upheld basic principles of macroeconomics (Hoffman and Trace), and another which was equivocal (Neumark and Wascher), I wouldn't start in with all the huffing and puffing over empirical data just yet. You'll just end up embarrassing yourself.

I do, however, agree with you on one thing: Unemployment is affected by many other factors than the minimum price of labor - hence my careful repetition of the words, "Other things equal."

 

[Escher's Waterfall]

Minimum wage laws price unskilled workers out of the market, it reduces the available supply of jobs for people whom are looking for employment.

Sure it does, at least in the short term, under some circumstances.

If a factory is employing minimum wage workers at full efficiency, and they are making $X per employee in profit, and the minimum wage increase is <$X, then it's obvious that such an increase is not necessarily going to lead to more unemployment at that factory.

But if the increase is greater than the profit per employee, then things get messier. The factory must increase the cost of goods in order to meet wages. That increase will effect demand for their product, even in a closed economy (where all employers are subject to the wage increase), since consumers may seek out substitute goods where labor makes a lower percentage of the total cost of the product.

But such a relationship isn't that great, as should be obvious. If wages had a long term effect on unemployment, most of us would be unemployed, since we make far more than we would in past moments in history. We also make less, on average, than we have at various moments in history, yet unemployment doesn't necessarily fall.

 

[What 23]

Walmart and partners love low min-wage and welfare in general.
1. cheap labor
2. 80% of food stamps/EBT are used at walmart.

Disgusting

 

[Coolwhip]

Don't forget about about Dube, Naidu, and Reich or Dube, Lester, and Reich. And even Hoffman admits that his "negative" findings are nearly insignificant in most cases, and do not account for benefits to other sectors of the economy through the multiplier effect.

The only people who still think that way are still going on about Say's law. Join this century please.

Companies hire enough workers to fill whatever demand there is for their goods and services, no more, no less. The only way a small increase in minimum wage would effect employment were if a price increase resulting from the wage increases caused to demand decline. And considering profit margins are higher than ever, and US corporations are sitting on piles of cash, there is no real reason to raise prices. The net result will be a transfer of income from the companies, which are unlikely to spend that money on goods or services, to its workers, who will use actually use the money thus increasing demand and stimulating employment growth.

 

[Joeof1]

Sure it does, at least in the short term, under some circumstances.

If a factory is employing minimum wage workers at full efficiency, and they are making $X per employee in profit, and the minimum wage increase is <$X, then it's obvious that such an increase is not necessarily going to lead to more unemployment at that factory.

Not all workers in a factory get paid the same, and not all workers perform to the same level. When you raise the minimum wage Elroy over there that is a special needs case and can only push a broom will likely find himself out of a job, because all he does is sweep the floor and one of the higher paid workers can start sweeping their own area up and save the money from paying for old Elroy over there.

If any of you are named Elroy, my apologies.

But if the increase is greater than the profit per employee, then things get messier. The factory must increase the cost of goods in order to meet wages. That increase will effect demand for their product, even in a closed economy (where all employers are subject to the wage increase), since consumers may seek out substitute goods where labor makes a lower percentage of the total cost of the product.

But such a relationship isn't that great, as should be obvious. If wages had a long term effect on unemployment, most of us would be unemployed, since we make far more than we would in past moments in history. We also make less, on average, than we have at various moments in history, yet unemployment doesn't necessarily fall.

Unemployment if calculated as it was during the Great Depression were calculated the same, the US employment figures have already surpassed the highest they were during the worst years of the Great Depression. Most of that is do to the lack of falling real wages and inflated pricing of minimum wage laws.

 

[kaywholed]

paying workers is too onerous on big business. fuck minimum wage, I want to increase my EPS by not paying any wage to workers. can't we just go back to the good old days of slavery?

 

[kaywholed]

Most of that is do to the lack of falling real wages and inflated pricing of minimum wage laws.

