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(CNN)   Massachusetts sets the state minimum wage to $11, suck it red state workers   (money.cnn.com) divider line 72
    More: Cool, Massachusetts, minimum wages, highest state  
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736 clicks; posted to Politics » on 20 Jun 2014 at 2:45 PM (32 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



Voting Results (Smartest)
View Voting Results: Smartest and Funniest

2014-06-20 03:38:03 PM  
8 votes:

Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: much in Massachusetts, so the negative impact will be marginal. But it will be negative, as it nearly always is.

http://www.raisetheminimumwage.com/pages/job-loss

Don't bother. Your data is outdated and based on flawed methodological assumptions, just like the research done on austerity.

DERP!! Your data is biased and would only be believed by left wing idiots.

Google "deadweight loss of minimum wage".


I know how stupid this was, my fellow Farkers, but I did it. I farking googled what DSC told me to.

Allow me to present the first five links. It's like a Buzzfeed listicle, but this will actually be funny.

1.  http://www.khanacademy.org/economics-finance-domain/microeconomics/co n sumer-producer-surplus/deadweight-loss-tutorial/v/minimum-wage-and-pri ce-floors

First we have a Khan Academy lesson in microeconomics. For all its faults, Khan Academy isn't totally terrible. Check out the comments.

2.  http://finance.townhall.com/columnists/politicalcalculations/2013/03/ 0 3/the-deadweight-loss-of-minimum-wage-hikes-n1524753/page/full

A Townhall link. Nice.

3.  http://catalog.flatworldknowledge.com/bookhub/reader/2992?e=coopermic r o-ch10_s02

Another ideologically biased site without much in the way of raw data that consistently fails to account for changes in the market as a result of the higher minimum wage. It focuses solely on the labor-work transaction (in which an employer believes she has a set amount of work that needs to be performed). It does not take into account an increase in demand (and therefore an increase in the amount of socially necessary labor to be performed).

4.  http://www.investopedia.com/terms/d/deadweightloss.asp

Oh investopedia. More ideology, low actual numbers.

5.  http://en.wikipedia.org/wiki/Deadweight_loss

It's sad when Wikipedia is the best source on the list.

Now, let's look at some actual data!

http://davidcard.berkeley.edu/papers/njmin-aer.pdf

Oh my God! Could it be that the reason Townhall and Investopedia don't have any concrete examples of a deadweight loss is because THE FARKING DATA DOESN'T SUPPORT THAT THEORY? Quelle surprise!

Conservatives, do not fark with the quants. They have your number. They have calculated exactly how farking wrong you are.
2014-06-20 03:21:36 PM  
6 votes:

Debeo Summa Credo: If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.


In the meantime, what is our minimum wage worker supposed to eat? Bootstraps? Unicorn steaks?

Do you even externalities, bro?
2014-06-20 03:19:29 PM  
5 votes:

cameroncrazy1984: Or is this a gut feeling?


It's not even that. It's an outright falsehood not supported by the actual research.

It's funny how you never see Republicans posting anything substantive on economics. Oh sure, they'll link a Heritage Foundation or Von Mises Institute screed, which is more ideology than data and interpretation, and they'll whine about how Krugman or DeLong are meanypants who say mean and unprofessional things about conservatives. They'll toss out a term like "Laffer curve," but when you ask them to back anything up with hard numbers, they turn tail and run because the data simply does not support the efficacy of conservative economics.
2014-06-20 03:16:13 PM  
5 votes:

Debeo Summa Credo: much in Massachusetts, so the negative impact will be marginal. But it will be negative, as it nearly always is.


http://www.raisetheminimumwage.com/pages/job-loss

Don't bother. Your data is outdated and based on flawed methodological assumptions, just like the research done on austerity.
2014-06-20 03:41:56 PM  
4 votes:

Debeo Summa Credo: CPennypacker: Debeo Summa Credo: CPennypacker: Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.

Society as a whole has to foot the bill of picking up the slack of poor wages, so it makes sense for society to set a price floor. If you need labor, you have to pay X, not just for the benefit of the person being hired but also to ease the burdon that purson puts on society. Labor is an input, inputs cost money and unfortunately can be and is regulated.

I agree that it is unfortunate that it is regulated(in regard to minimum wages). It's harmful regulation that does more damage to society than it helps.

The government shouldn't decide the price of an input, the market should.

Why should an employer pay someone $11 per hour when that person is only bringing $10 per hour in benefit to the employer?

Because we don't live in a purely free market. There's too much moral hazard.

Maybe the workers should just unionize then? Thats the free market solution right there. Consolidate the supply and jack up the price.

You mean form a cartel to artificially restrict supply to increase prices, like OPEC or the old trusts of the gilded age?

Hmmm. Might work. Detroit and upstate NY and other rust belt areas should've tried that.


If Wal mart puts its competition out of business, then demands more favorable prices, did the value of the goods they buy suddenly drop?

If Consolidated Almonds, Inc buys the other two major suppliers of almonds and raises prices by 20%, did the value of almonds go up 20%?

Why are those two perfectly allowable in a free market, but workers do the same thing and they some sort of evil cartel? Its the same shiat.

If you're going to whine about the free market being the answer to everything, you're just going to have to suck it up when it comes to unions, cuz its the exact same shiat. So pick your poison.
2014-06-20 03:11:50 PM  
4 votes:
Massachusetts
Area    Ranked 44th
Total    10,555 sq mi
Population    Ranked 14th
 - Total    6,692,824 (2013 est)
 - Density    840/sq mi  (324/km2)


The United States Bureau of Economic Analysis estimates that the Massachusetts gross state product in 2012 was US $404 billion. The per capita personal income in 2012 was $53,221, making it the third highest state in the nation.

