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Thread: minimum wage increase

  1. #1
    God/dess greenidlady1's Avatar
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    Default minimum wage increase

    Did anyone read in paper the proposal to increase minimum wage? I am totally for it. With the rise in fuel costs a lot of merchandise is becoming increasingly expensive. I read if Bush does sign it goes from 5.15 to 6.25 then 7.15 per hour gradually in a years time I believe.

  2. #2
    Yekhefah
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    Default Re: minimum wage increase

    Or, they could just print more money and hand it out in the streets! Then we'd all be rich!


  3. #3
    Jay Zeno
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    Default Re: minimum wage increase

    Big discussion in this section here:

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    God/dess greenidlady1's Avatar
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    Default Re: minimum wage increase

    Oh, thanks!

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    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    certain states enacted minimum wage increases during the last election ... with a long list of 'unintended consequences' being reported.

    On the federal level, the minimum wage bill is stalled because certain members of congress realize that the extra economic burden of forcing employers to increase minimum wage payroll must be offset by tax breaks to those employers to avoid pushing some businesses (and their minimum wage jobs) into oblivion. So far no settlement has been reached thus no bill to send to the white house.

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    God/dess Mr Hyde's Avatar
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    Default Re: minimum wage increase

    There should be no minimum wage. Laws like that actually hurt more than they help.

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    Featured Member yogibear179's Avatar
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    Default Re: minimum wage increase



  8. #8
    Yekhefah
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    Default Re: minimum wage increase

    The California minimum wage is way higher than the federal one. That's why we don't have any poor people here.

  9. #9
    AlexxaHex
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    Default Re: minimum wage increase

    Quote Originally Posted by Yekhefah View Post
    That's why we don't have any poor people here.
    Damn. I feel so left out! Did I miss the "no poor people" memo?

  10. #10
    BrunetteGoddess
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    Default Re: minimum wage increase

    I thought the truth was things go up in price BECAUSE of the minimum wage increases.

  11. #11
    Yekhefah
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    Default Re: minimum wage increase

    No worries, Alexxa, I missed that memo. I also missed the "no poor Jews" memo and the "no poor strippers" memo. I gotta get a better secretary 'cause this one sucks.

    And yes, Corsica, raising the minimum wage just causes employers to raise their prices to compensate.

  12. #12
    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    ^^^ employers raising prices is just ONE method that employers can use to compensate for the higher labor costs that they must pay when the minimum wage is increased. Remember that besides the increase in direct payments from employers to minimum wage workers, there is also a proportional increase in the employer's payment of social security taxes, unemployment insurance premiums, worker's comp premiums etc. for that worker. Thus if the minimum wage worker must receive say a $1.50 an hour pay increase, the cost increase to the employer may be more like $2.00 an hour with these other costs taken into account.

    Another method used by employers to compensate for their rising labor costs is to simply fire 25% of their minimum wage labor force and require the remaining 75% to work that much harder in order to accomplish the same amount of total work. This usually also involves the firing of additional minimum wage workers who don't 'produce' much, and replacing them with new minimum wage workers who are willing to work harder.

    Yet another method is for employers to eliminate minimum wage jobs via automation or consolidation. This may mean that a landscaping service goes out and purchases new larger lawnmowers so that 3 workers can mow the same amount of grass that used to require 5 workers driving smaller mowers. This can also mean an agricultural industry going out and purchasing automatic harvesting equipment so that only half as many minimum wage workers are needed at harvest time. This can also mean a gasoline / convenience store owner consolidating two medium sized stores into a single larger new store, with half of the minimum wage staffing requirement thus being eliminated when one of the two original locations closes permanently.

    The most significant option is that rising minimum wage related labor costs may be the 'straw that broke the camel's back' in terms of convincing a particular business owner to stay in business, to continue operating that business in the same city/state, to continue producing something in the USA vs buying components from Asia and simply reselling them etc.

    In the end, more minimum wage workers wind up being unemployed ... and unemployable. This in turn translates into an increased burden on social services, thus an increased burden on remaining workers and businesses due to eventual tax increases needed to pay for the additional social services.

