The Liberal Gun Club Forum

MayhemVI wrote:A lot of pseudo-intellectual, Wall Street Journal answers here. None of them address the actual people trying to get by. I higher minimum wage means less debt, less default. It means more money cycling through inner-city economies. It means more job openings because less people need three jobs to support their families. It means more money being spent at sandwich shops and auto parts stores....and Walmart. A higher minimum wage is better for people, so it's better for the economy. And anyone who thinks we were better off before there was a minimum wage, spend less time here and more time with a history book.

If you put "Liberal" in the name, expect a Liberal to show up, eventually. I look at the world through the individual, not the bar graph; through the family, not the statistic. And for those who think the money and the power and the decision of how much to pay workers should remain solely in the hands of the banks and big business, please explain 2008 to me.

I don't disagree that the focus should ultimately be on the individual, but where are the Wall St. Journal answers? (Aside from Coach, and he's well beyond what the Wall St. Journal would advocate) I see answers here not only in support of a minimum wage, but of a higher one at that.

This has been a fascinating thread so far with a variety of opinions and yet no flaming.


As for the original question (which was why the min. wage should increase to such a degree), consider that the minimum wage has not kept up with inflation. When the minimum wage remains the same while the value of the dollar diminishes and costs of living increases under inflation, the purchasing power of those making minimum wage falls.

Basically, those making minimum wage today are actually making proportionally LESS than those who worked for minimum wage in the past!

The Economist calculated that the minimum wage in the U.S. today should be about $12/hour.


Now I understand the counter argument that many small businesses simply cannot afford to pay their employees $12-15 an hour, I've worked for such places in the past. It's a solid argument and a very legitimate concern. Their conclusions are absolutely sound given the present market conditions - but that "present" is the key, isn't it?

What happens when people earning minimum wage start making $15 an hour? Their purchasing power leaps up! Their income is now not only stabilized to inflation, but they have a little extra money on top. What happens when people have a bit of spending money? They spend it! They go to restaurants more often, they buy that video games system their kids have always wanted, they buy the guitar they always wanted to learn, they adopt pets they can now afford to take care of, they start picking up more hobbies, etc.. This is all the stuff that keeps the economy going!

The companies that couldn't afford to pay their employees $15/hour are now seeing a significant bump in customers and revenue, and now they can afford those wages. A population with purchasing power will shift the landscape in favor of company interests!

I see the economy as being like a circulatory system, it has to flow throughout or the organism dies.

*Disclosure: economics aren't exactly a strong area for me, so apologies if I've gotten anything wrong.*

Bacchus wrote: I don't disagree that the focus should ultimately be on the individual, but where are the Wall St. Journal answers? (Aside from Coach, and he's well beyond what the Wall St. Journal would advocate) I see answers here not only in support of a minimum wage, but of a higher one at that.

Well, Coach is what a lot of what I was saying. But reading the comments, there is a readers perception that this issue begins and ends with Walmart (and what Forbes and Bloomberg have to say). Walmart isn't even on my radar. Small business and where they're located is what I'm driving at. Any economic evolution has its casualties. Raising the minimum wage will have its share. But overall, small business will benefit from a greater minimum wage. Why? Because the people earning it will be in a better position to support them. Forbes and Walmart don't give two craps about Mom & Pop operations and corner markets. They don't pay attention to areas, both urban and rural, where the only successful businesses are pawn shops and bars.

I should also state for the record (in a semi-apologetic kind of way) that as mentioned, I have an ongoing history on discussion boards. I am forced to admit that I'm a bit knee-jerk defensive on this subject, based to prior discussions. No one has said so here (and I appreciate it), that minimum wage earners are by definition stupid, lazy, unmotivated. If I was willing to share more of my career details, you might understand why I automatically shift into high gear.

So I'll apologize one more time if I'm posting here and answering somewhere else. But in terms of Forbes, Bloomberg, WSJ, CNBC, et al, what they say is meaningless. I walk this particular walk. I don't read about it, I live it. And so do my friends and co-workers.

TrueTexan wrote:I know the libertarians amoung us don't like to look at the history and facts when it comes to something that runs counter to their beliefs, but as a liberal I try to look at such facts I can gather when making a decision.

"Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly."
Congressional Budget Office

"A reduction in wage costs of some few thousand dollars increases employment. Obviously therefore a rise in wage costs of four or five times that is going to have significant unemployment effects."
Forbes

"There are seven European Union (E.U.) countries in which no minimum wage is mandated (Austria, Cyprus, Denmark, Finland, Germany, Italy, and Sweden). If we compare the levels of unemployment in these countries with E.U. countries that impose a minimum wage, the results are clear. A minimum wage leads to higher levels of unemployment. In the 21 countries with a minimum wage, the average country has an unemployment rate of 11.8%. Whereas, the average unemployment rate in the seven countries without mandated minimum wages is about one third lower — at 7.9%."
http://www.cato.org

"The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time."
Xenon Evans, owner of Borderlands Books, quoted in Reason

"The loss of 1,000 restaurant jobs (in Seattle) in May following the minimum wage increase in April was the largest one month job decline since a 1,300 drop in January 2009, again during the Great Recession."
Reason

Yeah, it's just the Libertarians.