Yeah, not to worried.  Also come in the top 5 for quality of life and education consistently.

Spending on education, infrastructure, and well being goes a long way to providing the inputs and employees businesses need to thrive. Thats a proactive, progressive approach, not a negative regressionary one.
2014-06-20 03:29:02 PM  
3 votes:

Debeo Summa Credo: 1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply


"Sara Lemos has conducted a comprehensive review of the 30 or so academic papers on the price effects of the minimum wage. She concludes: "Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%"; and "[t]he main policy recommendation deriving from such findings is that policy makers can use the minimum wage to increase the wages of the poor, without destroying too many jobs or causing too much inflation." Neumark and Wascher agree with Lemos's assessment about the likely price effects (while disagreeing with her conclusions about the overall usefulness of the minimum wage): "Both because of the relatively small share of production costs accounted for by minimum wage labor and because of the limited spillovers from a minimum wage increase to wages of other workers, the effect of a minimum wage increase on the overall price level is likely to be small." Other recent research by Daniel Aaronson, Eric French, and James MacDonald on restaurant pricing, a sector with a high share of low-wage workers suggests that the price effects are likely to be lower than the upper bounds suggested by Lemos. Aaronson, French, and MacDonald "find that a 10 percent increase in the minimum wage increases prices by roughly 0.7 percent."

Source: Schmitt, J. (2013) "Why Does the Minimum Wage Have No Discernible Effect on Employment?"

So, oooh.  0.4-0.7% price increases in exchange for lifting hundreds of thousands of people over the poverty line.  Everybody panic.
2014-06-20 03:18:25 PM  
3 votes:

Debeo Summa Credo: Your magical fairy dust doesn't apply in real life. They will lose more customers due to increased prices than they gain due to a small segment of their potential customer base getting a raise, believing anything else is economically illiterate fantasy.


That doesn't make any sense. If that were true, every other minimum wage increase ever would have tanked the economy.  Your logic means reducing the minimum wage would result in more customers from reduced prices.  The logical end of that means near-slavery (people having more or less NO MONEY TO SPEND) would be your best customers if your prices are cheap enough.
2014-06-20 03:14:01 PM  
3 votes:
This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working
2014-06-20 03:05:12 PM  
3 votes:

Debeo Summa Credo: what_now: Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.

You know, I pay taxes in Massachusetts, and I would be perfectly happy to see them raised slightly if it meant that my fellow massholes had a better standard of living.

Of course, this won't make my taxes higher.

Well, it will make you pay more sales tax to the extent the increased costs for businesses are passed on to consumers via higher prices.


Lemme lay some math on you.

WidgetCorp makes widgets, hence the name. WidgetCorp can make 100 widgets for $1,000. WidgetCorp then sells these at wholesale prices to ConMart. ConMart pays $1,050 for every 100 widgets. In order to break even, ConMart has to sell widgets for a price of $10.50. They mark it up to $19.99, which covers overhead for having the store open, marketing, workers salaries, etc. On that basis, ConMart makes $5.00 for every widget sold.

With the minimum wage increase, ConMart now makes $3.50 on every widget sold. Their profit margin goes down. ConMart hires an economist who tells them that the market will probably bear a $0.50 increase in widget prices. Sure, some outlying consumers might be priced out of the widget market, but most consumers will gladly shoulder a $0.50 increase. To top it off, the minimum wage hike has not priced in more consumers than ConMart lost, who can now afford the $20.49 cost of widgets. All of a sudden, ConMart's profit margins are even higher than before.

Which is not to say that there is not a point of diminishing returns. There obviously is. It's possible a minimum wage increase could price certain businesses out of the market and some employees would have to be let go. But for others, it will increase demand for their products and services as more people can afford them, which should (in theory) create new job opportunities for the people let go from businesses priced out of the marketplace.

You free-market types are supposed to respect this and say, "all is working as it should be."
2014-06-20 12:19:07 PM  
3 votes:

Gonz: cman: Mass just ensured their economic recovery cratered their economy.

FTFY. This will be overturned by popular demand within 6 months, because businesses will quit hiring.

Then there will be no demand for goods and services, and then MA will watch their tax revenues dwindle, and then they'll look to states like Mississippi to see how to fix the problem.


One of these days this doom and gloom scenario will come to pass.  Sure, it's always been wrong before, but THIS TIME yer F`CKED libtardos!!
2014-06-20 05:31:29 PM  
2 votes:

sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?


Because she doesn't have the power to bargain for a wage comparable to her marginal product of labor. Her employer will tell her to take a hike, and find someone with less dignity or more hunger.
That difference, the difference between what she produces and what she's paid, is a surplus to her employer. If he paid a wage that would prevail in a free market, in which everyone had equal bargaining power, the only difference between that economy and this one is he would make less and she would make more. Every other transaction would be made. No deadweight loss.
You could replicate our economy exactly, if you started with a free market with everyone having equal bargaining power, and then you gave every employer a gun and told him it was OK to hold it to poor peoples' heads and steal some money from them. Every transaction made in one economy would be the same as every transaction made in the other economy, except for the way one side is taking from another. I don't know why we call it stealing in one case and freedom in another. We could switch the labels if we want, because the two economies are the same.
2014-06-20 05:08:05 PM  
2 votes:

sendtodave: cameroncrazy1984: sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?

