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Tilting at Windmills

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June 21, 2006
By: Kevin Drum

THE MINIMUM WAGE....The Wall Street Journal reports that Democrats are planning to make the minimum wage a centerpiece of their campaign this year:

Democrats aim to make the minimum wage a maximum political problem for Republicans this election year.

The minority party fired the first shot last week, when the House Appropriations Committee broke with its Republican leadership and approved a $2.10-an-hour increase as part of a spending bill for labor, health and education programs. Speaker Dennis Hastert responded by putting the measure on hold possibly until after the election.

But Democrats are poised to come back this morning and offer the same wage amendment as part of a second appropriations bill funding science and law-enforcement agencies.

"I gave the Republicans fair notice that we will attach it to anything we can," said Wisconsin Rep. David Obey, the committee's ranking Democrat. Sen. Edward Kennedy (D., Mass.) went to the floor of Senate yesterday and proposed to add the same amendment to a pending defense-authorization bill.

Good for them. Republicans should be ashamed of themselves for blocking a minimum wage increase for the past decade, sending it to an all-time postwar low. Anything that makes them squirm over this is a good idea.

There are arguments against raising the minimum wage, of course, and the usual one is an appeal to simple economics: if the price of unskilled labor goes up, then the demand for unskilled labor will go down. Low-wage workers will be laid off and unemployment among the minimum wage population will go up.

This is technically correct, but it delicately avoids saying anything about magnitudes, which is what really matters. Does unemployment go up 5% after increasing the minimum wage a dollar, or does it go up .01%? And are there countervailing factors that affect this, human beings not being pig iron ingots, after all?

This really can't be settled by an appeal to theory. Empirical studies are what matters, and they mostly seem to show that modest minimum wage increases have either no effect on low-wage employment or else a very tiny effect, most of it centered on teenagers, not adults. A long history of changes to the minimum wage at the state, local, and national level in the United States, for example, gives little reason to think that small increases in the minimum wage have any serious negative impact but does suggest that these changes have, in fact, increased the wages of the working poor.

Likewise, Britain introduced a national minimum wage for adults in 1999 and it appears to have had no negative effect on employment at all. On the positive side, however, it has increased the wages of low-skill workers.

At this point, the bulk of the evidence suggests that modest minimum wage increases (a) provide a measurable benefit for poor workers, (b) have little or no impact on employment levels, and (c) are paid for by the customers of low-wage industries, which means the cost is broadly dispersed among all of us.

So, given that the benefits are clear and the harm appears to be minimal or zero, I think it's now up to minimum wage opponents to make a clear empirical case against raising the minimum wage if they want to be taken seriously. In a perfect world, there might be other policy instruments for helping the poor that work better the Earned Income Tax Credit is the usual favorite but we don't live in a perfect world and it's probably not a good idea to put all our eggs in one basket anyway. As Brad DeLong says:

The right solution, of course, is balance: use the minimum wage as one part of your program of boosting the incomes of the working poor, and use the EITC as the other part. Try not to push either one to the point where its drawbacks (disemployment on the one hand, and administrative error on the other) grow large. Balance things at the margin.

That sounds right to me. I'll change my mind if minimum wage opponents can point to a serious recent literature review suggesting a consensus that the minimum wage hurts more than it helps, but until then count me as a supporter.

Kevin Drum 1:26 PM Permalink | Trackbacks | Comments (175)

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Comments

why must the government set the minimum wage at all?

Posted by: Brian on June 21, 2006 at 1:31 PM | PERMALINK

why must the government set the minimum wage at all?

Posted by: Brian on June 21, 2006 at 1:33 PM | PERMALINK

I think it's now up to minimum wage opponents to make a clear empirical case against raising the minimum wage if they want to be taken seriously.

How about this: You're using the coercive power of the state to force individuals to pay more for something than it's worth. If an hour of labor is worth $3, then the market should settle on that rate.

Put another way, how about a bill that forces liberal bloggers to pay a minimum of $3,000 for any computer, regardless of quality? That would be absurd, of course, because the price of computers should be determined by market pressures. There's no reason the commodity of labor should be treated any differently.

You're also interfering with the rights of workers to contract freely. It might make sense to somebody to work for $5 an hour under the right circumstances (for instance, suppose it's a really good resume line that will be profitable later). We shouldn't interfere with the ability of competent adults to form contracts.

Posted by: American Hawk on June 21, 2006 at 1:33 PM | PERMALINK

Republicans should be ashamed of themselves for blocking a minimum wage increase

Really, you could have just omitted the last six words.

