23 thoughts on “Raising the Minimum Wage”

  1. Raising the minimum wage is a good idea, *if* and only *if* wages exist in total isolation from everything else. The problem is that they don’t and cannot, because wages, like everything else in the real world, interact with other things (cost, demand, etc.).

    Thus, supporting a rise in minimum wage is not only manifest economic ignorance, it’s a symptom of a denial of reality.

    To put it in space-related terms, it’s like trying to increase payload to LEO by increasing the number of engines (and thus thrust) on an existing launch system without also increasing the amount of fuel. Sure, it looks good to the ignorant who look at things in isolation (more thrust so it’s gotta be better, right?) but in the real world, you’re increasing dry weight for the same amount of fuel, giving you less, not more, performance. That’s the exact same logic the minimum-wage-boosters are using. The results of it are clear, as evidenced by Samoa (it hurts, and it hurts those it is supposed to help most of all).

    1. I disagree (surprise!). Even if raising minimum wage inexplicably had no effect on the economy, it would still be immoral. Why? Because no-one has a right to interfere in the consenting activities of adults, whether those are economic activities or not.

      1. Bingo. Exactly right.

        I think conservatives might “win” more arguments if we took this tack on a lot of economic issues.

      2. Even if the consenting activity of the adults leads to indentured servitude, or worse, slavery?

        Sometimes society needs to save people from themselves. I know it does not fit the mainstream libertarian mindset but reality isn’t simple.

        Mindless sweeping generalizations aside, while I am unsure if they should raise minimum wage in the US or not, what I am pretty sure of is that someone needs to straighten out the large differential of income between corporation executives and the remaining workers. This is what is essentially killing the middle class and leading us back into feudalism. As a reference you can look at Larry Ellison or the Barclay Brothers who decided to buy islands piecemeal and run them as their own little personal fiefdoms.

        The major issues currently, IMO, are housing prices and education costs. Also problematic is the dearth of available jobs for undertrained people or young people in general.

        1. “someone needs to straighten out the large differential of income between corporation executives and the remaining workers”

          And who is this someone? You? Obama? Bush? Some bureaucrat at the NSA? Some bureaucrat at the IRS? Your local sheriff?

          I don’t think you understand the consequences of the kind of government that would be put in place that can “straighten out” that problem. If the incomes of the rich are not secure because “it isn’t fair”, then neither is your income. Because really all that is is pointing guns and threatening to shoot someone because they make more than X. And that value of X can be moved around by whatever demagogue can get slightly more votes than someone else.

          Today X is $1,000,000. After you are through with them, now the “1%” are those that make $750,000. After you are through with them, it’s $150,000. And then $70,000.

          And now you have made a country completely and utterly poor in your “righteous” quest to right “injustice”, but all you have really done is thoroughly destroyed everyone. Some justice you have there.

          No, what is killing the middle class in this country is everyone getting their piece of someone else’s money at government gunpoint. The poor steal to get their welfare. The rich steal to get their bailouts. Students steal to get their government education loans that they expect to get forgiven. The old steal to get Medicare and Social Security. Everyone gets everyone else’s stuff at government gunpoint, except for the middle class that actually works for a living. One big societal circle jerk at the middle class’s expense.

          Socialism destroys everything and everyone it touches.

          1. Well that is certainly an interesting viewpoint. That could work.
            I am not in favor of student loans either. As for Social Security or Medicare I think it depends on how the whole thing is structured and which services are provided. Although I can understand why some people think we would be better off without either. The welfare and bailouts are harder to justify most of the time. e.g. I think there should have been no bank bailouts and systemic failure risk be damned. That is what the FDIC is there for. I am also against tax incentives for people with house loans. Why the heck should those people have preferential treatment against someone starting their own company, saving prior to building a house, or whatever?

            There are other ways of getting an intended result other than making laws with a specific ceiling. Not to mention that ceilings do not have to be absolute. They can be relative. There are even studies at least from the early XXth century describing the optimum balance between management and remaining worker compensation. The best way is when society itself realizes that the scheme stands on its own merits and it becomes an unwritten rule of society. Unfortunately this does not seem to be happening. Part of it is because of the way Wall Street works with their excessive focus on quarterly profits but there are other reasons.

          2. It doesn’t depend on how Social Security and Medicare are structured. The whole concept is evil. Forced wealth transfers at government gunpoint from those who are trying to build their retirement income to those that have had their entire lives to build their retirement income.

            Once again, the middle class gets screwed because they are the only ones who don’t have any real representation. Poor people have Democrats. Rich people have lobbyists. Old people have Democrats. The non-retired middle class really doesn’t have anyone really batting for them to allow them to keep their own money. Only promises that if they have their money stolen now for older people, that they can steal from younger people later.

            So, here’s the promise: Person A steals from Person B. Person B would be mad, except Person A says it’s OK, because Person A promises that in return Person B can steal from Person C.

            So, basically it doesn’t pay to be middle class.

            As for the income tax, guess where the biggest tax jump occurs? Here is the tax table for 2013 (from http://taxes.about.com/od/Federal-Income-Taxes/qt/Tax-Rates-For-The-2013-Tax-Year.htm):

            10% on taxable income from $0 to $8,925, plus
            15% on taxable income over $8,925 to $36,250, plus
            25% on taxable income over $36,250 to $87,850, plus
            28% on taxable income over $87,850 to $183,250, plus
            33% on taxable income over $183,250 to $398,350, plus
            35% on taxable income over $398,350 to $400,000, plus
            39.6% on taxable income over $400,000.