Because otherwise the taxpayers are. Why should we subsidize employers?

But, if employers can afford to pay their workers more, why don't they do so voluntarily?


Because they want to maximize profits. I figured that was obvious. Greed is good for the employer. Not for the employee.
2014-06-20 05:07:00 PM  
2 votes:

sendtodave: why don't they do so voluntarily?


Really, man?
2014-06-20 04:28:02 PM  
2 votes:

Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages! There's no magical wallet from which extra money comes!!!


No, actually there is. And it's completely possible. Check it out. I'll simplify numbers, to make the math easy to follow. This is just an example, simply a model, but learn something.

Scenario A- you have a store. You sell one thing- a widget. Each widget costs $2 to produce ($1 in parts, $1 in labor), and you make 50 of them every hour. You employ 5 people, each making $10 an hour. You sell your widgets for $4, and make $2 profit per widget. So, each worker can afford 2.5 widgets per hour of labor, and your factory makes $5 in profit per hour of labor.

Scenario B- Same store, but the government has imposed a $15/ hour minimum wage. Your total labor costs have gone from $50 to $75. You can either decrease profits, or increase prices. You obviously don't want to lose profits, so you now sell your widget for $5. Your standard of living has not decreased, you're still making $2 profit per widget sold, or $100 profit an hour. But, your workers can now afford 3 widgets per hour of work.

So, with their increased wages, they can do one of two things: keep demand constant, in which case money will accumulate in their bank, or increase demand to the full extent of their buying power. If demand increases, then you will be able to sell 60 widgets an hour, so your profits have gone from $100 to $120.

What if it's in the middle? Then your profits go to $110 an hour, and each worker puts $2 an hour in the bank.
2014-06-20 04:04:47 PM  
2 votes:

Debeo Summa Credo: estimated deadweight loss to economy of increases in minimum wage past 1994 at $500m per year.


Wait.  So even a far-right publication like Town Hall assesses the annual dead weight from minimum wage increases at $1.59 per American?

Where will we ever find that kind of money?  Oh, wait.  I throw some change in my desk drawer sometimes.  I think I can handle that expense to lift millions of my countrymen out of poverty.
2014-06-20 04:00:59 PM  
2 votes:

Obama's Reptiloid Master: But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.


And along the way, the government collects social security taxes, Medicare taxes, income taxes, etc. from the higher-paid workers, along with the sales tax from the additional transactions they will make now that they have some money, etc.  And as shown above via multiple sources, employment doesn't go down (and has gone up in some cases).  Fewer people now require government benefits like WIC and food stamps.   So now there are actually funds in the treasury to help the homeless sandwich board guys who are mentally ill and can't hold a steady job without getting help.
2014-06-20 04:00:44 PM  
2 votes:

Debeo Summa Credo: What should happen in this situation?


Find a strategy that doesn't suck.
2014-06-20 04:00:37 PM  
2 votes:

Debeo Summa Credo: estimated deadweight loss to economy


estimated deadweight loss

estimated deadweight loss

At some point, hombre, you actually have to measure it. And when it has been measured, it has been shown not in line with those estimates. I'm sorry. You're wrong.
2014-06-20 03:55:35 PM  
2 votes:

Debeo Summa Credo: What should happen in this situation?


Hey guys! Hey guys! He's arguing about macroeconomics by using a single microeconomics transaction!

DSC, here's what you don't get. Yes, you, the deli owner, no longer employ the Sandwich Board guy.

But, with an $11 minimum wage, ALL OF THE OTHER FARKING BUSINESSES AROUND YOU, and you yourself, are going to be making more money because people will have more disposable income. One of those businesses will meet their increased demand by hiring on new workers, including (possibly) your sandwich board guy. Who now has more money to spend on sandwiches from you, resulting in higher profits for you, increased demand for your sandwiches, which you pass on to your supply companies, etc. and so on.

That's why when people talk about MACROeconomics, we often use data across large scales of people and long stretches of time. Because policy is set at the macro-level, not the micro-level.
d23 [TotalFark]
2014-06-20 03:37:26 PM  
2 votes:

UncomfortableSilence: But Unions are unfair to the business. People are supposed to take what their betters deem appropriate for them and subsist off the scraps they may or may not be able to afford.


You know what is crazy about the anti-unionism right now?  It's that the people that are the biggest blowhards about Capitalism hate it.  Unions are a capitalistic reaction to too much power by large employers.  It *is* free market.  The people yelling about the free market the loudest only want the parts of the free market that suit them.
2014-06-20 03:37:15 PM  
2 votes:
Something that really pisses me off in these discussions is the insinuation that prices will go up if companies have to pay their workers more.

NEWS FLASH, MORONS! The prices of commodities like food and oil are going up  anyway, and whether or not the minimum wage is raised is  not going to change that. What this means is that without a minimum wage increase, minimum wage workers (and those barely above) have to work harder and harder for less and less.
d23 [TotalFark]
2014-06-20 03:28:49 PM  
2 votes:

cman: 2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.


No, but they do owe you a fair wage.  Every idiot that parrots this b.s. conveniently forgets that we these massive corporations hold orders of magnitude higher power.  When the corporations have enough power to pay starvation wages instead of free market wages and let the government pick up the tab with food stamps, it's DAMN SURE the government has an interest in making sure that fairness is restored.
2014-06-20 03:26:09 PM  
2 votes:

Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.


