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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 13, 2013 9:50 am Post subject: Raising Minimum Wage |
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Obama spoke about bumping min wage to $9.00 an hour last night. How can politicians be so economically inept? Have they not figured out that raising minimum wage does nothing but make things worse?
Businesses only have so much money available to put towards payroll. A 24% increase in wages (which is actually a lot more than that when calculating additional benefits/taxes etc.) is only going to result in two scenarios. The first scenario is that the business is able to raise their prices and pass this on to the consumers. This means that the cost of everything goes up, essentially negating the whole point of raising minimum wage in the first place, which is to allow minimum wage earners to live better.
The second scenario, is that the business can't pass those prices on to consumers. In this scenario, there is still a finite amount of money available for payroll. So now, in order to compensate for a 24+% increase in payroll costs, the business must either cut labor hours across the board, or by firing employees. So in this scenario, we now have either more people without jobs, or people are working less hours.
And at the end of the day, in either scenario, the real losers in this deal are the people who make more than minimum wage. Someone making $15/hr, isn't making Min wage + 8 dollars an hour. So the bump in minimum wage won't mean that they make an extra $1.75/hr, it will just mean that they now make $1.75/hr closer to minimum wage. Of course they're also going to be seeing the effect of the increased wages (see above) of their goods. So at the end of the day, we've now decreased the discretionary income and the quality of life non minimum wage earners have, for the illusion that minimum wage earners are going to enjoy a better life. What ever happened to acquiring skills that make you more valuable to your employer to justify a higher wage than the minimum?
Politicians can't possibly be this dense can they? |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Feb 13, 2013 10:11 am Post subject: |
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Welcome to the party. Out here on the left coast we have state minimums above federal(close to $9 anyway in OR), and by the way here they are indexed to inflation so it raises every year. _________________ Is President Obama a Keynesian? |
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chavez Ladies Man
Joined: 22 Sep 2003 Posts: 27375 City: Roseville
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Posted: Feb 13, 2013 10:26 am Post subject: |
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It's $8 here.
I can understand inflation indexing it, but picking arbitrary numbers and setting them globally does not make sense.
The local market should bear whatever the min rate is. Setting a global number is counterproductive - why should someone in Minot ND have the same min wage as someone in SFO? All that is going to do is cause inflation at the local level in the markets with lower cost of living. Let the local market work itself out and stop trying to intervene at a federal level... _________________
Quote: | That's Mr. Gingermex to you a$$hole. |
RIP MHL 04/25/1958 - 01/11/2006 |
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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 13, 2013 10:28 am Post subject: |
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eeven73 wrote: | Welcome to the party. Out here on the left coast we have state minimums above federal(close to $9 anyway in OR), and by the way here they are indexed to inflation so it raises every year. |
I believe Obama's plan calls for that as well (indexed to inflation).
I'm constantly astounded at the lack of basic economic and financial intelligence in this country, and from all walks of life. From politicians to burger flippers and everyone in between, it seems like 70% of people in this country don't understand the most basic financial or economic principles. |
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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 13, 2013 10:35 am Post subject: |
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chavez wrote: | It's $8 here.
I can understand inflation indexing it, but picking arbitrary numbers and setting them globally does not make sense.
The local market should bear whatever the min rate is. Setting a global number is counterproductive - why should someone in Minot ND have the same min wage as someone in SFO? All that is going to do is cause inflation at the local level in the markets with lower cost of living. Let the local market work itself out and stop trying to intervene at a federal level... |
If you look at historical levels, the current min. wage actually has slightly outpaced inflation.
As a comical anecdote, I saw an article referencing a study showing that every $1.00 increase in wages in a minimum wage household results in an annual increase in household spending of $2,800.
That sounds great! Of course, until you realize that in an average work year of 2000 hours, that $1.00 increase only means an extra $2000 in wages (pre-tax) to that household. So either the study is wrong, or the increase in wages causes these people to actually go 800 dollars in debt per year. or ... I'm not sure which. |
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jgriffith Wakeboarder.Commie
Joined: 21 Mar 2012 Posts: 1454 City: Boerne
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Posted: Feb 13, 2013 10:59 am Post subject: |
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eich82 wrote: | As a comical anecdote, I saw an article referencing a study showing that every $1.00 increase in wages in a minimum wage household results in an annual increase in household spending of $2,800.
