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Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Workers

Lafayette

Lafayette

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Report • By David Cooper • July 14, 2015, from here.

Excerpt:
Introduction and key findings

The minimum wage was established in 1938 as part of the Fair Labor Standards Act (FLSA). In addition to prohibiting child labor and mandating the 40-hour workweek, the FLSA established the federal minimum wage to help ensure that all work would be fairly rewarded and that regular employment would provide a decent quality of life. Moreover, regular increases in the minimum wage were meant to ensure that even the lowest-paid workers benefited from broader improvements in wages and living standards.

Yet today, because of decades of infrequent and inadequate adjustment, the federal minimum wage no longer serves as an adequate wage floor. Every year that the minimum wage is left unchanged, rising prices slowly erode its buying power. In 2014, the federal minimum wage of $7.25 was worth nearly 10 percent less than when it was last raised in 2009, after adjusting for inflation. In fact, the real (inflation-adjusted) value of the federal minimum wage in 2014 was 24 percent below its peak value in 1968.

This decline in purchasing power means low-wage workers have to work longer hours just to achieve the standard of living that was considered the bare minimum almost half a century ago. Over that time, the United States has achieved tremendous improvements in labor productivity that could have allowed workers at all pay levels to enjoy a significantly improved quality of life. Instead, because of policymakers’ failure to preserve this basic labor standard, a parent earning the minimum wage today does not earn enough through full-time work to be above the federal poverty line.

In April 2015, Sen. Patty Murray (D-Wash.) and Rep. Robert “Bobby” Scott (D-Va.) introduced the Raise the Wage.e Act of 2015, a bill that would raise the federal minimum wage in five steps to $12 per hour by 2020. Beginning in 2021, the minimum wage would be “indexed” to median wages so that each year, the minimum wage would automatically be adjusted based upon growth in the median wage. The bill would also gradually increase the sub-minimum wage for tipped workers (or “tipped minimum wage”), which has been fixed at $2.13 per hour since 1991, until it reaches parity with the regular minimum wage.
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Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

Raising the minimum wage might lift wages for 35 million workers, but it'll also raise prices for over 300 million citizens (which includes those 35 million workers.

You ever heard of costs and benefits? Mr. Cooper talked a whole lot about benefits, but completely ignored the costs side of the issue.

TANSTAAFL, you know.
 
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Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

The only way to raise minimum wages so that the poor will benefit is to bring in a commission system, and, make for a living wage based on the minimum wage.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

In a way it is catch-up. Some populists have found lying about the consequences a good ploy to capture votes. This is a pity as MW was tried, found wanting and left to be remembered. Sorrily it has been forgotten why it was abandoned and why it is a suboptimal strategy. As a matter of fact, it is the reason why the Bundesbank forbade indexing and the EZB is trying to get it made illegal for Euroland.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

It would encourage 35 million to stay in that dead end job.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Mycroft said:
Raising the minimum wage might lift wages for 35 million workers, but it'll also raise prices for over 300 million citizens (which includes those 35 million workers.

You ever heard of costs and benefits? Mr. Cooper talked a whole lot about benefits, but completely ignored the costs side of the issue.

TANSTAAFL, you know.
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A real downer is the long term effect on employment, which is often not well measured and reported. While the first impact of a minimum wage hike might be small or even under special conditions slightly positive, the multiplier is negative in following periods. These yearly small reductions in the number of available jobs accumulates and will be significant over time. So while there will be those that earn more than without the increase the hit persons take that inevitably lose their jobs is catastrophic. Don't let the populist propaganda confuse you. There is no free lunch in this and the promises are so many lies.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

WCH said:
It would encourage 35 million to stay in that dead end job.
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You mean those that still have one.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

BrettNortje said:
The only way to raise minimum wages so that the poor will benefit is to bring in a commission system, and, make for a living wage based on the minimum wage.
Click to expand...