Society as a whole has to foot the bill of picking up the slack of poor wages, so it makes sense for society to set a price floor. If you need labor, you have to pay X, not just for the benefit of the person being hired but also to ease the burdon that purson puts on society. Labor is an input, inputs cost money and unfortunately can be and is regulated.
2014-06-20 03:17:18 PM  
2 votes:

Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: what_now: Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.

You know, I pay taxes in Massachusetts, and I would be perfectly happy to see them raised slightly if it meant that my fellow massholes had a better standard of living.

Of course, this won't make my taxes higher.

Well, it will make you pay more sales tax to the extent the increased costs for businesses are passed on to consumers via higher prices.

Lemme lay some math on you.

WidgetCorp makes widgets, hence the name. WidgetCorp can make 100 widgets for $1,000. WidgetCorp then sells these at wholesale prices to ConMart. ConMart pays $1,050 for every 100 widgets. In order to break even, ConMart has to sell widgets for a price of $10.50. They mark it up to $19.99, which covers overhead for having the store open, marketing, workers salaries, etc. On that basis, ConMart makes $5.00 for every widget sold.

With the minimum wage increase, ConMart now makes $3.50 on every widget sold. Their profit margin goes down. ConMart hires an economist who tells them that the market will probably bear a $0.50 increase in widget prices. Sure, some outlying consumers might be priced out of the widget market, but most consumers will gladly shoulder a $0.50 increase. To top it off, the minimum wage hike has not priced in more consumers than ConMart lost, who can now afford the $20.49 cost of widgets. All of a sudden, ConMart's profit margins are even higher than before.

Which is not to say that there is not a point of diminishing returns. There obviously is. It's possible a minimum wage increase could price certain businesses out of the market and some employees would have to be let go. But for others, it will increase demand for their products and services as more people can afford them, which should (in theory) create new job opportunities for the people let go from businesses priced out of the marketplace.

You free-market types are supposed to respect this and say, "all is working as it should be."

Your magical fairy dust doesn't apply in real life. They will lose more customers due to increased prices than they gain due to a small segment of their potential customer base getting a raise, believing anything else is economically illiterate fantasy.

If I had time or the photo posting ability on my phone I'd post a graph showing the deadweight loss to the economy that results from artificial price floors or ceilings such as minimum wages.

$11 is not that much in Massachusetts, so the negative impact will be marginal. But it will be negative, as it nearly always is.


Speaking of magical fairy dust, where is your evidence for such claims? Or is this a gut feeling?
2014-06-20 03:06:43 PM  
2 votes:

Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.


Maybe Massachusetts can hire you a geographer.
2014-06-20 02:54:08 PM  
2 votes:
We gotta start somewhere. And while Seattle made the splash I am glad My state will try to lead the way again on the national level. We are a rich nation, no need for people in this country to be toiling away in poverty.
2014-06-20 02:49:48 PM  
2 votes:

Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.


MA has been running surpluses since Patrick's been in office.
2014-06-20 02:15:25 PM  
2 votes:

Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.


You know, I pay taxes in Massachusetts, and I would be perfectly happy to see them raised slightly if it meant that my fellow massholes had a better standard of living.

Of course, this won't make my taxes higher.
2014-06-20 11:13:59 AM  
2 votes:
FINALLY

Our economic recovery depends on getting money down to the consumer. Mass just ensured their economic recovery
2014-06-21 03:19:24 AM  
1 votes:

jaerik: If the GOP were smart, they would...


Yeah I see the problem right there.
The argument that prices are intrinsically tied to the wages of the lowest earning workers is crazy. Every fiscal conservative should understand that prices are set where "the market will bear." That's your favorite catchphrase. The reason a burger cost say $4.25 is because that's what enough people are willing to pay for it. If he raises prices he doesn't make more money to cover increased costs, he makes less money because he's not selling burgers. If Bob could sell as many burgers for five bucks, he'd do it in a heartbeat. He's not waiting for an increase in minimum wage to make a bigger profit margin. But he can't, because there is not enough demand. This fact does not change when there is a change in overhead.
The GOP wants to make the argument that with an increase in cost, a businessman will set his prices so high that nobody can afford them anymore. Shame, just when the working poor get some spare cash to invest in the community grill, suddenly nobody can buy anything! All those hungry customers will be wandering around town with pockets full of useless money.
2014-06-20 07:22:32 PM  
1 votes:

Debeo Summa Credo: cameroncrazy1984: Debeo Summa Credo: When I argue against the idiotic idea that the govt is subsidizing walmarts wages it is a real world thing.

How are you arguing against it from a factual standpoint? The data is clear. You are arguing a theoretical which does not exist. Walmart workers get a lot of government subsidies. How can you argue against facts?

It's not theoretical at all. Walmart pays $8.81 per hour or whatever on average to hourly workers. It's you who believes the theory that absent govt benefits to some of those workers those wages would go higher.


They would, because there would be a higher minimum wage.

I don't see how this is so difficult to comprehend.
2014-06-20 07:14:40 PM  
1 votes:

Lionel Mandrake: Debeo Summa Credo: They would continue to pay fair market wages, which would go down absent the safety net as it would increase the number of "desperate" workers and the number of hours those workers would want.

Wow...that sounds like an awesome society


Didn't I read a book about that once? Something about grapes.
2014-06-20 07:12:22 PM  
1 votes:

Debeo Summa Credo: They would continue to pay fair market wages, which would go down absent the safety net as it would increase the number of "desperate" workers and the number of hours those workers would want.