That sounds great! Of course, until you realize that in an average work year of 2000 hours, that $1.00 increase only means an extra $2000 in wages (pre-tax) to that household. So either the study is wrong, or the increase in wages causes these people to actually go 800 dollars in debt per year. or ... I'm not sure which. |
That sounds about right, you are explaining Washington accounting 101 right? |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Feb 13, 2013 11:08 am Post subject: |
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Quote: | I'm constantly astounded at the lack of basic economic and financial intelligence in this country, and from all walks of life. From politicians to burger flippers and everyone in between, it seems like 70% of people in this country don't understand the most basic financial or economic principles. |
QFT
A large portion of the general public doesn't fully grasp the difference between REVENUE and PROFIT for a corporation. Forget trying to talk US Monetary Policy or the like. _________________ Is President Obama a Keynesian? |
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Okie Boarder Ladies Man
Joined: 03 Mar 2008 Posts: 10056 City: Edmond
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Posted: Feb 13, 2013 11:35 am Post subject: |
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I think it has more to do with appeasing the voting base to stay in office than it does about any sort of logic and reason. _________________ If love is blind, why is lingerie so popular? |
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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 13, 2013 12:16 pm Post subject: |
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Okie Boarder wrote: | I think it has more to do with appeasing the voting base to stay in office than it does about any sort of logic and reason. |
While there is some truth to that, how much of the voting base makes minimum wage? I don't know the figures, but I'm sure a small % of the population actually makes minimum wage. And a good chunk of minimum wage earners aren't even old enough to vote. Another good chunk of them probably don't bother to vote.
And again, this only gives the illusion that minimum wage earners are better off with an increased min. wage. Furthermore, for everyone else, it only hurts them, which should have the opposite impact on voting.
Of course this brings us back to my earlier comment about the lack of economic/financial intelligence in the average American, which basically means that most people are too stupid to realize that this affects them negatively and/or they're too complacent to care. |
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Okie Boarder Ladies Man
Joined: 03 Mar 2008 Posts: 10056 City: Edmond
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Posted: Feb 13, 2013 1:03 pm Post subject: |
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Right, but those that vote and don't understand the process (to your point), will be the ones that see this as a good thing and support it. _________________ If love is blind, why is lingerie so popular? |
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brew Wakeboarder.com Freak
Joined: 09 Aug 2005 Posts: 2778 City: Jackson
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Posted: Feb 13, 2013 1:44 pm Post subject: |
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eich82 wrote: | chavez wrote: | It's $8 here.
I can understand inflation indexing it, but picking arbitrary numbers and setting them globally does not make sense.
The local market should bear whatever the min rate is. Setting a global number is counterproductive - why should someone in Minot ND have the same min wage as someone in SFO? All that is going to do is cause inflation at the local level in the markets with lower cost of living. Let the local market work itself out and stop trying to intervene at a federal level... |
If you look at historical levels, the current min. wage actually has slightly outpaced inflation.
As a comical anecdote, I saw an article referencing a study showing that every $1.00 increase in wages in a minimum wage household results in an annual increase in household spending of $2,800.
That sounds great! Of course, until you realize that in an average work year of 2000 hours, that $1.00 increase only means an extra $2000 in wages (pre-tax) to that household. So either the study is wrong, or the increase in wages causes these people to actually go 800 dollars in debt per year. or ... I'm not sure which. |
I thought most studies counted household income as 2 earners. I may be wrong on that though. |
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jryoung Ladies Man
Joined: 19 Mar 2004 Posts: 7664 City: Man Jose
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Posted: Feb 13, 2013 3:34 pm Post subject: |
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eeven73 wrote: | Quote: | I'm constantly astounded at the lack of basic economic and financial intelligence in this country, and from all walks of life. From politicians to burger flippers and everyone in between, it seems like 70% of people in this country don't understand the most basic financial or economic principles. |
QFT
A large portion of the general public doesn't fully grasp the difference between REVENUE and PROFIT for a corporation. Forget trying to talk US Monetary Policy or the like. |
Have you ever seen a politician pitch a plan that economic sense? From this minimum wage BS from the left to the "taxing job creators" on the right, elected officials know their voting constituents are most likely blinded by party affiliation and it doesn't help that those that are most vocal driving the discussion happen to be way out on the fringe.
