Minimum Wage Laws

Discussion in 'Political Opinions & Beliefs' started by redeemer216, Jun 11, 2019.

  1. redeemer216

    redeemer216 Well-Known Member

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    It's been major point of contention for awhile that the US minimum wage law has not risen enough over the past years or that it should be raised to $15/hr. I tend to disagree with the second just based on the major fact being the large differences in the cost of living across the states.
    https://www.minimum-wage.org/wage-by-state

    Instead...

    I am of the opinion we keep the current laws, but instead provide a mandate that states must follow in that:
    Every two years states would be required to update their minimum wage relative to an algorithm composed of the following:
    -Means testing according to the cost of living plus
    -Inflation.

    And... Currently states are not required to have a minimum wage. The federal minimum wage should be abolished and instead mandates provide the backbone that states use themselves to set their local wages. This may even have the added benefit where states compete for a lower cost of living to get their respective minimum wages down.
     
    Last edited: Jun 11, 2019
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  2. Belch

    Belch Well-Known Member

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    Wake me when you can get the necessary constitutional amendment.
     
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  3. redeemer216

    redeemer216 Well-Known Member

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    Is this not a discussion forum? Do I need an ammendment to ask questions or to maybe start a discussion?
     
  4. Reiver

    Reiver Well-Known Member

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    I see the rationale for differences in minimum wage rates. Britain, for example, employed the Wages Council system which set minimum rates at industry level. The idea is that, as productivity rates differ, minimum rates should differ too.

    I'd argue, however, that the switch from minimum wage rates to living wage rates changes the motivation. The former is focused on reducing market failure. We know, through job search frictions, firms have wage making power. We therefore know that the minimum wage is required to reduce underpayment (and can increase employment levels). However, with the living wage, I'd argue that the analysis shifts. We can refer, for example, to how it can be deliberately used as part of structural change to the economy. The profit from low wage labour is deliberately curtailed as part of a shift towards sustainable employment which isn't reliant on corporate subsidies. In that context, variation in rates can be problematic as they reduce the incentives to change behaviour.
     
  5. Belch

    Belch Well-Known Member

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    You're right. It's just that the minimum wage has been discussed to death here. Your idea jumps right over every argument against minimum wage laws that have been made in the past, so it's like a new set of clothes on the same old bum.
     
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  6. Steady Pie

    Steady Pie Well-Known Member Past Donor

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    I agree. Rural Kansas is not NYC. Northumberland is not London. Tawoomba is not Sydney.
     
    Last edited: Jun 11, 2019
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  7. DennisTate

    DennisTate Well-Known Member Past Donor

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    If President Trump were to coopt some of Andrew Yang's ideas there would be a total
    paradigm shift in the USA economy..... Greatly increased demand for workers willing to
    do renovations, work in restaurants or do landscaping would tend to increases wages for
    jobs that the relatively poor tend to be doing......

    http://www.politicalforum.com/index.php?threads/andrew-yang-for-president-2020.557098/
     
  8. Mac-7

    Mac-7 Banned

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    Just curious but where are you on the trump tariffs?
     
  9. Collateral Damage

    Collateral Damage Well-Known Member

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    What percentage of the current workforce here in the US, actually makes FMW? What age group is the largest demographic of the percentage? What level of experience and/or skill does that group have? What would be the overall impact of that increase?

    Know your subject before you jump in with a feel-good idea....
     
  10. redeemer216

    redeemer216 Well-Known Member

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    I wasn't aware I proposed any specific minimum wage. Very strange response as we already have one and many are advocating for something much more impactful to the market, a $15/hr wage across the board.
     
    Last edited: Jun 11, 2019
  11. 61falcon

    61falcon Well-Known Member

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    $15 per hour is not going to make anyone in any of our fifty states fat and sassy!!!It is barely a living wage anywhere.
     
  12. Collateral Damage

    Collateral Damage Well-Known Member

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    Perhaps you need to reread your post.
     
  13. Collateral Damage

    Collateral Damage Well-Known Member

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    It is not the markets requirement to provide someone with a 'living wage'. If 'you' don't like how much you are being paid, then do something to make yourself worth more.
     
  14. AKS

    AKS Well-Known Member

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    Reduce "underpayment"? LOL. WTF does that even mean? How would you measure it? Who decides what is fair? Why should the government even have a say in the price of labor?
     
  15. Spim

    Spim Well-Known Member Past Donor

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    I wouldn't mind seeing the minimum wage pushed up a little bit but I think $15 an hour is ridiculous and quite frankly I'm not even sure if we need to be concerned about the difference between Kansas city and New York City. You can travel 15 miles from my house which is in a middle-class neighborhood 3-400k homes and be in the poor neighborhoods 150k homes and then travel 15 miles further and be in the uber wealthy area 750k to 5 million Its all relative to zip code not just state lines.

