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Thread: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by HenryChinaski View Post
    China, Indonesia or Bangladesh?
    Texas...

    I would say Louisiana, but thanks to Obama the economy is in the ****ter.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by HenryChinaski View Post
    Not a flawed argument at all. WalMart is doing quite well financially yet they pay a wage where a large percentage of their employees still need WIC. Maybe they could get a second job? Wal-Mart has rigged that as well by assigning varying shifts and hours making a second gig nearly impossible. WalMart knows exactly what they're doing in keeping their worker bees close to the hive. Walmart also reaps the tax payers money when their employees spend that assistance money at work. It's a huge scam. I work for a company that is as large as Walmart in size, scope and name in the accounting industry and I seriously doubt that any of my employers worker bees are on welfare. Walmart are just cheap asses and playing the taxpayer for suckers.
    I'd say this is even a more flawed argument that the previous one. If WalMart is making tons of money, or if they are losing tons of money has absolutely no appreciable effect on the wages that their jobs are worth, all things being equal. They could decide to over pay their workers, perhaps they just want to give money away, but that would soon come to an end when the shareholders ask why they are giving their money away.

    It's funny that you imply that WalMart is doing something bad by selling goods at a low price to people that have less to spend. Should they raise prices for those on assistance? But it is okay for the government to take our income (those of us that do pay taxes) and dole it out to people they deem worthy?

    Are you saying that the company you work for pays people higher wages than the market demands? Are you the type of person that goes shopping and overpays at the register like you are advocating that WalMart should do?
    Last edited by Anthony60; 02-20-14 at 12:57 AM.
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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by Verax View Post
    So you're just the messenger for the rich. Why low income people support these systems blows me away.
    Sadly, most low-income people have a very poor grasp of basic finance and entry-level economics. That's why most poor people support minimum wage increases, despite the fact that they are the ones who suffer most from it. A simple explanation of how Supply and Demand apply to Labor would probably piss off quite a few of them, as would having the minimum wages' origins and intentions described to them.

    Your argument was that if any profit is cut into it would break the system.
    That's an interesting claim. Can you support it? Or are you engaging in the same kind of ad hominem claptrap that you did above and have throughout this debate.

    The unemployed are never going to get jobs unless consumer spending increases
    Wrong. There are a number of ways for the unemployed to get jobs, one of which is consumer spending increases. That being said, you cannot spend what you do not have. Basic refusal to acknowledge this point undergirds not a little of flawed left-wing economics, and inevitably results in those they are trying to help being left worse off than they were before.

    Consumer spending cannot increase unless consumers have more money to spend through stimulus.
    Also wrong. Government-directed stimulus reduces economic growth by redirecting resources from utilizations that are determined by productivity to utilizations that are determined by politics. The only way that you can apply a formula in which Government takes money out of the private economy, spends some of it on administration, loses some of it to fraud and grift, and then puts it back into those portions of the private economy that have good advocates on K-Street and end up with more wealth is to cut out the first step, and pretend that the government never took the money in the first place, but that it just received it magically from some Money Tree that they keep in D.C. That is why you will never see a Keynesian "multiplier effect" calculation include a cost/benefit analysis of getting the funds that are going to be spent in the first place.

    Raising minimum wage would be stimulus.
    On the contrary - raising the minimum wage would function to shift income from our poorest households to our low-middle and middle income earning households.

    Lowering wages so everyone has a job would just result in millions of people making 4$ an hour.
    That is incorrect. Those who have jobs today do so because their labor is worth it

    That is what Cuba does, they pay their workers crap and have virtually no unemployment.
    Yeah, because a state-directed system is totally comparable to a free market system

    Or, if you like, take a gander at unemployment among the populace that most strongly correlates to minimum wage earners the last time we raised minimum wage:

    New York Times: Many economists expect the minimum wage, if it has any effect, to (among other things) raise employer costs and therefore reduce employment, especially among those who are likely to work in minimum-wage jobs, like teenagers and restaurant workers.



    Hey! Lookit that!