So there is high unemployment because wages are falling, and because minimum wage is too high?

In the real world unemployment is high because business stopped investing in growth (in a large part because their 'cash' is offshore because they are avoiding tax liabilities). We fucked the consumers, and then complained the consumers weren't consuming enough, so we fucked the consumers more.

 

[Escher's Waterfall]

Not all workers in a factory get paid the same, and not all workers perform to the same level. When you raise the minimum wage Elroy over there that is a special needs case and can only push a broom will likely find himself out of a job, because all he does is sweep the floor and one of the higher paid workers can start sweeping their own area up and save the money from paying for old Elroy over there.

If any of you are named Elroy, my apologies.

So workers in the factory have enough free time to sweep the floors? Sounds like the factory is inefficient.

Unemployment if calculated as it was during the Great Depression were calculated the same, the US employment figures have already surpassed the highest they were during the worst years of the Great Depression.

Well, Bureau of Labor Statistics goes back to 1948 with their app. So that isn't a help. (Wow, and did you know that unemployment was higher under Reagan than in the Great Recession?) This .gov site goes back during the Great Depression and says it peaked at 24%

However, the BLS also has a chart going back through the Great Depression.

What's the unemployment rate in 1933? 24.9%.

What was it during the Great Recession? Highest was 9.6% in 2010.

So what statistics are you using?

Most of that is do to the lack of falling real wages and inflated pricing of minimum wage laws.

Well, back in 1933, the US got it's first minimum wage law, which would be $4.10 today. It was invalidated two years later.

However, if you check the chart going through the Great Depression, in 1932, the unemployment rate was over 20% - higher than it ever was during the Great Recession, even though there was a minimum wage throughout the Great Recession. In the summer of 1933, the first federal minimum wage law was passed, and unemployment rates started to fall. In 1935, the federal minimum wage law was struck down. Rates fell, but then jumped up again in 1938. In 1938, the second federal minimum wage law was passed, and rates fell again. The link between a minimum wage law and unemployment, even on a year-to-year basis, seems to be lost in other economic noise.

 

[Nately's Whore]

I find it incalculably odd that someone would even raise a question like this in a serious matter.

Fiat currency is completely doomed and we're currently in a bad state of 'stagflation' because subsidized money is being used for day-trading instead of being pushed back into the community.

Inflation is exponential like always and has created an environment of wage-slavery the likes of which we've not seen in some time (and even back then the wool couldn't be as openly concealed over the eyes of the indentured nearly as well as it currently stands for the common folk).

Cost-of-living raises are almost non-existant in most fields where min. wage workers are prevalent.

 

[Joeof1]

Stagflation is a myth. It's real inflation. That is how inflation behaves, and how it has been described for well over 400 years.

Subsidizing the economy would make matters worse for that said community, unless you think that it turned out well for the Wiemar Republic.

So workers in the factory have enough free time to sweep the floors? Sounds like the factory is inefficient.

Every factory requires it's workers to clean up their area.

Well, Bureau of Labor Statistics goes back to 1948 with their app. So that isn't a help. (Wow, and did you know that unemployment was higher under Reagan than in the Great Recession?) This .gov site goes back during the Great Depression and says it peaked at 24%

However, the BLS also has a chart going back through the Great Depression.

What's the unemployment rate in 1933? 24.9%.

What was it during the Great Recession? Highest was 9.6% in 2010.

So what statistics are you using?

How about you actually read the data you are trying to present to me first. Then look at how it's calculated. The way Unemployment is calculated has been changed several times, including as recently as 2010. People that are not on unemployment insurance are not counted as unemployed by the BLS. In the 1930's they were.

Well, back in 1933, the US got it's first minimum wage law, which would be $4.10 today. It was invalidated two years later.