Wow...that sounds like an awesome society
2014-06-20 07:11:43 PM  
1 votes:

Debeo Summa Credo: The government doesn't "take the obligation off Walmart to pay their employees more" because as you say they wouldn't pay anybody any more if there was no social safety net.


Yes they would, if there were a higher minimum wage. There's no contradiction there.
2014-06-20 06:06:08 PM  
1 votes:

Debeo Summa Credo: You are simplistically ignoring the fact that increased costs to employers will be paid by society, just like taxes.   It's not free.


Except for every single time that wages have been raised in the past.
2014-06-20 06:04:38 PM  
1 votes:

Debeo Summa Credo: I'm not so sure.  We've assumed as a society a minimum level of income (lets pretend its $15 per hour) is necessary and subsidize people who fall below that (whether they don't work at all or work at wal-mart at $8 per hour).   Unless you believe that absent that social safety net Walmart would have to pay its workers $15 per hour, then we aren't subsidizing walmart.  Rather we are subsidizing the low income worker, which is the intention.


Absent that safety net (remember, we didn't always have that) people also were not paid a living wage.

You're acting like this is a theoretical thing when in fact it is a real-world example.
2014-06-20 05:12:09 PM  
1 votes:

cameroncrazy1984: Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.

In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.


I'm not so sure.  We've assumed as a society a minimum level of income (lets pretend its $15 per hour) is necessary and subsidize people who fall below that (whether they don't work at all or work at wal-mart at $8 per hour).   Unless you believe that absent that social safety net Walmart would have to pay its workers $15 per hour, then we aren't subsidizing walmart.  Rather we are subsidizing the low income worker, which is the intention.

If you truly believe that the market would force Walmarts wages up to $15 absent govt benefits to their minimum wage workers, then by all mean lets cut those benefits (gradually) and let the market drive wage prices to their natural clearing rate.

I propose this all the time but nobody every takes me up on it.  Why?  Because the truth of the matter is that absent govt benefits to low and no income workers, labor supply to walmart would dramatically INCREASE as people at that level would seek additional employment to make up for the loss of govt benefits.  This increase would lower the wages walmart would need to pay.   So if anything, our social safety net increases the market clearing rate of low wage labor, the exact opposite of what liberals would have you believe.

If we do want to subsidize low income workers, the fairest and most efficient is EITC, food stamps, rent subsidies etc., not farking around with the labor market.
2014-06-20 05:08:44 PM  
1 votes:

cameroncrazy1984: Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.

In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.


Exactly

We can't do this anymore.

Its becoming too damn expensive for the tax payers to make up for what they should be getting in wages

Food stamps in a perfect world would be there to help those who are unable to work. Someone who works should get paid enough to live.
2014-06-20 05:00:56 PM  
1 votes:

sendtodave: raerae1980: My employer can certainly handle the addition in pay.

Then why does your employer have to be forced to pay more?


Because otherwise the taxpayers are. Why should we subsidize employers?
2014-06-20 05:00:00 PM  
1 votes:

Debeo Summa Credo: Cubicle Jockey: Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!

This statement implies that halving everyone's wages would be a net benefit to the economy. Is that your intent?

Letting the market decide wages, without price floors, would be optimal for the economy.   Wouldn't remotely reduce in anything close to halving wages.


In theory. In practice, that's just not the case. We end up subsidizing substandard wages with tax dollars. That is not optimal.
2014-06-20 04:31:46 PM  
1 votes:
hmm yes if I invent a complex enough analogy with enough numbers, I will definitely convince the guy who thinks the poor should be lining the piss gutters of the wealthy that a small increase in minimum wage won't destroy the economy
2014-06-20 04:30:13 PM  
1 votes:

Geotpf: Gonz: cman: Mass just ensured their economic recovery cratered their economy.

FTFY. This will be overturned by popular demand within 6 months, because businesses will quit hiring.

Then there will be no demand for goods and services, and then MA will watch their tax revenues dwindle, and then they'll look to states like Mississippi to see how to fix the problem.

[Citation Needed]

Maybe the price of a burger will go up by a dime.


If Wal-Mart paid their employees a livable wage you'd end up spending about a penny more on each item you buy. 

The going trend I see is that citizens are being pitted against citizens to try to dodge the important topics in this kind of debate and others. 

Most people generally want their community to succeed, and by extension their city / state / nation. Increasing the minimum wage is a step in that direction. Don't let the fear of "corporate backlash" prevent us from making choices that benefit us all.
2014-06-20 04:17:45 PM  
1 votes:
I just don't understand. Even to the casual observer, cutting taxes on the wealthy doesn't make fiscal sense, and doesn't help a demand side economy (which is what we have). 

What good is a large supply, if no one can actually buy it? 

Increasing the minimum wage only makes sense. If more people can buy, then more supplies can be sold. Making those at the bottom and middle of the ladder have a better access to the things they want makes goddamn sense. Everyone wins!

Folks, this is what you call long term fiscal responsibility. It might take awhile for it to be felt, but in the long term, it will help everyone.

A short term fiscal approach would be trickle down economics. Wherein, the wealthy have more money to maybe spend it on things to help boost the economy. Eventually, the loss of money through taxes cut for them will be felt and budgets will shrink. QOL goes down, but short term gains might go up. How this ever got lauded as being a sound fiscal approach is beyond me.
2014-06-20 04:17:07 PM  
1 votes:

chimp_ninja: Fun fact: Science is completely invisible to our resident Internet Tough Guy Economist.


