"Pete C." wrote in message
ter.com...
Buerste wrote:
"Pete C." wrote in message
ster.com...
Buerste wrote:
"Ignoramus5662" wrote in message
...
On 2010-04-23, Buerste wrote:
Far too many people believe that low paying jobs should be
eliminated. Minimum wages are pushed up and the consequence is
these
low-end jobs disappear and society supports these people with
social
programs. These people are denied the satisfaction of
accomplishment and contribution and their pride is stolen from
them.
Don't blame machines, that is a reaction by business to control
cost, a counterplay to political induced instability to a free
market. Is a person truly better off sitting at home collecting
government hand-outs that keep them under control and in a state of
hopelessness?
I am confused as to what you are saying.
Are you saying that, if minimum wage was eliminated, the progress of
replacing people with machines would stop? I find this to be very
unlikely.
And, if minimum wage was dropped, the wage disparity would increase,
not decrease, so I cannot see how you can blame wage control for
income disparity. It seems to be a bogus argument.
What percentage of the bottom earners are there because they just
lack the ability to be trained for more lucrative positions and
what
percentage are there because of bad decisions, bad choices and
apathy? If there are no consequences because society will always
provide a big TV, food, clothing and shelter...why try?
To have a better TV, more clothing and bigger shelter?
i
I think that minimum wage laws have been detrimental to the lowest of
the
low end employees, but have not had any impact on anyone else.
Minimum
wage laws only affect a very small percentage of people. From my own
tiny
speck of experience, I used to have a couple of min-wage guys to do
gopher
work. I can't do that anymore, those functions have been eliminated
or
absorbed by other people. BUT, I sure learned that not all people are
trainable for more complicated tasks! So, the couple of people that I
gainfully employed are now on the dole. That sure makes sense,
doesn't
it?
On the other hand, There have been times that I have offered signing
bonuses
and significantly higher wages than industry standard to attract
better
quality people.
My only little point is that I don't think it's always a good idea for
the
gov to interfere with supply and demand in the labor market. Wages
are
driven up when more jobs than people are available, not by gov decree.
Wage
laws don't affect the average employee. If there were no wage laws,
do
you
really think wages would fall? I don't...supply and demand!
I'm pretty sure there are entire states that don't have a single
minimum
wage employee simply because there is nobody that could work for that
little and reside in the state. I know areas where the starting pay
flipping burgers at McD's was $12/hr+ and they could barely get enough
people to maintain staff levels.
In my experience, the couple of low-end jobs that I used to offer went to
people that weren't sole supporters of a family but a grandpa or brother
earning a check to help out at home and do something satisfying, or young
kids on break from school. I can't do that anymore and it hurts the
local
economy a bit, there are LOTS of small companies that are in the same
boat.
Min wage laws have cut the bottom out of the job market. Stupid move on
the
gov's part.
My wage averages are pretty good for my industry and most of my people
can
make piece-work bonus that can double their pay if all goes right. A lot
of
these people take home more than I do. The more automation I do the more
my
payroll costs, but productivity and quality go up too.
I don't believe that they even have the effect of "cutting the bottom
out of the labor market" as you say, because so few actually work for
minimum wage. Minimum wage laws and promised increases to them serve
only to buy the votes of the ignorant.
The real effect is that when the minimum wage is raised, the very few
people making minimum wage are fooled into thinking that they are better
off, and the liberal folks who are so eager to help the poor with
someone else's money are fooled into thinking that the poor have been
helped. What really happens is that the minimum increase triggers
inflation and within a year the ratio of work hours:buying power is
rebalanced and those minimum wage folks are back exactly where they
started, just with bigger numbers on their pay check and their expenses.
Pete, if the people making minimum wage are "very few," how could an
increase in the minimum wage trigger inflation?
This is another part of the conservative economic catechism that just
doesn't stand scrutiny. The economic effects of raising the minimum wage
are, as you suggested first, too small to make even a dent in the larger
monetary and fiscal policies of the government, and also 'way too small to
make a dent into trade factors that influence it (particularly the effects
of oil prices during the '70s). Increasing minimum wage doesn't dump much
cash into the economy -- note that Tawwwwwm is saying that he's actually let
people go because of minimum wage -- and it doesn't change anything that
would affect velocity. If people have little cash, they spend all of it.
Higher wages could actually *decrease* velocity by increasing savings. But
it doesn't, in general. It just has little net effect either way.
We could look at the numbers and show that there is a correlation between
minimum wage and inflation, but you'd see that, at least since 1968, wage
increases have LAGGED inflation by a substantial amount. And, again, the
monetary effects of increasing minimum wage are so low that they disappear
into the noise.
Here's a table that shows the value of minimum wages since 1955, in current
dollars and constant dollars. In other words, the first column is the face
value of the minimum wage and the second column indicates what it would buy
in that year, adjusted for inflation:
http://www.infoplease.com/ipa/A0774473.html
Here's a graph of inflation:
http://research.stlouisfed.org/fred2...CPIAUCSL?cid=9
Unfortunately, they don't tell much from those without some careful thought
and analysis, but you can see from the wage table that minimum wage
increases have lagged inflation by quite a bit in recent years. It's
difficult to make a case that wage rates have driven inflation. If you look
at total monetary effects you'd see it more clearly. But that would take me
a couple of hours to assemble, so you'll have to consider doing it for
yourself. d8-)
--
Ed Huntress