    Its nonsense, the powerful trick the poor into taking smaller amounts of money home every year. You're just another sucker who has bought the lie.
    unlike you, I've read the history of the minimum wage, and know exactly why the powerful people who put it into place did so. The people who actually originally called for and got minimum wage legislation were pretty obvious about what they thought thought the problem was. Decent White Folks who were trying to raise Decent White Families in Decent White Conditions... but who were being undercut by "Negros and mongrelized asian hordes." Sidney Webb (British Socialist) argued that "[o]f all ways of dealing with these unfortunate parasites, the most ruinous to the community is to allow them unrestrainedly to compete as wage earners". Edward Alsworth Ross (American Progressive) pointed out that since inferior races were content to live closer to a filthy state of nature than the Nordic man, they did not require a civilized wage. "The Coolie cannot outdo the American, but he can underlive him" was the problem, and the answer was to enact a civilized minimum wage that would put said savages out of wage competition. The authors of the Davis-Bacon Act were quite open about the fact that the intent was to keep cheap black laborers from "taking" jobs from whites.

    now, the language has shifted, and the minimum wage is presented as a means of wealth-redistribution. the argument goes that any employer can afford to pay any worker minimum wage (plus taxes, plus the regulatory burden), and so they should be forced to do so, in order to make sure that the worker is getting enough resources from the employer. Unfortunately, this is in direct contradiction to historical reality - the originators of the minimum wage had a sounder grasp of economics than its' modern defenders. In practice, many workers today are not worth the minimum wage plus the cost of taxation plus the additional regulatory burden. It's a small percentage of the total workforce, but it is our poorer portion of the workforce. If you are part of the community that is young, urban, poor, black, and dropped out of high school because doing drugs or having a baby sounded like more fun at the time, then you face the harsh reality that under our current regime, you may be structurally unemployable, and the higher the minimum wage and regulatory costs, the less likely you are to ever be able to become employable. Oh, given some experience, some job skills, etc. you could become employable; but thanks to the higher cost whose threshold you cannot cross, you will never get that experience. Meanwhile, demand goes on, and the guys in the neighborhood a block over are all working 10-12 hours a day. Because they don't fall under minimum wage or regulatory laws - because they are illegal immigrants.
    Last edited by cpwill; 02-20-14 at 12:33 PM.

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by Verax
    How you think paying everyone less would fix this is beyond me. Do you think paying everyone $5 an hour would result in nobody on welfare?
    I don't think that reducing the minimum wage would result in everyone getting paid $5 an hour any more than I think that the fact that we have no price floor for automobiles means that everyone will pay only $5,000 for a car. The idea that everyone, or even large sectors of our workforces, would see pay decreases in the advent of a MW reduction flies in the face of the reality that only about 2% of our workers earn MW today. Meaning that ~98% are already earning above MW. If your implicit claim was correct, we would see everyone in this economy earning $7.25.

    This is a common myth that people choose between welfare or working.
    Wait - what? We just had a weeklong celebration by Democrats of the fact that the Obamacare Subsidies would encourage people not to work. On top of that, you can predict SSDI increases and decreases by the unemployment rate because they track. Welfare cliffs are all over the place, and some of them are massive.



    You should already realize that most of the people on welfare are... already... working...
    Again, if you put in EITC, all those, etc., sure. However, if you want to talk poor households? Not so much, certainly not to their full efforts - work is limited explicitly to avoid the cliffs described above.

    The current thinking has largely been austerity and it hasn't worked very well.
    WTH? We massively expanded federal spending, through hundreds of billions of dollars into an ill-fated Stimulus, then made it part of our baseline, dramatically expanded social benefits, expanded unemployment benefits basically into perpetuity, we haven't put austerity into place anywhere.

    We are starting to talk about more Keynesian solutions finally.
    where the hell were you in 2009?

    Remember This:



    ?

    Same myth again, you don't lose money when you work.
    See Above. You can also lose money by getting married.

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Honest Question for MW supporters: why shouldn't we make the Minimum Wage $25 an hour? Seriously?

    Don't give me the "disruption" claim, according to your set of assumptions, increasing the MW to $25 would result in massive inflows to these businesses, making them ridiculously profitable.

