Minimum Wage
- Thread starter Shadows
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If you aren't working for a living yet, minimum wage is probably a really good thing. I was below stock boy at my local grocery store during my senior year of high school and the summer after. I was a facer that basically cleaned up after the stockboys, meaning we just straightened what they stocked...because...they couldn't do it themselves like every other store did... and we got $7.50 or so starting, and then a $.30 raise after 6 months of work. It was ridiculous since I didn't pay for gas or anything, so it all became beer money for me my freshman year. Blew it all by next April. :worried:
it sucks for people who were making 6.50 and 7.50 before min wage went up.. because they were slightly ahead of the 5.50 curve, and then they raise min wage to what the people mentioned were making, thus everything else goes up do to min wage going up, and those ppl are making the same as before but their bills go up. while the min. wage people are making more than before and their bills go up but their wages do also to even it out while the others are getting fucked.
i was making 7.50 at hooters when min wage was like 5.30 and they said min. wage would be going up to 7.50 and i was pissed. i knew it would bite me in the ass. luckily i'm making 13 an hour now, it should be a while before min wage gets that high.
i was making 7.50 at hooters when min wage was like 5.30 and they said min. wage would be going up to 7.50 and i was pissed. i knew it would bite me in the ass. luckily i'm making 13 an hour now, it should be a while before min wage gets that high.
Unless you really like poverty, you're going to need a decent minimum wage.
Look at the USA for example (not to be a dick). Years they've done with an absolutely marginal or even non-existant minimum wage. Now they have tens of millions living in brutal poverty (there are other factors contributing to this, of course).
Look at the USA for example (not to be a dick). Years they've done with an absolutely marginal or even non-existant minimum wage. Now they have tens of millions living in brutal poverty (there are other factors contributing to this, of course).
Job loss and divorce are factors in other countries as well. Granted, job loss is easier for the employer to do and harder for the employed to recover from in the States (compared to other Western countries).
But compared to other Western countries the US minimal wage is pathetic. Combined with the very harsh nature of american socio-economics I think it's a a big factor relative to the "rest of the West".
You're not looking at the other side of the equation. The problem with increasing the minimum wage is that it discriminates against low-skilled laborers and minorities. A high minimum wage is more attractive to skilled laborers and the skilled laborers have an advantage over low-skilled labors. If, for example, the minimum wage in my state was $10 an hour, it would provide incentive for those with high school diplomas, or even 2 year degrees, to apply for the job. What happens to the significant number of youth in the 15-18 age range without high school diplomas if the minimum wage is $10? They have a harder time finding a job. That is the problem with artificial increases in minimum wages. Another problem with artificial increases in wages is productivity. If you as a worker produce $5 worth of goods in an hour, why should you be paid $8 an hour?
There have been decades of studies done showing that minimum wage laws actually decrease employment. The OECD concurs with that as well.
Now, I'm curious to see what you're basing your argument off of. If you have data or published articles saying that the low minimum wage in the US is increasing poverty levels, I'd be happy to read them.
Also, I'm curious what AmerikazMost thinks of this matter as his knowledge of economics is far better from mine.
There have been decades of studies done showing that minimum wage laws actually decrease employment. The OECD concurs with that as well.
Now, I'm curious to see what you're basing your argument off of. If you have data or published articles saying that the low minimum wage in the US is increasing poverty levels, I'd be happy to read them.
Also, I'm curious what AmerikazMost thinks of this matter as his knowledge of economics is far better from mine.
I wanted to reply to this but I think this discussion really goes way beyond the boundaries of internet contact and can only be properly resolved through direct communication, hehe.
Just a small few things:
15-18 yr olds applying for a job aren't the usual standard to measure poverty. These are usually school going people going for a job on the side, not people that really have to feed mouths (lack of "beer money" is not poverty. Lack of "food money" quite clearly is.)
If you're 15-18 without any diploma's and no experience, you're going to have a hard time finding a job regardless of the economic circumstances.
