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(CATO)   One of the big reasons for the current unemployment numbers according to CATO - minimum wage increases   (cato-at-liberty.org) divider line 151
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1417 clicks; posted to Business » on 16 Jun 2010 at 4:42 PM (4 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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SSP
2010-06-16 12:03:13 PM
BS...during the Clinton years ...employers had to pay 2 to 3 dollars above minimum wage for burger flippers. But Clinton?
 
2010-06-16 12:10:23 PM
Yes, I forgot, everyone who is unemployed used to make minimum wage and had to be laid off when it went up.
 
2010-06-16 12:13:51 PM
Regardless of affiliation, think tanks are always more "tank" than "think", and nothing that comes out of them should be taken at face value.
 
2010-06-16 12:18:50 PM
xenophon10k: Regardless of affiliation, think tanks are always more "tank" than "think", and nothing that comes out of them should be taken at face value.

ESPECIALLY the CATO douchebags.
 
2010-06-16 12:22:50 PM
GAT_00: Yes, I forgot, everyone who is unemployed used to make minimum wage and had to be laid off when it went up.

Just FYI - there are quite a few jobs where the hourly rate is minimum wage + X. Minimum wage doesn't only affect bottom earners.
 
2010-06-16 12:43:01 PM
"Don't blame your company for hiring a team of Indians in New Delhi to do your job for one tenth of your old salary. Don't blame the right-wing policies that further incentivized them to do so. Don't blame us who told everyone off-shoring would create more jobs. Blame the guy at the fast food joint for making enough to buy food."
 
2010-06-16 12:56:27 PM
To paraphrase a 2006 argument between myself and the rest of my business school...

"Off-shoring is costing us jobs."

"Don't be stupid. It creates even more jobs here!"

"Like burger-flippers and land-scapers?"

"No. High-skilled jobs. The WSJ says so, so it must be true."

"But even skilled labor is being off-shored."

"Those are just task related jobs. We'll always have the creative type jobs."

"What's from stopping them from being off-shored."

"ReaganFreidmanExceptionalism."

"Right."

"And the finanical sector is booming! Those jobs ain't goin' nowhere."
 
2010-06-16 12:57:54 PM
I feel dumber having read the article. How many unemployed worked at minimum wage?
 
2010-06-16 01:11:25 PM
We want the working poor to have enough money to survive, and we want American business to be able to compete with cheap foreign competition.

The solution is a wage subsidy. Take the poverty level, divide it by 2080 (40 hours per week times 52 weeks per year), and have the government give every employed person that much per hour worked. Then eliminate the minimum wage. You can split the cost between federal and state government, so each has an incentive to keep people honest.

The 2009/2010 HHS guidelines say that the poverty line is $10,830 per year. This works out to $5.21 per hour.

Problem solved (well, except for the funding part).
 
2010-06-16 01:16:18 PM
Why not make the minimum wage $15 an hour. That's a livable wage.
 
2010-06-16 01:18:29 PM
Minimum Wage....HEYAH!!!!
 
2010-06-16 01:30:33 PM
EatHam: GAT_00: Yes, I forgot, everyone who is unemployed used to make minimum wage and had to be laid off when it went up.

Just FYI - there are quite a few jobs where the hourly rate is minimum wage + X. Minimum wage doesn't only affect bottom earners.


That's kind of the idea. The whole "a rising tide lifts all boats" philosophy. Except in the case of the minimum wage, it actually lifts more than the luxury yachts.

It's possible that without a minimum wage, sure, there would be more jobs created. However, you'd also have many more people forced to work two (or more) jobs in order to pay the same bills they are paying now. I fail to see the advantage of a system that does nothing but overwork employees.
 
2010-06-16 01:35:01 PM
Minimum wage laws reduce employment. It has been part of accepted economic theory for about a million years, and it has been experimentally confirmed. So the point of debate here is whether its negative effect on employment is offset by some other benefit it generates. I would argue against that, but some might reasonably argue for it.

But please don't let me dissuade you from continuing to post, "Derp Cato libertarian stupid derp nuh uh!"
 
2010-06-16 01:37:45 PM
slayer199: Why not make the minimum wage $15 an hour. That's a livable wage.

I think it should be upwards of about $22. Daddy wants a new boat.
 
2010-06-16 01:39:38 PM
EatHam: GAT_00: Yes, I forgot, everyone who is unemployed used to make minimum wage and had to be laid off when it went up.

Just FYI - there are quite a few jobs where the hourly rate is minimum wage + X. Minimum wage doesn't only affect bottom earners.