    Also, for workers who are one or two steps up the 'ladder' from inexperienced minimum wage workers, seeing their $8-7-10 an hour paychecks stay the same while the new hire pay rate goes from $5 to $7 can be extremely demoralizing. And since the employer is forced to redistribute payroll dollars towards the new hires' higher minimum wage, this leaves less payroll dollars thus less chance of a pay raise for those $8-9-10 an hour more experienced more productive workers. And if the increasing cost of social welfare benefits for an increased number of former minimum wage workers results in a state/local tax increase to pay for those increased social welfare benefit costs, those $8-9-10 an hour workers will actually be worse off than before the minimum wage was increased ! This is doubly true if prices for local products and services are increased as well.


    In purely economic terms, a mandated increase in the minimum wage that occurs without a corresponding increase in the 'productivity' of minimum wage workers has to be financed by somebody else in the economy. There is no such thing as a 'free lunch' or a 'free pay raise'. Increasing prices forces everybody, including minimum wage workers, to pay for the minimum wage increase. Increasing taxes forces those with higher earnings levels to pay for the minimum wage increase. The gov't simply printing more money forces people who have savings and investments to pay for the minimum wage increase, and eventually results in additional price increases as well.


    From a dancer-centric point of view, minimum wage workers never have been and never will be strip club customers. However, to the degree that a minimum wage increase translates into higher prices for local goods and services, higher local property / sales / income taxes etc., these additional costs can and will take additional money out of the pockets of higher paid workers ... higher paid workers who WERE strip club customers. This in turn will leave those higher paid workers with stagnant paychecks and rising costs for essentials, forcing them to cut back their spending on 'luxuries'. And lap dances are definitely a 'luxury' item !

    !
    Last edited by Melonie; 06-02-2007 at 03:00 AM.

  13. #13
    BrunetteGoddess
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    Default Re: minimum wage increase

    Thanks Melonie, that's what I was trying to get at.

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    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    ^^^ the minimum wage issue has always been, and continues to be, one of those subjects that 'sounds good' when you first hear it ... but quickly turns sour once you start digging into the actual costs involved, who will actually wind up paying for those costs, the 'unintended consequences' in terms of businesses, the economy, and minimum wage workers themselves that will stem from a higher minimum wage mandate etc. Again, the reasons that many Americans don't connect the dots economically is that A. US schools do not really teach economics, and B. mainstream media seldom reports the negative side of the equation.


    While on the subject of lack of economics being taught in US schools, I couldn't help but notice that the original poster of this thread sincerely believed that an increase in the minimum wage would be a 'good' thing. This is of course the prevailing view of the majority of young Americans, as well as the viewpoint of mainstream media stories on the subject, thus nobody should be faulted for buying into mainstream opinion. However, what IS disturbing is that, thanks to a lack of economics being taught in US schools, this particular young American has been convinced to support a policy that will directly impact her own personal earnings potential in a negative way without even being aware of that consequence !

    IMHO one of the most important things that a dancer can do from an economic standpoint is to analyze her 'customer base' ... what sort of guys are spending money in her club ... what sort of businesses / industries provide the incomes that are the source of the money that guys are spending in her club ... what sort of 'necessary expenses' absorb money from these guys first thus leaving them with less money to spend in her club ...

    IMHO the second most important thing that a dancer can do from an economic standpoint is to analyze her own economic situation ... what economic factors affect her own income ... what sort of taxes / 'expenses' absorb her own income etc. After all, exotic dancers are offering a service that is clearly considered to be a 'luxury item', which makes their income potential particularly vulnerable to relatively small and/or 'local' changes in the economy.

    !
    Last edited by Melonie; 06-02-2007 at 04:21 PM.

  15. #15
    Jay Zeno
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    Default Re: minimum wage increase

    The universe, economies, and life run in a balance.

    If you have people being terribly exploited, living in hovels, and starving, then a minimum wage is mandatory out of basic human decency.

    If the employers are taking care of their employees because they know that well-fed, happy employess are productive employees, then no minimum wage is needed.

    We do not currently exist at either of those extremes. Hence we have a minimum wage that does the job without letting people starve and without letting employers completely exploit their employees.

    If we look at examples, we can find times when having no minimum wage worked very poorly. There were times when having tightly regulated wages foisted upon employers also worked very poorly.

