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(NPR)   Raising the federal minimum wage would do more harm than good   (npr.org) divider line 705
    More: Obvious, minimum wages, Chicago's South Side, hourly workers, O'Hare International  
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16900 clicks; posted to Main » on 09 Jul 2012 at 12:30 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-08 10:48:15 PM
Subby, did you read the article? The only "harm" mentioned was the typical thing always mentioned by business owners: that they cannot afford to pay people more and that this would lead to layoffs. This is the same thing we hear every time the minimum wage is increased, and there never seems to be a huge up-tick in unemployment. What does happen is that money enters the economy - and fast. The people most impacted by a minimum wage increase do not have enough cash just to sit on it. So we are talking about an almost immediate boost tot he economy.
 
2012-07-08 11:06:24 PM
Well, as a general rule, the minimum wage must either do nothing or cost jobs. It's pretty basic economics. Labor is like any other good: it has a supply curve and a demand curve, and if the price (wage) is higher than the equilibrium point, it WILL create a deadweight loss and leave some people unemployed who would otherwise be employable. If below, it will do nothing.
 
2012-07-08 11:24:49 PM
Wage elasticity, how does it work?
 
2012-07-08 11:29:59 PM
Well, looks like my work here is done.
 
2012-07-08 11:42:57 PM
If the minimum wage is so horrable why don't we just abolish it? Because spending 80 hours a week making $1/hour digging ditches is EXACTLY what this economy needs.

/idiots.
 
2012-07-08 11:51:13 PM

Ambivalence: If the minimum wage is so horrable why don't we just abolish it? Because spending 80 hours a week making $1/hour digging ditches is EXACTLY what this economy needs.

/idiots.


I'm sure some people simplify this to, "It's a bad thing to raise minimum wage." It's not that we shouldn't have one. It's that people should be aware of the trade-offs. The point is that you have to balance any potential benefits against the fact that it will cause fewer people to be employed/fully employed. This is not something that people have an easy time accepting.
 
2012-07-08 11:56:35 PM

Ricardo Klement: The point is that you have to balance any potential benefits against the fact that it will cause fewer people to be employed/fully employed. This is not something that people have an easy time accepting.


Wouldn't there be a similar problem if there were no minimum wage (or if it were lowered significantly)? A few more people might be able to find jobs, but a whole lot of people would have less money to spend. Less spending means less revenue for employers, which means fewer workers needed.
 
2012-07-08 11:58:34 PM

Ricardo Klement: Ambivalence: If the minimum wage is so horrable why don't we just abolish it? Because spending 80 hours a week making $1/hour digging ditches is EXACTLY what this economy needs.

/idiots.

I'm sure some people simplify this to, "It's a bad thing to raise minimum wage." It's not that we shouldn't have one. It's that people should be aware of the trade-offs. The point is that you have to balance any potential benefits against the fact that it will cause fewer people to be employed/fully employed. This is not something that people have an easy time accepting.


Oh I think you underestimate the level of derp over this issue. There are plenty of people who think the minimum wage should be abolished entirely because...freedom.

There is a balance to be had. But when someone can't subsist (and I mean that in the barest sense) on a minimum wage, then the minimum wage is too damn low.
 
2012-07-09 12:04:06 AM

skinnycatullus: Ricardo Klement: The point is that you have to balance any potential benefits against the fact that it will cause fewer people to be employed/fully employed. This is not something that people have an easy time accepting.

Wouldn't there be a similar problem if there were no minimum wage (or if it were lowered significantly)? A few more people might be able to find jobs, but a whole lot of people would have less money to spend. Less spending means less revenue for employers, which means fewer workers needed.


Well, I'm talking about a hypothetical rise in the minimum wage - not a hypothetical cut. But in theory, the wage cut would yield greater employment, arguably offsetting any loss in the floor for some positions.
 
2012-07-09 12:08:58 AM

Ambivalence: Oh I think you underestimate the level of derp over this issue. There are plenty of people who think the minimum wage should be abolished entirely because...freedom.

There is a balance to be had. But when someone can't subsist (and I mean that in the barest sense) on a minimum wage, then the minimum wage is too damn low.


Oh, I acknowledged some people would make that argument. I am not sure how the math works out, but if the public is paying for food stamps and housing assistance to minimum-wage-earners, that suggests that it's effectively a public subsidy of business - that your tax dollars go to help make up the shortfall between minimum wage and subsistence. It would be an interesting study for an ambitious economics PhD candidate.
 
2012-07-09 12:15:28 AM
On the plus side, more money aval for buying cheap Chinese made goods. On the minus side, small businesses could be hurt.
 
