Economics 101: Raise Minimum Wage and Jobs Decrease

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posted on Feb, 12 2007 @ 07:42 AM
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Just as any basic economics student finds out during the first weeks of class, a price floor will crowd out, creating a shortage. This not only applies to products but to the labor market as well.
 



www.azcentral.com
Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support.

Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school.

"I've had to go to some of my kids and say, 'Look, my payroll just increased 13 percent,' " he said. " 'Sorry, I don't have any hours for you.' "

Messner's monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high.


Please visit the link provided for the complete story.


To those who praised the wage increase, you need to realize that two things occurred: 1) That most minimum wage workers are not adults struggling to raise a family, but younger workers who are trying to supplement an income. 2) The increase in set wages increases the black market for labor, something that people claim is already happening too often in this country. This first policy of the democratic congress has blown up already, but I know that it will be refuted with nonsense and non-logical thinking.




posted on Feb, 12 2007 @ 10:49 AM
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I tried to explain this to some of my friends before it was passed, it's really simple economics. The economy corrects to the inflated wages, and the correction is not fun for anyone.

Except Politicians selling snake oil.

But but but, the Dems are going to save us all. Yeah, that's going real well so far , damn shills.




[edit on 12-2-2007 by Awake and All Seeing]


df1

posted on Feb, 12 2007 @ 12:34 PM
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I tried to explain this to some of my friends before it was passed, it's really simple economics. The economy corrects to the inflated wages, and the correction is not fun for anyone.

You confuse simple economics with economics for the simple. The amount of inflation caused by a couple dollar increase in the minimum wage will no more cause rampant inflation than an added drop of water will overflow the Atlantic Ocean.

The US government controls the money supply and the value of the dollar via the FED to the detriment of everyone excepting the very rich. The capitalists constantly sell this fear that socialists will come in and impose a centralized economy controlled by the government. This is pure nonsense, these capitalists have already imposed a centralized economy controlled by the central government. Who controls the money supply and the value of the dollar should be of more concern to every citizen.

This minimum wage legislation that is constantly harped about is a canard designed to fool the ignorant. Every citizen should have greater concern over who controls the money supply and the value of the dollar, because the people currently driving this train are not operating in the best interest of the American people. I would imagine that the capitalist money brokers are over joyed at seeing the common man bickering over the false flag of "minimum wage" legislation while they continue screw us with the FED.



posted on Feb, 12 2007 @ 02:42 PM
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"Distributed by McClatchy-Tribune News Service
Published on Monday, February 12, 2007 by CommonDreams.org
Minimum Wage Raise Is Good for Business
by Holly Sklar

The minimum wage is headed for a raise -- back to the 1950s. That's right, even after rising from $5.15 now to $7.25 in 2009, the federal minimum wage will still be lower than it was in 1956, when it was $7.41 in today's dollars.

The minimum wage was enacted in 1938 through the Fair Labor Standards Act, designed to eliminate "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers."

Business lobbyists who'd abolish the minimum wage if they could have held it hostage for 10 years -- the longest period ever without a raise. Now they want to collect a ransom of tax breaks to let it go.

www.businessforafairminimumwage.org...



Economics 101? Hardly....more like Apologist for Greed 101.

YOU try and live on minimum wage. Been there done that it sucks.

[edit on 12-2-2007 by grover]

Mod Edit: External Source Tags – Please Review This Link.

[edit on 12/2/2007 by Mirthful Me]



posted on Feb, 12 2007 @ 02:48 PM
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How many american's live on minimum wage? Those who live on minimum wage either have it as supplemental income or they are doing by choice, either as a college or high school student. I am a waiter and technically get minimum wage, however this does not include my tips, which most are cash and untraceable by the IRS. This is something that is absent from statistics that support the increase.

By forcing a company to raise wages you also increase the price of the goods sold. The marginal cost to hire another worker is raised so you cannot employ as many workers and you also increase overhead. Those who feel this is "greed", work two days as a manager or in the accounting department and then tell me whats greed.

Also, I do live on minimum wage technically, and life isn't that bad because i #1 choose to, and #2 make enough money on the side to cover what expenses I do have. Decrease consumption will increase savings even on a min wage household income.



posted on Feb, 12 2007 @ 02:56 PM
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Messy logic child very messy logic.

First off the majority of the people who work minimum wage are unskilled and do not do so by choice. Even greeters at Wal-mart make better than minimum.

Second of all... I am a former chef and managed restaurant kitchens for years and I know this... if you are not reporting your tips for tax purposes both you and your employer are breaking the law, BUT it won't be the employer who will be responsible for paying the taxes on your unreported wages when he gets caught (restaurants are one of the highest audited businesses in the country for good reason) IT WILL BE YOU!

Finally you cannot even claim that you live on minimum wage because you make tips... AND I know from experince tips can be damned good.

