On Wed, 5 Aug 2015 10:40:57 -0700 (PDT), "
wrote:

On Wednesday, August 5, 2015 at 7:58:59 AM UTC-4, Ed Huntress wrote:




Minimum wages are set on the basis of maintaining a socially and
economically viable minimum for workers at the bottom, for the sake of
the society and the economy as a whole. Raising it is justified when
those at the bottom can't sustain themselves to a degree that the
society finds acceptable on their present income (and polls make it
clear what most people think about it). It isn't about those who are
already making more. It isn't because we feel sorry for Bambi or for
the engineers who already are making much more.

I am a cynic. Minimum wages are set by politicians who want to increase their chances of being re-elected.

Dan seems to think it's all about relative proportions of income.
That's a bogus argument. Those who were near the bottom, and who now
find themselves at the very bottom because the minimum wage was raised
to match what they're making now, will need a small raise. Above them,
nobody is going to care. They're already well above the bottom. The
minimum wage isn't about them, and nobody will think it is.

You need to figure out how the relative proportions of income came about.

Supply and demand.

And then figure out why raising the minimum wage will not affect the relative proportions of incomes.

Within the ranges we're talking about, relative proportions don't
matter. The gaps are too large for it to matter.


Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation.

Show us what has happened after minimum wages were increased in the
past.

Here, I'll help you out. Wages are scaled to show the relationship:

https://research.stlouisfed.org/fred...raph_id=249218

You have a period of inflation, and then a minimum-wage hike to try to
keep up. Inflation is pretty steady; it does not react to wage hikes.
Consistently.

So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated.

Here, let's add employment to see how that works out in real life
(wages and employment are scaled to show the relationships):

https://research.stlouisfed.org/fred...0&category_id=

Employment follows recessions (the gray bars), not minimum wage hikes.


Think of what an increase of the minimum wage to $30 / hour would do.

Too big of a shock.

Now think how a raise to $15 / hour will have the same type of effect but not as large an effect.

Much less of a shock. Outcome unknown.

And finally think of the effect that eliminating the Federal minimum wage would have. Almost none.

According to what you've said, it should increase employment.

--
Ed Huntress