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Study: The 2007 minimum wage hike cost more than 1 million jobs during the recession

Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
I can't think of a single reason that we should have that policy. I'd much prefer to eliminate all forms of means tested welfare, and then use that money to either provide more government services for everyone, or to simply reduce taxation.
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I don't quite agree, or at least not entirely. We'll always have people who cannot work and make a livable wage, and they might be diagnosed as disabled or not. And whether anyone WANTS to subsidize those people, it's going to happen because we won't allow beggars with little infants to stand around every gathering place like you see regularly overseas, or little kids begging for food on the side of the road, etc.

I get accused of being a liberal frequently, but I'm really much more of a libertarian - if something has to be taxpayer subsidized (like McDonalds), then we probably don't really need it. I think that a higher minimum wage would produce a much better economy, than any sort of means tested individual welfare or subsidies to low paying employers.
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I do agree with that for the most part, but I'm actually not very opposed if at all to things like EITC, and we (taxpayers) are going to have to subsidize healthcare for low wage workers somehow, IMO, not because I want that but realistically and practically that's the best option.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

JasperL said:
I don't quite agree, or at least not entirely. We'll always have people who cannot work and make a livable wage, and they might be diagnosed as disabled or not. And whether anyone WANTS to subsidize those people, it's going to happen because we won't allow beggars with little infants to stand around every gathering place like you see regularly overseas, or little kids begging for food on the side of the road, etc.
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I agree. I don't have any issue with helping those who are disabled. But we can do that without means testing.


I do agree with that for the most part, but I'm actually not very opposed if at all to things like EITC, and we (taxpayers) are going to have to subsidize healthcare for low wage workers somehow, IMO, not because I want that but realistically and practically that's the best option.
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Seems like policies that lead to higher wages and more productivity would be preferable to EITC. Also, seems like lower taxes on the non-rich would have the same effect as EITC. If we are going to subsidize healthcare in any way, and I can see that there may be a need for that, it should be in such a manner that everyone receives that same government benefit. this kinda brings us to something like the "citizens dividend" (aka "guaranteed income"), which would replace all forms of means tested welfare, but wouldn't penalize those who work and make decent incomes, and wouldn't have the effect of locking people into poverty.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Fletch said:
Except no one is advocating that. You really should be able to tell the difference between voluntary employment and slavery at this point.
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Those the advocate the abolition of the minimum wage do not understand the concept of de facto slavery.... You lose minimum wage and there really isn't much difference between voluntary employment and slavery other than you have choice over who does the whipping.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

OrphanSlug said:
It would not be pretty, but it very well might create jobs. What we would see is wage rate determination by the cross of Labor Supply and Demand.
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Econ 101 does not adequately explain the real world.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

ttwtt78640 said:
When I worked for MW (it was $1.60/hour and soon went to $2.00/hour) I shared an apartment becuase, as you said, it was not enough income to meet expenses living alone. MW was then, and still is now, not offered except to entry level workers (under 3% of the workforce) and anyone could exceed that pay by proving themselves to be worth more. The idea that one full-time worker at MW can fully support themselves, much less support a familiy, has never been the case; an entry level McJob was never intended to be a career.
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Intended by whom? And why shouldn't full time employment support a family? What law of the universe dictates this?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Deuce said:
Intended by whom? And why shouldn't full time employment support a family? What law of the universe dictates this?
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Assuming that a family is 4 persons, and only one of them works 40 hours per week, in order to not be poor enough to get Medicaid then that single worker must receive at least $32,713/year (138% of the FPL) or about $16/hour (at todays prices). Obviously, if the MW were raised from $7.25/hour to $16/hour many prices would also increase requiring the federal poverty level (thus the MW) to rise again.

One must also consider that those now making MW + $X/hour would expect to remain at that level, since the relative value of their labor still remains above that of the 3% that now get the federal MW. Is it really practical to give most US hourly workers (and many salaried workers) a raise of $8.75/hour each?

The resulting cost of living increase (from giving the bulk of the US workforce a sizable raise) would require COLA adjustments in SS (more taxes?) and reduce the value of many private pensions that do not get COLA adjustments. If it were as simple as mandating that all US workers wiill be middle class by raising their hourly pay rate then that would have been done long ago.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

ttwtt78640 said:
Assuming that a family is 4 persons, and only one of them works 40 hours per week, in order to not be poor enough to get Medicaid then that single worker must receive at least $32,713/year (138% of the FPL) or about $16/hour (at todays prices). Obviously, if the MW were raised from $7.25/hour to $16/hour many prices would also increase requiring the federal poverty level (thus the MW) to rise again.