Posted by: Gregory on June 21, 2006 at 1:36 PM | PERMALINK
The usual argument against a minimum wage increase is an appeal to simple economics: if the price of unskilled labor goes up, then the demand for unskilled labor will go down.

An argument that, as it rarely discusses the amount of unemployment is supposedly expected to decrease compared to the increased wages, is apparently grounded on the premise that it is (for a simple example) superior if everyone seeking work is employed making $450/month than if 90% of the work-seeking population is employed making $1000/month, and the employed pay 10% taxes to support the 10% that aren't employed as if they made $450/month (yes, I'm allowing for a full half of the tax going to bureaucratic waste and inefficiency).

Posted by: cmdicely on June 21, 2006 at 1:39 PM | PERMALINK

I agree that most studies show that MODEST minimum wage increases have more positive than negative effects. So long as the data still trends that way I have no problem with a modest increase (and even indexing to inflation).

On the flipside...the positive effects are also modest -- why? Because most of the working poor make more than minimum wage anyway...

Posted by: Nathan on June 21, 2006 at 1:39 PM | PERMALINK

This is technically correct, of course, but it carefully avoids saying anything about magnitudes, and that's what really matters. Does unemployment go up 5% after increasing the minimum wage a dollar, or does it go up .01%? And are their countervailing factors that affect this, human beings not being pig iron ingots, after all?

Kevin, you didn't mention the other argument increasing the minimum wages causes inflation. This leads the feds to increase interest rates which causes investment to go down. The decline in investment causes layoffs and therefore more unemployment results. So that's another argument raising the minimum wage causes more unemployment.

Posted by: Al on June 21, 2006 at 1:40 PM | PERMALINK

please pardon the double post.

Posted by: Brian on June 21, 2006 at 1:40 PM | PERMALINK
How about this: You're using the coercive power of the state to force individuals to pay more for something than it's worth.

Sorry. While, if it were true, that might be the starting point of a good argument, it doesn't work against the minimum wage, which sets the minimum price, but doesn't compel any transactions, and therefor compels no one to pay more for anything than it is worth.

Posted by: cmdicely on June 21, 2006 at 1:41 PM | PERMALINK
Put another way, how about a bill that forces liberal bloggers to pay a minimum of $3,000 for any computer, regardless of quality?

As the major problem with such a bill is that it discriminates against speech based on content, rather than mere economic policy concerns, its a bad example and completely disanalogous.

You're also interfering with the rights of workers to contract freely.

As a contract to do an illegal thing is generally void, virtually every law, by definition, limits the ability of people, workers and otherwise, to contract freely. That's not really a very good argument.

Posted by: cmdicely on June 21, 2006 at 1:44 PM | PERMALINK
Kevin, you didn't mention the other argument increasing the minimum wages causes inflation. This leads the feds to increase interest rates which causes investment to go down. The decline in investment causes layoffs and therefore more unemployment results. So that's another argument raising the minimum wage causes more unemployment.

Sure, that's an argument about how it could, in theory, cause more unemployment. Lacks any actual evidence that it does, however.

Posted by: cmdicely on June 21, 2006 at 1:46 PM | PERMALINK

Well, another measure to look at wages is how much time does it take to earn enough money to buy something. In my case, in 1983, it took about 64 hours to pay for my shelter (a two-bedroom apartment in West Covina, CA); in 2006, it takes about 51 hours to pay for my shelter (a five-bedroom home in Ventura County). So my time-to-shelter ratio is looking pretty good.

But I recognize that renting is often more expensive than owning in many ways.

Posted by: Darryl Pearce on June 21, 2006 at 1:48 PM | PERMALINK

How about Congress should be shamed because last week they increased their wage; have to keep up with the cost of living, you know. If Congress gets a wage hike, so should the minimum wage.

Of course raising the minimum wage has almost no effect, many, many burger joints pay more than the minimum in order to attract workers.

Never the less, the Republican heartlessness should be used to beat them into the ground!

Posted by: Tigershark on June 21, 2006 at 1:48 PM | PERMALINK

The marginal benefit to the working poor is the reason to increase the minimum wage because it makes a big difference in their lives. The marginal disincentive to the rich is almost zero. The marginal ability of people to complain about communism/socialism/big brother is larger than most calculators' displays.

