Economics 101: Raise Minimum Wage and Jobs Decrease

Originally posted by steve22
Minimum wage is a temporary resolution...it must be constantly updated so that it is still effective. Yes, this may contribute to inflation somewhat, but so do many other things. Businesses would love to repeal the minimum wage because then labor would get less and less expensive, meaning more $$ for them! Consider countries with no minimum wage laws, they have people sewing soccer balls for 17 Cents an hour.

Wages DO NOT adjust themselves for inflation...a person desperate enough for a job will work for next to nothing, is it ethical for that to be allowed to happen?

Is it ethical for someone to take on that position? The personal choice in the US is on the downfall, but there are always opportunities. If you cannot get help from yourself, that's why you have churches, family and other sources of private help, rather than taking it from others who have no intention of redistributing their wealth. That's not greed, but personal choice.

If a person has very limited skills, or doesnt have the mental capacity to find a better job then that person would be stuck taking a horribly paying position. I'm sure many of us have had a job that they have hated but continued to do because they needed the money. And also, if the minimum wage laws were abolished or fall by the wayside, churches would be overwhelmed with people coming for a handout...

right....the system is messed up, but the aftermath of the system would be worse...so lets continue down the wrong road...

Originally posted by df1

I tried to explain this to some of my friends before it was passed, it's really simple economics. The economy corrects to the inflated wages, and the correction is not fun for anyone.

You confuse simple economics with economics for the simple. The amount of inflation caused by a couple dollar increase in the minimum wage will no more cause rampant inflation than an added drop of water will overflow the Atlantic Ocean.

And most libs, especially in congress, seem to have mastered the "economics for the simple" quite well, as we'll see below.

The businesses paying the minimum wage will either have to raise prices, cut workers hours or both to compensate for the additional costs. If enough businesses have to do this it creates a ripple effect throughout the economy.

Real effects of minimum wage increase

But even if the matter is settled in Congress, it isn't settled at all in Atchison, and Robert Iles's drive home is proof. Every stop he made on his ride home revealed a different facet of how complicated the minimum wage can be in the parts of America where, instead of a debatable issue, it is a way of life.

At the store where Iles works, for instance, the owner thinks the minimum wage should be increased as a moral issue but worries about which employees' hours he will have to cut to compensate.

At the store where he bought the chimichangas, the cashier who makes $6.25 worries that a raise will force her out of her subsidized apartment and onto the street.

At the convenience store where he bought gas, the owner worries that he will have to either raise prices, angering his customers, or make less money, "and why would I want to make less money?"

So, all can see that the issue and its effects are not quite as simple as the libs would have us all believe. Call yourselves the "party of the little people" all you want, but you might want to make sure your ideas are actually helping those same people (or any people) before passing the laws.



[edit on 2/12/2007 by centurion1211]

Originally posted by df1

I tried to explain this to some of my friends before it was passed, it's really simple economics. The economy corrects to the inflated wages, and the correction is not fun for anyone.

You confuse simple economics with economics for the simple. The amount of inflation caused by a couple dollar increase in the minimum wage will no more cause rampant inflation than an added drop of water will overflow the Atlantic Ocean.

The US government controls the money supply and the value of the dollar via the FED to the detriment of everyone excepting the very rich. The capitalists constantly sell this fear that socialists will come in and impose a centralized economy controlled by the government. This is pure nonsense, these capitalists have already imposed a centralized economy controlled by the central government. Who controls the money supply and the value of the dollar should be of more concern to every citizen.

This minimum wage legislation that is constantly harped about is a canard designed to fool the ignorant. Every citizen should have greater concern over who controls the money supply and the value of the dollar, because the people currently driving this train are not operating in the best interest of the American people. I would imagine that the capitalist money brokers are over joyed at seeing the common man bickering over the false flag of "minimum wage" legislation while they continue screw us with the FED.

I am well aware of how out economy is run by a private cabal of a bankers.
It's irrelevant to this conversation though.



For those you saying "you try and live on min wage" you don't understand what I mean by correction.

The Economy will first adjust to the shock of increased wages, then it will adjust to the new Min Wage . No , new, wealth, is , created. Prices go up along with the wages the effect you wanted will vanish in the long run and the correction will be bad in the short run.


Why Min Wage Hikes are bad.


Mr. Slave is making 5.25(?)
Mr. Guy is making 7.25
Mr. Dude is making 15.00

Mr. Employer likes Cartoons.

Corrupt Globalist Government trying to crash the value of our dollar and kill our country.....Raises Min Wage to 7.25 over 5 years.

The common man thinks it's a great idea.
More money means more wealth....... right?
WRONG.

Mr. Slave now gets paid 7.25
Mr. Guy is now making slave wage
Mr. Dude is making 15.00

MR Employer has to raise prices to compensate for the increase in wages by Mr. Slave. This is a fact of real business.