I tend to doubt the existence of a free lunch here no matter how complicated we make it. But maybe you could explain.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

I like the bill. It's time for the bill. But, IMO, it doesn't go far enough. There should be a two-tiered system whereby those people under age 18 get paid X% of the higher minimum.

I think we will be surprised how this significant change will positively impact this country. The quality of our labor force will improve. There will be more competition for jobs causing people to elevate their education and skills.

Examples: I'm not going to have to struggle to understand a minimum wage ESL employee at the drive-thru. There will be enough competition for that $12 an hour job to create the incentive we need to see our immigrants anxious to hone their English language skills. Or they'll be out of work. Next, there will be more competition for jobs -- again incentivizing people to perform better and improve their work ethic.

Will we have to pay more for things? Yes,we will. But if we aren't willing to pay more for things in order for people left fortunate than ourselves to earn enough money thru a job-and-a-half to support themselves, we should probably re-evaluate our mindset. Will it have unintended consequences? What doesn't? But this isn't a reason to keep the minimum wage so low that the least of us can't support ourselves.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

Economists=eggheads with fancy degrees that I hire to make me richer,instead of themselves.
Great,another thread in which people who have never worked (or owned) in the restaurant business is going to tell those of us with years of experiance in the profession what to do with our businesses.
Let the armchair quarterbacking begin.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

Why is it "best" to use the 1968 (historic high, inflation adjusted) value of the federal MW? If one used the 1938 (initial) value of the MW then today adjusted for inflation it would be about $4.20/hour. If one used the 1939 (after the largest increase in MW history which was a 100% increase) value of the MW then today adjusted for inflation it would be about $8.40/hour.

Arguing for inflation adjustment (indexing it to the CPI) of the MW I can agree with - choosing a (cherry picked?) MW value which was raised farthest above inflation to become the baseline actually goes against using inflation as the rationale for indexing the MW to the CPI.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

MaggieD said:
I like the bill. It's time for the bill. But, IMO, it doesn't go far enough. There should be a two-tiered system whereby those people under age 18 get paid X% of the higher minimum.

I think we will be surprised how this significant change will positively impact this country. The quality of our labor force will improve. There will be more competition for jobs causing people to elevate their education and skills.

Examples: I'm not going to have to struggle to understand a minimum wage ESL employee at the drive-thru. There will be enough competition for that $12 an hour job to create the incentive we need to see our immigrants anxious to hone their English language skills. Or they'll be out of work. Next, there will be more competition for jobs -- again incentivizing people to perform better and improve their work ethic.

Will we have to pay more for things? Yes,we will. But if we aren't willing to pay more for things in order for people left fortunate than ourselves to earn enough money thru a job-and-a-half to support themselves, we should probably re-evaluate our mindset. Will it have unintended consequences? What doesn't? But this isn't a reason to keep the minimum wage so low that the least of us can't support ourselves.
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I'd rather encourage people to be motivated enough not to accept a low wage job if they want more money than mandate businesses pay more money whether the employee is worth it or not (in terms of value to the business).

But your two-tiered system will only encourage business to engage in age discrimination. Why would they hire older workers if they can get their job done with a younger worker?
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Mycroft said:
I'd rather encourage people to be motivated enough not to accept a low wage job if they want more money than mandate businesses pay more money whether the employee is worth it or not (in terms of value to the business).

But your two-tiered system will only encourage business to engage in age discrimination. Why would they hire older workers if they can get their job done with a younger worker?
Click to expand...

If I assume you believe a 16-year-old is equal in skills and work ethic to a 30-year-old single mom, then I would remind you that the number of kids between 16 and 18 who want to and can work, is woefully inadequate to field all the minimum wage jobs out there.

Your mindset is self-serving, IMO. It's time we looked at the workers who are exploited.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

MaggieD said:
I like the bill. It's time for the bill. But, IMO, it doesn't go far enough. There should be a two-tiered system whereby those people under age 18 get paid X% of the higher minimum.