Posted by: Hostile on June 21, 2006 at 1:51 PM | PERMALINK

The trolls are out in force, and dumber than ever. Chickenhawk, why not let the market dictate tax rates? In a tight labor economy, employers are going to pay the minimum that they are required. The current minimum wage has 46% less purchasing power than it did 40 years ago. You may be OK with that, Chickenhawk (after all, Mom doesn't charge you to stay in the basement, right?), but many of us think it sucks. Congress is charged with "promot(ing) the general welfare" of the people, and this is a textbook example.

And Al, you are as dumb as a bag of rocks. Inflation??? U thought you guys were trumpeting the claim that "only 3%" of workers earn minimum wage? Yet increasing the wages of 3% of the workforce is going to cause inflation? Smarter monkeys, please.

Posted by: MeLoseBrain? on June 21, 2006 at 1:52 PM | PERMALINK

I need a minimum wage job in Ventura, CA, one of my favorite places, so I can purchase a five bedroom home there.

Posted by: Hostile on June 21, 2006 at 1:55 PM | PERMALINK

Conservatives seldom have a problem using "the coercive power of the state" to force individuals to do what they want in all kinds of other ways, like sexual morality, travel to Cuba, etc. But when it involves fixing a real social problem? Well that's different all of a sudden.

Posted by: 2.7182818 on June 21, 2006 at 1:57 PM | PERMALINK

the bulk of the evidence suggests that modest minimum wage increases ... are paid for by the customers of low-wage industries, which means the cost is broadly dispersed among all of us.

Communist.
.

Posted by: Grand Moff Texan on June 21, 2006 at 1:59 PM | PERMALINK

How about this: You're using the coercive power of the state to force individuals to pay more for something than it's worth.

Sorry. While, if it were true, that might be the starting point of a good argument, it doesn't work against the minimum wage, which sets the minimum price, but doesn't compel any transactions, and therefor compels no one to pay more for anything than it is worth.

Any particular transaction might not be compelled by a minimum wage law, but when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.

Posted by: Brian on June 21, 2006 at 2:00 PM | PERMALINK

That any increase in the minimum wage will necessarily lead to an increase in unemployment is only 'technically correct' if we assume that firms make all of their hiring decisions on the basis of the wage rate. Anyone who has ever held a job in the private sector knows that, in fact, firms make their hiring and investment decisions on the basis of how they think business will be in the future.

As far as minimum wages increases causing inflation is concerned, I think someone is confusing the minimum wage with the 'prevailing wage.'

Posted by: Rufustfyrfly on June 21, 2006 at 2:01 PM | PERMALINK

why must the government set the minimum wage at all?

Because if you set it, no one would notice.

Btw, I am formally announcing a minimum speed limit of 112 mph for the greater Austin area, so y'all watch yer ass.
.

Posted by: Grand Moff Texan on June 21, 2006 at 2:01 PM | PERMALINK

Kevin,

Republicans don't do empiricism. Where have you been for the last five years?

Posted by: Monkey on June 21, 2006 at 2:02 PM | PERMALINK

"The Wall Street Journal reports that Democrats are planning to make the minimum wage a centerpiece of their campaign this year."

If this so, then it means that they are admitting that they have no, or very little chance, of taking either House of Congress in the midterm election.

Who gives a sh*t about raising the minimum wage? I think the last Pew or Gallop Poll had this issue clocking with in less than 1% of people who thought it important. You guys are going to be very, very, very depressed come November 8th.

Posted by: Chicounsel on June 21, 2006 at 2:02 PM | PERMALINK

If an hour of labor is worth $3, then the market should settle on that rate.

If we priced goods and services the way you price labor, no one would ever make a profit.
.

Posted by: Grand Moff Texan on June 21, 2006 at 2:03 PM | PERMALINK

Can an economist here point us to an empirically derived supply and demand curves for unskilled labor? Without such information, anybody can say anything she wants, and there is no way to refute her.

Posted by: nut on June 21, 2006 at 2:04 PM | PERMALINK

Kevin, you didn't mention the other argument increasing the minimum wages causes inflation.

Like if Al runs with scissors he might fall down and break his neck and poke his eye out.

I told you Drum was a communist.
.

Posted by: Grand Moff Texan on June 21, 2006 at 2:04 PM | PERMALINK
Any particular transaction might not be compelled by a minimum wage law, but when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.

Who is making you hire someone whose labor is worth less to you than the minimum wage?

