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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
    My point is that government needs to step in sometimes. Company script, Child labor laws, workplace safety, etc.. A company will keep it business as usual until there is intervention... Oh wait then they just close up shop and ship off to some third world nation and exploit their people.
    Oh...I thought you were supporting Napoleon with his "statement of fact".

    And...what?

    Do you think raising the minimum wage is the intervention that is needed? Do you really equate a fair wage for a fair day's labor with things like company script, child labor or workplace safety?
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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by Mycroft View Post
    Oh...I thought you were supporting Napoleon with his "statement of fact".

    And...what?

    Do you think raising the minimum wage is the intervention that is needed? Do you really equate a fair wage for a fair day's labor with things like company script, child labor or workplace safety?
    Prior to the FMW. Half of the country was in poverty because companies could pay as little as possible, exploiting the workforce.
    Give a man a fish and he can eat for a day. Teach a man to fish and he can sit in a boat, drinking beer all day while you fool around with his Woman.

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

    Quote Originally Posted by HenryChinaski View Post
    Prior to the FMW. Half of the country was in poverty because companies could pay as little as possible, exploiting the workforce.
    shrug...

    That's how the free market works. If you raised the minimum wage to $25/hr, companies would STILL pay as little as possible...except they would be paying it to less people.
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    Re: CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    Quote Originally Posted by HenryChinaski View Post
    Up until recent decades here in the US, lumber and mining companies were paying their employees in script and company store money until it finally became outlawed. There was no short supply of labor. Those industries preyed on desperate men with no other options and a need to eat. If a business can get away with it, they'll do it. Think about it. Businesses were using child labor until the practice was outlawed.
    decades?

    try close to a century ago no decades. you are talking 1920's this is 2014.

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

    Quote Originally Posted by DA60 View Post
    CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs

    'Increasing the U.S. minimum wage may lift some workers out of poverty while leading to as many as 1 million job losses, according to a report from the Congressional Budget Office.

    The report was seized on by House Speaker John Boehner, an Ohio Republican who opposes President Barack Obama’s call to increase the minimum wage to $10.10. The federal minimum wage is currently $7.25 an hour.

    ...A change in employment probably would range from a “very slight reduction” to a decrease of 1 million jobs, CBO said. Some workers would lose their jobs as companies look to offset the change by reducing payrolls, according to the report.'



    CBO Says Minimum-Wage Rise May Ease Poverty, Cost Jobs - Bloomberg
    The CBO also responded to criticism from the White House about their analysis. Responding to White House doubts, CBO defends minimum wage study - CBS News

    After facing some blowback from the White House over their methods in a study about raising the minimum wage, the Congressional Budget Office (CBO) director defended his work as sound.

    “I want to be clear that our analysis on the effects of raising the minimum wage is completely consistent with the latest thinking in the economic profession,” said Douglas Elmendorf Wednesday at a breakfast sponsored by the Christian Science Monitor.
    Regardless, I think it is difficult to predict what will actually happen. Previous minimum wage hikes haven't really outpaced the market, but this one seems like quite a jump.

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

    Quote Originally Posted by Enginerdy View Post
    The CBO also responded to criticism from the White House about their analysis. Responding to White House doubts, CBO defends minimum wage study - CBS News



    Regardless, I think it is difficult to predict what will actually happen.
    Previous minimum wage hikes haven't really outpaced the market, but this one seems like quite a jump.
    With respect, I think it is rather easy to predict what will generally happen.

    Having the government force a 39% rise on the minimum wage - with ZERO increase in productivity - cannot result (IMO) in any other result but a rise in manufacturing/servicing costs, a rise in prices, a reduction in sales in those areas effected and a corresponding reduction in the labor force.

    Additionally, as the labor cost rise works it's way through the system (you raise minimum wage, you are going to have to raise those presently making $10/hr. to $12.50/hr. to keep them 'happy' - i.e. stop them from striking; then you have to raise people previously making $12.50/hr. to $15/hr. to keep them 'happy' and so on), a large number of goods and services will increase in price, which further erodes American competitiveness with foreign imports, which erodes sales further, which causes more layoffs.

    There is no way realistically possible - IMO - that a U.S. government-forced raise in the minimum wage by 39% cannot result in a significant loss of American jobs.


    This does not even mention the negative effect a rise in prices will have to those on fixed incomes.
    Last edited by DA60; 02-20-14 at 09:36 PM.