However, if you check the chart going through the Great Depression, in 1932, the unemployment rate was over 20% - higher than it ever was during the Great Recession, even though there was a minimum wage throughout the Great Recession. In the summer of 1933, the first federal minimum wage law was passed, and unemployment rates started to fall. In 1935, the federal minimum wage law was struck down. Rates fell, but then jumped up again in 1938. In 1938, the second federal minimum wage law was passed, and rates fell again. The link between a minimum wage law and unemployment, even on a year-to-year basis, seems to be lost in other economic noise.

See my first reply to you.

I continually see this everywhere I go, people only looking at the reported figures and not how they are calculated, then go back to my original comment on it, and take note that you simply ignored that I already specified where you went wrong before this reply. It's the same everywhere you guys are predictably defensive of government figures without ever looking into how they are actually calculated. Their own methods of calculating are being used to make my point.

So there is high unemployment because wages are falling, and because minimum wage is too high?

In the real world unemployment is high because business stopped investing in growth (in a large part because their 'cash' is offshore because they are avoiding tax liabilities). We fucked the consumers, and then complained the consumers weren't consuming enough, so we fucked the consumers more.

Unemployment is high for the very reason reasons I stated already. Growth is a fiction in any economy that has no savings rate.

paying workers is too onerous on big business. fuck minimum wage, I want to increase my EPS by not paying any wage to workers. can't we just go back to the good old days of slavery?

Yes, because having workers that don't show up for work works out great for businesses looking to make a profit by selling manufactured goods. Note the sarcasm.

 

[Coolwhip]

Unemployment if calculated as it was during the Great Depression were calculated the same, the US employment figures have already surpassed the highest they were during the worst years of the Great Depression. Most of that is do to the lack of falling real wages and inflated pricing of minimum wage laws.

How do you even come up with this stuff?

 

[kaywholed]

Unemployment is high for the very reason reasons I stated already. Growth is a fiction in any economy that has no savings rate.

Growth ceases when people (1%) remove the profit from the economy, halting R&D, capital and labour investments.

The trickle down economy has fucking failed, to the extent that the lower and middle class have been almost reduced to one.

Yes, because having workers that don't show up for work works out great for businesses looking to make a profit by selling manufactured goods. Note the sarcasm.

Slaves show up for work, I think we should get rid of the illusion and allow slavery to exist once again.

 

[Escher's Waterfall]

Stagflation is a myth. It's real inflation. That is how inflation behaves, and how it has been described for well over 400 years.

And what makes it "inflation" to you?

Subsidizing the economy would make matters worse for that said community, unless you think that it turned out well for the Wiemar Republic.

So economic subsidies lead to the Wiemar Republic's financial woes?

I don't think many economists would agree with you.

Every factory requires it's workers to clean up their area.

If each worker had the time to clean up his or her area without having an effect on production, then that factory was being inefficient by hiring Elroy.

How about you actually read the data you are trying to present to me first. Then look at how it's calculated. The way Unemployment is calculated has been changed several times, including as recently as 2010. People that are not on unemployment insurance are not counted as unemployed by the BLS. In the 1930's they were.

During the Great Depression, the unemployment rate topped out at 24.9%. During the recession, it topped out at an official 9.6%. That's an increase of 159%. Are you seriously arguing that for every 100 people "officially" unemployed, there was 159 people unofficially employed?

The highest "unofficial unemployment" figure I can find is 16.7% for the Great Recession, and that's counting the part-timers as "unemployed".

I still can't find any credible evidence for your assertion that unemployment during the recession was the same as during the Great Depression.

I continually see this everywhere I go, people only looking at the reported figures and not how they are calculated, then go back to my original comment on it, and take note that you simply ignored that I already specified where you went wrong before this reply. It's the same everywhere you guys are predictably defensive of government figures without ever looking into how they are actually calculated. Their own methods of calculating are being used to make my point.

And? Show us.

Growth is a fiction in any economy that has no savings rate.

I'd say the inverse - no savings is a friction on growth.

