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(The Atlantic)   Raising the minimum wage would be small and short-lived and actually be worse in the long run   (theatlantic.com) divider line 117
    More: Obvious, Minimum Wage Create, minimum wages, Federal Reserve Bank of Chicago  
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2443 clicks; posted to Business » on 22 Dec 2013 at 5:59 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-12-22 01:49:59 PM  
Yep. Inflation will rise with the minimum wage. 
Zimbabwe here we come.
 
ZAZ [TotalFark]
2013-12-22 04:11:08 PM  
I wouldn't call it a bad deal-working class families should be able afford cars, after all-but it's not exactly a stimulus plan to write home about.

Wanting to raise the minimum wage is correlated with an anti-car attitude, both being mainly liberal policy positions in America.

I'm generally pro-car, but I'd rather see more car sharing in cities than a new subsidy for car ownership.
 
2013-12-22 04:33:00 PM  
So, when wages grow faster than costs, that's bad. But when costs rise faster than wages, as it has for the last dozen years or so, that's....what exactly?
 
2013-12-22 05:04:07 PM  

Ambivalence: So, when wages grow faster than costs, that's bad. But when costs rise faster than wages, as it has for the last dozen years or so, that's....what exactly?


Freedom.
 
2013-12-22 05:09:59 PM  
FTFA:  Of course, things aren't quite that simple (are they ever?). When wages go up, some businesses raise their prices, which leaves their customers with less to spend elsewhere. So, to some degree, hiking the minimum wage just shuffles money between two different sets of consumers.

Some businesses may, but not all will.  This assumes that businesses will raise prices to keep their margins the same to offset the higher payroll costs, but it fails to take into account that other businesses will see it as an opportunity to operate at a lower margin to undercut those companies who raise prices, thereby increasing their market share and profits by selling more goods even if they make a little bit less on each transaction.

FTFA: Part of the answer: debt. One reason increasing the minimum wage would plump up spending so much, they find, is that it would give workers the ability to put down payments on big-ticket items like cars. Later on, their spending would fall as they begin making loan payments.

So someone who can't afford a car now buys a car.  The interest on that loan goes to the bank that now has more money to lend to other people.  The car salesman and dealership make money off of the car purchase and can then go and buy more stuff.  The car requires gas, insurance, and maintenance which requires the customer to spend additional money throughout the ownership period, further boosting the economy.
 
2013-12-22 05:13:51 PM  
Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.
 
2013-12-22 05:19:10 PM  
It sure ruined the stock market in 2008 didn't it?

We can't be too careful. We start paying people more and they'll start spending more and then I'll have to hire more people to make more stuff and it's really not worth it, you know what I mean? That would just KILL my business.
 
2013-12-22 05:36:59 PM  
Wages need to rise, simple as that

If people don't have the means to consume then what the fark is the point of a consumer based economy?
 
2013-12-22 05:44:29 PM  

cman: Wages need to rise, simple as that

If people don't have the means to consume then what the fark is the point of a consumer based economy?


You have to sell the idea that we have a consumer based economy first. Right now it's all about the poor Job Creators (profits be upon them).
 
2013-12-22 05:46:44 PM  
As the CEO of Americas largest manufacturer of robots, I'm in favor of this.
 
2013-12-22 05:49:44 PM  

TuteTibiImperes: This assumes that businesses will raise prices to keep their margins the same to offset the higher payroll costs, but it fails to take into account that other businesses will see it as an opportunity to operate at a lower margin to undercut those companies who raise prices, thereby increasing their market share and profits by selling more goods even if they make a little bit less on each transaction.


www.mostlytruestuff.com
 
2013-12-22 05:52:51 PM  

nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.


Really we just need to tighten up that definition of "living wage". 2 bedroom apartment with 4 occupants, utilities including internet but not cable tv, 2000 calories of reasonably healthy food a day. Set different minimum wage in different local economies based on how much it takes to buy all that under their cost of living.

If you have 3 kids to feed but are working the same job as a high school student, it's the governments responsibility to feed those kids, not Wal-Marts.
 
2013-12-22 05:53:00 PM  

TuteTibiImperes: So someone who can't afford a car now buys a car. The interest on that loan goes to the bank that now has more money to lend to other people. The car salesman and dealership make money off of the car purchase and can then go and buy more stuff. The car requires gas, insurance, and maintenance which requires the customer to spend additional money throughout the ownership period, further boosting the economy.


www.thephillipsfoundation.org
/approves
 
2013-12-22 06:06:59 PM  
You know what we should do? Tax cuts for the wealthy, because that has worked out soooooo well so far.
 
2013-12-22 06:19:02 PM  

nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.




Walmart was in favor of minimum wage increases in the 90's.

I bet Walmart is in favor of Food Stamp increases.
 