One must also consider that those now making MW + $X/hour would expect to remain at that level, since the relative value of their labor still remains above that of the 3% that now get the federal MW. Is it really practical to give most US hourly workers (and many salaried workers) a raise of $8.75/hour each?
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Why not? Prices go up, yes, but not as much as the pay.

Libertarians and conservatives in this sort of discussion often throw out terms like "value of labor," but ask yourself this:

Why is a McDonald's worker's labor worth $7.25 and not $15?

The resulting cost of living increase (from giving the bulk of the US workforce a sizable raise) would require COLA adjustments in SS (more taxes?) and reduce the value of many private pensions that do not get COLA adjustments. If it were as simple as mandating that all US workers wiill be middle class by raising their hourly pay rate then that would have been done long ago.
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"Family can be fed and housed" is now "middle class?" When did our standards get this low? I feel I should also point out that minimum wage can't support a family of one, let alone four.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Deuce said:
Intended by whom? And why shouldn't full time employment support a family? What law of the universe dictates this?
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Some people prefer that those who they feel are below them should stay below them. I think that part of their mindset is that if entry level workers make a decent living, then it will cause the standard of living of higher skill level workers to fall.

What I find odd about that is that the same people are the first to point out that economics isn't a zero sum game when someone else suggests that the excessive income and wealth acquired by the uber rich results in others having less. apparently zero sum only works in one direction.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

ttwtt78640 said:
... If it were as simple as mandating that all US workers wiill be middle class by raising their hourly pay rate then that would have been done long ago.
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It was done long ago, in other countries, and it seems to work out for them.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Deuce said:
...

Why is a McDonald's worker's labor worth $7.25 and not $15? ...
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Some claim that it's not even worth $7.25. Of course if that was true, then no minimum wage workers would have a job because no employer is going to pay anyone more than they are worth.

The fact is that no worker get's paid what they are worth, with the possible exception of the CEO and his/her buddies. If workers got paid what they are worth, then the company couldn't make a profit.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

buck said:
So.. According to you, their labor costs go up, they get busier, they hire more (at the now higher wage) and magically reduce prices. :roll:
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It's not magic. It's how it works. That's why we did better back when we paid more.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Boo Radley said:
It's not magic. It's how it works. That's why we did better back when we paid more.
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What's missing from the 'wage increases cause inflation' thing is so long as wage increases are tied to productivity gains, there is no need for higher prices because costs per unit don't increase. For a couple hundred years, wage increases WERE tied to productivity, and instead of inflation being the big effect, we had rising living standards. The problem is about 1970 or so, productivity gains quit going to workers and went to owners/executives, so wages have stagnated despite robust productivity gains.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

jasperl said:
what's missing from the 'wage increases cause inflation' thing is so long as wage increases are tied to productivity gains, there is no need for higher prices because costs per unit don't increase. For a couple hundred years, wage increases were tied to productivity, and instead of inflation being the big effect, we had rising living standards. The problem is about 1970 or so, productivity gains quit going to workers and went to owners/executives, so wages have stagnated despite robust productivity gains.
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Exactly!!!

It's a distribution of income issue, nothing more, nothing less.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
Exactly!!!

It's a distribution of income issue, nothing more, nothing less.
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Uh oh you used the D word, you must be a communist.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Deuce said:
Uh oh you used the D word, you must be a communist.
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Some people tell me that I am.

It's often the same people who tell me that I am a socialist or commie, that argue against me when I say that we should eliminate means tested welfare, stop subsidising low wage paying companies like Walmart and McDonalds, and decrease taxation. Go figure.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

It is almost totally illogical to think that forcing companies to pay people more money for zero extra productivity is actually going to help an economy. Lowering productivity is almost never a good thing.

Sure, many liberals say it means the poor have more money to spend and yada yada.

But as I have pointed out many times, that argument does not hold water. And the CBO (and the OP study) apparently agree with me.

And it is typical of socialistic thinking. Often well intentioned but poorly thought out and usually detached from reality.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
It is almost totally illogical to think that forcing companies to pay people more money for zero extra productivity is actually going to help an economy. Lowering productivity is almost never a good thing.

Sure, many liberals say it means the poor have more money to spend and yada yada.

But as I have pointed out many times, that argument does not hold water. And the CBO (and the OP study) apparently agree with me.

And it is typical of socialistic thinking. Often well intentioned but poorly thought out and usually detached from reality.
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for every study that indicates a higher min wage is bad, there's a study that indicates otherwise.

Even the Heritage Foundation study on the subject admitted that there is no trend towards either higher inflation or loss of jobs when we increase min wage, although the study continues on to say that they still believe it is bad for our economy.

