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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:
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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But if the things they are buying cost as much or more then the added money in their pockets, they save nothing. I have explained this several times in other threads.

If you are seriously going to argue that inefficiency is the way to economic prosperity, then, with respect, I strongly think you should rethink your position.

Anyway, if you have a problem with what I am saying, I suggest you take it up with those that wrote the CBO report...they can probably explain it better (or at least, use much bigger words) then I can.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

TeleKat said:
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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I agree. When I've asked some of my middle class tea party buddies about that, their reasoning was that they believed a higher minimum wage would somehow harm their own earnings ability, either through the lower paid worker getting a disproportionately large slice of the wage pool pie, or due to inflation. Their concern for their personal well being exceeds their concern for fiscal conservatism.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
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.
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I am defining productivity by it's definition. Many people can start calling a banana a Camaro...but the official definition of the yellow fruit in question is still a banana.

I simply do not believe that if the government forces a company to pay minimum wage worker 'X' 50 cents more per hour that worker 'X' will work any harder.

Why should he? The company is not rewarding him for anything, they do not want to give him the extra money and are only doing so because they have no choice. He might feel more loyalty to the government and vote for them next election, but not the company...which is EXACTLY, btw, why most governments do it. Votes.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
I simply do not believe that if the government forces a company to pay minimum wage worker 'X' 50 cents more per hour that worker 'X' will work any harder.
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The argument isn't that the worker will work harder. It's that the worker will spend more money and expand our economy by producing more demand, and that this economic expansion will result in more employment and more goods and services being produced.

If McDonalds get's a boost in sales due to every other low wage paying company having to pay more, then McDonalds will be able pay it's own worker pay increase because of the additional profit from the boost in sales.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
I agree. When I've asked some of my middle class tea party buddies about that, their reasoning was that they believed a higher minimum wage would somehow harm their own earnings ability, either through the lower paid worker getting a disproportionately large slice of the wage pool pie, or due to inflation. Their concern for their personal well being exceeds their concern for fiscal conservatism.
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The sad thing is: a higher minimum wage would really benefit everyone. It's a common misconception that your personal gain alone produces your living standards. That's just not true. The economy is inherently cooperative and, like it or not, we rely on others for our personal well-being. Now, from that assertion, we have a choice: do we want the other members of the economy around us to be happy and prosperous, or do we want them to work in wage slave jobs where they make just barely enough to keep alive?
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
The argument isn't that the worker will work harder. It's that the worker will spend more money and expand our economy by producing more demand, and that this economic expansion will result in more employment and more goods and services being produced.

If McDonalds get's a boost in sales due to every other low wage paying company having to pay more, then McDonalds will be able pay it's own worker pay increase because of the additional profit from the boost in sales.
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How can McDonald's get a boost in sales by raising the price of it's food? That makes no sense..level in your scenario (that I have heard from the pro-raise minimum wagers MANY times).

I am not getting into some philosophical discussion over this as I have gone over it several times before in the $15/minimum wage threads.

As I said, if you think the answer to America's economic problems is more inefficiency (because if you agree they would not work any harder - then that is what you are putting forth), then, with respect, I do not think you are thinking this through.

How can inefficiency move humanity forwards? Should we deliberately produce less efficient cars? Computers that are slower? Or cost more to do the same thing as the year before? Come on now, man. I STRONGLY suggest you read the CBO study.

Either way, I don't want to go into this again at this time.

We will just have to agree to disagree.

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

imagep said:
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.
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Nonsense Scott...The question should be why is a McD employee worth $16 per hr?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

j-mac said:
Nonsense Scott...The question should be why is a McD employee worth $16 per hr?
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Why is he/she not? Probably does more in a given day at work than 50% of the work force.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

whysoserious said:
Why is he/she not? Probably does more in a given day at work than 50% of the work force.
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Because the supply of workers with their skill set is enormous.
 
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.

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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Or to put simply higher wages goes hand and hand with higher profits.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Henrin said:
Because the supply of workers with their skill set is enormous.
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Agreed - but not everything has to run on a free market equation.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

j-mac said:
Nonsense Scott...The question should be why is a McD employee worth $16 per hr?
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Easier to answer if you tell me why you think they aren't.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

whysoserious said:
Why is he/she not? Probably does more in a given day at work than 50% of the work force.
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I use to think so too when I was just a mere cashier.

Then I learned when I got a real job...
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
It was done long ago, in other countries, and it seems to work out for them.
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It was done here in 1968. ;)
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

DA60 said:
How can McDonald's get a boost in sales by raising the price of it's food? That makes no sense..level in your scenario (that I have heard from the pro-raise minimum wagers MANY times).
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There you go again, you are starting out with the assumption that McDonalds would raise the price of it's food. What I'm trying to explain is that they wouldn't have a need to increase the price of food. The increase in sales that they would get would result in enough increase in profit to cover the higher cost of labor.

When you start out with an assumption, then you can't logically think about an issue.

Maybe you don't understand that companies can't just randomly increase prices. Companies price their goods at the profit maximizing price. If they increase their prices, then their profit actually declines (because they loose sales). Competition is the biggest factor that restrains prices in the competitive free market.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

j-mac said:
Nonsense Scott...The question should be why is a McD employee worth $16 per hr?
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Because they produce far more than that in sales.

Anyhow, I'm not pushing a $16 min wage. I think that there is an economic maximizing min wage. I don't claim to know how much it is, but based upon history in the US, and in other countries, it probably exceeds $10/hr.

So now tell me why any CEO would be worth a hundred million a year, when there are a thousand other people who would have done the job for less money, but who are equally qualified.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Henrin said:
Because the supply of workers with their skill set is enormous.
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That's a negotiating power factor, not a production ability factor, but you do have a point that negotiating power is what sets wages.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Henrin said:
Or to put simply higher wages goes hand and hand with higher profits.
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I would hope it worked that way.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

TeleKat said:
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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You've had 9 minimum wage increases since 1938, and somehow this keeps happening...

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This is because welfare programs increase effective marginal tax rates of low-income earners.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

imagep said:
I would hope it worked that way.
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It pretty much does work that way. Higher wages increases demand and market activity which in turn increases profits.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
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This is because welfare programs increase effective marginal tax rates of low-income earners.
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Why do you say that? Do we tax welfare?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

TeleKat said:
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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It doesn't work that way though. Demand for welfare programs and the use of those programs has only grown since they came into existence.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Henrin said:
It pretty much does work that way. Higher wages increases demand and market activity which in turn increases profits.
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I agree, but I'm shocked that you do.

To slightly mis-quote Bush: "I misunderestimated you"
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Henrin said:
It doesn't work that way though. Demand for welfare programs and the use of those programs has only grown since they came into existence.
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That's true, but partially because minimum wage hasn't kept up with inflation since 1968, despite the occasional increase in minimum wage.

Personally I find that an increase in wage, and decreases in taxation, are preferable to increasing means tested welfare.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

TeleKat said:
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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How do you explain that while while less than 3% of the US workforce makes the MW that 15% (or more) rely on the "safety net"?
 
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