2012-07-09 12:18:40 AM

cman: On the plus side, more money aval for buying cheap Chinese made goods. On the minus side, small businesses could be hurt.


"could be" for sure. Small business could also get hit by meteors. They could also get crushed by Walmart.
 
2012-07-09 12:19:13 AM
Aaaaaaaaaaaaand it goes green. Alas, I have to go to bed, so I'll miss the "fun".
 
2012-07-09 12:21:51 AM
Why would we trust the graphs from labor economists when those geniuses can't even figure out what kind of economy we currently have, need or want. How to maximize employment, and how to do so in a cost effective way.

It's all a farking theory when the real focus needs to be on driving up demand by getting more people employed immediately at higher wages so they can purchase sh*t they don't really need.

We're f*cked right now. If we can't increase demand we're not going to increase employment. The only way to do that is to get more money into more people's pockets so they can spend it.

I'd be fine with a min. wage hike, but that will not solve our problems. We need to put down the tax cuts for the wealthy crack pipe and focus on getting more money to people who can spur demand.

Just use basic math. If you give $500 billion to 5,000,000 people in the form of a tax cut or tax credit, you are going to create far more demand for products and jobs than if you give that same amount to 500,000 people. The multiplier effect works, but you have to target it to the group of people that is most likely to spend all of it in our economy.
 
2012-07-09 12:26:43 AM
Another fine example of 0bama's overreach and overregulation that will do nothing but hurt business while adding $$$ to his 15 trilloin debt. Boost economy? please
 
2012-07-09 12:27:31 AM

Bucky Katt: cman: On the plus side, more money aval for buying cheap Chinese made goods. On the minus side, small businesses could be hurt.

"could be" for sure. Small business could also get hit by meteors. They could also get crushed by Walmart.


I am not talking about just about Walmart.

There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.
 
2012-07-09 12:31:19 AM

DeltaPunch: $$$ to his 15 trilloin debt.


So, it's his debt? Dayum! I hope he can roll that over to a 0% interest Discover card. Those monthly payments must be a b*tch.
 
2012-07-09 12:31:53 AM
Better idea: Tie company taxes to the percentage of workers they have in the United States.
 
2012-07-09 12:33:14 AM

cman: Bucky Katt: cman: On the plus side, more money aval for buying cheap Chinese made goods. On the minus side, small businesses could be hurt.

"could be" for sure. Small business could also get hit by meteors. They could also get crushed by Walmart.

I am not talking about just about Walmart.

There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.


As a way of offsetting this, perhaps some tax breaks to smaller businesses such as the one you refer to would be a food thing.
 
2012-07-09 12:34:25 AM
Is it more harmful to have a working underclass who still is without adequate basic necessities of food, shelter, and healthcare even when they put in 50 hours a week?
 
2012-07-09 12:34:30 AM

ambassador_ahab: Wage elasticity, how does it work?


It keeps shrinking until it breaks under pressure.
 
2012-07-09 12:34:42 AM

DeltaPunch: .. while adding $$$ to his 15 trilloin debt.


Yes...becuase he is responsible for that ENTIRE 15 trillion.

Idiot.
 
2012-07-09 12:36:14 AM
Raising minimum wage doesn't increase the value of minimum wage jobs.
 
2012-07-09 12:36:30 AM
like this is all that important
 
2012-07-09 12:36:51 AM
Joe Olivo owns a small printing press in New Jersey that employs 47 people. Olivo tells Raz that a higher minimum wage basically raises the whole wage scale and would force him to make cuts.

Relevant: Why Joe Olivo's name sounds familiar
What I didn't know is that Joe Olivo doesn't appear to be just another random small business owner. Steve M. made a fascinating observation.

[A]s it turns out, Joe Olivo of Perfect Printing turns up quite a bit in public discussions of this and other issues. Here he is testifying against the health care law before House and Senate committees in January 2011. Here he is on the Fox Business Network around the same time, discussing the same subject. Here he is a few days ago, also on Fox Business, talking to John Stossel about the law. Here he is discussing the same subject on a New Jersey Fox affiliate.

And here he is in July 2010 discussing small business hiring with Neil Cavuto on Fox News. Here he is opposing an increase in the minimum wage in an MSNBC debate a couple of weeks ago.

Go to many of these links and you find out something about Joe Olivo that NPR and NBC didn't tell you: he's a member of the National Federation of Independent Business.


NPR: "Journalists" who don't know how to use Google
 
2012-07-09 12:37:57 AM
The only way to solve the jobs problem is to cut taxes on the wealthy and lower wages while increasing taxes for the poor. The wealthy will be so delighted that the jobs will come trickling down.
 