    Do you recognize a point at which price effects the demand for labor?

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    What did one of the most respected economists in the western world have to say about the CBO model?

    "The CBO analysis underestimated the benefits and overestimated the costs in several respects"
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by Verax View Post
    CPWill you screwed up your quotes and I don't feel like sifting through it to fix it, so this is my reply to your last post.

    The logic in your business example is so bizarre and twisted it is incomprehensible psychobabble. You've attributed cause effect in so many different directions it borders on insanity. The idea that a business paying it's workers $100 more would result in a 98% net loss for everyone involved is such incredible hyperbole I have to wonder where you get these ideas from.
    see, it's when you post stuff like that that I think you don't even bother to really read the posts that you are responding to. I pointed out that the claim that businesses would do better with a MW increase because of the increase in business was crap because they were the ones providing the funds in the first place. I used basic math and citation to demonstrate how this very simple point would work itself out in real life, and your response.... since apparently you are unable to answer the math... is to accuse others of psychobabble.

    Well, alrighty then. I continue on secure in the observation that even MW's defenders are unable to come up with a logically coherent argument in its favor, and are forced to depend instead on emotional hyperbole. Which, it is hilarious to see you accuse anyone else of, given the way in which you toss out accusations that folks who disagree with you must be working on behalf of some kind of secret cabal of rich people

    Yes Wal-Mart's cheap goods have some positive effects.
    Yes. For example, they significantly lower the cost of living for our poor and low-income, thereby increasing their disposable income and standards of living.

    However they also have negative effects on the surrounding community. You have to weigh the entire net effect of this kind of business. Cheap goods but they pay poverty wages for everyone who works there
    That, however, is false. You appear to be confusing "what the bag-boy makes" with "what everyone makes" at Wal-Mart. Glassdoor.com tracks Walmart salaries. It seems that (for example) Assistant Managers can make anywhere between $31K and $80K (Average of $44K), while Pharmacists bring in a range of $97K to $149K (Average of $120K). Far from your claims that everyone is shoved down to minimum wage, it seems that associates earn raises as they gain experience and skill sets, and the average wage for a Wal-Mart Associate is $8.89 an hour. Cashiers make $8.52/hr (average), and overnight stockers $9.67/hr.

    Huh. That's interesting. It looks like once again basic application of logic to evidence available demonstrates that you either have no idea what you are talking about, or do not care, preferring to sling emotionally-charged rhetoric in place of reason.

    The profit is funneled out of the community. Watch "Wal-Mart: The High Cost of Low Prices" for another perspective on this. These low wage workers become welfare cases that the state government has to prop up, subsidizing Wal-Mart's profits.
    This is also a false argument. If all of those workers ceased working at Wal-Mart, they would not suddenly no longer draw government subsidies, they would increase the subsidies they draw. Conversely, if the government were to suddenly cease it's subsidy programs, there is no mechanism that would then force Wal-Mart to raise its' wages.

    The workers can less afford healthcare if they get sick and run up the costs of healthcare because they can't pay the bills.
    Actually, it turns out that Walmarts' health plan for associates is cheaper, and offers more coverage than Obamacare.

    These things do not strengthen the community, they weaken it terribly.
    Oh, I don't know. I think offering the poorest of the poor a path out of poverty while lowering the cost of living for the community at large (but especially, again, for our low-income populaces) is a pretty beneficial set of things, by and large.

    The point I've made numerous times in this thread is that the majority of people are median, they will be paid a median, low wage. That is the problem with the middle class, the median class, they have too little spending power. Individual achievement is not going to magically fix this.
    yeah. Right.

    Look, man, the median middle class right now live lives unimaginable to anyone else in human history. We are incredibly wealthy. We've gotten here precisely because a few hundred years ago we decided to adopt forms of government that unleashed the individual.

    We're talking about the economy, not how individuals can improve their lives.
    Oh. Well then I could care less about how you want to manipulate numbers - I am interested in how poor people can improve their lives. If you are not interested in how individuals can improve their lives, well, I can understand then why you would be in favor of a MW increase, as it funnels more money to your preferred political party via unions, and can thus be understood as a power play. Thank you for your honesty.