At this point, it isn't believable that it's an accident that he conveniently never replies to any of the posts above citing evidence from formal economic studies.
2014-06-20 04:14:24 PM  
1 votes:

Debeo Summa Credo: The increased sales of products cannot, mathematically, be greater than the increased costs due to higher wages!


Yes it can. Very, very easily. That's why buying in bulk is a thing. Increased cost eats into profit margin. Cost can be passed on to consumers, but only at a rate the market will tolerate. If you increase the number of consumers (which everyone agrees a minimum wage hike will do), you also spread out the cost among the consumers, making it easier to bear the increased price.

If there are 50 people that buy a product at $1.00, we can assume that some of them would drop off if the price were raised to $1.50. So we're down to 40 consumers that will tolerate at $1.50 price. But we've increased the universe of consumers with the minimum wage increase, so now 60 people will buy. 60 times $1.50 is $90.00. When it was at $1.00, and the universe of consumers was smaller, the net income to the seller was $50.00. By increasing the price a small fraction, even though we lost some consumers, we gained others, and now the company is making a significant amount more.

Again, this is not a simple two-way street. If the minimum wage increase is too high, then the seller would have to increase prices too much and it might price out even the newly-made consumers. If the price increase is too low, the seller might not realize any increased profit.

This is why every major company hires economists to study these kinds of market factors and determine at what price a given good or service will sell in a given market. People do this every day. Acting like any minimum wage increase is automatically going to throw the economy out of whack and lead to widespread unemployment and price increases while only marginally affecting consumers' spending ability is as foolish as believing we could set the minimum wage at $1,000,000 and all be millionaires by tomorrow.
2014-06-20 04:07:07 PM  
1 votes:

Debeo Summa Credo: in the townhall link.


Seems legit.
2014-06-20 03:51:58 PM  
1 votes:

cameroncrazy1984: Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.

Okay, name one. Show us the work.


What really gets me about this argument is that it's no longer a theoretical excercise. Minimum wages exist and have been raised in the past. Not ONE SINGLE INSTANCE has caused an inflationary bump of statistical significance. Not one. Never. It doesn't happen. To argue that it does flies in the face of reality.
2014-06-20 03:49:07 PM  
1 votes:

Debeo Summa Credo: I do find it funny that you easily dismiss a townhall link, yet seem to think a website called "raisetheminimumwage.org" and a link from Berkeley have credibility.


Wait.  You think an article from Town Hall is more reliable than a professional publication in The American Economic Review from two Princeton economists that happens to be hosted on a Berkeley server, among other locations?

I think I've found our problem.
2014-06-20 03:48:15 PM  
1 votes:

Debeo Summa Credo: yet seem to think a website called "raisetheminimumwage.org" and a link from Berkeley have credibility.


Dude, there's ACTUAL DATA at both of those links. See, unlike Townhall and Investopedia, I showed my work. I provided you links to the raw data.

Also, it's freakin' Berkeley. One of the most respected academic institutions in the world. And it hasn't been a center of left-wing thought since the 60s. You should really get with the times.

 

Debeo Summa Credo: Arguing against that is like arguing against the existence of global warming.


I never argued that all minimum wage increases led to a net benefit. Obviously you could set a minimum wage too high. I said this:

"Which is not to say that there is not a point of diminishing returns. There obviously is."

You're arguing against a strawman position and consistently failing to address the fact that the links I have provided have actual empirical data to back them up.

You're the one with his fingers in his ears saying, "nope, the world isn't warming, the science is wrong," when I'm pointing to charts of temperature readouts that are climbing.

Although I am pleased to see such an eloquent example of the Rovian dictum to accuse your interlocutor of what you yourself are guilty of. Your ideological bias is strong, ergo you must try to point out my ideological bias. Fine. I'll admit it. I'm a big, stinking lizard commie. You got me. But that's why I'm not telling you just to believe me or google random macro terms. I'm telling you there's the data in black and white. Don't believe me, double check it.
2014-06-20 03:44:56 PM  
1 votes:

Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: much in Massachusetts, so the negative impact will be marginal. But it will be negative, as it nearly always is.

http://www.raisetheminimumwage.com/pages/job-loss

Don't bother. Your data is outdated and based on flawed methodological assumptions, just like the research done on austerity.

DERP!! Your data is biased and would only be believed by left wing idiots.

Google "deadweight loss of minimum wage".

I know how stupid this was, my fellow Farkers, but I did it. I farking googled what DSC told me to.

Allow me to present the first five links. It's like a Buzzfeed listicle, but this will actually be funny.

1.  http://www.khanacademy.org/economics-finance-domain/microeconomics/co n sumer-producer-surplus/deadweight-loss-tutorial/v/minimum-wage-and-pri ce-floors

First we have a Khan Academy lesson in microeconomics. For all its faults, Khan Academy isn't totally terrible. Check out the comments.

2.  http://finance.townhall.com/columnists/politicalcalculations/2013/03/ 0 3/the-deadweight-loss-of-minimum-wage-hikes-n1524753/page/full

A Townhall link. Nice.

