New bill pushing for $10 minimum wage; how will this affect economy?

A new bill in Congress "Catching Up To 1968 Act of 2012″, which advocates for an increase in the national minimum wage from $7.25 to $10.00/ hr

www.talkradionews.com...

The bill is being pushed by Jesse Jackson Jr, Rep. John Conyers, Jr. (D-MI), Rep. Dennis Kucinich (D-OH), Robert Wiseman of the consumer advocacy group Public Citizen, and activist Ralph Nader.

“I don’t think a conservative Republican worker at Walmart making $7.75 an hour will say that their ideology prevents them from supporting a $10.00 minimum wage,” said Nader.

Im currently making less than this new increase, and i just dont think this is a good idea for the economy. It seems like the prices of all goods are just going to increase because of this. Any thoughts?

It seems like the prices of all goods are just going to increase because of this. Any thoughts?

I think you're exactly right. Historically, each time the minimum wage has been raised then the price of goods and services has risen. The end result is that no change is seen in a person's ability to support themselves.

J

Of course the prices are going to go up with an increase... its a dirty dirty game that can never be won(for the people that is)

I think it should be 10 as well... just wish there was a way to freeze the prices, but that just brings even more power to govt i think..

I make a bit over 10, but I work with people who get half the hours I do, and get 9$... alot of them have kids too... I couldnt even imagine having a kid on 10$ an hour or less... I couldnt even do it where im at

reply to post by LadyJae
Exactly. Most businesses/employers in the US are not part of the 1%, and that additional cost to them has to be made up somewhere...which ends up driving the cost of living up, causing layoffs and additional workloads if can't be offset by price increases, and a range of other issues.

People always like to eagerly attack even mere discussion of doing away with the minimum wage, but there are valid and extensive arguments on both sides that require much review and consideration. Sure, if you could just magically give everyone more money at no hidden cost, great - but that's not how the real world works.

It's always good to appeal to low wage earners in an election year.

If it passes, you can be sure things like "waivers" and "exceptions" will be given out.

The fast & furious food chains will scream the loudest.

This is a bad tactic for the Obama Campaign however.

Most voters are not minimum wage earners and will see this as negative.

Not that it is necessarily negative, but they will see it that way.

This could actually cost votes for Obama !!

For starters the CEO's will up their pay another $7,000 an hour. Got to maintain 'parity'!

Originally posted by oghamxx
For starters the CEO's will up their pay another $7,000 an hour. Got to maintain 'parity'!

Yes, yes, the wicked CEOs.

Why does everyone want to actual like all employers are CEOs with megabucks instead of realizing that most employers - in the US at least - are in SMALL BUSINESS, with a good many already struggling to make ends meet?

Originally posted by LadyJae

It seems like the prices of all goods are just going to increase because of this. Any thoughts?

I think you're exactly right. Historically, each time the minimum wage has been raised then the price of goods and services has risen. The end result is that no change is seen in a person's ability to support themselves.

J

edit on 6/7/2012 by LadyJae because: spelling

Historically, the price for goods and services have risen regardless...

Originally posted by LadyJae

It seems like the prices of all goods are just going to increase because of this. Any thoughts?

I think you're exactly right. Historically, each time the minimum wage has been raised then the price of goods and services has risen. The end result is that no change is seen in a person's ability to support themselves.

J

edit on 6/7/2012 by LadyJae because: spelling

It had good effect in the late 90's, the correlation is not as strict as you

Think.

It is going to cause me to lay off employees. I can't keep raising prices to compete, so customer service will suffer.

Idiots that don't own or run a small business don't seem understand how things work.

Originally posted by usernameconspiracy

Originally posted by LadyJae

It seems like the prices of all goods are just going to increase because of this. Any thoughts?

I think you're exactly right. Historically, each time the minimum wage has been raised then the price of goods and services has risen. The end result is that no change is seen in a person's ability to support themselves.

J

edit on 6/7/2012 by LadyJae because: spelling

Historically, the price for goods and services have risen regardless...

Yes look at gas -

Coffee or even gum

Want to know how I feel?

If this passes people will lose their jobs. Doesn't take much for a business owner to figure out if they have 12 employees that they can manage with 10. Or if they keep the same 12 people getting 40 hours a week, they can just cut everyone down to 30 hours to offset the change.

Government has no business telling people what they are worth, minimum or maximum.

Originally posted by oneness86

Im currently making less than this new increase, and i just dont think this is a good idea for the economy. It seems like the prices of all goods are just going to increase because of this. Any thoughts?

I believe you to be correct; if minimum wage rises, so will the cost of things so corporations can continue to financially rape the common man at the same pace they are now.

To really fix things and raise peoples standards of living, massive regulation of this travesty some claim is a "free market" needs to take place. Safe guards against circumvension of the spirit of the law would need to be enacted so the letter of the law loopholes, and just plain ol greed could not get around the good intention of the law.

A number of other things would need to be put in place in supplement to this to make it less attractive to corporations to try and get around it. Basically make it financially disasterous for them to try.

We all know that will never happen, though... because its corporations who really run things in the West... not the everyday common man, or representatives of him.

Even if it's raised, prices for everything will go up to compensate for it. It just makes you think you're moving up in the world.

i would like to think that putting more money into the pockets of the average joe will help the economy because the average joe will now have more money to spend on the products and businesses in the united states thus creating more profit and more jobs. try and have a positive view here, trickle down economy does not work, lets try trickle up economy!!

reply to post by oneness86


All they are doing here is raising the bar on the lower end of the problem.
Lets say they bring Min wage up to 10$. Then you will see an increase in everything else! Not only will will small biz owners have to let people go, but service will suffer aswell.

