Minimum wage - leads to price increases more regressive than sales tax, only 35% of the benefits go to those under 2x poverty line

[Canard DuJour]

Well no, it apparently doesn't since they were and probably continued (since it's WalMart) to pay below average wages. They also, as I and Churchill said, undercut the competition with their reduced costs, gaining them market share. Assuming their competitors aren't running charities, this means downward pressure on wages even if there's the occasional diddy rise. Employees everywhere will have fewer better paying alternatives and less bargaining power.

Where is your data to demonstrate below average wages compared to the going rate for those kind of jobs?

Eh?! I don't need any as long as everyone isn't paying the same wage for a given kind of job. Someone is by definition paying below average.

 

[Axulus]

Where is your data to demonstrate below average wages compared to the going rate for those kind of jobs?

Eh?! I don't need any as long as everyone isn't paying the same wage for a given kind of job. Someone is by definition paying below average.

You claimed Wal-Mart was paying below average wages and/or that Wal-Mart drove average wages for those kind of jobs down. Where is your evidence?

Also, if someone is paying below average, why do you assume that substandard profits would not result?

 

[Canard DuJour]

Eh?! I don't need any as long as everyone isn't paying the same wage for a given kind of job. Someone is by definition paying below average.

You claimed Wal-Mart was paying below average wages and/or that Wal-Mart drove average wages for those kind of jobs down. Where is your evidence?

I may be wrong about Wal-Mart (whom I understood to be poor payers?) but as long as everyone isn't paying the same, the point stands.

Also, if someone is paying below average, why do you assume that substandard profits would not result?

I don't. As long as they're in business with reduced costs the point stands.

 

[Loren Pechtel]

Minimum wage has always been more about getting votes and demonizing opponents than sound economics.

The cost of it is also hidden and does not appear on the government books (making it easier for politicians to support) - it's also often portrayed by its proponents as nearly cost free (or, at the very least, when pressed, paid for by rich companies exploiting workers via reduction in their ill gotten gains/profits).

Yup. At best it's an off-the-books welfare scheme. I am categorically opposed to off-the-books accounting. If it's worth doing it's worth doing on the books.

 

[Loren Pechtel]

So you are saying these statements were pulled out of their ass?

Yes for the most part. These are economists after all. Let me pull some statements.

To depict the circumstances deemed most likely to apply by minimum wage advocates, the analysis below assumes that no employment or profit losses occur as a result of minimum wage increases

"Thus, our simulations make three related assumptions:

• consumers do not reduce consumption as prices rise,
• all increased labor costs are passed on in higher prices, and
• low-wage workers remain employed at the same number of hours after the minimum wage rises.

Taken together, these three assumptions provide a setting for simulating the expected effects of minimum wage increases in a relatively straightforward manner"

#1 and #3 are favoring your side. #2 is a reality you don't like--you want it to be funded by profits.

They also look at gross family income not selecting out impoverished families or effects on individuals which would better measure effects on those groups. In other words, all teen workers who live at home have their income counted with their families and this waters down the aggregate numbers.
___________

Which is exactly the point--most minimum wage workers aren't the primary breadwinner in the family!

 

[Loren Pechtel]

Here is more support for the allocation of benefits of the minimum wage:



http://www.brookings.edu/~/media/re...ing-minimum-wage-redesigning-eitc-sawhill.pdf

I see no reason why a member of a wealthy household should make poverty wages either.

They aren't suffering because of the minimum wage--your sob stories of how people suffer on the minimum wage don't apply. These are teens that aren't trying to support themselves, but rather earn spending money.

 

[Loren Pechtel]

"Thus, our simulations make three related assumptions:

• consumers do not reduce consumption as prices rise,
• all increased labor costs are passed on in higher prices, and
• low-wage workers remain employed at the same number of hours after the minimum wage rises.

That second assumption is awful.

Awful for your position, that is. Just because you don't like this reality doesn't make it go away, though.

- - - Updated - - -

That second assumption is awful.

So what does happen? You failed to answer last time I asked.

How much gets passed on? What happens to the rest?

This is just another manifestation of the infinite pool of profits they deny drives their decisions.