Monetary policy as a whole is complex as F@#$. I have a pretty good understanding finance in general, but when I get to talking to some colleagues with PhDs in Economics the conversation quickly goes right over my head. _________________
Quote: | You don't meet many old vegans. It's mostly young priviliged kids trying to figure out where they stand in the world. | - Steve Rinella |
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pyrocasto PityDaFool Who Posts This Much
Joined: 29 Aug 2003 Posts: 5291 City: hendersonville
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Posted: Feb 13, 2013 7:47 pm Post subject: |
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Thank God it wont affect my business much, I start people off at $9 at the lowest already. The only difference is now people will bitch about it because it's only minimum wage! _________________
eeven73 wrote: |
At least 50% of the population is retarded so I discount what they think or feel automatically. |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Feb 13, 2013 7:51 pm Post subject: |
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I'm not remotely talking about PhD level economic theory. "Taxing Job Creators" is very real. The 5% bump in the tax rate on incomes above 400K is a royal screw job to s-corp business owners. Which brings me back to the point that most of the general population has no idea what the difference between an s-corp and a c-corp most specifically in regards to taxation. A bump in the minimum wage, the above mentioned tax implication combined with the (known at this point) costs of Obamacare equals s-corporations with employment above 50 are right in the f-zone. _________________ Is President Obama a Keynesian? |
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jryoung Ladies Man
Joined: 19 Mar 2004 Posts: 7664 City: Man Jose
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Posted: Feb 13, 2013 8:24 pm Post subject: |
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I own a S-corp there are ways to plan around the increase, though betting on the Huskies to cover the spread against the ducks is not one of them. Job creation is largely created by consumption...said job creators dont consume much more than the average Joe. _________________
Quote: | You don't meet many old vegans. It's mostly young priviliged kids trying to figure out where they stand in the world. | - Steve Rinella |
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eeven73 PityDaFool Who Posts This Much
Joined: 16 Jan 2003 Posts: 5377 City: Halfway
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Posted: Feb 14, 2013 7:44 am Post subject: |
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Quote: | I own a S-corp there are ways to plan around the increase, |
I would be interested in hearing these. PM if too personal, or tell me to mind my business if proprietary. _________________ Is President Obama a Keynesian? |
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3MileBayWaker Soul Rider
Joined: 14 Jan 2011 Posts: 256 City: Syracuse, NY
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Posted: Feb 15, 2013 12:07 pm Post subject: |
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He's a moron.... But that's already been establish. _________________ 2010 Glastron GT 205XL ( Volvo 4.3L GL-J)
Low Profile Black Windshield
Roswell Wake Air Tower
2009 Liquid Force Trip 142/ 2008 CWB Answer
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buckthis Wakeboarder.Commie
Joined: 22 Jan 2003 Posts: 1058 City: Orlando
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Posted: Feb 16, 2013 10:28 am Post subject: |
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"it seems like 70% of people in this country don't understand the most basic financial or economic principles" yet these are the people that keep the economy going! Maybe its a good thing the minimum wage is raised to give them a feeling to SPEND MORE which creates jobs.
"but when I get to talking to some colleagues with PhDs in Economics the conversation quickly goes right over my head."
I'm sure Bernacke had a phd, he taught at Princeton, but he didn't have a clue what to do in the Federal reserve(sorta like McCain in 2008 saying the economy is strong) Bernacki even passed laws to ease the control on Banks. _________________ Live to Ride, ride to live |
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Okie Boarder Ladies Man
Joined: 03 Mar 2008 Posts: 10056 City: Edmond
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Posted: Feb 18, 2013 12:38 pm Post subject: |
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I've seen some discussions on other forums stating $9/hr isn't enough and that we should be raising it to $15-16/hr. Well, why stop there...why not make it $30/hr. Let's make sure everyone can make a good living, why don't we. _________________ If love is blind, why is lingerie so popular? |
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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 18, 2013 1:39 pm Post subject: |
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buckthis wrote: | "it seems like 70% of people in this country don't understand the most basic financial or economic principles" yet these are the people that keep the economy going! Maybe its a good thing the minimum wage is raised to give them a feeling to SPEND MORE which creates jobs.