2013-12-22 06:21:57 PM  
Who cares if raising the minimum wages creates jobs? (I know who, it was a rethorical question).

Raise the minimum wage so that people can make a decent living of having a job, that in itself is the goal.

And do something so unemployed people get basic subsidies.

---

Oh, and wave goodbye to the Walmart greeter, the grocery packer, the valletparker etc. What you'll see in countries with decent wages, is that companies only employ people to do something actually productive.
 
2013-12-22 06:33:21 PM  
Low wage jobs indicate that the employer has failed to create a business model that cares for its workers. In turn, it's workers must rely on government assistance. A low minimum wage therefore rewards failure through government subsidies. Why should the government -- through inaction -- reward failure?
 
2013-12-22 06:37:34 PM  
Love how TFA says this: "The standard argument against raising the minimum wage is that it kills jobs by making workers more expensive to hire. Whether or not that's true has been the subject of century-long economics debate, which probably won't be resolved any time soon."

Then they proceed to claim that the argument made against raising are are concrete conclusions.  Which is it? Is it debatable or factual?
 
2013-12-22 06:38:23 PM  

spawn73: Who cares if raising the minimum wages creates jobs? (I know who, it was a rethorical question).

Raise the minimum wage so that people can make a decent living of having a job, that in itself is the goal.

And do something so unemployed people get basic subsidies.

---

Oh, and wave goodbye to the Walmart greeter, the grocery packer, the valletparker etc. What you'll see in countries with decent wages, is that companies only employ people to do something actually productive.


I'd add the Fry's & Walmart receipt-checkers to that list...

/ especially Fry's
// treated like I was a criminal......still p*ssed off after 5 years...
 
2013-12-22 06:45:06 PM  

Forbidden Doughnut: spawn73: Who cares if raising the minimum wages creates jobs? (I know who, it was a rethorical question).

Raise the minimum wage so that people can make a decent living of having a job, that in itself is the goal.

And do something so unemployed people get basic subsidies.

---

Oh, and wave goodbye to the Walmart greeter, the grocery packer, the valletparker etc. What you'll see in countries with decent wages, is that companies only employ people to do something actually productive.

I'd add the Fry's & Walmart receipt-checkers to that list...

/ especially Fry's
// treated like I was a criminal......still p*ssed off after 5 years...


Why are they checking your reciept? Isn't the purpose of the reciept for the customer to verify that he didn't overpay, as a proof of purchase for warrenties etc.?

There's no such thing as reciept checkers in countries with 20USD minimum wages anyway, that's for sure. People who have a job, do stuff that is actually needed.
 
2013-12-22 06:49:27 PM  

edmo: It sure ruined the stock market in 2008 didn't it?

We can't be too careful. We start paying people more and they'll start spending more and then I'll have to hire more people to make more stuff and it's really not worth it, you know what I mean? That would just KILL my business.


This is the weirdest thing to me when it comes to arguments against putting more money in the hands of the poor. I mean, it's not like if you give Brandine $2 an hour more, she's going to put it all in mutual funds. Businesses are getting every dime of that min wage hike back.
 
2013-12-22 06:50:52 PM  

Forbidden Doughnut: spawn73: Who cares if raising the minimum wages creates jobs? (I know who, it was a rethorical question).

Raise the minimum wage so that people can make a decent living of having a job, that in itself is the goal.

And do something so unemployed people get basic subsidies.

---

Oh, and wave goodbye to the Walmart greeter, the grocery packer, the valletparker etc. What you'll see in countries with decent wages, is that companies only employ people to do something actually productive.


Nah, Baggers are multipurpose retail monkeys. They can be used to corral carts from the parking lot and bring them back to the store, clean up a spill in an aisle, and with a little training, take over for a cashier who is on break.

So baggers will never disappear, they will just be used for a variety of shiatty duties instead of just strictly bagging.

/worked retail for far too long in and just out of high school.
 
2013-12-22 06:55:22 PM  

LoneWolf343: You know what we should do? Tax cuts for the wealthy, because that has worked out soooooo well so far.


Stimulus for Wall Street because...trickle down.
 
2013-12-22 06:57:50 PM  
How about fark you, does that work?
 
2013-12-22 07:17:45 PM  
So, can anyone explain why TFA author can't explain why

when for example debit processing charges went down a few years ago retailers didn't LOWER prices?
 
2013-12-22 07:17:55 PM  

nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.


Can I join you on fantasy island?
 
2013-12-22 07:21:57 PM  

DerpHerder: nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.

Can I join you on fantasy island?


i.onionstatic.com
 
2013-12-22 07:22:08 PM  

FirstNationalBastard: Nah, Baggers are multipurpose retail monkeys. They can be used to corral carts from the parking lot and bring them back to the store, clean up a spill in an aisle, and with a little training, take over for a cashier who is on break.