    I don't need a second job but I'll be honest with you if they raise the minimum to $15 an hour you're going to see employers firing their minimum wage workers because they're no longer worth 15 and it will create employment opportunities for people like me who actually have the skills but don't really need the money but for $15 an hour I just might get a second job. I bring a lot more to the table than a $9 an hour worker I almost never miss work I'm crazy reliable 30 years at the same job I don't need health insurance and I have some marketable skills. I just prefer to sit at home on the weekends because $9 an hour doesn't motivate me, but 15 might do the trick. And I'll probably need the extra cash because the cost of goods and services is going to jump.

    Many (not all) $9 an hour workers are generally useless, just bodies doing average work at best, and not always reliable. If an employer is going to be forced to pay 15 they're either going to hire somebody more competent or eliminate the position altogether.

    We only have one person at my workplace that makes under 10 and he holds a broom, runs errands, nice fella but not too bright.

    If the boss is forced to pay him 15 he's just going to tell the rest of us to pick up the slack and fire that guy, maybe we'll each get a dollar-an-hour raise, but for $9 he's handy to keep around, makes our jobs a tad easier.
     
    Last edited: Jun 11, 2019
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  16. MolonLabe2009

    MolonLabe2009 Banned

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    The government shouldn't be in the wage fixing business.
     
  17. Reiver

    Reiver Well-Known Member

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    Basic labour economics. If a firm is a wage taker, with wages determined by market supply and demand criteria, then wage will be determined by marginal productivity criteria. Any wage making power will lead to a wage below that objective measure.

    It's then an easy empirical approach to measure underpayment. You could do it yourself. A wage regression with controls for education and experience will allow you to derive an understanding of wage determination. Underpayment can be measured through, for example, stochastic frontier analysis.

    Of course this is just supply and demand analysis and not the purpose of my post. That refers to how this type of analysis isn't sufficient for living wage debate.
     
  18. AKS

    AKS Well-Known Member

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    This is absurd. How could wage be determined by marginal productivity? Does the price of electricity vary by production? Of course not! Labor cost, like any raw input, is (Or should be) set by pure free market forces. When artificial controls are imposed the result is a net negative. We see this over and over again.
     
    Last edited: Jun 12, 2019
  19. Mac-7

    Mac-7 Banned

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  20. Mac-7

    Mac-7 Banned

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    Reiver loves to dazzle us with bullshit that says nothing

    Its his MO
     
  21. garyd

    garyd Well-Known Member

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    Minimum wage laws increase inflation. What ever level you set the minimum wage at you're living hand to mouth until you make about two to 2.5 times that. So make minimum wage 15 buck an hour an the only thing you'll accomplish pushing a hell of a lot more people closer to poverty.
     
  22. Reiver

    Reiver Well-Known Member

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    Sounds like you don't understand supply and demand. For a graphical analysis, we would just need to refer to the marginal revenue productivity of labour. For an empirical analysis, we just need to know human capital variables and factors such as compensating differentials (captured by occupational dummy variables)

    Ramble that shows no understanding of supply and demand. We know the empirical evidence: the latest meta-analysis, confirm that minimum wages do not create disemployment effects (which you'd theoretically expect if firms have wage making power, as there isn't then a market wage and a binding minimum rate would just lead to a movement up the firm's labour demand). Indeed, estimates range from statistically insignificant to positive.

    As I said, this is a side issue. I already know that you don't understand how supply and demand is applied to minimum wage analysis. That debate is now old hat. Neoclassical theory is in agreement with heterodox approaches, after all. The debate is now over the living wage. Those focused only on equity issues are essentially ignoring the importance of eliminating rent for structural change to the economy.
     
  23. Reiver

    Reiver Well-Known Member

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    Myth! Lemos (2008, A Survey of the Effects of the Minimum Wage on Price, Journal of Economic Surveys, Vol 22 Issue 1, pp 187-212), for example, finds that price effects are small and that "policy makers can use the minimum wage to increase the wages of the poor".
     
  24. AKS

    AKS Well-Known Member

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    When you increase the minimum wage you increase marginal costs. Period. It's absolutely no different than any other input increasing in cost.
    Any empirical evidence to contrary (which you don't site) would hinge on the elasticity of the market.
     
  25. AKS

    AKS Well-Known Member

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    This would be dependent on the number of unskilled workers that are employed.
     

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