            The biggest jump is right at $36,250. Right on the lower end of the middle class (I am defining approx $30,000-100,000 as middle class, although you could disagree up or down a bit, but I think it is a good round range).

            Things like this are why the middle class get screwed. Because the middle class doesn’t get to keep their own money. It is completely disincentivized to be in the middle class.

          3. To add to someguy’s comments… The immigration bill passed by the Senate has an interesting loophole to the PPACA. If you’re a business with more than 50 full time employees, then you are required to provide healthcare to your employees. If you choose not to, you can pay the lesser fine of $3,000 per employee, and make them get their own required insurance from the government. Except, by employees, what is meant is employees that are citizens of the United States.

            If you are a non-citizen with a work permit, waiting 13 years for citizenship you don’t want; you are not required to purchase health insurance (1). Further, a US company, which hires you to work in the states, doesn’t have to provide you insurance or pay a fine for failing to do so. This makes foreign workers living in the US $3,000 cheaper to hire than US citizens that want to work.

            Of course, for highly skilled labor, businesses will still need to compete for the talent. So this loophole won’t hurt high earners. But if you are young and entering the workforce or lack skills for a high pay job with benefits; then you are at a competitive disadvantage to every foreign worker that is interested in the work you do.

            This loophole brought to you by the Obama Administration, the Democratic Party, Harry Reid’s Democrat controlled Senate, and the Gang of 8+.

            (1) Note, the PPACA does not eliminate the requirement for ERs to provide medical care on demand for emergent cases regardless of ability to pay or citizenship. Thus foreign workers will continue to visit ERs like they are doctor’s offices to receive free medical care.

      3. @ Trent,

        I didn’t mean raising the minimum wage would be okay if it had no effect on the economy. I meant it would be theoretically okay only if it existed in total isolation (economic and otherwise). The case you mention would be one of many where it does not exist in isolation – it has effects beyond itself. In other words, we agree. 🙂

        About the only example I can think of that would be an act in total isolation would be if I had a safe with two shoe boxes with cash in them, and decided to move some from one shoe box to the other.

  2. It’s a mistake to always assume good intentions.

    This wasn’t some good idea that had simply gone awry in American Samoa. The smarter of the minimum wage advocates *knew* it was going to hurt people at the bottom. They didn’t care.

  3. The funny part is that raising the minimum wage buys votes from the very people it hurts.

    I remember a TV interview some years ago in the UK when the minimum wage was first imposed, where office cleaners talked about how they’d celebrated the government forcing their employer to raise wages… until said employer cut their hours and told them they’d have to do the same amout of work in less time. Odd are they’ve since been laid off and replaced by Eastern Europeans who are happy to work for less than minimum wage, with whom no law-abiding British employer or worker can compete.

  4. For the people from just a couple days back saying it’s perfectly reasonable to pass laws that affect some states differently than others for no good reason:

    You could get a law through both the House and the Senate that doubled the minimum wage in the Blue States if it halved it in the Red States.

    According to “Blue” philosophy, this should create increase payroll in Blue States and decrease it in Red States.

    So test it suckers.

    1. The federalist and Constitutional way to do that would be for Congress to remove the federal minimum wage, letting each state set minimum wage for itself.

      The democrats in congress would never go for that.

      1. I do agree completely that that’s the -correct- way to do it.

        But we’re -always- “bending our principles” just a smidge to compromise on something that’s fundamentally antithetical with our principles. Slap things like this all over the place as “compromises”.

      2. Well, some states have a higher minimum wage than the federal. That could provde some basis for a comparison, although there are many other factors than minimum wage.

  5. A federal minimum wage should be considered unconstitutional. Al said it. If it’s a good idea, let the states compete in setting the proper rate or no rate at all.

  6. I’ve had fun on other websites advocating an increase in the minimum wage to $25/hour, usually in response to an article talking about how an increase is needed to help the poor. If a rate of $8/hour is good, then why not $25?
    Having said that, I’ll add the caveat that there are some jobs that pay minimum wage or near it, and IMHO the work is such that the people deserve a lot more than I get for pushing electrons around on UGNX. Being a nurse aide in a nursing home, for starters.

    1. Something is only worth whatever someone else is willing to pay for it. It’s a little different for wages in that a job only pays whatever someone is willing to accept. If no one will accept the offered low salary, the would be employer has to either raise the offer or find some other means to accomplish the work such as automation.

    2. I worked so much harder back when I was a night-shift convenience store clerk than I do today, and get paid so much more than the minimum-plus-fifty-cents I got back then, that it’s easy to think I’m getting away with murder now. But the problem is, what I was doing just wasn’t particularly productive back then, and what I’m doing right now can’t easily be done by some desperate part-timer, no matter how relatively easy it is *for me*.

      And I can’t imagine that nurse aides in nursing homes are paid the pittance you think they are getting. The monthly cost to warehouse a relative in a nursing home, especially up here in blue-hell Pennsylvania, is appallingly high. The merely crap places start at 8k a month, and acceptably-run ones are more like 10k.

    1. Yes this is quite likely the main reason. As it is being done now most money is flowing first to the banks and then it has been piling up on the stock market driving the index up.

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