So baggers will never disappear, they will just be used for a variety of shiatty duties instead of just strictly bagging.

/worked retail for far too long in and just out of high school.


I have never seen a grocery bagger anywhere, at any store, in Norway.

/"minimum wage" is $18-$20
 
2013-12-22 07:23:09 PM  

DerpHerder: nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.

Can I join you on fantasy island?


It's across the ocean in northern Europe.  Get here if you can.
 
2013-12-22 07:25:32 PM  
That's why all the socialist countries with high minimum wages are such hell holes.
 
2013-12-22 07:40:35 PM  
Raising the minimum wage by it self isn't a silver bullet, you also have to pass comprehensive immigration reform, and have better access to quality education for those who aren't doing pretty OK middle class/rich among other polices. The point of raising the minimum wage though is that in general, we think its a good idea that millions of Americans can do more than survive. It does not address the fact that many of those jobs will be replaced by robots in the near future. It does not address that things are more competitive than ever.

Pick though. Would you prefer that Walmart pay its employees enough to live? Or are you happy to biatch and moan about welfare queens, while you contribute to one of the biggest Welfare Queens in this country. Yes, I'm talking about Walmart. When your business depends on US taxpayers to pick up the tab for feeding a large amount of your employees, you are NOT doing it right.
 
2013-12-22 07:42:19 PM  

I_C_Weener: LoneWolf343: You know what we should do? Tax cuts for the wealthy, because that has worked out soooooo well so far.

Stimulus for Wall Street because...trickle down.


Yeah, something's trickling down alright.
 
2013-12-22 07:50:18 PM  

bbfreak: Raising the minimum wage by it self isn't a silver bullet, you also have to pass comprehensive immigration reform, and have better access to quality education for those who aren't doing pretty OK middle class/rich among other polices. The point of raising the minimum wage though is that in general, we think its a good idea that millions of Americans can do more than survive. It does not address the fact that many of those jobs will be replaced by robots in the near future. It does not address that things are more competitive than ever.


I worry about that time when robots are everywhere; they will eat old people's medicine for fuel.  They may strike at any time. And when they grab people with those metal claws, they can't break free: because they're made of metal, and robots are strong.

Don't deny the existence of robots, or I suspect you are one yourself.

I only wish I could by insurance against such calamity!
 
2013-12-22 07:57:56 PM  
Foreigner here. The US minimum wage is a frikkin' disgrace, and you are all very bad people.
 
2013-12-22 07:58:59 PM  

Beta Tested: DerpHerder: nmrsnr: Or, raising the minimum wage won't affect jobs, but let people who work full time actually be able to support themselves without having the federal government subsidize Wal-Mart by letting them pay their workers less than a living wage, and having the government pick up the slack in food stamps.

Can I join you on fantasy island?

It's across the ocean in northern Europe.  Get here if you can.


I would rather die young somewhere in America than grow old in Northern Europe.
 
2013-12-22 08:00:25 PM  

RyansPrivates: bbfreak: Raising the minimum wage by it self isn't a silver bullet, you also have to pass comprehensive immigration reform, and have better access to quality education for those who aren't doing pretty OK middle class/rich among other polices. The point of raising the minimum wage though is that in general, we think its a good idea that millions of Americans can do more than survive. It does not address the fact that many of those jobs will be replaced by robots in the near future. It does not address that things are more competitive than ever.

I worry about that time when robots are everywhere; they will eat old people's medicine for fuel.  They may strike at any time. And when they grab people with those metal claws, they can't break free: because they're made of metal, and robots are strong.

Don't deny the existence of robots, or I suspect you are one yourself.

I only wish I could by insurance against such calamity!


Pray you and your loved ones are on the protected scrolls.
 
2013-12-22 08:01:14 PM  
If we raise the minimum wage, rich will have less to distinguish themselves from the poors.

We can't have the rich and the poors intermingling now, can we?
 
2013-12-22 08:06:02 PM  

serial_crusher: it's the governments responsibility to feed those kids, not Wal-Marts


You're suggesting that only people with support from their family and/or the government can afford to work at Wal-Mart. That policy sounds a lot like a public subsidy to Wal-Mart -- do we really want jobs that cannot support the people working them?
 
2013-12-22 08:07:04 PM  

serial_crusher: As the CEO of Americas largest manufacturer of robots, I'm in favor of this.


Is that Boston Dynamics?  And what are you in favor for?
 
2013-12-22 08:12:33 PM  
ALL economic decisions are small and short-lived and will cause problems in the long run.

There's no such thing as a magic fix that works all the time forever. Everything must be tinkered with and adjusted over time with respects to changing conditions in dozens of socio-economic sectors.
 