Posted by: cmdicely on June 21, 2006 at 2:37 PM | PERMALINK

Why won't those ungrateful little peons just shut up and take the pennies their benevolent employers toss them for scrubbing toilets and flipping burgers? If they'd had any gumption at all, they'd have gone to college so they could get good jobs, like working at Frito-Lay. After all, those Cheetos don't make themselves, which reminds me..

Hey, ma! Toss me down another bag! And not those goddamn flamin' hot ones! The spices make my pee-pee hurt when I....umm, never mind!

Posted by: Anti-American Chickenhawk on June 21, 2006 at 2:37 PM | PERMALINK

Chicounsel: Who gives a sh*t about raising the minimum wage? I think the last Pew or Gallop Poll had this issue clocking with in less than 1% of people who thought it important. You guys are going to be very, very, very depressed come November 8th.

Of course, the Republicans are running on gay marriage and flag burning, which come in even lower. As for immigration, the announcement of hearings shows that, even when the GOP controls the House, the Senate, and the White House, they still can't pass effective legislation from any perspective (i.e. either pro- or anti-immigration, build a wall, whatever).

Who's going to be depressed?

Posted by: Rick on June 21, 2006 at 2:40 PM | PERMALINK

Oh, wow. This thread reminds me of a song:

The Ballad of Jayne

He robbed from the rich
And he gave to the poor
Stood up to the man
And gave him what for
Our love for him now
Ain't hard to explain
The hero of Canton
The man they call Jayne

Our Jayne saw the mudders' backs breakin'
He saw the mudders' lament
And he saw the magistrate takin'
Every dollar and leavin' five cents
So he said "you can't do that to my people"
He said "you can't crush them under your heel"
So Jayne strapped on his hat
And in 5 seconds flat
Stole everythin' Boss Higgins had to steal

He robbed from the rich
And he gave to the poor
Stood up to the man
And gave him what for
Our love for him now
Ain't hard to explain
The hero of Canton
The man they call Jayne

Now here is what separates heroes
From common folk like you and I
The man they call Jayne
He turned 'round his plane
And let that money hit sky
He dropped it onto our houses
He dropped it into our yards
The man they called Jayne
He stole away our pain
And headed out for the stars

He robbed from the rich
And he gave to the poor
Stood up to the man
And gave him what for
Our love for him now
Ain't hard to explain
The hero of Canton
The man they call Jayne.

Posted by: Darryl Pearce on June 21, 2006 at 2:43 PM | PERMALINK

At this point, the bulk of the evidence suggests that modest minimum wage increases (a) provide a measurable benefit for poor workers, (b) have little or no impact on employment levels, and (c) are paid for by the customers of low-wage industries, which means the cost is broadly dispersed among all of us.

The next question is whether a 40% increase is in the neighborhood of the "modest" increases investigated in the empirical literature.

Posted by: johnchx on June 21, 2006 at 2:44 PM | PERMALINK

Who is making you hire someone whose labor is worth less to you than the minimum wage?

cute bit of semantics, that.

Posted by: Brian on June 21, 2006 at 2:45 PM | PERMALINK

I've got mine. Fuck them. So there.

Posted by: American Chicken Fucker on June 21, 2006 at 2:47 PM | PERMALINK

Al just does hit and runs, and fails to acknowledge the responses to his, uh, "arguments" unless he can regurgitate talking points.

Until you start to have a discussion, Al, your irrelevant.

Posted by: Boorring on June 21, 2006 at 2:47 PM | PERMALINK

Its got zero effect on the economy as long as the federal minimum wage is below the average prevailing minimum wage.
(you cant find jobs even advertised that start at the minimum wage unless they include tips that bring them above it)

No- Most union contracts are tied to the minimum wage and give any union member an instant raise when the minimum wage is raised (by whatever amount)

Thats the only reason democrats support a minimum wage increase.

Posted by: Fitz on June 21, 2006 at 2:54 PM | PERMALINK

A couple of comments.

Most businesses actually make employment decisions on how many units of labor they need to run their business. Increasing the minimum wage really has no effect on this type of employment directly.

However, there is a "maximum" value of some employment, where raising the minimum wage literally does make employment unworthwhile, eliminating those jobs. This is theoretically. But the number of these jobs are so small, on focusing on them is silly.

Finally, it's not just 8 million. True, that's the number of minimum wage workers, but there's a lot of people making less than 6.50. A minimum wage increase to 7 and a quarter is a substantial wage for them.

A quarter an hour is 20 every two weeks. Not bad at all.