Hey, guess which branch of government DOESN'T set private corporate policy?

/no, really, guess
//it's all of them
 
2010-06-16 01:42:09 PM
Even if that wasn't bullshiat, it would only explain the loss of jobs for people who made minimum wage, not computer programmers and engineers.
 
2010-06-16 01:43:12 PM
My advice to any business that claims that they can't afford to pay their help mid level POVERTY WAGES.....LOCK THE DOOR AND GO HOME! You shouldn't be in business.
 
2010-06-16 01:45:31 PM
aden_nak: I fail to see the advantage of a system that does nothing but overwork employees.

online.wsj.com

Mister investment banker sees the advantage. Not that I blame him for his economic short-sightedness; he's legally obligated to maximize short-term profits for his clients at any cost within the confines of the law. Which is precisely why labor and regulatory laws are necessary.
 
2010-06-16 01:46:27 PM
Yeah, I'd give more credit to this if job cuts weren't happening in companies with no minimum wage workers outside the janitorial staff.


Minimum wage might fark with the weather, but this is a shiatty climate.
 
2010-06-16 01:53:57 PM
Wendy's Chili: Not that I blame him for his economic short-sightedness; he's legally obligated to maximize short-term profits for his clients at any cost within the confines of the law.

Only if the consequences of breaking the law cost less than the income generated. Then they should break the law in order to maximize profits.

Let's compare this to the commons:

Corporations are like horses used to farm the commons. If you let them run roughshod they're going to destroy your piece of the commons and maybe other's.

If you hog tie them with regulation and beat them to within an inch of their lives you're not getting any benefit out of them and ought to just get rid of them and do all the work yourself.

But if you harness them and control them you can make your piece of the commons a lot more productive.
 
2010-06-16 01:53:59 PM
filth: Minimum wage laws reduce employment. It has been part of accepted economic theory for about a million years, and it has been experimentally confirmed. So the point of debate here is whether its negative effect on employment is offset by some other benefit it generates. I would argue against that, but some might reasonably argue for it.

But please don't let me dissuade you from continuing to post, "Derp Cato libertarian stupid derp nuh uh!"


It reduces employment by something like .05%. The current recession has absolutely nothing to do with the minimum wage.
 
2010-06-16 01:55:57 PM
filth: "Derp Cato libertarian stupid derp nuh uh!"

Damnit, I was going to post exactly that but in bold.

The simple fact of the matter is that our economic system isn't anything *remotely* close to perfect competition - it's far closer to oligopolistic/corporatist - and in such a setup equilibrium wages are necessarily depressed due to bargaining asymmetry.

HEY! IDEA: A better solution is to break up megaconglomerates into tiny bits, keep directors from being able to serve on multiple boards, and see some real free market competition. Put the economic theory to work, for once.

I've never seen Reason (or our resident Fark Libertarians, for that matter) argue for the dismantling of our lopsided, bastardized, far-from-free-market economic system. Odd, that.

It's almost as if they believe that ownership should have all the power and employees should be wage slaves. *cough* =|

/will begin taking reason.com seriously once they begin taking economics seriously
 
2010-06-16 01:56:10 PM
Hey business people! If your company can't afford to pay a lousy 40 bucks a week for an employee because they raised minimum wage then maybe it's not the employees at fault but the leadership. I love how minimum wage gets raised while conservatives scream how it's the end of the world and yet oddly enough businesses adapt.
 
2010-06-16 02:08:55 PM
slayer199: Why not make the minimum wage $15 an hour. That's a livable wage.

Why not $150 per hour. Then we'd all be rich.

/except for me. I retired two months ago.
 
2010-06-16 02:16:15 PM
ScubaDude1960: Why not $150 per hour. Then we'd all be rich.

OK, I'll explain this to you as I would a child. Just as it is not ideal to have either a 0% tax rate or a 95% tax rate, it is also not ideal to have either no minimum wage or a $150 an hour minimum wage. Given that fact, an improper absurd logical extension is not an appropriate argument against either the current minimum wage or an increase in it, since you're only knocking down the strawman that anyone who favors a high minimum wage would always favor increases in it no matter what it were. You might want to consider that in future situations in which you're discussing taxes, so you don't make a fool out of yourself.
 
2010-06-16 02:16:48 PM
slayer199: Why not make the minimum wage $15 an hour. That's a livable wage.

Inflation.
 
2010-06-16 02:22:37 PM
Racht: ScubaDude1960: Why not $150 per hour. Then we'd all be rich.