    At the end you revert to a laissez faire worldview where you think if we just let things play out it will fix everything and be great. We've already tried this many times, it doesn't work.




    Quite the contrary, economic freedom seems to be the only thing that works. That free trade worldview has lifted more people out of poverty in the last three decades than the rest of human history combined. You are probably making the common left-wing mistake of confusing a free economy with a lack of rule of law.

    What we end up with is a wild, unbalanced system that breaks everything as it spins out of control. It just happened back in 2007 and you guys still don't get it. You de-regulate and let things play out and what you get is a violent game where the big players loot and pillage and the common person foots the bill.
    Dude what in the world makes you think that the heavily regulated financial industry in 2007 was lasseiz faire?

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by cpwill View Post
    Honest Question for MW supporters: why shouldn't we make the Minimum Wage $25 an hour?
    It is a hyperbole. $25/hr is higher than the average wage. Placing the wage floor above the nations average wage would negatively impact the pricing for the overwhelming majority of companies. Moving from $7.25/hr to $10.10/hr will have an impact on the minority of companies, while reducing the ability for companies to derive profit from low wage labor.

    Any company that derives $3.35/hr by paying employees $7.25/hr is a ****ty business to begin with, and has bigger problems than the wage hike.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by Kushinator View Post
    It is a hyperbole. $25/hr is higher than the average wage. Placing the wage floor above the nations average wage would negatively impact the pricing for the overwhelming majority of companies. Moving from $7.25/hr to $10.10/hr will have an impact on the minority of companies, while reducing the ability for companies to derive profit from low wage labor.
    Why would we want to have a negative impact on the companies who hire the largest workforces, such as Wal-Mart? More specifically, why would we want to have negative impact on the minority of workers who are our lowest-paid portions of the workforce - why would we want to price low-value labor out of the workforce by reducing the ability for companies to derive profit from it?

    If we increase the cost of legal labor, do we not then increase the price advantage of illegal labor?


    However, it's worth noting that at least you are admitting that the effects on the businesses involved will be negative.



    Any company that derives $3.35/hr by paying employees $7.25/hr is a ****ty business to begin with, and has bigger problems than the wage hike.
    Any company who only derives $3.35 in benefit per $7.25 in dollar spent on labor is probably doomed. If you think that is greedy, I agree to send you a check for $3.35 for every check for $7.25 that you send me until the first one of us runs out of money.

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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by cpwill View Post
    Why would we want to have a negative impact on the companies who hire the largest workforces, such as Wal-Mart?
    Not accounting for illegal labor, only 3.6 million Americans were receiving less than or equal to the minimum wage in 2012. The question really becomes: do we want to support the ability to profit from low value production of goods and services?

    More specifically, why would we want to have negative impact on the minority of workers who are our lowest-paid portions of the workforce - why would we want to price low-value labor out of the workforce by reducing the ability for companies to derive profit from it?
    Because it is a less than optimal use of resources, and as a result diminishes the productive capacity of the nation. Allowing companies to consistently profit from low wage labor leads to complacency with respect to fixed capital investment.

    If we increase the cost of legal labor, do we not then increase the price advantage of illegal labor?
    Slippery slope. Using this line of logic, taxes increase the price advantage of illegal labor. And yet you don't see hospitals hiring doctors by promising to pay them cash @ 75% the going rate. In reality, illegal labor is more about a lack of marketable skills than wage floors.

    However, it's worth noting that at least you are admitting that the effects on the businesses involved will be negative.
    Of course. Increasing the minimum wage to the point where it would exceed the average wage is a ridiculous idea, and would harm most (if not all) businesses. Increasing the wage floor to reflect price differentials is not even comparable.

    Any company who only derives $3.35 in benefit per $7.25 in dollar spent on labor is probably doomed. If you think that is greedy, I agree to send you a check for $3.35 for every check for $7.25 that you send me until the first one of us runs out of money.
    My apologies, but i trying to provide an example of companies operating at such a tight margin, that they would have to let workers go because they only derive $10.60 from one hour of minimum wage labor. These are the kind of companies we can surely do without.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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