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[edit on 12/2/2007 by Mirthful Me]



posted on Feb, 12 2007 @ 03:06 PM
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I fully support any reasonable raising of the minimum wage. In many parts of this country it is literally impossible to survive on minimum wage.

I believe the "living wage" for a single parent with one child around here is $22/hr. And that amount would barely cover rent, food and utilities not including any money for car payment or insurance. That would mean a double income family with both earners making minimum wage would not be able to make it.

The federal poverty line is a joke. Maybe in some parts of the US you are above the poverty line if you are able to get by. For instance the poverty line for a single person is $10,120 ... rent in the Bay Area for even a studio apartment is at least 700/mo ... that leaves about $2,000 for the entire year to cover all the other expenses.

What is the purpose of the minimum wage if it isn't to ensure that people can at least survive? If someone who works for 40 hours a week can't even afford a 400 sq ft studio apartment then why have any minimum wage at all?



posted on Feb, 12 2007 @ 03:08 PM
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Government controls of the level of income will not only crowd out private investment but will also increase the unemployment rate. Messy Logic? Let's take a look at a living wage country: Germany. 17% unemployment nearing the rates of unemployment during the US great depression...not messy logic, but horrific big government fact.

Or if you want to see some documentation:


Summary of Research on the Minimum Wage

* The minimum wage reduces employment.

Currie and Fallick (1993), Gallasch (1975), Gardner (1981), Peterson (1957), Peterson and Stewart (1969).

* The minimum wage reduces employment more among teenagers than adults.

Adie (1973); Brown, Gilroy and Kohen (1981a, 1981b); Fleisher (1981); Hammermesh (1982); Meyer and Wise (1981, 1983a); Minimum Wage Study Commission (1981); Neumark and Wascher (1992); Ragan (1977); Vandenbrink (1987); Welch (1974, 1978); Welch and Cunningham (1978).

* The minimum wage reduces employment most among black teenage males.

Al-Salam, Quester, and Welch (1981), Iden (1980), Mincer (1976), Moore (1971), Ragan (1977), Williams (1977a, 1977b).

* The minimum wage helped South African whites at the expense of blacks.

Bauer (1959).

* The minimum wage hurts blacks generally.

Behrman, Sickles and Taubman (1983); Linneman (1982).

* The minimum wage hurts the unskilled.

Krumm (1981).

* The minimum wage hurts low wage workers.

Brozen (1962), Cox and Oaxaca (1986), Gordon (1981).

* The minimum wage hurts low wage workers particularly during cyclical downturns.

Kosters and Welch (1972), Welch (1974).

* The minimum wage increases job turnover.

Hall (1982).

* The minimum wage reduces average earnings of young workers.

Meyer and Wise (1983b).

* The minimum wage drives workers into uncovered jobs, thus lowering wages in those sectors.

Brozen (1962), Tauchen (1981), Welch (1974).

* The minimum wage reduces employment in low-wage industries, such as retailing.

Cotterman (1981), Douty (1960), Fleisher (1981), Hammermesh (1981), Peterson (1981).

* The minimum wage hurts small businesses generally.

Kaun (1965).

* The minimum wage causes employers to cut back on training.

Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

* The minimum wage has long-term effects on skills and lifetime earnings.

Brozen (1969), Feldstein (1973).

* The minimum wage leads employers to cut back on fringe benefits.

McKenzie (1980), Wessels (1980).

* The minimum wage encourages employers to install labor-saving devices.

Trapani and Moroney (1981).

* The minimum wage hurts low-wage regions, such as the South and rural areas.

Colberg (1960, 1981), Krumm (1981).

* The minimum wage increases the number of people on welfare.

Brandon (1995), Leffler (1978).

* The minimum wage hurts the poor generally.

Stigler (1946).

* The minimum wage does little to reduce poverty.

Bonilla (1992), Brown (1988), Johnson and Browning (1983), Kohen and Gilroy (1981), Parsons (1980), Smith and Vavrichek (1987).

www.house.gov...

That's from our own government....how about them apples?

[edit on 12-2-2007 by CAConrad0825]

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Mod Edit: External Source Tags – Please Review This Link.


[edit on 12/2/2007 by Mirthful Me]



posted on Feb, 12 2007 @ 03:19 PM
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I am really not impressed with 12 year old talking points from the republican party. How about trying to refute the article I posted.



posted on Feb, 12 2007 @ 03:22 PM
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You post an article you never made an argument. Secondly, your article was from an extremely biased source, not the government that implemented the policy. Lastly, your insults prove my point that you have no argument but rather are angry that someone has outed your ignorance...the purpose of this entire organization.


df1

posted on Feb, 12 2007 @ 03:26 PM
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Originally posted by CAConrad0825
Let's take a look at a living wage country: Germany. 17% unemployment nearing the rates of unemployment during the US great depression...not messy logic, but horrific big government fact.