- - - Updated - - -

With a minimum wage, we are also telling people "if you labor isn't worth the minimum wage, then your labor is worthless, we would rather not have you contributing work to society".

That also says a lot about how we value those individuals who are in that circumstance.

Have you ever worked for minimum wage?

Does it not occur to you that many of us had jobs while in school? I worked for minimum wage back in college.

 

[Loren Pechtel]

All I can tell you is from my experience with Wal-Mart (I worked there for 2.5 years in college) to think about how businesses like that put it into practice in the real world (I don't have time to make a lengthy empirically supportable case at the moment). When I worked there, they were frequently comparing their wages to the average rate in the area for other retail businesses, such as Target, Best Buy, Home Depot, etc. At one point, they had determined that the average wages in the area were going up, and they announced an unexpected $.50/hr raise for everyone to keep up. They did not increase the wages to be charitable.

Yup. I've been around such discussions also--a department manager making the case to top management that we needed to raise our pay for <x> because we were below what our competitors were paying. Soon I was aware of a change in the pay for <x>.

Furthermore, after Wal-Mart announced their recent $9 minimum wage to be phased in in 2015 and $10 to be phased in by 2016, we saw other several large retailers follow suit - the going rate in the market went up with Wal-Mart's announcement, and the competitors were forced to follow suit to prevent substandard profits from resulting. These companies didn't just do it out of the goodness of their hearts.

Exactly. They did it to get better quality.

- - - Updated - - -

It doesn't contradict it, but it demonstrates the obsession of a large company to make sure it was not paying below the going rate or average rate and to remedy it when it is. They are not doing it to be charitable but to prevent substandard profits.

Well no, it apparently doesn't since they were and probably continued (since it's WalMart) to pay below average wages. They also, as I and Churchill said, undercut the competition with their reduced costs, gaining them market share. Assuming their competitors aren't running charities, this means downward pressure on wages even if there's the occasional diddy rise. Employees everywhere will have fewer better paying alternatives and less bargaining power.

You are basing your argument on the fantasy that Wal-Mart pays below-average wages.


The demonization of Wal-Mart is being done by the unions that hate them, not because they're actually behaving worse than other companies.

 

[Duke Leto]

Oh gee. I guess we'll just have to make up the progressivity difference by cutting sales tax in favor of higher income taxes on high incomes.

Or was the OP expecting another reaction?

 

[Nice Squirrel]

With a minimum wage, we are also telling people "if you labor isn't worth the minimum wage, then your labor is worthless, we would rather not have you contributing work to society".

That also says a lot about how we value those individuals who are in that circumstance.

Have you ever worked for minimum wage?

In college I earned ~$1.50 (~16% above it). What is the relevance?

So the answer would be "no". The relevance is if you felt people were calling your labor worthless.

 

[laughing dog]

Awful for your position, that is. Just because you don't like this reality doesn't make it go away, though.

No, but just because you like it doesn't make it reality either. Higher costs do not necessarily get translated completely into higher prices. That is taught in economics 101. In order that those costs to be completely translated into higher prices, demand for the output has to be completely unresponsive to price changes or that supply has to basically completely responsive to costs changes (the terminology is perfectly elastic). Now the assumptions (demand is perfectly inelastic or that supply is perfectly elastic) is as unrealistic as it gets.

 

[Nice Squirrel]

The minimum wage is really all about about a bunch of self righteous moralizing and sticking it to the "corporate masters" , as demonstrated by the past several posts. It really isn't actually about helping people (whatever extent it actually helps people is just the cherry on top). It's refreshing to see some honesty on the real underlying motivations on the issue.

Didn't I just give the reason my state raised the minimum wage? It was popular, it was bipartisan, but there was no self-righteous moralizing or "sticking it to the corporate masters" involved. People just felt that it was too low and nobody should work for that low of a wage.

 

[Nice Squirrel]

The demonization of Wal-Mart is being done by the unions that hate them, not because they're actually behaving worse than other companies.

The unions? Really? I think there are plenty of non-union voices out there demonizing Wal-Mart, but most of my other posts appeared to fly over so keep on believing what you want to believe. It is the Unions and they are in a plot to raise prices through minimum wage.