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

    Quote Originally Posted by DA60 View Post
    With respect, I think it is rather easy to predict what will generally happen.

    Having the government force a 39% rise on the minimum wage - with ZERO increase in productivity - cannot result (IMO) in any other result but a rise in manufacturing/servicing costs, a rise in prices, a reduction in sales in those areas effected and a corresponding reduction in the labor force.

    Additionally, as the labor cost rise works it's way through the system (you raise minimum wage, you are going to have to raise those presently making $10/hr. to $12.50/hr. to keep them 'happy' - i.e. stop them from striking; then you have to raise people previously making $12.50/hr. to $15/hr. to keep them 'happy' and so on), a large number of goods and services will increase in price, which further erodes American competitiveness with foreign imports, which erodes sales further, which causes more layoffs.

    There is no way realistically possible - IMO - that a U.S. government-forced raise in the minimum wage by 39% cannot result in a significant loss of American jobs.


    This does not even mention the negative effect a rise in prices will have to those on fixed incomes.
    I agree that it will have some negative effects and I understand what you’re saying with the whole ripple effect, although I do think there are more factors to consider for us to know the overall effect.

    Many high cost of living areas are already paying workers at or above $10/hr and right now the wage increase will only apply to one portion of the workforce, many people that might already be in those high cost of living areas doing federally contracted work.

    Just consider the range that the CBO gave in their analysis. From the OP, they said: “A change in employment probably would range from a ‘very slight reduction’ to a decrease of 1 million jobs”. That just doesn't sound like a very definitive number to me.

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

    Quote Originally Posted by Kushinator View Post
    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?
    It seems to me if the alternative is to make poor people structurally unemployable.... yes. Absolutely. We should be seeking out more ways for our economy to leverage low-value workers. Making people structurally unemployable is destructive to them and the greater economy.

    Because it is a less than optimal use of resources, and as a result diminishes the productive capacity of the nation.
    On the contrary, that the resources are being utilized there absent coercion indicates that it is likely to be the most optimal use of resources, and (as you seemingly admit) throwing low-wage workers out of jobs in order to marginally increase the wages of low-middle and middle income workers does not increase, but rather decreases the aggregate productive capacity of the nation.

    Allowing companies to consistently profit from low wage labor leads to complacency with respect to fixed capital investment.
    because there is no such thing as competition?

    Slippery slope. Using this line of logic, taxes increase the price advantage of illegal labor.
    They do indeed. Anything that increases the cost of hiring a low-value American laborer increases the advantage to the low-value illegal laborer who is his competition in the job market.

    And yet you don't see hospitals hiring doctors by promising to pay them cash @ 75% the going rate.
    That's because Cash Pay as a salary works for those who are living in the black market, not those who are working in the above-ground economy. Doctors aren't willing to risk going to jail for tax evasion - illegals know they are extremely unlikely to ever be pursued.

    In reality, illegal labor is more about a lack of marketable skills than wage floors.
    The education and language skills of your average illegal immigrant is not that much better if it is better than your average low-income American. You may have a natural skill-set advantage in agricultural industries, but not retail.

    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.
    Hey, as long as you are upfront about the fact that the Minimum Wage Increase would hurt the businesses involved and the low-income people who previously worked for them, I'll admit, I'm left without much else to argue, except an a priori argument that doing so is bad economics, bad policy, and immoral.

    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.
    On the contrary, those are precisely the kind of companies that we need more of - unemployment among our poor, young, and low-education is at exceedingly high levels, and simply pricing them out of the job market because you find them distasteful is abusive. It is precisely, in fact, the original argument in favor of the Minimum Wage.

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

    Quote Originally Posted by HenryChinaski View Post
    Prior to the FMW. Half of the country was in poverty because companies could pay as little as possible, exploiting the workforce.
    Wrong. Poverty is mankinds' default setting. Prior to the FMW (using your figures) half the country had managed to escape poverty because we left individuals generally free to pursue their self interest.


    As for prior to the FMW, well, prior to the FMW there was (unsurprisingly) a political movement to establish a FMW. Would you like to know more about them?

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

    Quote Originally Posted by HenryChinaski View Post
    My point is that government needs to step in sometimes. Company script, Child labor laws, workplace safety, etc.. A company will keep it business as usual until there is intervention... Oh wait then they just close up shop and ship off to some third world nation and exploit their people.
    And government or organized labor is different because.......?


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