2012-07-09 12:38:27 AM

cman: There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.


I think one of the biggest question is, why is that all they can afford? A business is supposed to be competative, but not starving. Why does THAT company struggle to pay their workers a living wage?
 
2012-07-09 12:38:46 AM
DIAF, subby
 
2012-07-09 12:39:26 AM

SilentStrider: cman: Bucky Katt: cman: On the plus side, more money aval for buying cheap Chinese made goods. On the minus side, small businesses could be hurt.

"could be" for sure. Small business could also get hit by meteors. They could also get crushed by Walmart.

I am not talking about just about Walmart.

There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.

As a way of offsetting this, perhaps some tax breaks to smaller businesses such as the one you refer to would be a food thing.


I am unsure of how much they pay in federal and state taxes. Tax breaks are useful up to a point, but if your company is still losing money, tax breaks really wont help much.
 
2012-07-09 12:39:28 AM

Abox: Raising minimum wage doesn't increase the value of minimum wage jobs.


Unless those jobs are undervalued as they are. Who determines the value of a job? The employer? The employee? The company's customer?
 
2012-07-09 12:40:26 AM

Ambivalence: If the minimum wage is so horrable why don't we just abolish it? Because spending 80 hours a week making $1/hour digging ditches is EXACTLY what this economy needs.

/idiots.


If raising the minimum wage is so great, to hell with these little piddly, quarter an hour, raises. Why not just make it $20 and hour? $25? $30? No one should have to work for less than $40/hour. Why not?

/idiots
 
2012-07-09 12:40:27 AM

DeaH: Subby, did you read the article? The only "harm" mentioned was the typical thing always mentioned by business owners: that they cannot afford to pay people more and that this would lead to layoffs. This is the same thing we hear every time the minimum wage is increased, and there never seems to be a huge up-tick in unemployment. What does happen is that money enters the economy - and fast. The people most impacted by a minimum wage increase do not have enough cash just to sit on it. So we are talking about an almost immediate boost tot he economy.


We have a friend who owns his own retail business. He has 5 or 6 employees---some part-time, two full-time---and he pays a tiny bit over minimum wage (no benefits).

No surprise, he's completely against raising the minimum wage 'cause it would mean less money in his own pocket. During this recession, his income has continued to rise and he's now earning about $200,000/year, which isn't bad for a low cost-of-living area. Increasing his employees' wages $1/hour would make very little dent in his own finances, but it could be a boon for his employees. Yet, he's still opposed to giving them raises " 'cause they aren't worth it."

Oh, and the guy goes into work one day per week. He's hardly a workaholic.
 
2012-07-09 12:40:31 AM
Um; doesn't increasing the minimum wage have a corrilating effect on inflation and the general cost of living?

/ I'm not saying it's necessarily a bad thing; but increasing the minimum wage can create problems.
 
2012-07-09 12:40:40 AM
The minimum wage in Austrailia is about 15$ an hour American. They don't seem to be doing too badly in this recession.

Personally, I think it's because the people who have the most demand as a demographic, aren't taking paycuts, and are able to pay for their essentials in any economic climate, which spurns the economy.
 
2012-07-09 12:41:05 AM

cman: There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.


But no one ever looks at the next step, the sudden uptick of demand generated by min wages earners all getting a raise at the same time. It could just drive up demand for whatever it is that this processing plant manufactures, as suddenly more people are able to afford it.
There is always a 100% guarantee involved in raising the minimum wage: the beneficiaries will spend it.
If ma and pa's processing plant has a competitive product, they'll do fine. If they can't operate and pay their workers more than poverty wages, they don't deserve to be in business.
 
2012-07-09 12:41:05 AM

DeltaPunch: Another fine example of 0bama's overreach and overregulation that will do nothing but hurt business while adding $$$ to his 15 trilloin debt. Boost economy? please


So we're ignoring that the $4 trillion war and the $7 trillion bank bailout was W's doing, the and Reagan and the first Bush got us in for another $4 trillion, and the only reason we're not $16 trillion in at this point was a trillion dollars worth of debt forgiveness and downright paying our bills for us by France during the bank bailout? Got it.
 
2012-07-09 12:41:07 AM

Ambivalence: cman: There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.

I think one of the biggest question is, why is that all they can afford? A business is supposed to be competative, but not starving. Why does THAT company struggle to pay their workers a living wage?


I bet the company owners never missed a payday.
 