I think we will be surprised how this significant change will positively impact this country. The quality of our labor force will improve. There will be more competition for jobs causing people to elevate their education and skills.

Examples: I'm not going to have to struggle to understand a minimum wage ESL employee at the drive-thru. There will be enough competition for that $12 an hour job to create the incentive we need to see our immigrants anxious to hone their English language skills. Or they'll be out of work. Next, there will be more competition for jobs -- again incentivizing people to perform better and improve their work ethic.

Will we have to pay more for things? Yes,we will. But if we aren't willing to pay more for things in order for people left fortunate than ourselves to earn enough money thru a job-and-a-half to support themselves, we should probably re-evaluate our mindset. Will it have unintended consequences? What doesn't? But this isn't a reason to keep the minimum wage so low that the least of us can't support ourselves.
Click to expand...

Usually, I agree with your opinions. In this case I really cannot do so. Minimum wages are but for very exceptional situations always job killers. The jobs will not be lost in the first periods necessarily but will accrue over time. The other day I read that the CBO calculations expect a loss of 500.000 jobs from a MW of $ 15 over time.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

MaggieD said:
If I assume you believe a 16-year-old is equal in skills and work ethic to a 30-year-old single mom, then I would remind you that the number of kids between 16 and 18 who want to and can work, is woefully inadequate to field all the minimum wage jobs out there.

Your mindset is self-serving, IMO. It's time we looked at the workers who are exploited.
Click to expand...

Your point has merit, though not complete merit. Any business looking to be profitable will, at the least, consider the up and down sides of your two-tiered system. While not all businesses will see an upside likely to happen, some will. That means that some job applicants will be discriminated against based on their age.

Do you think your two-tiered system is really worth such discrimination...and the resultant political, social and legal fights that will occur?


btw, workers are not "exploited". They are free to work for an agreed upon wage and they are free to look elsewhere if they do not agree to the wage. They certainly don't need the government to tell possible employers what to pay them.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Verthaine said:
Economists=eggheads with fancy degrees that I hire to make me richer,instead of themselves.
Great,another thread in which people who have never worked (or owned) in the restaurant business is going to tell those of us with years of experiance in the profession what to do with our businesses.
Let the armchair quarterbacking begin.
Click to expand...

Another group left to ponder why raising labor costs (for everything by mandate) is "good for all of us" are those living on fixed incomes whether private retirement pensions or public assistance.

As you are well aware, increasing the cost of sales requires increasing sales revenue or reducing profit. The guy (or gal) mowing grass is not suddenly going to produce more, just because their paycheck was mandated to grow, so their employer has but one option - raise the price of their lawn care services. That sweet little 80 year old lady, who needs her lawn mowed, is not likely to feel helped by all of that "fairness". ;)
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Mycroft said:
Your point has merit, though not complete merit. Any business looking to be profitable will, at the least, consider the up and down sides of your two-tiered system. While not all businesses will see an upside likely to happen, some will. That means that some job applicants will be discriminated against based on their age.

Do you think your two-tiered system is really worth such discrimination...and the resultant political, social and legal fights that will occur?


btw, workers are not "exploited". They are free to work for an agreed upon wage and they are free to look elsewhere if they do not agree to the wage. They certainly don't need the government to tell possible employers what to pay them.
Click to expand...

You've raised a good point re age discrimination. I guess I'd have to think about that.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

ttwtt78640 said:
Another group left to ponder why raising labor costs (for everything by mandate) is "good for all of us" are those living on fixed incomes whether private retirement pensions or public assistance.

As you are well aware, increasing the cost of sales requires increasing sales revenue or reducing profit. The guy (or gal) mowing grass is not suddenly going to produce more, just because their paycheck was mandated to grow, so their employer has but one option - raise the price of their lawn care services. That sweet little 80 year old lady, who needs her lawn mowed, is not likely to feel helped by all of that "fairness". ;)
Click to expand...