Posted by: Karmakin on June 21, 2006 at 2:54 PM | PERMALINK

This is why immigration reform has stalled.

Raise the minimum wage all you want.

They'll just flood the market with more illegals, and not bust the employers.

(if minimum wage increases cause unemployment, that's because employers have found workers who are not covered by the minimum wage law to employ instead).

Posted by: Osama_Been_Forgotten on June 21, 2006 at 2:56 PM | PERMALINK

Al baby, while the Fed is gassing over the threat of petrochemical induced inflation, the real elephant in the room is deflation.

Wise up.

Posted by: Keith G on June 21, 2006 at 2:56 PM | PERMALINK

Any particular transaction might not be compelled by a minimum wage law, but when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.

Simple solution -- if you'd have to pay more for that labor than it is worth, don't hire someone to do that labor. Do it yourself. That's the genius of capitalism -- if you value the money more than the service you'd acquire in exchange, keep the money and do the service yourself.

Posted by: Stefan on June 21, 2006 at 2:56 PM | PERMALINK

A min. wage job in CA will give you a gross income of about $1200 a month. A 2 bed 1 bath apt. in Fresno, CA (A city on the low end of rents in the state) runs between $800-1000 a month.

Food, clothing and health-care are a luxury most can't afford.

Posted by: nutty little nut nut on June 21, 2006 at 2:59 PM | PERMALINK

Proposed new slogan for the Democratic Party:

The Republican personality is like a rat's nest of piss.

Posted by: cld on June 21, 2006 at 3:00 PM | PERMALINK

The next question is whether a 40% increase is in the neighborhood of the "modest" increases investigated in the empirical literature.

Most of the studies are on more recent and more modest increases. However, we did increase minimum wage 90% and 33% in 1950 and 1956 respectively.

In 2004 86% of Americans were in favor of a $1.30 (25%) increase in the minimum wage.

A 40% increase would probably affect (directly and indirectly) the wages of 15 to 20% of the population. It would effect women and some minorities even more.

Posted by: rewolfrats on June 21, 2006 at 3:03 PM | PERMALINK

Alan Blinder recently published a survey of economist of what they though a 10% increase in the minimum wage would do to employment.

The average response was it would cause minimum wage employment to drop 1%.

this means that out of 100 minimum wage employee
99 would receive a 10% wage increase and one(1) would lose their job.

If my objective function is to improve the economic welfare of minimum wage employees I will take that tradeoff every time.

Posted by: spencer on June 21, 2006 at 3:04 PM | PERMALINK

why must the government set the minimum wage at all?
Posted by: Brian on June 21, 2006 at 1:33 PM | PERMALINK

Why must the government set the minimum number of people I can murder at all?

Posted by: Osama_Been_Forgotten on June 21, 2006 at 3:05 PM | PERMALINK

Kevin-

I disagree with the framing.

Increasing minimum wage reduces turnover (and training costs) and stimulates demand by putting more money into the hands of people that spend it.

Consider also that by increasing minimum wage you make the opportunity cost of not working greater. It means that if you would rather economize if you were paid $3 and work less, you may work more if you made $6 per hour. You are increasing market participation by raising the floor - not decreasing it. Empirical studies have shown that this effect is real.

Finally, the degree to which labor or capital has to eat the additional cost of the price floor (in either unemployment or reduced profits) is a function of the elasticity of demand. When San Francisco raised the minimum wage to $8.50 there was no adverse effect on market activity, even though the increase was passed on in the form of higher costs to consumers. Consumers determined that to pay the additional premium was better than going to Oakland and getting it cheaper. I gather too that consumers don't consider restaurants in Oakland to be perfect substitutes for restaurants in San Francsico.

So while your model look perfectly reasonable, it doesn't necessarily bear out.

(Intuitively for some of the same reasons that people that make 20 times what others make don't buy 20 times the number of hot dogs. Supply and demand curves are important conceptual frameworks, but are sometimes -even oftentimes- misleading.)

Posted by: Saam Barrager on June 21, 2006 at 3:07 PM | PERMALINK

If cheap labor is the only thing keeping you solvent, you're not solvent.

Posted by: cld on June 21, 2006 at 3:09 PM | PERMALINK

half of the state's currently have a minimum wage above the federal amount..

why doesnt someone take a look at the two groups and compare?


Posted by: thisspaceavailable on June 21, 2006 at 3:10 PM | PERMALINK

Brian: Any particular transaction might not be compelled by a minimum wage law, but when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.