3.  http://catalog.flatworldknowledge.com/bookhub/reader/2992?e=coopermic r o-ch10_s02

Another ideologically biased site without much in the way of raw data that consistently fails to account for changes in the market as a result of the higher minimum wage. It focuses solely on the labor-work transaction (in which an employer believes she has a set amount of work that needs to be performed). It does not take into account an increase in demand (and therefore an increase in the amount of socially necessary labor to be performed).

4.  http://www.investopedia.com/terms/d/deadweightloss.asp

Oh investopedia. More ideology, low actual numbers.

5.  http://en.wikipedia.org/wiki/Deadweight_loss

It's sad when Wikipedia is the best source on the list.

Now, let's look at some actual data!

http://davidcard.berkeley.edu/papers/njmin-aer.pdf

Oh my God! Could it be that the reason Townhall and Investopedia don't have any concrete examples of a deadweight loss is because THE FARKING DATA DOESN'T SUPPORT THAT THEORY? Quelle surprise!

Conservatives, do not fark with the quants. They have your number. They have calculated exactly how farking wrong you are.

You are obviously biased and unwilling to put facts and logic ahead of left wing partisanship (I know, welcome to fark, right?)

I do find it funny that you easily dismiss a townhall link, yet seem to think a website called "raisetheminimumwage.org" and a link from Berkeley have credibility.

Every farking Econ textbook agrees that there is a deadweight loss from price floors and ceilings in the vast majority of instances. Arguing against that is like arguing against the existence of global warming.


So many people agree that you just can't seem to find one.
d23 [TotalFark]
2014-06-20 03:38:41 PM  
1 votes:

cameroncrazy1984: Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?

The consumer doesn't. The taxpayer does.


The taxpayer sure as hell does when Wal Mart has their thumb on the scale and pays below cost of living.
2014-06-20 03:38:29 PM  
1 votes:

Debeo Summa Credo: Why should an employer pay someone $11 per hour when that person is only bringing $10 per hour in benefit to the employer?


Because that's never how it actually happens.  An employee's value is always higher than their pay.  If you listen to many corporate employers there's no bottom to how little people should be paid and it has nothing to do with an individual's value and everything to do with a the degree with which a line on a chart shoots upwards.  The law says if you want to take a person's waking hours to work for your profit, they have to be paid a minimum of X.  Sorrybro.

If you have a problem paying people $11 an hour, you need a better business model.  That goes for "mom and pop shops" and Wal-Mart alike.  If Wal-Mart will be financially crestfallen having to pay their workers (all of which on average work hard) a living wage, then it's time for Wal-Mart to face market reality itself, one in which they have to play by civilized society's rules.
2014-06-20 03:38:27 PM  
1 votes:

cameroncrazy1984: chimp_ninja: Debeo Summa Credo: 1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply

"Sara Lemos has conducted a comprehensive review of the 30 or so academic papers on the price effects of the minimum wage. She concludes: "Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%"; and "[t]he main policy recommendation deriving from such findings is that policy makers can use the minimum wage to increase the wages of the poor, without destroying too many jobs or causing too much inflation." Neumark and Wascher agree with Lemos's assessment about the likely price effects (while disagreeing with her conclusions about the overall usefulness of the minimum wage): "Both because of the relatively small share of production costs accounted for by minimum wage labor and because of the limited spillovers from a minimum wage increase to wages of other workers, the effect of a minimum wage increase on the overall price level is likely to be small." Other recent research by Daniel Aaronson, Eric French, and James MacDonald on restaurant pricing, a sector with a high share of low-wage workers suggests that the price effects are likely to be lower than the upper bounds suggested by Lemos. Aaronson, French, and MacDonald "find that a 10 percent increase in the minimum wage increases prices by roughly 0.7 percent."

Source: Schmitt, J. (2013) "Why Does the Minimum Wage Have No Discernible Effect on Employment?"

So, oooh.  0.4-0.7% price increases in exchange for lifting hundreds of thousands of people over the poverty line.  Everybody panic.

Mmm, science.


Fun fact: Science is completely invisible to our resident Internet Tough Guy Economist.

Why, a 0.7% increase would raise the price of a Big Mac meal from $5.69 to $5.73!  Society would surely crumble at such an insult, leaving our minimum-wage overlords to pick at our corpses.
2014-06-20 03:36:45 PM  
1 votes:

Lucky LaRue: d23: Well, it's corporations right now like Wal-Mart that are the takers at the moment.  They've offloaded huge amounts of their labor costs on the public.

When I see a statement like this, my reaction is "of course".  Am I missing some part of your argument, or do you think it's unfair for a price to be set so that the consumer pays the expense (of labor, shipping, storage, etc.al)?


The consumer doesn't. The taxpayer does.
2014-06-20 03:32:34 PM  
1 votes:

Debeo Summa Credo: CPennypacker: Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.

Society as a whole has to foot the bill of picking up the slack of poor wages, so it makes sense for society to set a price floor. If you need labor, you have to pay X, not just for the benefit of the person being hired but also to ease the burdon that purson puts on society. Labor is an input, inputs cost money and unfortunately can be and is regulated.

I agree that it is unfortunate that it is regulated(in regard to minimum wages). It's harmful regulation that does more damage to society than it helps.

The government shouldn't decide the price of an input, the market should.

Why should an employer pay someone $11 per hour when that person is only bringing $10 per hour in benefit to the employer?


Because we don't live in a purely free market. There's too much moral hazard.

Maybe the workers should just unionize then? Thats the free market solution right there. Consolidate the supply and jack up the price.
2014-06-20 03:31:09 PM  
1 votes:

Debeo Summa Credo: If you want welfare or foodstamps or EITC so higher income people will subsidize lower income people, that's another topic.