MayhemVI wrote:

Bacchus wrote: I don't disagree that the focus should ultimately be on the individual, but where are the Wall St. Journal answers? (Aside from Coach, and he's well beyond what the Wall St. Journal would advocate) I see answers here not only in support of a minimum wage, but of a higher one at that.

Well, Coach is what a lot of what I was saying. But reading the comments, there is a readers perception that this issue begins and ends with Walmart (and what Forbes and Bloomberg have to say). Walmart isn't even on my radar. Small business and where they're located is what I'm driving at. Any economic evolution has its casualties. Raising the minimum wage will have its share. But overall, small business will benefit from a greater minimum wage. Why? Because the people earning it will be in a better position to support them. Forbes and Walmart don't give two craps about Mom & Pop operations and corner markets. They don't pay attention to areas, both urban and rural, where the only successful businesses are pawn shops and bars.

I should also state for the record (in a semi-apologetic kind of way) that as mentioned, I have an ongoing history on discussion boards. I am forced to admit that I'm a bit knee-jerk defensive on this subject, based to prior discussions. No one has said so here (and I appreciate it), that minimum wage earners are by definition stupid, lazy, unmotivated. If I was willing to share more of my career details, you might understand why I automatically shift into high gear.

So I'll apologize one more time if I'm posting here and answering somewhere else. But in terms of Forbes, Bloomberg, WSJ, CNBC, et al, what they say is meaningless. I walk this particular walk. I don't read about it, I live it. And so do my friends and co-workers.

Where the rubber hits the road. You've got valuable insight into the immediate effects from the perspective of your industry, location, and situation, and that's important.

Coach wrote:

TrueTexan wrote:I know the libertarians amoung us don't like to look at the history and facts when it comes to something that runs counter to their beliefs, but as a liberal I try to look at such facts I can gather when making a decision.

"Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly."
Congressional Budget Office

<snip for brevity>

Yeah, it's just the Libertarians.

I'm not sure that the first quote is a strong backer of your position. For that matter, I don't see that any of your sources support your position of no minimum wage with the exception of Cato; Sweeden is not Greece, however, just as the US is unlike many countries in Europe.

Context matters. How much increase are we talking about? Is it across the board or does it vary by region? Is it pegged to an inflation index? Nuance is important here, as is the big picture. No-one is suggesting a $1000/hr minimum wage. (as much as I may have fantasized about that when I was digging holes)

Likewise, it is specious to raise the specter of the inflation boogeyman as an argument against minimum wage increases when all others (and most particularly those whose earnings have grown fabulously the past few decades- I'm lookin' at you, 1%) have risen. That argument also ignores a fundamental, if ignored, bit of economics: that a low level of inflation is generally a good thing.

The working class saves virtually nothing and spends virtually everything it takes in. Increasing their wages allows them to live a better life, with less government assistance, while recirculating their earnings back into the economy. There's more money to be made for businesses of all sizes, they just need the initiative and know-how to win it.

I imagine a scenario where all those Wal-Mart employees, now earning $15/hr, take their spending to Costco or Target. The thought amuses.

Libertarianism in a nutshell: democracy for the bosses, slavery for everyone else.

All I can say is that retirement saving rates have already been dismal. The Republican plans to cut entitlement spending are going to fail miserably the more people that are living with Social Security as their only source of income.

The two things that always stood out for me were the massive gains in productivity that occurred in the last three decades. The other is the massive exporting of manufacturing jobs that occurred over the same time span. Both of these have exponentially increased corporate profitability. I can point to my career in IT and can pretty much hang the jobs of more than a few people as a result of the projects and restructuring that I managed. The increased corporate profitability never "trickled down" to lower levels of the organizations. Neither were the funds especially used by most corporate organizations to innovate. A great deal was spent on entrenching and consolidating existing business lines. This doesn't bode well for our future competitiveness.

Today we have very few of the well paying manufacturing jobs that drove the American economic engine between the end of WWII (and before) and the 1980's. All our labor jobs are concentrated in the low skill service industries. This isn't sustainable.

Part of me wishes that we did far less for the 2007 financial crisis. I know it would have been exceptionally painful for the average citizens. But we ended up rescuing the very portions of the economy that were least productive towards our long term economic vitality. Such are what corrections are made of, and corrections that have the ability to effect structural changes do not come along very often. So we ended up putting another bandaid on the stovepipe economy that wasn't working before.

Higher minimum wage? It will help some people in the short term, but it doesn't solve any of the structural problems. There is still a widespread lack of skilled manufacturing jobs. Economies built on service industries are notoriously underperforming and subject to wild fluctuations. Small market corrections resonate throughout service industries damping down demand across the board making corrections worse.

The only argument I could see against a minimum wage hike, is that the actual effect would be to take a lot of people who currently are above minimum wage, and put them at minimum wage.

There's a hope that employers would do the rational thing and increase pay for everyone by whatever the minimum wage increase is, but that doesn't happen. Florida has a minimum wage tied to inflation, so most years it goes up some, but it only goes up for those making it. Everybody else just sees the floor rise up a bit below them.

What effect this has on the economy, I don't know. But it is something that has to be taken into consideration.