    Melonie has a libertarian bent that feels government should abdicate involvement in private busines. Others will have a philosophy that government should be the ultimate regulator. I fall between those extremes. So the readers can keep those philosophies in mind when reviewing what we advocate.

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    Default Re: minimum wage increase

    y'know, seattle and to a lesser extent the entire puget sound area have a high minimum wage (8 an hour presently, and goes up every year cos of inflation), and yet jobs paying up to twice that are extremely easy to get because employers have a very hard time finding enough people to work all the jobs there are.

    interestingly, it is also fairly easy to get jobs approaching six figures with or without a degree for much the same reasons (not enough people around to fill all the open job slots).

    so there's your edge case-- the puget sound area. copious social services, one of the highest minimum wages in the nation, and yet job openings that pay 30, 50, 70, 90k routinely available (in fact, most jobs available are either under 50k or over 70k, which is a curious little side effect in itself).

    also, waitstaff and barstaff and casino staff make the eight an hour plus tips rather than the more common 2.13-4 per hour, which means those jobs are extremely good ones to have most of the time. and yet always openings, despite the modest rate of turnover (somewhat lower than in other parts of the country).

    this is actually a pretty interesting area of the country because stripping is not a particularly good economic choice in the area mostly (but not solely) due to the regulations and club cuts.

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    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    not meaning to derail this thread, but the Seattle area is a rather poor example of 'free enterprise'. Seattle's major employer is the University of Washington, with those paychecks funded by tax revenues in large measure. Seattle is also the hub of hundreds of biotech and medical device companies, with many of those paychecks being funded by tax revenues and grant money.

    Another major employer in the Seattle area is Boeing, plus hundreds of parts and service suppliers. Boeing's economic fortunes are supported by the US gov't, both in terms of federal tax revenue funded purchases of Boeing product at inflated prices for military use, and by arguably illegal US gov't protection against the import of foreign competing products (see AirBus lawsuit).

    The quintessential employer in the Seattle area is Microsoft, who also benefits from being allowed to operate a gov't sanctioned quasi-monopoly (see EU lawsuits) which guarantees that Microsoft can overprice their product without (much) fear of foreign competition. Medical device companies also enjoy similar gov't sanctioned quasi-monopolies via the FDA.

    IMHO the Seattle economy has been cleverly structured, and is very positive for Seattle area residents. However, there is also no denying that the success of the Seattle economy depends to some degree at least on substantial 'stealth' subsidies vis a vis the tax money of other Americans being transferred into the Seattle area plus other Americans being forced to pay higher prices for Seattle based products because the US gov't has restricted their access to lower cost foreign competition. Fortunately, the vast majority of taxpayers living in other states do not realize that part of their federal income taxes, and part of the prices that they must pay for everything from replacement hip joints to airline tickets to a new computer, are being used to subsidize Seattle's 6 figure standard of living at the expense of their own ! However, should federal gov't policy ever change re the continued transfer of federal tax money from other states and/or the continued 'protection' of quasi-monopolies, Seattle's economic fate would change in a heartbeat.

  18. #18
    God/dess greenidlady1's Avatar
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    Default Re: minimum wage increase

    Now that I don't dance anymore I bring home about 1100-1300 monthly depending on how many hours I actually get. I average about 40 hours weekly. So, if minimum wage increases to 7.25 minimum then I will hopefully get a raise because my average pay equals less than that.

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    Featured Member snoopy's Avatar
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    Default Re: minimum wage increase

    Quote Originally Posted by Melonie View Post
    The most significant option is that rising minimum wage related labor costs may be the 'straw that broke the camel's back' in terms of convincing a particular business owner to stay in business, to continue operating that business in the same city/state, to continue producing something in the USA vs buying components from Asia and simply reselling them etc.
    the whole post was very well written but this one particular part has a direct personal connection with me.

    ironically, i'm paying myself far below minimum wage to help fund this increase. where's the minimums for the people who lay their entire savings and personal value (i.e. personal guarantees)? i see no "limits" or "help". heck, i'd be happy with gov't butting out everyday business stuff (safety and equality stuff is fine).

    manufacturing truly is dying very quickly here. *sigh*

    thank you, melonie, for a very well expressed post of the minimum wage problem. you're right, most people just don't understand the far-reaching effects but the ignorance of washington (who should be knowledgeable about the ramification, haha) just continues to astound and frighten me.

