The Minimum Wage Destroys Jobs

For the comment you made...perhaps the problem then isn't the minimum wage, but it is non-enforcement of immigration laws.


Here is why minimum wage can't be looked at as a free market item like a sweatshirt: there is no incentive for employers to pay more than minimum wage for their minimum wage employees.

I don't make minimum wage. But the amount I pay on a hamburger increases with time. The rate of increase isn't set in stone for a period it might even go down, but over a long stretch, the price goes up. But the increase in the price of my movie ticket will almost never translate to a rate increase for those making minimum wage. The rich will get richer. Which might be a good thing, you know, incentive and communism is bad and all that jazz.

But what usually gets left out of this equation is that now the minimum wage ticket tearer at the theater has to work an extra 40 minutes to be able to buy the product his company was selling. Small price increases on products massively hurts people who make minimum wage. You can't just have the entire economy moving along without the wages keeping pace.

And why would they raise their wages? There is no competition for a 17-year old popcorn filler (while there is a massive amount of competition for my entertainment dollar), so there is no incentive to ever raise the wage. Hell, they pay minimum wage and most places still treat their employees like a piece of dirt and they get away with it because the demand for jobs is higher than the supply. I don't want to use the term exploit, but the ability to do so is there sometimes.

The teenage workforce is affected, sure, but let's remember they aren't the only people who make the bare minimum: most people working off tips (people who pull lunch shifts where tips are low), janitorial staffers (no, not everyone who does that is illegal), non-teenage fast food workers (someone flips burgers during the day during the school year).

And most teenage jobs are still classified as seasonal, which of course are the first workers to go. It's not like employers are dumping off 40-hour a week employees who work 52 weeks a year. The effect on the economy is not negative, because we're losing people who work 4 months a year for 20-hour weeks.


I am mostly a fan of a free market economy, but the reality is that we have too many people to fill these low-wage jobs and a situation where corporations and business are given 400 concessions before their workers are even given 1.

Minimum wage increases are good in that it gives minimum wage workers more buying power versus those of us who make more. Prices go up for everyone, but their increase doesn't out pace the wage increase.

If you can convince me that higher profits translates to higher wages, then I'm convinced that no minimum wage is needed. Otherwise, you are saying that minimum wage is required, and, if it is, it is ridiculous not to keep up some pace with inflation.

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If you forced companies to pay illegal immigrants the same wages, they just wouldn't report they they were paying less. I mean, that's the whole point, that you can get away with paying less than minimum wage. And since they wouldn't report it, the enforcement issue for that is just as hard as it is for not allowing them to hire illegals period.

There's nowhere I can't reach.

Your equation lacks the demand side. Less people buying things, prices go down so demand goes up. More people making less can buy more things. Downsizing is a result of poor profit margins, which usually has to do with existing inefficiencies or a company where the salaries are too top heavy.

And I don't know that not increasing minimum wage would send anything into a recession. We're talking about people with the smallest buying power anyway. Not increasing the minimum wage ever as inflation goes up does increase the poverty rate, but the money is just in different hands, so the economy is as robust as it would be anyway.

Originally Posted by Bradylama

Even if you could enforce Illegal Immigration you're still faced with the conundrum of outsourcing.

Both problems are a damned if you do, damned if you don't equation, because if you kick out all of the illegals and maintain a minimum wage, then farms that can't afford to mechanize will go under. With outsourcing, American jobs are lost to foreign competitors, but if you illegalize outsourcing then you ruin businesses and increase the price of goods.

Possibly, but I don't see much outsourcing of minimum wage jobs. Janitors, fast food people (yeah, we've all heard about the drive-through intercom stuff being outsourced), farm workers, those job require warm bodies.

If the farms that can't mechanize go under, then the prices go up, but only temporarily, because at higher prices, it becomes more lucrative to become a more efficient farmer, so larger corporations come in, buy up the farms, run them efficiently, and the price goes back down.

This thing is sticky, and I don't like it. I don't appreciate it.

I don't have any statistics, but I live in one of the call center hotbeds in the United States, and, while we've lost quite a few jobs to Asia, it has been my experience (at the three I've worked at) that they all pay above minimum wage.

The minimum wage in my state has matched the federal minimum wage changed 9 years ago. And these jobs still left, despite having no obligation whatsoever to raise wages. Outsourcing will happen if the minimum wage goes up or not, business owners just want an excuse to not look as bad.