Seriously,didn't we just have a thread the same as this a day or two ago?
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Lafayette said:
Report • By David Cooper • July 14, 2015, from here.

Excerpt:


Wow! Is Uncle Sam playing catch-up in the minimum-wage, or what?!?

Discuss ...
______________________________
Click to expand...

The laughable assumptions by a radical left Socialist Progressive think tank are meaningless.

There really isn't much to discuss.

It's amazing to me how Socialist Progressive SJW's are so anxious to destroy job opportunities for young people seeking their first jobs.

It would be wise for the opposition to take this message to them.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

MaggieD said:
If I assume you believe a 16-year-old is equal in skills and work ethic to a 30-year-old single mom, then I would remind you that the number of kids between 16 and 18 who want to and can work, is woefully inadequate to field all the minimum wage jobs out there.

Your mindset is self-serving, IMO. It's time we looked at the workers who are exploited.
Click to expand...

Why is equal pay for equal work suddenly a bad idea? One does not need experience to perform "unskilled" labor and the assumption that "work ethic" suddenly changes at age 19 is just as silly (and discriminatory?) as saying that "work ethic" changes with gender.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Verthaine said:
Seriously,didn't we just have a thread the same as this a day or two ago?
Click to expand...

Those that wish to "fight poverty" by raising "unskilled" labor costs (and by extension, prices) never seem to stop trying to sell their "fairness" plan. ;)
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle's overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.
Why raising the minimum wage in Seattle did little to help workers, according to a new study
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Mandate a change to the market conditions, and the market reacts, just not as the wage hike proponents would want or expected, fewer jobs and fewer hours.

This was predicted, accurately, and those warnings ignored by those proponents.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

ttwtt78640 said:
Why is it "best" to use the 1968 (historic high, inflation adjusted) value of the federal MW? If one used the 1938 (initial) value of the MW then today adjusted for inflation it would be about $4.20/hour. If one used the 1939 (after the largest increase in MW history which was a 100% increase) value of the MW then today adjusted for inflation it would be about $8.40/hour.

Arguing for inflation adjustment (indexing it to the CPI) of the MW I can agree with - choosing a (cherry picked?) MW value which was raised farthest above inflation to become the baseline actually goes against using inflation as the rationale for indexing the MW to the CPI.
Click to expand...

The Minimum Wage has very little to do with the past, and far more to do with the future.

Whatever the advance in the minimum wage, at any rate between $10 and $15 an hour (this latter having been selected by NYC) is a boon to the 50 million Americans living below the Poverty Threshold.

Btw, that's the population of California and Illinois combined. And you're dithering over a few bucks and hour, that will affect only casually the rate of cost inflation?

Moreover, you miss the point. By enhancing the minimum wage we are simply shifting money from the top (where people earn very decent income that they spend on consumption) to the bottom where people do not earn decent income and therefore spend none of it.

However, by expanding income at the bottom, we also enhance consumption - and the entire economy benefits.

Wow, if you don't understand that factor, then what a case of economic myopia ...
_____________
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

Actually, it will raise prices for 325 million people, making the $15 minimum wage's buying power the same as it was before.

Wages usually lag price increases, unless the government turns the economic model on it's head and then wonders why the poor keep getting poorer.
 
Re: Raising Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Work

ttwtt78640 said:
Why is equal pay for equal work suddenly a bad idea? One does not need experience to perform "unskilled" labor and the assumption that "work ethic" suddenly changes at age 19 is just as silly (and discriminatory?) as saying that "work ethic" changes with gender.
Click to expand...

One would actually have to work to have a work ethic. A 16 year old applying for his/her first job has no work history upon which an employer can make an evaluation. If you are going to pay someone $15 per hour to flip burgers, I would hire someone with a work history that I could review rather than some kid who might not last two days. Entry level jobs will mostly disappear leaving youth unemployment at high levels.
 
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