2012-07-09 12:41:34 AM

Ambivalence: cman: There is a family run produce processing plant not far from where I live. The name of this business is called Curran. The VA program I was in at the time had many people working there. They only paid minimum wage, no benefits, because thats all they could afford. The company employes (IIRC) about 70 people full time. These people at times can barely make the payroll as is, and adding more to the minimum wage would force them to let go of a few employees.

I think one of the biggest question is, why is that all they can afford? A business is supposed to be competative, but not starving. Why does THAT company struggle to pay their workers a living wage?


Produce is not exactly known for its high profit margins. Plus it is in Maine. Our economy isn't that bad, but there are far bigger companies that handle more product more efficiently and cheaply.
 
2012-07-09 12:42:50 AM
We'll be paying for the poor through tax-funded social programs or profit-funded minimum wage either way so IDGAF.

Why can't we just tie it to the CPI so we don't have sit through a shiatstorm every time it needs adjusting?
 
2012-07-09 12:42:52 AM
Don't you love it when business shills on radio treat the impact of wages on the economy as a zero-sum game but their press releases tout economic growth?
Their cognitive dissonance self-defeating cynicism is literally incredible.

/And when you apply the other edge of that razor, a CEO who takes in 7500 times the median company wage is killing 7400 jobs - give or take, isn't s/he?
 
2012-07-09 12:43:22 AM

RowdyRough: The minimum wage in Austrailia is about 15$ an hour American. They don't seem to be doing too badly in this recession.


They have an export heavy economy thanks to their natural resources and small population. Pretty bad analogy for the American economy.
 
2012-07-09 12:43:26 AM

Tumunga: Ambivalence: If the minimum wage is so horrable why don't we just abolish it? Because spending 80 hours a week making $1/hour digging ditches is EXACTLY what this economy needs.

/idiots.

If raising the minimum wage is so great, to hell with these little piddly, quarter an hour, raises. Why not just make it $20 and hour? $25? $30? No one should have to work for less than $40/hour. Why not?

/idiots


Yes, because clearly the solution to an extremist position in one direction (made sarcasticly I might add) is an extremist position in the other direction.

As I said previously, there has to be a balance. But if you can't subsist (in the barest definition of the term) on a minimum wage job, the minimum wage is too damn low.

I don't think anyone is suggesting the solution is everyone make 40k/year.

Idiot.
 
2012-07-09 12:43:45 AM

Ambivalence: But when someone can't subsist (and I mean that in the barest sense) on a minimum wage, then the minimum wage is too damn low.


t3.gstatic.com

This.
 
2012-07-09 12:44:02 AM

DeltaPunch: Another fine example of 0bama's overreach and overregulation that will do nothing but hurt business while adding $$$ to his 15 trilloin debt. Boost economy? please


by Obama, do you mean Tom Harkin? Or are you just blinded by baseless rage?
 
2012-07-09 12:44:45 AM
high labor costs or labor shortages are one of the biggest drivers for productivity growth and GDP per capita growth. When there are low labor costs why would you invest in a new machine or system to improve productivity if you can just hire another team of desperate / foreign wage slaves.
 
2012-07-09 12:45:07 AM
How about everyone just work for food and live in giant warehouses?
 
2012-07-09 12:45:23 AM

Ricardo Klement: I am not sure how the math works out, but if the public is paying for food stamps and housing assistance to minimum-wage-earners, that suggests that it's effectively a public subsidy of business - that your tax dollars go to help make up the shortfall between minimum wage and subsistence. It would be an interesting study for an ambitious economics PhD candidate.


I see someone else has read "Nickel and Dimed" too.
 
2012-07-09 12:45:49 AM

iheartscotch: Um; doesn't increasing the minimum wage have a corrilating effect on inflation and the general cost of living?

/ I'm not saying it's necessarily a bad thing; but increasing the minimum wage can create problems.


Wages have been pretty stagnant for years, but inflation (especially in areas of food and energy) have skyrocketed. One does not neccessarily cause the other. There are many other factors involved.
 
2012-07-09 12:46:12 AM

NewportBarGuy: RowdyRough: The minimum wage in Austrailia is about 15$ an hour American. They don't seem to be doing too badly in this recession.

They have an export heavy economy thanks to their natural resources and small population. Pretty bad analogy for the American economy.


Are you saying that the US is resource starved or that we are overpopulated?
 
2012-07-09 12:46:28 AM
Subby needs to choke on a bag of impoverished dicks.

/Also, you wanna fix the economy, and this country, institute a MAXIMUM wage.
//That's right, suck a fart outta my socialist ass.
///Farking conservavictims.
 
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