Part of the problem is that you have to pay well above minimum wage in the US to get any sort of skill level that doesn't involve a mop. If they lowered their wages, they wouldn't get workers with enough skill, and their customer service would suffer. So they send it overseas, get comparable workers for a lot less because they have no good jobs there to begin with.


I've always been under the impression that people who work in the tip industry have their minimum go up if the minimum wage for non-tipped employees goes up. I could be wrong, I haven't read the Arizona proposition close enough to know if that is going up.


A discussion like this is hard to have without encompassing all of health care too. The cost of health care is so out of whack that it is basically ruining these businesses, not wages. Either you can afford to give benefits or you can't afford good workers.

I am a dolphin, do you want me on your body?

Originally Posted by Night Phoenix

Sinking economy? The economy hasn't been this strong in decades. Tax revenues are at an all time high, unemployment is at 4.4% (which most economists consider to be basically full employment), So what sinking economy are you talking about?

The unemployment number is a bit of a falsity; it doesn't represent the number of people who are underemployed. I've heard/read several times over the past year/couple years that the country is underemployed at a higher rate than any time since such measurements were made. And, not that it matters, but I can attest to that.

The economy, for the first time last year, spent more than it made. The first time ever, in the history of the country. How? By buying itself into massive credit card debt. (That, and we still had a huge Christmas retail season.) Part of this is because people believe they will have better jobs more suited to their skills/training/education, part of it is because we are in an irresponsible age.

There is going to be a time where the bills have to be paid and because the labor market is filled with such poor job offerings, they won't be. People will max their credit cards with necessities, get stuck paying off interest, and non-need good purchases will go down. The economy will fall into a recession, and the only people who will make money are the banks, because they rack up huge amounts of interest on debt that will be paid eventually by someone because of new bankruptcy laws which don't allow people to write off debt like they used to. Purchases fall, so prices dip and people get laid off, leading to higher unemployment.

It might not be so grim that it affects everything, but the day is coming. If/when it hits, a lot of us are going to see a lot of people in a world of financial hurt.

(This has nothing to do with minimum wage. This is largely a middle-class issue.)

(Also, there might come a time when we look at all the money we spent in Iraq and wonder if it might have been better spent on Americans if/when the shit hits the fan. But that's another discussion altogether.)

I was speaking idiomatically.

Originally Posted by ComradeTande

and as a working woman, i get paid $7.00 an hour working in a deli at a grocery store. Keep in mind, I've worked in the same store (i started at about $5.15, minimum wage at the time) for nearing four years. Lets just say men who start working there just recently get paid as much as me (and even more than me), and all they do is cashier.
Iowa is raising minimum wage to $7.15 (i believe, its off the top of my head), and hell, that makes me feel like shit. I'd enjoy the extra money, etc, but the fact that a 14 year old boy who bags groceries will get paid just as much as me when I'm actually holding down 8 hour shifts and 30 hour workweeks (I'm still a student at this time, but during the summer I will most likely work 40+ hours).
But at least I'm getting paid more...

Or with their increased pay they'll be able to put more money into the economy, which means that grocery stores will sell more or be able to sell their products for more, which means that a person who makes $7.15/hour can also get a raise.

Or, like in Guru's case, with everyone who was making minimum wage making $1.50 more an hour, they can now spend their money at Starbucks, which means that Starbucks could similarly raise their base pay.

Or, one could argue that Starbucks was paying their employees a fair living wage while people only paying $5.15 were not (yeah, yeah, teenagers and bullshit, there are plenty of family earners on minimum wage).

What kind of toxic man-thing is happening now?

I guess it wouldn't be a Brady thread without "socialist bastards" making an appearance.

I hate unions, but I also am not about to allow a corporation to justify paying workers $1/hour.

Originally Posted by Bradylama

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing. Alternatively, prices would go up to meet the increase in overhead, which also means that on the net, nobody has increased buying power.

You can't claim that raising the minimum wage forces businesses to both fire people and raise prices. It's one or the other (assuming the owner knows anything about balancing a checkbook).

Originally Posted by Winter Storm

It doesn't and wont work that way for Kroger. The #1 Grocery Retailer that is known for paying thier employees crap pay(8 years with them, 7.75/hr - quitting in 2 weeks) they also have the worst overall work ethic among employees(which probably affects how future employers will percieve me when reading my application).

You felt you were paid crappy but you stayed for eight years??

That's the equivalent of spending $100,000 on a Toyota Corolla. If you feel you were getting a raw deal, you were free to quit. And if enough people shopped their employment services around, then they would be forced to treat their employees better.