It's completely independent of the economics of minimum wages and fair market wages


Wow...
2014-06-20 03:26:27 PM  
1 votes:

Debeo Summa Credo: Obama's Reptiloid Master: Debeo Summa Credo: much in Massachusetts, so the negative impact will be marginal. But it will be negative, as it nearly always is.

http://www.raisetheminimumwage.com/pages/job-loss

Don't bother. Your data is outdated and based on flawed methodological assumptions, just like the research done on austerity.

DERP!! Your data is biased and would only be believed by left wing idiots.

Google "deadweight loss of minimum wage".


How can data be biased? Because it doesn't confirm your unscientific worldview?
2014-06-20 03:22:22 PM  
1 votes:

Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.


Okay, name one. Show us the work.
2014-06-20 03:22:06 PM  
1 votes:

Debeo Summa Credo: whidbey: This is getting tiresome.

1. There is no evidence that raising a minimum wage will suddenly "make everything more expensive"
2. People deserve to be paid decent wages or they shouldn't be working

It is getting tiresome.

1) every economist in the world will tell you that the cost of inputs will work its way into the cost of outputs, either directly as producers raise prices or indirectly as increased costs drive producers or potential producers from the market, reducing supply
2) people deserve to be paid whatever they can mutually agree with an employer. If you think you deserve $11 but can only get $9, don't take the job. Nobody owes you a living.


1. Appealing to authority is a well-employed fallacy. Thanks for playing. You have no proof that wage increases cause price increases. Drop the busted talking point, please.
2. Or labor will organize as in this case and get a mandate passed that employers hire at $11 an hour. Suck it up.
2014-06-20 03:18:54 PM  
1 votes:

CPennypacker: Enjoy your $11 hamburgers, Massholes


1-media-cdn.foolz.us

That is not how economies work stupid human.
2014-06-20 03:18:50 PM  
1 votes:

Lucky LaRue: Obama's Reptiloid Master: Lemme lay some math on you.

WidgetCorp makes widgets, hence the name. WidgetCorp can make 100 widgets for $1,000. WidgetCorp then sells these at wholesale prices to ConMart. ConMart pays $1,050 for every 100 widgets. In order to break even, ConMart has to sell widgets for a price of $10.50. They mark it up to $19.99, which covers overhead for having the store open, marketing, workers salaries, etc. On that basis, ConMart makes $5.00 for every widget sold.

With the minimum wage increase, ConMart now makes $3.50 on every widget sold. Their profit margin goes down. ConMart hires an economist who tells them that the market will probably bear a $0.50 increase in widget prices. Sure, some outlying consumers might be priced out of the widget market, but most consumers will gladly shoulder a $0.50 increase. To top it off, the minimum wage hike has not priced in more consumers than ConMart lost, who can now afford the $20.49 cost of widgets. All of a sudden, ConMart's profit margins are even higher than before.

LOL!  Math is *hard*!


Huh?  If ConMart is selling more units at $4 profit, they may make more money than selling fewer units at $5 profit.

This isn't rocket science.  The minimum wage increase isn't applied to one company.  Many other companies would also raise the pay of many workers, and for people right at the poverty line, nearly all of that additional salary is likely to be expended.

Math isn't that hard.  When you go back for your GED in Law, make sure to sign up for some after you finish North American Geography.
2014-06-20 03:14:59 PM  
1 votes:
2014-06-20 03:05:34 PM  
1 votes:

Debeo Summa Credo: Why "suck it red state workers"? This just means there will be more jobs for red staters. Red state workers should be psyched!!


Yeah, all those service jobs just gonna move out of state
2014-06-20 03:04:08 PM  
1 votes:

CPennypacker: Enjoy your $11 hamburgers, Massholes


They won't go to $11 just because the minimum wage was raised. Sure, prices will increase some and there will be fewer jobs than there would be otherwise, and there will be an overall deadweight loss to the economy. But it doesn't mean prices will double overnight.
2014-06-20 02:13:10 PM  
1 votes:

Dusk-You-n-Me: Perhaps we can celebrate this success without shiatting all over our fellow citizens who happen to live in states that vote red, who could also certainly use a raise.


Then they should stop voting for assholes.
2014-06-20 01:01:01 PM  
1 votes:

Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.


I don't understand your logic here. Employers paying their employees more is a good thing, considering how expensive everything is nowadays. I get paid *slightly more* than min wage, more money in my pocket means I can pay my student loans on time, and make other financial commitments. Why would this be bad? My employer can certainly handle the addition in pay.
2014-06-20 12:56:10 PM  
1 votes:

Lucky LaRue: Massachusetts has finally conceded that the only way they can pay for their liberal government bloat is to collect more revenue, which they can only do if there are higher wages to tax.

It's brilliant, really.


Yeah, look at those red states, with their total lack of poor people and magnificently balanced budgets!!
2014-06-20 12:41:22 PM  
1 votes:
This will ruin our Commonwealth just like taking the lead on same-sex marriage did
vpb [TotalFark]
2014-06-20 11:57:16 AM  
1 votes:

cman: FINALLY

Our economic recovery depends on getting money down to the consumer. Mass just ensured their economic recovery


There is no supply without demand.
2014-06-20 11:47:22 AM  
1 votes:
Still not a living wage.
2014-06-20 11:21:10 AM  
1 votes:
www.chicagonow.com
 
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