Mr. Guy has just lost value on his money
Mr. Dude has just lost value on his money
Even Mr. Employer has just lost value on his money.
That increase in wages Mr. Slave saw is now being neutralized by prices.

So Now MR. Employer is in a bit of a bind. He has to raise prices again, but how can he stay competitive?

Mr. Guy no longer having the buying power he once had demands a raise
So does Mr. Dude.
Mr. Guy is wondering why he is getting paid a slave wage to do non slave labor. Mr. Dude is feeling the effects of increased prices at home.

If Mr. Employer raises wages across the board, he has to raise prices again.
And he can't raise prices or he will lose business.

So, he goes to Mr. Dude, and hands him a pink slip. Sorry Mr. Dude.
Mr. Employer will have to fill that position with someone cheaper. Or cut labor overall. Mr. Guy may get a small raise, but he will get an increased work load. to compensate fro Mr. Dude. And Mr. Slave will have more demands on him as well.

Mr. Dude is stunned, lots of people are facing the same thing. He can't find a job anymore at the wage he was making ,and he barely got by on that. Unemployment is up, welfare is up. More people are signing on to social programs. Which will be on the tax payer to make up for. Now there is less money on the market because of taxes. Mr. Employer is losing too much business.

He goes to Mr. Guy , sorry, I have to cut your wages back to slave labor.
Mr. Guy takes his paycut, what else is he going to do?
This all devalues the money.

Now it's cheap to export but kills the consumer on imports. This is a country that depends on the whole world to make it's slave labor.

Mr. Employer can't afford to pay the prices for the imports needed to run his business. Boards go on the windows.
And now he's out there looking for a new job. Competing against the people he just fired.
All those companies shipping jobs overseas are happier than a pig in **** though. It wasn't the Republicans that signed NAFTA. Not that it matters they are both working towards the same goal.

Horaaay Wage Hikes! (for politicians who will never have to explain this to the voting public who doesn't understand it anyway)

This effects the middle class more than anyone. The elite class isn't effected by these things. The Slave class just expands. The middle class is the one getting screwed over.

The questions should be . . .

Who will benefit the most from and increase on wages . . .

Who will lose at the end from the increases . . .

On the first . . . if you are a teen . . . but if you are a person with a family to support the new minimum wage will no be enough . . .

But if immigrants get amnesty they will be the first to benefit from it

On the second one if you are on a salary you are to lose money as the standard of living will be raised base on that new minimum wage.

Yes . . . minimum wage is just an illusion like our entire economy right now.

You do not need to be an economist to add one and one minus three.

Everyone is looking at the minimum wage issue from a business's POV...think about it from another angle: Higher wages = more money in people's hands to spend = people spending more money at businesses = those businesses making more money

Its a huge cycle of money. Businesses will all eventually get back what they put out, especially the smaller businesses who depend on consumers and not gov/corporate contracts.

Originally posted by steve22
think about it from another angle: Higher wages = more money in people's hands to spend = people spending more money at businesses = those businesses making more money

No necessarily, when the minimum wage goes up even if is just a fractions the enitire cost of living will be raised, that will leave who with more money in their hands?

You? no me, when you are under a salary you end losing as the standard of living gets up, this nothing than manipulation by the system we have . . . we are a nation of big spenders with to much credit.

You got a littler wages increase but guess what !!!!! your eggs, milk and butter is going to cost you a littler bit more very soon.

Well said Awake and All Seeing.


As with anything, you have to follow the money trail. Who supports this legislation in congress. Democrats. Who is a prime supporter of the Democrats. Labor Unions. The labor unions have the most to gain. Especially now when many are failing.



Union members, Not Minimum wage Earners Benefit When the Minimum Wage Rises!!!


Think about it. Does Mr. Slave support political parties? No. And Mr. Guy only does because his union forces him to pay union dues that eventually fund canidates and lobbists. It certainly isn't their boss. Labor is a commodity. It is a cost to business. This can be big corporations or more commonly mom and pop shops barely scraping enough together for themselves.


Until you have actually run a business you probably won't truely understand. And for those of you that hate big business, remember this is who provides jobs that can have employees for the government to tax.

This has been an enlightening thread. I live below the poverty line by my own choice and I don't even want to go into that, but I fealt I should say it.

Being someone who has made around minimum wage for much of my life I was somewhat distrubed by the idea being presented by the OP. But this thread has turned me around. Raising minimum wage may not help the poor. But keeping it the same won't help them either. So should we abolish it and have factory workers working for 20 cents and hour? Because we all know that major corps move their operations overseas just to get those .20/hour employees. They certainly would lower pay across the board. And prices probably would go down as a result. But do we want our economy to become like Indonessia or Mexico(no insult meant to my example nations)?