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    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    ^^^ again, we're back to the underlying issue that there is probably a reason that US schools do not teach the entire circle of economics ... which IMHO is because politicians run the school systems, and politicians also know that they couldn't get away with the vast majority of their 'sounds good the first time you hear it' proposals if American taxpayers immediately connected the dots and understood that those politicians were actually giving away another part of their paycheck and/or a part of their employer's future growth and profits (= their own future pay raise / job security / retirement benefits).

    As to 'risk taking' entrepreneurs like yourself, yes I agree that in some US states at least anyone who chooses to invest their own life savings in a business rather than in fed + state tax exempt state muni bonds is probably crazy, or is at minimum a glutton for punishment. If the 'mandated costs' don't get you (i.e. minimum wage, SSI, comp, unemployment, Sarbanes Oxley), and the business tax rates don't get you, the employee lawsuits will !

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    Default Re: minimum wage increase

    melonie, i looked up the percent of federal funds that seattle gets, and it is about half what houston, tx gets (a city much much harder to find work in, and with a lower minimum wage to boot). where do you get the data that seattle is lapping up the gov't monies? even regarding state monies, the share that seattle gets is not wildly disproportionate to the population.

    i do think seattle is a valid edge case precisely because it isn't relying on subsidies (UW employs a lot of people, but not THAT many, frex) and yet doesn't suffer from having one of the highest min. wages in the nation.

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    Banned Melonie's Avatar
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    Default Re: minimum wage increase

    ^^^ the quick answer is that federal funds come in many forms. For example, what portion of the US military budget was spent on products from Boeing, and what percentage of that military spending of US tax dollars at Boeing was at higher pricing levels than if the US military had purchased similar products from a foreign supplier ? As another example, how much federal tax money was spent by every gov't agency from HHS to DHS to DOD in the form of research grants to Seattle area companies ? Neither of these areas of federal spending shows up in the the 'percent of federal funds' reports.

    Another aspect is the federal gov't using it's authority to force US consumers to pay higher prices to Seattle area companies directly. Even though this money doesn't technically pass through the hands of the federal gov't first, the effect is obviously the same. A few examples are being forced to pay $5000 extra for a replacement hip joint made in Seattle because the FDA will not allow lower cost foreign made replacement hip joints to be used in US hospitals. And don't get me started about Microsoft's gov't backed quasi-monopoly adding $100 to the price of every new computer.

    Circling back on topic, the gov't mandating that employers pay a higher minimum wage is another variant of the federal gov't using it's authority to force US consumers to pay higher prices. However, unlike the situation re Seattle's hip joint manufacturers and computer operating system suppliers receiving gov't intervention to keep out lower cost foreign competition, US employers of minimum wage workers receive no such similar gov't protection from the effects of lower cost competition i.e. no similar gov't regulations re low cost imports to prevent US consumers from shifting their business / spending away from US businesses and towards the lower cost foreign alternatives.

    ~
    Last edited by Melonie; 06-07-2007 at 03:35 AM.

  23. #23
    Jay Zeno
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    Default Re: minimum wage increase

    Quote Originally Posted by Melonie View Post
    what portion of the US military budget was spent on products from Boeing, and what percentage of that military spending of US tax dollars at Boeing was at higher pricing levels than if the US military had purchased similar products from a foreign supplier ?
    It's an interesting question. Does anyone know? I'm assuming it'll never happen, as the military wants the prize technology classified, meaning it can't go to another country, regardless of price.
    As another example, how much federal tax money was spent by every gov't agency from HHS to DHS to DOD in the form of research grants to Seattle area companies ?
    Another interesting question, but until it's answered, the hypothesis that Seattle has an artificial economy because of Federal spending is just a hypothesis.