OK, I'll explain this to you as I would a child. Just as it is not ideal to have either a 0% tax rate or a 95% tax rate, it is also not ideal to have either no minimum wage or a $150 an hour minimum wage. Given that fact, an improper absurd logical extension is not an appropriate argument against either the current minimum wage or an increase in it, since you're only knocking down the strawman that anyone who favors a high minimum wage would always favor increases in it no matter what it were. You might want to consider that in future situations in which you're discussing taxes, so you don't make a fool out of yourself.


You say that as if teabaggers wouldn't cream their pants at the prospect of a 0% tax rate.
 
2010-06-16 02:22:52 PM
Considering how many people have a "don't go to a restaurant if you aren't willing to tip 20%" policy, I'm amazed at how many people don't have a "don't hire an employee if you can't pay them a living wage" policy.

People are weird.
 
2010-06-16 02:28:56 PM
 
2010-06-16 02:29:19 PM
haddie: Considering how many people have a "don't go to a restaurant if you aren't willing to tip 20%" policy, I'm amazed at how many people don't have a "don't hire an employee if you can't pay them a living wage" policy.

The waitresses are supposed to pull themselves up by the bootstraps and become Wall Street executives. Didn't you know that? Anyone who earns less than six figures is clearly worthless as a human being.
 
2010-06-16 02:29:40 PM
Racht: ScubaDude1960: Why not $150 per hour. Then we'd all be rich.

OK, I'll explain this to you as I would a child. Just as it is not ideal to have either a 0% tax rate or a 95% tax rate, it is also not ideal to have either no minimum wage or a $150 an hour minimum wage. Given that fact, an improper absurd logical extension is not an appropriate argument against either the current minimum wage or an increase in it, since you're only knocking down the strawman that anyone who favors a high minimum wage would always favor increases in it no matter what it were. You might want to consider that in future situations in which you're discussing taxes, so you don't make a fool out of yourself.


So now is a good time to lower the minimum wage is what you're saying.
 
2010-06-16 03:00:49 PM
Wendy's Chili: filth: Minimum wage laws reduce employment. It has been part of accepted economic theory for about a million years, and it has been experimentally confirmed. So the point of debate here is whether its negative effect on employment is offset by some other benefit it generates. I would argue against that, but some might reasonably argue for it.

But please don't let me dissuade you from continuing to post, "Derp Cato libertarian stupid derp nuh uh!"

It reduces employment by something like .05%. The current recession has absolutely nothing to do with the minimum wage.


You can pretend whatever you want. Willy Wonka said so. It's a world of pure imagination.
 
2010-06-16 03:09:23 PM
filth: You can pretend whatever you want. Willy Wonka said so. It's a world of pure imagination.

You're absolutely right, CATO think tank studies are pure imagination.
 
2010-06-16 03:14:56 PM
Wendy's Chili: You say that as if teabaggers wouldn't cream their pants at the prospect of a 0% tax rate.

Oh I'm sure they would. But not even they could make an argument in favor of it with a straight face.
 
2010-06-16 03:16:45 PM
filth:
You can pretend whatever you want.


The implication there, I gather, is that the current recession does in fact have to do with the minimum wage. If that's your assertion, I'm going to have to ask for some evidence from somewhere other than CATO and the Von Mises Institute. If it's "part of accepted economic theory for about a million years", that shouldn't be too hard to come up with.
 
2010-06-16 03:25:58 PM
Racht: If it's "part of accepted economic theory for about a million years", that shouldn't be too hard to come up with.

It's part of accepted economic theory to everyone who believes in the Austrian school of economics. You know, the one that gave us the great theory of Reaganomics.
 
2010-06-16 03:51:30 PM
GAT_00: Racht: If it's "part of accepted economic theory for about a million years", that shouldn't be too hard to come up with.

It's part of accepted economic theory to everyone who believes in the Austrian school of economics. You know, the one that gave us the great theory of Reaganomics.


Reaganomics (new window) had nothing to do with the Austrian school. It was pure Keynesianism.
 
2010-06-16 03:58:13 PM
filth: Minimum wage laws reduce employment. It has been part of accepted economic theory for about a million years, and it has been experimentally confirmed. So the point of debate here is whether its negative effect on employment is offset by some other benefit it generates. I would argue against that, but some might reasonably argue for it.

But please don't let me dissuade you from continuing to post, "Derp Cato libertarian stupid derp nuh uh!"


I lost a really nice minimum wage job back when I was graduating school because minimum wage was just too muck money to pay us. It paid crap, but was really fun, at the time at least.