10$ will only serve to do one thing. Justify the high price of Gas/goods/services already out there.
Right now they can not justify such a big jump in price margin. Not that it will stop them. But they feel it would ease the blow of such an increase of all goods coming and going.

10$ will do the lesser folks no good at all. In fact the increase in cost would out weight the 10$ an hour. Now middle class will start to fall into the poor class.
This will help make the rich, richer. As they could justify paying themselves ++ to make up for the difference of min wage.

This would affect our economy is a very bad way. But do they really care? From what I see, they are trying to crash this system. Yeah lets make 10$ an hour min wage. But you will now need to make 15$ an hour just to make it by.
So by raising the cap.. They would in effect be lowering the living standard in this country.

Let's see... raise the cost of doing business by $2.75 per hour x 40 hours per week (being an optimist here) = $110 per week per employee.

As a small business owner who employs 20 people at that wage = $2200 per month. Now lets take $2200 x 12 months and get $26,400 per year.

So in order for me to cover the $26, 400 per year just on payroll alone (does not include all the other requirements such as taxes, unemployment insurance, etc) as there is a difference of $12,480 (26,400-13920= 12,480), I think I would have to lay off more people in order to keep maintaining a desired level of profit. Now mind you, if the cost of goods go up due to a market adjustment of more disposable income, my costs on materials will eventually rise and the cycle repeats itself.

So, unfortunately, no that will not work. Besides, I have had the opportunity to work with some folks that only make $7.25 per hour and I wouldn't want to pay them any more than that. Quite useless to be honest.

Which brings me to my next question... Do any of these people in government understand how a market works and not just by reading a book?

It has no effect.
With the rate of inflation and the increase in food/gas/etc, it doesnt.

Min wage here is 10.25CAD. Doesn't make a difference when the price of everything is going up. It would be nice for awhile but its barely enough for a person to survive on.

Here you go, have an extra 3 dollars an hour. But we wont tell you that the rate of inflation has been on the steady increase and that extra 3 dollars an hour is actually only worth one.

reply to post by oneness86


It doesn't actually make the price of goods increase. That's not what's actually happening. That's just what they've tricked you into thinking. That's not what's making the prices go up.

We have a fiat currency system. The way our economy works the price of goods are going to increase anyway as they print more fiat money. Every dollar you print, all the other dollars become worth less. The prices aren't actually going up. What's happening is the value of the dollar is going down so you require more dollars to buy the same product.

Regardless of if we raise minimum wage or not the prices are going up. It's called inflation and it's built into our system on purpose. It's supposed to do that. It makes borrowing money cheaper and easier to pay back. It's the theory our entire system is based off. It's all based off cheap borrowing.

Remember, how much something costs doesn't matter. It's all relative. All that matters is how much work you have to put in to buy it. If you get paid a dollar an hour and bread costs a dollar, than it's no different than if bread costs $100 and you get paid $100 an hour. All that matters is how much real work you have to put in.

How does this make borrowing money cheaper? Because when you borrow money, by the time you pay it back the currency will have inflated and what you pay back will be worth less "real value" than what you originally borrowed. Nobody really pays their loan back in this country. That would be impossibly expensive.

Instead they inflate out of them. They borrow money when bread costs a dollar, and pay it back when bread costs $1.50. True there is interest on it, but if the currency didn't inflate you couldn't pay your interest.

Deflation is bad, if wages don't increase, the prices can't inflate. They deflate because eventually people will stop buying and businesses will have to lower prices. Which seems like a good idea, but remember, it's all relative. It doesn't matter how low the price is, if you're broke. You still can't afford it. It's all just a number.

All business runs off cheap, short loans. If we have deflation they'll all go broke because they can't pay their loans. Say a business borrows $100 and then we have deflation and they have to lower their prices. Say the value of money goes up so that $90 is now worth what $100 is now. The business can never pay its loan because the bank won't accept $90 for the loan. They'll still want the $100. But the business owner doesn't have $100. He had to deflate all his prices. He only has $90.

That's why we want a small amount of inflation because it works both ways. Even if the value of money goes down and now $120 is worth $100, the bank will still accept only $100 to pay the loan. The business owner can pay it back cheaper than when he borrowed it and use the $20 for interest.

Without inflation the business owner has no way to pay the interest on the loan. You can't pay back a $100 loan with $100, there's interest. He has to pay it back with $120. We must have inflation or the whole system falls apart. Nobody can pay their interest.

That's why raising minimum wage isn't a problem as long as you stay under the rate of inflation. And if you look at the price of gas lately that shouldn't be a problem.

As long as you are under or match the rate of inflation that's going to happen anyway, then nothing has changed. All you're doing is adjusting the numbers to match where they should be now. If wages don't increase, we slip into deflation causing a whole bunch of businesses to default on their loans because it becomes too expensive to pay them back.

They're not actually raising it all, they're just adjusting the numbers so you get the money you lost. The whole time you were getting paid $7.00 the currency was inflating meaning every single paycheck was worth less in "real value" than the paycheck before it was. The numbers were the same, but you were actually getting poorer the whole time due to inflation.

Most of the time this isn't a problem because a very small percentage of people actually get paid minimum wage. But for companies that want to take advantage of the poorest people out there, they try to skirt their inflation tax by taking it out on their poorest employees. But they're not supposed to do that. You make money off your customers, not your workers.