On the difference between "skilled" and "unskilled" labour: You'll always need unskilled labour. So increasing minimum wage for these people that, brutally put, can't do any better (but they do have families to look after), only helps them.
On the "attractiveness" of a job based on salary: I think you're overestimating the effects. If minimum wage goes up, some jobs may become interesting for "skilled" labourers where previously they were not. But there are many factors working in their disadvantage (a student thats more intelligent than Mr. B may do just as well but since Mr. B has a family to feed he WILL be the more loyal and better worker than the student who's working to finance a beer tab).
Also, you may overestimate the eagerness of skilled labour picking up unskilled jobs purely for the money. These people and their employers will quickly realize the workers are going to move on sooner or later. And the type of jobs we're talking about here don't really rely on pure intelligence and skill to be able to function.
I immediately admit, though, that my knowledge of economics is rudimentary at best. I'm also interested in what Amerikazmost may have to add to this, since he seems knowledgeable on this subject. I do think the effects of it all will straighten out over a few years and that an increase in minor wage helps against poverty.
By popular demand, I will contribute my two cents.
A minimum wage creates unemployment if we assume:
1. The market is perfectly competitive.
2. The minimum wage is set above the equilibrium value.
It's pretty easy to assume that raising the minimum wage would create unemployment based on our classical teachings, right? Well, as the current crisis clearly shows, the real world is not a perfect, simplified model. Some empirical studies have shown this to be the case.
As a note, I don't have references to those case studies anymore or feel like looking them up, but I'm sure someone could find one of them if they didn't trust my word.
Anyway, there are likely to be distortions in our "perfect" market. From the evidence, it appears that many business that pay minimum wage (say, grocery stores) actually act with some monopsony power.
In a monopoly, the seller controls how much product will be sold. In a monopsony, the buyer controls how much product will go through the market. In many cases, such as instances where transportation costs are too high to allow for perfectly fluid markets or where information is asymmetric, these businesses might be able control the wages of their employees without competitors driving them up to a competitive equilibrium.
Thus, if we can set a minimum wage at the point where the competitive wage would be, we can actually remove the dead-weight loss created by the real world imperfections to the model.
The studies I've alluded to have shown that raising the minimum wage have had insignificant effects on the unemployment rates. Of course, there are probably others that show otherwise. From my experience with studying economics, the real-world results seem inconclusive.
The minimum wage would never be the answer to eliminate poverty, but it can safeguard against wage discrimination in monopsonistic economies, which can and do exist. Though it would not eliminate poverty, it can curtail it. Unless we would like to live in a country with utter destitution...
Get the point?
A minimum wage creates unemployment if we assume:
1. The market is perfectly competitive.
2. The minimum wage is set above the equilibrium value.
It's pretty easy to assume that raising the minimum wage would create unemployment based on our classical teachings, right? Well, as the current crisis clearly shows, the real world is not a perfect, simplified model. Some empirical studies have shown this to be the case.
As a note, I don't have references to those case studies anymore or feel like looking them up, but I'm sure someone could find one of them if they didn't trust my word.
Anyway, there are likely to be distortions in our "perfect" market. From the evidence, it appears that many business that pay minimum wage (say, grocery stores) actually act with some monopsony power.
In a monopoly, the seller controls how much product will be sold. In a monopsony, the buyer controls how much product will go through the market. In many cases, such as instances where transportation costs are too high to allow for perfectly fluid markets or where information is asymmetric, these businesses might be able control the wages of their employees without competitors driving them up to a competitive equilibrium.
Thus, if we can set a minimum wage at the point where the competitive wage would be, we can actually remove the dead-weight loss created by the real world imperfections to the model.
The studies I've alluded to have shown that raising the minimum wage have had insignificant effects on the unemployment rates. Of course, there are probably others that show otherwise. From my experience with studying economics, the real-world results seem inconclusive.
The minimum wage would never be the answer to eliminate poverty, but it can safeguard against wage discrimination in monopsonistic economies, which can and do exist. Though it would not eliminate poverty, it can curtail it. Unless we would like to live in a country with utter destitution...
Get the point?