Sure it was "minimum wage", but the position was a starting area for quite a few people who moved up the ranks in the company. I had been hoping to move up to a low-end tech, and probably would have, but the layoffs cut that short. With no way to learn the tech position while working the min-wage position, there was no way I could get my foot in the door in that part of the company.

People also need to remember the compliance costs when employing someone. That alone can raise the cost of an employee above their marginal production. The more money that needs to be spent on compliance costs, the less that can be paid to the worker. The more regulations the government passes, the less workers can be paid, because the employer doesn't look at the wage, they look at the total cost to employ someone.
 
2010-06-16 04:14:51 PM
Crosshair: I lost a really nice minimum wage job back when I was graduating school because minimum wage was just too muck money to pay us. It paid crap, but was really fun, at the time at least.

The federal minimum wage is fair in some areas, and woefully inadequate in others-- $7.25/hr can put (basic) food on the table in rural areas, but it does jack squat in San Francisco, New York, Los Angeles, etc. $1208/month before taxes? Good luck with rent.

Now, you're from North Dakota (where the state motto is "WHO RULE BARTERTOWN?"), so maybe you had issues with employers weeping under the burden of paying the minimum wage of the day. Almost anywhere else, they were laughing all the way to the bank, and still are.

And finally, why the heck do we always pass a minimum wage law where we write down a number? Why not at least peg it to inflation?
 
2010-06-16 04:32:07 PM
Hmm, that's very odd...

img1.fark.net

Nope. Still works.
 
2010-06-16 04:34:48 PM
I'm OK with lowering the minimum wage, but only if it affects brown people.

/can I be a Republican now?
 
2010-06-16 04:36:28 PM
chimp_ninja: why the heck do we always pass a minimum wage law where we write down a number? Why not at least peg it to inflation?

Because legislators obey their owners?
 
2010-06-16 04:45:24 PM
chimp_ninja:
Now, you're from North Dakota (where the state motto is "WHO RULE BARTERTOWN?"), so maybe you had issues with employers weeping under the burden of paying the minimum wage of the day. Almost anywhere else, they were laughing all the way to the bank, and still are.


Clearly the country would be in far better shape if only everything were run like a sparsely populated, frozen hellscape.
 
2010-06-16 04:47:05 PM
Okay, so lower rents across the continent by about $200 a month, and then lower min wage.

the real problem is not the wage, it is landlords. The minimum wage is subsidizing landlords so they can ignore the invisible hand.
 
2010-06-16 04:47:56 PM
Pretty much everything thats happened over the past decade is gonna get blamed for the financial meltdown. I just read an article on how the republican bankruptcy reform of 2005 lent a hand.
 
2010-06-16 04:48:18 PM
What happened to the trickle-down?!
 
2010-06-16 04:51:23 PM
filth: It has been part of accepted economic theory for about a million years, and it has been experimentally confirmed.

[citation needed]
 
2010-06-16 04:51:51 PM
citypaper.net

Sorry, fella. I'd like to hire you at 7.25 per hour, but those red hotels on Boardwalk and Park Place are REALLY expensive. And don't forget the $75 luxury tax.
 
2010-06-16 04:52:23 PM
aden_nak: EatHam: GAT_00: Yes, I forgot, everyone who is unemployed used to make minimum wage and had to be laid off when it went up.

Just FYI - there are quite a few jobs where the hourly rate is minimum wage + X. Minimum wage doesn't only affect bottom earners.

That's kind of the idea. The whole "a rising tide lifts all boats" philosophy. Except in the case of the minimum wage, it actually lifts more than the luxury yachts.

It's possible that without a minimum wage, sure, there would be more jobs created. However, you'd also have many more people forced to work two (or more) jobs in order to pay the same bills they are paying now. I fail to see the advantage of a system that does nothing but overwork employees.


That's what we currently have now, I thought? I get 32 hours a week at minimum wage and can barely afford rent. The job I'm at doesn't offer full time to any of its employees (however, we're just two people working the same store) so we split 65 hours down the line.

Not a livable wage. I have to go out and get another part time job just to make ends meet. In the end, I'll be luck for the privilege of having at least 60 hour work weeks with two jobs, and no benefits because they only extend those to their full time workers.

Also, raising the minimum wage? Hate it. I worked at safeway for three years and they raised the minimum wage twice in that time. Everytime I got a .25c pay raise, I was right back to minimum wage again. Never did me a lick of good.
 
2010-06-16 04:53:04 PM
Wireless Joe: Sorry, fella. I'd like to hire you at 7.25 per hour, but those red hotels on Boardwalk and Park Place are REALLY expensive. And don't forget the $75 luxury tax.

I've never had a $200 bank error in my favor. >=(
 
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