No one (knowingly) hires someone whose labor is worth less than they are paying for it. In an intelligent business, labor is always worth more than it is paid - that's part of how profit enters the picture. If a laborer only performed $5 worth of work, rather than hire them for $7 they would simply not be hired.

What you are really saying is that "one has to pay more for labor than one might otherwise have to pay", which is different. In the unusual situation that all other factors of the business lead to losses, and only the differential between the value of the labor and the cost of the labor generates profit, this might in theory drive some businesses out of business. That has never, however, proven to be the case; businesses do not position themselves to take losses on all inputs other than labor.

What the minimum wage does cause, and this has been with relative strength empirically verified, is that businesses will now employ more valuable workers rather than less valuable workers. In other words, at a minimum wage of $7.50 the cheap labor formerly charging $5 will now be bypassed for the cheap labor formerly charging $7 (on account of greater skills). However, this effect too has proven to be small.

Posted by: S Ra on June 21, 2006 at 3:14 PM | PERMALINK

"Put another way, how about a bill that forces liberal bloggers to pay. . ."
Personally, I'm more favorably disposed towards a law requiring right-wing trolls to pay $1,000,000 before they will be allowed to post anything on this site.

Posted by: chasmrich on June 21, 2006 at 3:15 PM | PERMALINK

half of the state's currently have a minimum wage above the federal amount..why doesnt someone take a look at the two groups and compare?

Those comparisons have been done. The states with higher minimum wage, such as Massachusetts and New York, generally are much healthier economically, have higher employment, and contribute more in taxes than do states, such as Alabama and Mississippi, that have the lowest possible minimum wage. Correlation is not causation, of course, but this does discredit the claim that raising the minimum wage will somehow devastate the economy.

Posted by: Stefan on June 21, 2006 at 3:17 PM | PERMALINK

No one (knowingly) hires someone whose labor is worth less than they are paying for it.

Hollywood excepted, of course....

Posted by: Stefan on June 21, 2006 at 3:18 PM | PERMALINK

Good for the Democrats trying to raise the minimum wage!

This will compensate for them trying to lower the wages of middle class Americans by bringing in 140 million more illegals, guest workers, and crud immigrants from the third world to vote Democratic.

Posted by: Myron on June 21, 2006 at 3:19 PM | PERMALINK

How about this: You're using the coercive power of the state to force individuals to pay more for something than it's worth.
Posted by: American Hawk on June 21, 2006 at 1:33 PM | PERMALINK

How about this: Music publishing companies are using the coercive power of the state (in the form of copyright) to force individuals to pay more for their products than they're worth.

How about this: Oil companies are using the coercive power of the state to force individuals (by blowing them up) to take less for their resources (land and drilling rights) than they're worth.

How about this: Drug companies are using the coercive power of the state to force individuals (by bribing senators into extending patents, and embargoing imports) to pay more for their products are worth.

How about this: Defense contractors are using the coercive power of the state to force individuals into paying more (for Iraq reconstruction) for what their products are worth.

How about this: Republican Senators are using the coercive power of the state to force individuals into paying more (for their salaries) than their labor is worth.


We shouldn't interfere with the ability of competent adults to form contracts.

I'm sure that this could apply to gay civil unions as well. But apparently, not in the Republican mind.

If an hour of labor is worth $3, then the market should settle on that rate.

It's already been well established that labor is worth maybe 75 cents a day, in Bangladesh. So why don't we just do away with minimum wage altogether, and outsource everything to Bangladesh. Hey, those employers are actually free to move there if they want. Hey, Bush's tax plan actually rewards companies with discounts for doing this. Hey, if more people earned only 75 cents a day, then wow, our nation's tax revenue would be what - 20 bucks a year? Then America could REALLY be great! And think of our economy, since 2/3 is driven by consumer spending. Imagine how much spending 280 million Americans would be doing earning 75 cents a day!

. . .Put another way, how about a bill that forces liberal bloggers to pay a minimum of $3,000 for any computer, regardless of quality? . . .There's no reason the commodity of labor should be treated any differently.. . .

That's an apples-to-oranges comparison, you haven't measured comparative quality, nor can you prove any equivalency between $3000 computers and $3 per hour. And of course, you dishonestly limit your bill to "Liberal Bloggers" - when minimum wage will apply equally to everyone - all employers. Not just liberal bloggers, conservative trolls, or sweatshop operators.