You, effectively, are a justification for them paying people who have worked for them for 8 years $7.75 an hour.

FELIPE NO

Originally Posted by Bradylama

And who's going to work a dollar an hour for, anything? You could make better money mowing lawns. The reason we even get payed higher than minimum wage is because entrepreneurs and other rival corporations compete for labor, and the wage earnings of a position as a result naturally gravitate to the actual worth of the labor.

If there are more low-wage workers than there are low-wage jobs, theoretically (since Libertarians ideas mostly are just theory), employers could pay whatever they wanted.

You argue that people should be paid for their productivity, but that wouldn't happen: people would be paid on a market value. Higher skill workers are paid that now, but, with no minimum wage, there's nothing to keep the baseline from spiraling to a point where workers are getting paid well below their worth to a company and we're talking at your levels of destitution.

What, you don't want my bikini-clad body?

Originally Posted by Bradylama

Theoretically in a baseline status quo. However, entrants into the market and entrepreneurs keep employers competing for labor in order to avoid a potential staff flight.

Is McDonald's or Wal-Mart concerned about turnover?

Originally Posted by Bradylama

People are already payed in accordance to their real rate of productivity. The reason we have minimum wage jobs is because they're just barely productive enough to justify the pay. Once you increase the minimum to a certain point, you lose demand for an entire industry. It's why farmers imported illegals to pick strawberries, and contractors imported them to rebuild New Orleans. Cheap, menial labor costs too much to justify a minimum wage.

There's no guarantee whatsoever that companies would attempt a "race to the bottom" in the absence of a minimum wage. If that were the case then why doesn't everybody make a minimum wage?

Why are you so forgiving of the farmer? Who says that he wants to pay someone what they are worth? The farmer imports illegals because it makes him the most money, not because it is the most fair price to pay for someone to pick strawberries.

Everyone doesn't make a minimum wage because there is high demand for high-skilled workers. If there were too many lawyers or chemists for how many lawyer or chemist jobs are available, they wouldn't get paid as much. They don't get paid as much when that situation arises, which is proof that if more low-skill jobs are available and no wage safeguard, wages would drop drastically.

That's hardly saving anyone from destitution.

Jam it back in, in the dark.

Originally Posted by Bradylama

Yes, Mikey, 2 dollars an hour is the most fair price to pick strawberries, as it's cheaper on labor costs than automation in the long-term. Do you really think that farmers can afford to pay 40 people 7.25 an hour to pick strawberries for a month?

But companies are free to automate now and a person making $2/hour might as well not work at all. So what do you care?

(Yes, I am ignoring that $2 is a lot in Mexico for an illegal immigrant. I don't believe in basing policy on law-breakers, though.)

There's nowhere I can't reach.

So we should allow people to break the law to encourage them to not break it.

Oh.

Oh wait I see, this is another one of your arguments where what you want isn't dependent on changing 1 thing, but 4,000.

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Hey and Brady wins either way.

Yay Libertarianism.

hate coming in political palace anymore

I am a dolphin, do you want me on your body?

See, I still only see her in my toast. No fair.

I was speaking idiomatically.

Originally Posted by Vestin

Plus it makes sure that when they come over they can speak english because I get upset sometimes when I'm trying to go to the store and buy something and they person that's helping me doesn't speak the same language I do (english for you ignorants) and I don't get mad I try not to because it's not their fault and I know they are disadvantaged because of it and it's not their fault and I can respect them for that and trying so hard.

Darn they people ignorants who not speakin any english.

I don't even think Dickens wrote sentences of that length.

What kind of toxic man-thing is happening now?

Originally Posted by Vestin

Oh yeah lol I know what you mean! Like when ignorants try and tell black people of african american descent that they're not speaking english properly because they use slang is stupid! It's just slang! Get over it!

Originally Posted by you

and they person that's helping me doesn't speak the same language I do

Like when ignorants try and tell black people of african american descent that they're not speaking english properly because they use slang is stupid!

So that's black people English?

I really don't know. I haven't gone to the hood recently, my nizzy.

Originally Posted by Zergrinch

Ok, I read the whole thread, and I'm not exactly sure who's arguing what. it seems to have deviated quite a bit from the original topic, at any rate!

So before I jump in, am I right in assuming that BlueMikey thinks the minimum wage destroys jobs, while everyone else thinks it will make everyone better off?

Are you sure you read the whole thread?

FELIPE NO