Yes, because having workers that don't show up for work works out great for businesses looking to make a profit by selling manufactured goods. Note the sarcasm.

How does it work out for the same business when consumers don't have the money to afford their goods?

 

[superelephant]

How does it work out for the same business when consumers don't have the money to afford their goods?

This is so fucking stupid. seriously? they fucking fire everyone close shop and live on their millions upon millions of dollars.(or whatever happens to be the dominate currency as they've had millions stashed in all of them) that's what happens.

 

[Nately's Whore]

Stagflation is a myth. It's real inflation. That is how inflation behaves, and how it has been described for well over 400 years.

Subsidizing the economy would make matters worse for that said community, unless you think that it turned out well for the Wiemar Republic.



Every factory requires it's workers to clean up their area.




How about you actually read the data you are trying to present to me first. Then look at how it's calculated. The way Unemployment is calculated has been changed several times, including as recently as 2010. People that are not on unemployment insurance are not counted as unemployed by the BLS. In the 1930's they were.





See my first reply to you.

I continually see this everywhere I go, people only looking at the reported figures and not how they are calculated, then go back to my original comment on it, and take note that you simply ignored that I already specified where you went wrong before this reply. It's the same everywhere you guys are predictably defensive of government figures without ever looking into how they are actually calculated. Their own methods of calculating are being used to make my point.




Unemployment is high for the very reason reasons I stated already. Growth is a fiction in any economy that has no savings rate.




Yes, because having workers that don't show up for work works out great for businesses looking to make a profit by selling manufactured goods. Note the sarcasm.

You've got to be fucking shitting us.

 

[Joeof1]

How do you even come up with this stuff?

Some people call it reading, others call it magic.

Growth ceases when people (1%) remove the profit from the economy, halting R&D, capital and labour investments.

The trickle down economy has fucking failed, to the extent that the lower and middle class have been almost reduced to one.

That is what inflation does. It creates malinvestment and imbalances all across the economy that is experiencing it, and it destroys any chance of real wealth being preserved.

And what makes it "inflation" to you?

The definition of inflation in economics is the expansion of the monetary supply by specie. In more modern terms for economics, it's the growth of the monetary supply in relation to available population which employs it's use.

So economic subsidies lead to the Wiemar Republic's financial woes?

The answer is yes.

I don't think many economists would agree with you.

I am an Economist, and there are great many that have agreed with me in the past, and still do to this day. Austrian school is the oldest and fastest growing school of thought in economics.

If each worker had the time to clean up his or her area without having an effect on production, then that factory was being inefficient by hiring Elroy.

No one ever said that when factories are able to hire at a lower wage that they do not hire extra people to allow the work load to be better distributed. Happy workers produce better goods at a higher efficiency.

During the Great Depression, the unemployment rate topped out at 24.9%. During the recession, it topped out at an official 9.6%. That's an increase of 159%. Are you seriously arguing that for every 100 people "officially" unemployed, there was 159 people unofficially employed?

The highest "unofficial unemployment" figure I can find is 16.7% for the Great Recession, and that's counting the part-timers as "unemployed".

I still can't find any credible evidence for your assertion that unemployment during the recession was the same as during the Great Depression.

I know you can't find it, because you are looking for someone in the mainstream to come out and say it. Do you not understand what career suicide is?

You have to do the math yourself, and keep digging, the information is out there. I had it shown to me once by Tom Woods. That is the direction you might want to start in.

And? Show us.

How about you show me that you can do some work on your own first, and then I can start showing you some other things on the topic. The last thread of this nature died because none of you were willing to do anything for yourselves. I do not work like that. I refuse to simply pump out information for free without an actual conversation around it. Horses and water.... I value my time a lot, and I do not give it freely.

I'd say the inverse - no savings is a friction on growth.

Sure you would, because you've been told that all your life. Look around you, the only companies and corporations growing are those that are being pumped full of free Federal Reserve notes. Credit is debt. Savings is wealth in storage, just waiting to be used in a productive effort.