Your numbers provide no basis for comparison as they are calculated in a multitude of different ways in completely different eras. This would require a considerable data normalization effort and time consuming academic study to have any meaning. As for your lengthy list of citations, this proves is that you are able to cut and paste. If these documents contain something that supports your views then tell us.

[edit on 12-2-2007 by df1]



posted on Feb, 12 2007 @ 03:28 PM
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I wrote an article, posted an argument and supported it. The thread has now disintegrated into attacking the form of argument rather than the issue. I'll have the thread closed until real ATS members show up.


df1

posted on Feb, 12 2007 @ 03:42 PM
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Originally posted by CAConrad0825
I'll have the thread closed until real ATS members show up.

Do whatever you want. As I see it, you presented a weak baseless argument and when it was pointed out you run and hide.

MODs this guy wants the thread closed because he is unable to defend his position.



posted on Feb, 12 2007 @ 03:42 PM
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If you can't stand the heat get out of the kitchen...

the article I posted was full of material to repute your assertions and to say that you were using messy logic is not an attack it was the truth and I pointed out quite clearly what was wrong with your assertions there as well.

To say that you will have the thread shut down smacks of the "I'm taking my marbles and going home" spoiled sport.



posted on Feb, 12 2007 @ 03:43 PM
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The thread is going to remain open, and hopefully a spontaneous discussion of the topic Economics 101: Raise Minimum Wage and Jobs Decrease will ensue.

I'd also like to remind everyone that ATSNN is held to a higher standard.

Thanks.



posted on Feb, 12 2007 @ 03:44 PM
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Originally posted by grover
If you can't stand the heat get out of the kitchen...

the article I posted was full of material to repute your assertions and to say that you were using messy logic is not an attack it was the truth and I pointed out quite clearly what was wrong with your assertions there as well.

To say that you will have the thread shut down smacks of the "I'm taking my marbles and going home" spoiled sport.


No, arguing with a fool makes you a fool as well. You don't have heat, just pure annoyance and ignorance. Also learn to do research and use unbiased sources. The US House is a little bit credible. Also that's why people include links...so you can read....and understand the source rather than taking its cliff notes version.



posted on Feb, 12 2007 @ 03:50 PM
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Originally posted by CAConrad0825
How many american's live on minimum wage? Those who live on minimum wage either have it as supplemental income or they are doing by choice, either as a college or high school student. I am a waiter and technically get minimum wage, however this does not include my tips, which most are cash and untraceable by the IRS. This is something that is absent from statistics that support the increase.

By forcing a company to raise wages you also increase the price of the goods sold. The marginal cost to hire another worker is raised so you cannot employ as many workers and you also increase overhead. Those who feel this is "greed", work two days as a manager or in the accounting department and then tell me whats greed.

Also, I do live on minimum wage technically, and life isn't that bad because i #1 choose to, and #2 make enough money on the side to cover what expenses I do have. Decrease consumption will increase savings even on a min wage household income.


Before you go slappin your back on that $125.00 cash tips that you "don't claim" word of advice...If the IRS ever audits you as I were in 2000 they have every record of your work history. Now given that when I was a bartender in college the bar I worked in didn't use a CPU system and I wasn't assigned a employee number that I logged onto the system. But the IRS had a pretty nifty way of calculating my cash tips by the cedit card tips I claimed. Having said this the agents can get access to all sale for profit records by your employer if they feel the need. And today alot of pubs and such use a simple CPU to track sales and if you got an employee number then you also have a sales history and the sales history also has a "cash" or "charge" memo on that print out and if your sales are all cash then you might want to at lest claim 20% of that cash tips just for good measure in case? Cause when and if they ever come calling have your records and don't volunteer any information if they don't have it.



posted on Feb, 12 2007 @ 03:52 PM
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Minimum wage is a temporary resolution...it must be constantly updated so that it is still effective. Yes, this may contribute to inflation somewhat, but so do many other things. Businesses would love to repeal the minimum wage because then labor would get less and less expensive, meaning more $$ for them! Consider countries with no minimum wage laws, they have people sewing soccer balls for 17 Cents an hour.

Wages DO NOT adjust themselves for inflation...a person desperate enough for a job will work for next to nothing, is it ethical for that to be allowed to happen?



posted on Feb, 12 2007 @ 03:55 PM
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I have heard that, so a good rule of thumb is claiming 10% of sales...which in some areas isn't too rare of a tipping level. But the IRS audit does seem credible...I am an accounting major, so the threat is pretty close to home.



posted on Feb, 12 2007 @ 03:55 PM
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Originally posted by CAConrad0825
No, arguing with a fool makes you a fool as well.


You are correct so I am stopping right here. Enjoy your thread.





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