We all pick and chose to believe in whatever suits our ideology.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
It is almost totally illogical to think that forcing companies to pay people more money for zero extra productivity is actually going to help an economy. Lowering productivity is almost never a good thing.

Sure, many liberals say it means the poor have more money to spend and yada yada.

But as I have pointed out many times, that argument does not hold water. And the CBO (and the OP study) apparently agree with me.

And it is typical of socialistic thinking. Often well intentioned but poorly thought out and usually detached from reality.
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You're operating under the impression that their current pay matches the exact productivity of their labor. Faulty assumption.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
Some people tell me that I am.

It's often the same people who tell me that I am a socialist or commie, that argue against me when I say that we should eliminate means tested welfare, stop subsidising low wage paying companies like Walmart and McDonalds, and decrease taxation. Go figure.
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I feel ya. It seems like, to many people, anyone who isn't falling completely off the right side of the chart economically is a "commie."
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
for every study that indicates a higher min wage is bad, there's a study that indicates otherwise.

Even the Heritage Foundation study on the subject admitted that there is no trend towards either higher inflation or loss of jobs when we increase min wage, although the study continues on to say that they still believe it is bad for our economy.

We all pick and chose to believe in whatever suits our ideology.
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I don't have an ideology on this...I simply go with common sense and first hand experience. I quoted the CBO because liberals seem to respect the CBO. Plus, it is (supposedly) an unbiased source.

All things being equal, you cannot make an economy more productive by forcing businesses to have less productivity...it is not possible. It does not even make sense.

If you or others choose to ignore this, go ahead. It does not make it any less impossible.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Deuce said:
You're operating under the impression that their current pay matches the exact productivity of their labor. Faulty assumption.
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Ummm...I don't think you understand what 'productivity' means.

'PRODUCTIVITY'
An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories. Productivity measures may be examined collectively (across the whole economy) or viewed industry by industry to examine trends in labor growth, wage levels and technological improvement.'

Productivity Definition | Investopedia

Whatever they are producing at their cost IS their productivity.

If they are paid 1 cent or $1 million dollars per hour doesn't matter. In both examples, they are producing the good/service with a level of productivity...the former obviously has far more productivity then the latter.

Whatever someone is paid to produce something IS their level of productivity.

So, if you are paid $7/hr. to make a widget/hr. then you are more productive then if you are paid $8/hr. to make a widget/hr..

So, by paying someone more money to do the exact same task, all other things being equal, then you are making them less productive.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
...Making large numbers of products or services more expensive without improving them in any way cannot help society as a whole. Again, not possible. It just means society as a whole must spend a larger percentage of their incomes to buy products/services that are no more efficient.

If you or others choose to ignore this, go ahead. It does not make it any less impossible.
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When people have more money in their pockets, they spend and save more, and demand increases. When companies have an increase in realized demand, they produce more, and thus they hire more people, and create more wealth. The cost for higher wages is paid for out of the additional wealth creation, it costs the consumer nothing, and it costs the business owner nothing.

You are starting out with the assumption that an increase in wages would automatically result in higher prices, but nothing in economics is "automatic". There has to be some sort of inflationary mechanism, which is not fully offset by opposing deflationary mechanisms, for there to be an increase in prices.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
Ummm...I don't think you understand what 'productivity' means.

'PRODUCTIVITY'
An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories. Productivity measures may be examined collectively (across the whole economy) or viewed industry by industry to examine trends in labor growth, wage levels and technological improvement.'

Productivity Definition | Investopedia

Whatever they are producing at their cost IS their productivity.

If they are paid 1 cent or $1 million dollars per hour doesn't matter. In both examples, they are producing the good/service with a level of productivity...the former obviously has far more productivity then the latter.

Whatever someone is paid to produce something IS their level of productivity.

So, if you are paid $7/hr. to make a widget/hr. then you are more productive then if you are paid $8/hr. to make a widget/hr..

So, by paying someone more money to do the exact same task, all other things being equal, then you are making them less productive.
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I understand that you are defining productivity as units produced per labor dollar, but that's not how most people use it.

I think that most of us would define "productivity" in terms of units of production per work hour. So if our productivity increases, that would mean that we are producing more per hour, regardless of how much labor cost was involved for that hour.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
When people have more money in their pockets, they spend and save more, and demand increases. When companies have an increase in realized demand, they produce more, and thus they hire more people, and create more wealth. The cost for higher wages is paid for out of the additional wealth creation, it costs the consumer nothing, and it costs the business owner nothing.
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The way I see it is that a higher minimum wage would actually allow us to lower taxes to a reasonable level, since welfare programs would not be as prominent or necessary. You'd think the fiscal conservatives would be all over that. :shrug:
 
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