"but when I get to talking to some colleagues with PhDs in Economics the conversation quickly goes right over my head."
I'm sure Bernacke had a phd, he taught at Princeton, but he didn't have a clue what to do in the Federal reserve(sorta like McCain in 2008 saying the economy is strong) Bernacki even passed laws to ease the control on Banks. |
Lots of fail in this post.
First it's Bernanke, not Bernacke or Bernacki. He is still the Fed Chairman, so I'm not sure why you're using past tense. Also neither the Federal Reserve nor the Chairman of the Federal Reserve can "pass laws".
In regards to the first part of your post, go through the thread again and learn why raising minimum wage does not create jobs or actually improve the standard of living for people making minimum wage.
As far as your SPEND MORE comment, if that's what will improve the economy, why don't we just bump Minimum wage to $25/hr. Then everyone will have $50k a year to SPEND!!!! Think about how much that will benefit the economy!!!!! That's the ticket! Now if we could just couple that with the government borrowing 1-2 trillion dollars to spend and we'd be all set. It doesn't matter what they spend it on, just get the money out there and spend it. By god I think we've just solved all our economic problems for the rest of time. |
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eich82 Addict
Joined: 13 Jan 2003 Posts: 860 City: MTP
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Posted: Feb 18, 2013 1:48 pm Post subject: |
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Okie Boarder wrote: | I've seen some discussions on other forums stating $9/hr isn't enough and that we should be raising it to $15-16/hr. Well, why stop there...why not make it $30/hr. Let's make sure everyone can make a good living, why don't we. |
You mean the classic "living wage" argument that was born out of the class warfare campaign or as I like to call it the "living good wage"?
People say you can't LIVE off of $12.00/hr. Of course by live they mean be able to buy a home in a nice neighborhood, drive a new car and replace every few years, be able to go out to eat all the time, be able to take a vacation or two every year to some far away place, have a 70" HDTV (or two), have the latest smartphone with the full data and talk package, be able to buy nice clothes all the time, etc.
Those are all standard necessities that everyone should have right? You can't have all that on $12/hr and you can't expect someone to have to go without those "necessities".
Of course all this leads back to the point made that you couldn't and shouldn't try to legislate this at a federal (macroeconomic) level because the cost of living in BFE, Idaho isn't the same as New York City.
Also when are people going to realize that their employer isn't their adoptive parent. They don't "owe" you anything more than the wage you have agreed to work for and what the market will bear for the skills and expertise you can provide. If you want to make more money, better yourself and figure out how to provide more value to an employer. I can tell you that employers do value good, reliable and talented employees, while the unreliable, low skilled, entitled employees who are more concerned about doing the least amount of work possible to get a paycheck are a dime a dozen. That's why good employees who provide value to their employers move up through an organization, while those that are looking to get the most for doing the least simply bounce around from job to job their whole lives. |
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buckthis Wakeboarder.Commie
Joined: 22 Jan 2003 Posts: 1058 City: Orlando
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Posted: Feb 18, 2013 7:28 pm Post subject: |
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eich, you probably think that we would have been fine if the American people did not bale out the big banks(so much for the free market), of course you would be wrong and you back up BernANke?(how did you ever know that was the guy I was talking about?) Bernanke is a big FAIL,he believed(believes?)less regulation for the big banks was good, this is an obvious FAIL, he didn't(doesn't) have a clue how to help the economy, just like you! You think there are going to be LESS jobs if the fairly low minimum wage law is past and yet the law could pass and the economy would get stronger.
"why don't we just bump Minimum wage to $25/hr"
funny you should bring that much money up because the the Unionized auto workers who had absolutely no skills, just a GED(if that much) got as much as $50/hr AND there was very little unemployment back then. But that was at a time when the minimum wage was $10/hr(this is of course with inflation figured in)
"That's why good employees who provide value to their employers move up through an organization" MORE B.S. This should read
Thats why ass kissers who cannot build their own business
make someone else rich with their skills and hard work. When are these good talented employees going to learn that their employer owes them NOTHING! Work two weeks and get your pay nothing else.
Now the item that IS going to be a jobs killer is if the congress cannot RAISE the debt ceiling and the automatic government cuts go into effect, but you probably think this would be a GOOD thing, don't you eich? _________________ Live to Ride, ride to live |
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