How does it work out for the same business when consumers don't have the money to afford their goods?

Where did I say that it did? I already know where this conversation is headed.

I already know this conversation will end with people discounting it and throwing Ad-Hom's my direction. This is the norm for me. If you look above my post it's already started. I do not feel like sharing information among people whom are hostile. I don't believe in simply handing out stuff for free without civility. There is a reason why so many have left this forum, and it has to due with the hostility that is present everywhere. This hostility is anger and resentment. All of your trials and tribulations and difficulties are caused by the monetary policies that are in place now. If a group of people can not be strong enough to stay calm and behave in a civil fashion, those of us that actually have that information and knowledge will not be willing to share it or help you understand it. We will simply leave you to your vices and find sanctuary elsewhere.

The difference between me and the rest of you other than base philosophy is that I refuse to be bullied into giving away what I know and understand for free. I have nothing to prove to anyone here, and me sharing something is merely a gesture of civility towards all of you. If you want answers, you have to behave civilly, otherwise I will share nothing. It's best that you all understand what level our relationship is on, and keep it in mind. I have been a part of this site since it started in one form or another. I remember when it was just a bulletin board back in 1999. I have slowly cut myself away from it thanks to several of the associations I have had with people that populate this site.

I find myself less and less willing to converse with a great number of people over the Internet because of the intolerable hostility encountered everywhere. It seems that pseudo-anonymity makes people behave in ways that they otherwise would not. I do not behave that way, and I expect others to return that civility.

Just look at how hostile Paranoid Android was towards me in the other thread. Where were the Mods? Everyone disappears when I do come around, why? You don't like it when your beliefs are questioned, and most of you tend to get hostile.

 

[BK Bonkey Kong]

How about you actually read the data you are trying to present to me first. Then look at how it's calculated. The way Unemployment is calculated has been changed several times, including as recently as 2010. People that are not on unemployment insurance are not counted as unemployed by the BLS. In the 1930's they were.

I thought the criteria was whether or not an unemployed person looked for work in the past four weeks. Even if you take the broadest measure of unemployment, the U-6, which includes both discouraged workers and part-time workers wishing to work full-time as part of the unemployed, the figure peaks at 16.6% in December 2010. I don't see any possible way of calculating unemployment that gets the recent recession to 24% unemployed (like in the Great Depression).

If you want answers, you have to behave civilly, otherwise I will share nothing. It's best that you all understand what level our relationship is on, and keep it in mind.

I think this is why people respond to you the way that they do. You're talking about controversial topics such as stagflation with authority as if you know for an absolute fact that what you say is true ("stagflation is a myth"), and then stipulating that people must bow down to your knowledge and accept what you say as fact. That's not how debate works though. You have to actually make good points and then back them up. You may as well not even post with authority if you're going to back it up with "figure out why it's the truth on your own". It does nothing for anyone but yourself.

 

[Joeof1]

I thought the criteria was whether or not an unemployed person looked for work in the past four weeks. Even if you take the broadest measure of unemployment, the U-6, which includes both discouraged workers and part-time workers wishing to work full-time as part of the unemployed, the figure peaks at 16.6% in December 2010. I don't see any possible way of calculating unemployment that gets the recent recession to 24% unemployed (like in the Great Depression).

Examine how the data itself is actually collected.

I think this is why people respond to you the way that they do. You're talking about controversial topics such as stagflation with authority as if you know for an absolute fact that what you say is true ("stagflation is a myth"), and then stipulating that people must bow down to your knowledge and accept what you say as fact. That's not how debate works though. You have to actually make good points and then back them up. You may as well not even post with authority if you're going to back it up with "figure out why it's the truth on your own". It does nothing for anyone but yourself.

You can think that if you wish. I am guiding here, not teaching. The lack of willingness to discover on one's own is partly why the US is in this mess in the first place.