So WHAT IS THE SOLUTION?!?

I don't know! Do any of you?

Vas

Originally posted by steve22
Everyone is looking at the minimum wage issue from a business's POV...think about it from another angle: Higher wages = more money in people's hands to spend = people spending more money at businesses = those businesses making more money

Uh, and now the "extra money in people's hands" must be used to buy goods that are now more expensive than they were before.

Net result, no gain for the workers.

And the article I posted did look at this issue from the worker's point of view. Try reading it again if you need to.

Originally posted by MrMedic
Well said Awake and All Seeing.


As with anything, you have to follow the money trail. Who supports this legislation in congress. Democrats. Who is a prime supporter of the Democrats. Labor Unions. The labor unions have the most to gain. Especially now when many are failing.



Union members, Not Minimum wage Earners Benefit When the Minimum Wage Rises!!!


Think about it. Does Mr. Slave support political parties? No. And Mr. Guy only does because his union forces him to pay union dues that eventually fund canidates and lobbists. It certainly isn't their boss. Labor is a commodity. It is a cost to business. This can be big corporations or more commonly mom and pop shops barely scraping enough together for themselves.


Until you have actually run a business you probably won't truely understand. And for those of you that hate big business, remember this is who provides jobs that can have employees for the government to tax.

What that article fails to mention is people need to get laid off for the rest of the group to see those wage increases.

by Awake and All Seeing

What that article fails to mention is people need to get laid off for the rest of the group to see those wage increases.

Actually this gives them more bargaining power when thay are negotiating their contracts with the management. "The unskilled are making more so we need to make more." so on an so forth.

Originally posted by MrMedic

by Awake and All Seeing

What that article fails to mention is people need to get laid off for the rest of the group to see those wage increases.

Actually this gives them more bargaining power when thay are negotiating their contracts with the management. "The unskilled are making more so we need to make more." so on an so forth.

And management will pay the wages.
But only if they can cut jobs and further break the union. Wonder who is going to win there?

And you must think really highly of union jobs, it doesn't take people with incredible aptitude to do them. Business can train people to do monkey work faster, and they can outsource. Unions no longer have any advantages that's why there are so few left in this country. Compared to even 20 years ago.

But lets say everyone gets that increase in pay, the Business will have to make up the loss in prices. Which eventually corrects.
Wealth is a lot like matter. It is neither created or destroyed.
It only changes hands/forms.

When wages are increase nationally by means of artificial manner and not by the individual employers that used raises to compensate the people that are productive, it will put the jobs and the employers at disadvantage.

Meaning that only the more productive employees will stay employ while others less productive will lose their jobs to make for the national increases.

The result will be that the cost of products and services, materials, labor, and expenditures like taxes and profits will feel the result.

You do not have to be an economic genius to know what comes next . . .If you increase one item then everything down the line will suffer the increased, raise wages and the consumer will pay for that increase.

That is call inflation

You get more money but you will pay more for the products, services on and on down the line.

Increases in wages will not make the poor any wealthier or more productive.

Too many people confuse the "minimum Wage" with a "living wage".


To those that support a minimum wage, why not support a minimum wage of $25/hr? Wouldn't that solve the problems of poverty?

Well I didn't read all of the other posts but my idea of this is that if minimum wage goes up, prices on goods must go up as well. and I agree with whoever had the mr. guy mr. dude mr. slave idea. My dad makes 30$ an hour which right now barely covers it. If minimum wage goes up, but his wage, stays the same, then he looses money. People whos wages did go up don't have more money because all the other prices have gone up as well.

Originally posted by CAConrad0825
Government controls of the level of income will not only crowd out private investment but will also increase the unemployment rate. Messy Logic? Let's take a look at a living wage country: Germany. 17% unemployment nearing the rates of unemployment during the US great depression...not messy logic, but horrific big government fact.

How many of those figures are due to immigrants (muslim or other)? I'm pretty sure most of the unemployed in central Europe aren't native Europeans. They have good welfare, and the poorer people of poorer nations are seeking it (like in France...the riots, remember?). So toss that out the window.

Originally posted by Awake and All Seeing
Why Min Wage Hikes are bad.


Mr. Slave is making 5.25(?)
Mr. Guy is making 7.25
Mr. Dude is making 15.00

So you admit it's slave labor. And you think that's necessary this day-in-age? I can see where you come from. CEOs will cry because they can only make 1.5mil this year and not 1.8mil.

Originally posted by Awake and All Seeing
Wealth is a lot like matter. It is neither created or destroyed.
It only changes hands/forms.

That's a drab thought. So no matter how hard people work, they'll never get a better life (in the same 'class' bracket). And here I thought America was on it's way to providing ideals to make everyone's standard of living higher. Guess that's why we keep dropping in the 'standard of living' race.