 

[Duke Leto]

Yeah, that's a pretty impressively Newspeaky argument.

"We are not allowing you to work for less than minimum wage, therefore we are declaring any work you would be willing to perform at less than that wage to be worthless." Yeah, I don't actually think most minimum wage employees think like that.

Also, I had Axulus pegged as significantly younger than late 60s/early 70s. My mental picture of him had been some Libertarian Hedge Fund salesman in his 20s or 30s. Quite a shame to see repeated proof that age confers no wisdom.

 

[Axulus]

The minimum wage is really all about about a bunch of self righteous moralizing and sticking it to the "corporate masters" , as demonstrated by the past several posts. It really isn't actually about helping people (whatever extent it actually helps people is just the cherry on top). It's refreshing to see some honesty on the real underlying motivations on the issue.

Didn't I just give the reason my state raised the minimum wage? It was popular, it was bipartisan, but there was no self-righteous moralizing or "sticking it to the corporate masters" involved. People just felt that it was too low and nobody should work for that low of a wage.

You've stated a fair and reasoned position. My response was referring to the other posters in response to what felt errily similar to religious preaching. My statement was too generalized in the heat of the moment. I meant to say that there is a significant underlying component of those things in many of the MW advocates on this board.

 

[dismal]

So what does happen? You failed to answer last time I asked.

How much gets passed on? What happens to the rest?

Each company handles it differently. Some will be able to pass on all the added cost. Some will absorb a portion of the cost through lower profits. Some will change how they employ people.

Assuming all the added cost will be passed on is just overly simplistic and has no basis in reality. But I guess it's right at home in an economics model.

Actually economics says just what you just said. And then it adds thing like less profits means more marginal businesses close and fewer MW employing businesses open. And that higher prices for those products you raised the price of means less demand for them, and this means less profits still and fewer businesses that employ MW workers still. And all those things you euphemistically refer to as "how they employ people" cut in the direction of employing fewer MW people and perhaps thus reducing the quality of the service and experience for customers causing demand for these employers to fall further still.

So when you enter the economics zone it means MW workers get fewer jobs, fewer hours, and places that employ them will be more likely to shut down.

These are realities people in the ksen zone usually seem to deny.

 

[barbos]

So long story short, the original paper and allegedly this paper make a great argument for conservatives to increase welfare distributions because they are more effective in getting money to those in poverty.

I have access to the paper. It's not a study but a thought experiment and lit review to support a preconceived conclusion. There are no hard numbers only a lot of "shoulds" and "we thinks". I could do the same thing and "prove" the Koch Bros are Bolsheviks.

Well, at least one of them is. So it's not such a stretch if others are too.

 

[Duke Leto]

I have access to the paper. It's not a study but a thought experiment and lit review to support a preconceived conclusion. There are no hard numbers only a lot of "shoulds" and "we thinks". I could do the same thing and "prove" the Koch Bros are Bolsheviks.

Well, at least one of them is. So it's not such a stretch if others are too.

I think it's safe to say that Frederick R. Koch has been kicked out of the brotherhood.

 

[ksen]

Each company handles it differently. Some will be able to pass on all the added cost. Some will absorb a portion of the cost through lower profits. Some will change how they employ people.

Assuming all the added cost will be passed on is just overly simplistic and has no basis in reality. But I guess it's right at home in an economics model.

Actually economics says just what you just said. And then it adds thing like less profits means more marginal businesses close and fewer MW employing businesses open. And that higher prices for those products you raised the price of means less demand for them, and this means less profits still and fewer businesses that employ MW workers still. And all those things you euphemistically refer to as "how they employ people" cut in the direction of employing fewer MW people and perhaps thus reducing the quality of the service and experience for customers causing demand for these employers to fall further still.

So when you enter the economics zone it means MW workers get fewer jobs, fewer hours, and places that employ them will be more likely to shut down.

These are realities people in the ksen zone usually seem to deny.

I call it the kzone.

 

[Canard DuJour]

You are basing your argument on the fantasy that Wal-Mart pays below-average wages.

OK, what argument have I based on that?