2013-12-22 08:12:44 PM  
while I am in favor of increasing the minimum wage, I'm not in favor of applying a single wage nationwide.

there should be a cost index at the state level, perhaps even at the county or city level.

$10.10/hour is nowhere near enough in SF, DC, or NYC, and could actually be too much for parts of Mississippi and Kentucky.
 
2013-12-22 08:16:16 PM  
We've seen what happens when wages get too high for an industry.  The automotive factories automated much of the work as the unions drove wages higher and higher.  Unskilled and low skilled jobs can be done by robots.  If you raise the minimum wage too high all it will do is drive automation to new heights.  Fewer people will have jobs.  More people will be on welfare.  And the more people on welfare the larger the voting base for the Democrats.  That's all this is.  A democrat/fascist voter drive.
 
2013-12-22 08:16:18 PM  

doyner: Ambivalence: So, when wages grow faster than costs, that's bad. But when costs rise faster than wages, as it has for the last dozen years or so, that's....what exactly?

Freedom.


Freedom, apparently, is just another word for nothing left to lose.
 
2013-12-22 08:17:06 PM  

rooftop235: Yep. Inflation will rise with the minimum wage.


You know how I know you didn't read the article?

Virtually no one credible thinks raising minimum wage, even a significant amount, will have any real impact on inflation. The numbers just don't bare that out.

The article actually discusses the much narrower perspective of the number of jobs that might be created by raising the minimum wage. It argues that, while a higher minimum wage could create jobs, they likely wouldn't represent a long-term gain.  It doesn't even mention the improvement in the lives of the people making more money, it only discusses the change in terms of the broader economy, and even there only in terms of employment.

Here's a literature survey discussing both inflation and employment changes related to changes in minimum wage and citing many parts of the broader research that's gone into the issue, should you like to undertake more in-depth study:  http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
 
2013-12-22 08:22:25 PM  

rooftop235: Yep. Inflation will rise with the minimum wage.
Zimbabwe here we come.


Wages have NEVER affected inflation. EVER. That's not how inflation works.
 
2013-12-22 08:28:27 PM  
I think the author of the article has created a strawman to attack.  I'm not aware that many people are claiming that an increase in the minimum wage, even to $10.10/hour, would be much of an economic stimulus.  The push to increase the minimum wage has been made more as a matter of fairness rather than any stimulus.
 
2013-12-22 08:34:19 PM  

spawn73: Forbidden Doughnut: spawn73: Who cares if raising the minimum wages creates jobs? (I know who, it was a rethorical question).

Raise the minimum wage so that people can make a decent living of having a job, that in itself is the goal.

And do something so unemployed people get basic subsidies.

---

Oh, and wave goodbye to the Walmart greeter, the grocery packer, the valletparker etc. What you'll see in countries with decent wages, is that companies only employ people to do something actually productive.

I'd add the Fry's & Walmart receipt-checkers to that list...

/ especially Fry's
// treated like I was a criminal......still p*ssed off after 5 years...

Why are they checking your reciept? Isn't the purpose of the reciept for the customer to verify that he didn't overpay, as a proof of purchase for warrenties etc.?

There's no such thing as reciept checkers in countries with 20USD minimum wages anyway, that's for sure. People who have a job, do stuff that is actually needed.


Fry's Electronics checks the receipt of customers as they walk out of the store....for "theft prevention". I got stopped for walking out with stuff that I already paid for in the store...

/ land of the free...yeah, right...
 
2013-12-22 08:39:51 PM  
So I guess the minimum wage at $7.25 forever to the point where a minimum wage means nothing. So this columnist would rather watch the poor exploited even more in the long run than to have it be a fair assessment of the minimum acceptable wage for someone's labor.

Hell, even with a $7.25 wage the economy still sucks and anyways I would guess that most of the people who have been laid off make much more than the minimum wage. I can't understand why people refuse to raise the wage to what's fair for workers, not for businesses.
 
2013-12-22 08:40:43 PM  

Forbidden Doughnut: Fry's Electronics checks the receipt of customers as they walk out of the store....for "theft prevention". I got stopped for walking out with stuff that I already paid for in the store...

/ land of the free...yeah, right...


Fact: if you are willing to be an ass, you can walk on by.   They can't force you to stop..  One of the guys I work with never lets them check (he is definitely an ass, btw).

Me, I'b a bit more nuanced.  I will let them check if I don't have to wait to leave.  The second there is a line, I walk on by.   I've never been forcefully stopped or had any sort of rent-a-pig come after me.  I did have them yell "sir, SIR!" a couple of times, but I can ignore them.
 
2013-12-22 09:15:02 PM  

rooftop235: Yep. Inflation will rise with the minimum wage.
Zimbabwe here we come.


So why are we not Zimbabwe now since execs have seen a 200x increase in their wages?
 
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