A better analogy would be - what about a bill that imposed a minimum price on computers of $30 regardless of quality. Nobody would ever run into that limit, of course, so it would really be irrelevant to the computer selling market. Just as raising the minimum wage from $5.15 to $8 would also have no measurable impact on the labor selling market.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 3:20 PM | PERMALINK

why doesnt someone take a look at the two groups and compare? -thisspaceavailable

http://ideas.repec.org/p/nbr/nberwo/5224.html

Shows a decrease in employment, and is a refutation of earlier research showing an increase in employment. (They used different methods.)

The idea was to look at Fast Food restaurants in New Jersey and Pennsylvannia after New Jersey raised its minimum wage by 18%. The states share a long urbanized boundary, making them a nice comparison.

Posted by: Saam Barrager on June 21, 2006 at 3:21 PM | PERMALINK

when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.
Posted by: Brian on June 21, 2006 at 2:00 PM

HANGING IS TOO GOOD FOR PEOPLE LIKE YOU!!

Posted by: seriously? on June 21, 2006 at 3:22 PM | PERMALINK

relatively few people get paid minimum wage--the uneducated and those that lack experience. it seems like a misguided strategy to fight for an issue that applies to few people who actually vote.

dems need two to three 'big' issues and two to three emotional issues. like, republicans have defense and taxes and also have abortion and immigration.

min. wage is a small issue but i'm not sure it's emotional enough to really get voters to the polls.

Posted by: rob on June 21, 2006 at 3:28 PM | PERMALINK

Any particular transaction might not be compelled by a minimum wage law, but when hiring someone whose labor is worth less than the min. wage one has to pay more for that labor than it is worth.

For God's sake, stop hiring street corner hookers, then.

Posted by: Stefan on June 21, 2006 at 3:28 PM | PERMALINK

You can use the minimum wage as a thumbnail benchmark of the economy of a state. The higher the minumum wage, the more robust and stable the economy,


http://66.102.7.104/search?q=cache:NJPRl3MAmpgJ:www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf+state+minimum+wage+levels&hl=en&gl=us&ct=clnk&cd=1&client=firefox-a

Posted by: cld on June 21, 2006 at 3:30 PM | PERMALINK

Shame on me for not reading the entire post.

I just refuted the very first part of Kevin's post after somehow not reading the part where he himself refuted it.

My bad.

Posted by: Saam Barrager on June 21, 2006 at 3:31 PM | PERMALINK

Rick:

While the performance of the GOP Congresscritters, especially the Senate, has been depressing from a conservative's point of view being the majority takes alot of the sting out. Thank God for the House-Senate Conferences where the Senate can be minimized.

Since the point of my comment was that the Dems have already thrown in the towel on the midterm elections by making raising the minimum wage the "centerpiece" of their campaign, I assuming that your side will be more depressed about being in the minority for the last 2 years of the Bush Administration than me.

Posted by: Chicounsel on June 21, 2006 at 3:32 PM | PERMALINK

There's obvioulsy an upper limit beyond which raising the minimum wage would not help an economy, but are there any serious studies that try to determine it?

Would $30 an hour be too high?

Posted by: cld on June 21, 2006 at 3:34 PM | PERMALINK

the Dems have already thrown in the towel on the midterm elections by making raising the minimum wage the "centerpiece" of their campaign

In your opinion, chicounsel, what *should* be the centerpiece of the Dems' campaign? Really. I want to hear your answer.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 3:35 PM | PERMALINK

The CENTERPIECE? Oh Gawd, we're gonna get creamed at the polls again in November.

Yes, I think the minimum wage should be increased. But to make something like this the centerpiece of a campaign is to make the typical Democratic mistake of focusing on the mushroom on the first oak to the left of the maple on the eastermost NNW corner of the south side of the forest, and missing trees and forest entirely, not to mention the narrative.

The narrative is opportunity, community, justice. A campaign to raise the minimum needs to be about the NARRATIVE, not the policy.

The best opportunity to lay waste to the right wing machine in 25 years, and the technocrats are going to blow this one too. I can't watch. It is too horrifyingly sad. Not to mention that we will be mired in more years of unchecked Bushwhacking.

The stakes are too high. Please DC insiders, don't screw this up.

Posted by: bluewave on June 21, 2006 at 3:39 PM | PERMALINK


If we priced goods and services the way you price labor, no one would ever make a profit.

Um, that is how things are priced. Every business prices their product or service based on what they think their product is worth.