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    Featured Member snoopy's Avatar
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    Default Re: minimum wage increase

    Quote Originally Posted by Melonie View Post
    As to 'risk taking' entrepreneurs like yourself, yes I agree that in some US states at least anyone who chooses to invest their own life savings in a business rather than in fed + state tax exempt state muni bonds is probably crazy, or is at minimum a glutton for punishment. If the 'mandated costs' don't get you (i.e. minimum wage, SSI, comp, unemployment, Sarbanes Oxley), and the business tax rates don't get you, the employee lawsuits will !
    it's...it's like you've been listening in on the rants, i mean conversations between my brother (my partner) and me about our lot in life. we prefer the term "morons" though.

    but what you stated is quite true, especially the legal aspects because he's actually a trial lawyer i dragged into the family biz. so i hear the legal mumbo-jumbo all the time.

    hey, he entered of his own freewill at the time. no coercion or threats.

    but i don't think he'll ever forgive me.

    Quote Originally Posted by Melonie View Post
    Circling back on topic, the gov't mandating that employers pay a higher minimum wage is another variant of the federal gov't using it's authority to force US consumers to pay higher prices. However, unlike the situation re Seattle's hip joint manufacturers and computer operating system suppliers receiving gov't intervention to keep out lower cost foreign competition, US employers of minimum wage workers receive no such similar gov't protection from the effects of lower cost competition i.e. no similar gov't regulations re low cost imports to prevent US consumers from shifting their business / spending away from US businesses and towards the lower cost foreign alternatives.
    see, that's the main problem i have with this issue. i don't mind paying even higher wages than what's already on the books. i just mind that i'm playing against a stacked deck. level the playing field is all i'm asking for.

    if i'm not a good (or lucky) enough bizman to succeed then so be it. that's the law of the bizjungle. i can live with that, i'm a big boy. but when i'm told to run the race with a weight tied around my neck, uncle sam screwing me all the way thru, and expected to smile about it...that's where i draw the frickin' line. ugh. bgjhtuyfbv! *headsmashkeyboard*

    Quote Originally Posted by Jay Zeno View Post
    Another interesting question, but until it's answered, the hypothesis that Seattle has an artificial economy because of Federal spending is just a hypothesis.
    but i think it's a fairly/widely accepted one. most traditional economists just call it the "military-industrial complex".

    you could point that out in many local economies though. some are even more stark than the seattle example. military bases, hawaii (although tourism is probably slightly more significant there), state college towns, quasi-gov't/utility zones, shipbuilding in connecticutt, etc.

    i think the question is more "is the gov't support the main or one of the main reasons for that locale and is it inflated above market?"

    ...waitaminute, scratch that last part. it's the government. by definition, it's inflated.
    Last edited by snoopy; 06-07-2007 at 09:13 AM.

  25. #25
    Jay Zeno
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    Default Re: minimum wage increase

    Quote Originally Posted by snoopy View Post
    but i think it's a fairly/widely accepted one. most traditional economists just call it the "military-industrial complex".
    Well...

    1. miabella noted that Seattle's economy moves along fine with high wages.
    2. Melonie said Seattle is an anomaly because of the amount of government spending.
    3. miabella said statistics showed government spending is lower in Seattle than, say, Houston.
    4. Melonie said that doesn't take into account secondary and tertiary levels of government spending, like for defense contracts with Boeing and a government-supported (I think it's market-supported, too) Microsoft monopoly.

    But there's nothing really backing up that last one, except a note that it's "fairly/widely accepted." And the bridge to Microsoft as being government-supported but without specific government contracts has some substance, but it's getting much more remote.

    I mean, if it's a fact, it's a fact, but I like to see declarative statements supported. So: Does Boeing manufacturing in Seattle produce defense products? Or is it dedicated to producing commercial aircraft and parts, while their Kansas and Texas plants are producing military aircraft? I don't know the answer to that, but I'm not going to jump in and say, "Defense dollars are propping up Boeing in Seattle" - or not - without knowing the facts.

    Please note, I haven't contested the contention that Seattle has a false successful economy because of government skewing. I'm just saying until the statement has some bones, it's just a statement.

    You want me to agree that government mandates increase the cost of living? Absolutely. Agree that it's not a level playing field when we're getting foreign goods from places that aren't subject to those same mandates? Again, absolutely. How about we agree that without some kind of minimum wage, history shows that there are employers who would exploit their workers into squalor and starvation? Because I think I can prove up that one.

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