Posted by: Andy on June 21, 2006 at 3:40 PM | PERMALINK

I mean, every business prices their product or service based on what they think the market will pay for their product.

Posted by: Andy on June 21, 2006 at 3:42 PM | PERMALINK

Well, I read the first twenty-some comments, and the trolls couldn't come up with any documented social harms from the minimum wage. Mostly, as usual, they tried to change the subject and make more conjectural claims of problems, for which there is apparently even less evidence than the evidence for increased unemployment. Faith over facts, as usual.

To some extent, of course, they don't believe that the minimum wage does any harm, they just object to imposing a very small cost on employers to aid the working poor. That, thank God, is still an enormous political loser in this country, and I await its adoption by the Republican party eagerly.

Posted by: David in NY on June 21, 2006 at 3:48 PM | PERMALINK

In your opinion, chicounsel, what *should* be the centerpiece of the Dems' campaign? Really. I want to hear your answer.

Better yet, what centerpiece could the Dem's employ that Chicocounsel will think gain them control of Congress?

Posted by: Edo on June 21, 2006 at 3:50 PM | PERMALINK

Who gives a sh*t about raising the minimum wage? I think the last Pew or Gallop Poll had this issue clocking with in less than 1% of people who thought it important. You guys are going to be very, very, very depressed come November 8th.
Posted by: Chicounsel

That's right, min wage is not nearly as important as gay marriage, flag burning, non-binding resolutions hailing the troops, keeping Terri Schiavo alive, have I missed any?

You rightards crack me up. Complain about a poll's "liberal bias" until one says what you want it to say, than it's the gospel truth.

Posted by: MeLoseBrain? on June 21, 2006 at 3:52 PM | PERMALINK

If we raise the minimum wage, then women will be encouraged to work, which will discourage them from having babies, which will mean that children will be raised with one or two siblings max, and become spoiled, and this will contribute to the moral decay of society.

Clearly, we should have a maximum wage law for everyone who works "those kinds of jobs", and that maximum wage should be zero. And Halliburton should get a no-bid contract to manufacture the chains and whips. We can borrow ten trillion dollars from China to fund that, because deficits don't matter.

Posted by: American Fuck on June 21, 2006 at 3:54 PM | PERMALINK

Two centerpieces would do:

Bush and Republicans want us to be in Iraq indefinitely.

Bush and Republicans don't care about you -- they want to give big tax breaks to families with four to ten million dollars while they refuse to raise the minimum wage to help people with the price of gas.

Posted by: David in NY on June 21, 2006 at 3:56 PM | PERMALINK

You should have some numbers to back up the arguments. Generally, even Republican conservative scholars that have conducted studies concede there are very small effects on unemployment due to an increase in the minimum wage. Florida is a recent example. They raised the minimum wage by popular vote in the same election that Kerry lost despite a heavily financed campaign how this would increase unemployment and cut down on jobs and lead to bankruptcies and higher prices at restaurants. One year later, restaurants who said they were going to be devastated by this, the most affected industry, couldn't point to anything that had changed and new restaurant growth was larger than ever.

Enough with the anecdotes. Here are some studies. The CATO Institute, which absolutely hates the minimum wage and are the most critical of it, has a study of the national increase in the minimum wage from $3.35 to $4.25 an hour - a big 27% increase. For men, women and blacks the increase in unemployment they found was 7.3 percent, 11.4 percent, and 10.0 percent for teenagers; and for adult high school dropouts they are 3.1 percent, 5.2 percent, and 6.7 percent. (Why teenagers and high school dropouts? - They are the groups most affected, why the subgroups - so they can show bigger numbers.)

http://www.cato.org/pubs/regulation/reg18n1c.html

San Francisco recently boosted its minimum wage to $8.50 and hour - surely disastrous.

* The new policy did not affect employment growth in affected businesses -- primarily restaurants, where the fulltime employment increased and job tenure improved.

* Average prices for restaurant menu items increased slightly --approximately 3 cents on the dollar -- relative to their business counterparts on the east side of San Francisco Bay. For all of California, which at $6.75 has a higher minimum than the national $5.15, those who receive the minimum wage are 83.1% adults and 60.7% work full time to support themselves and their families.
http://repositories.cdlib.org/iir/iirwps/iirwps-111-05/

Because of the incredibly low minimum wage many states now have higher state minimums. Job growth has been faster in those states. I know, not a causal factor but could simply reflect who would want to live in states that don't support their poorest workers.

David Neumark, a minimum wage critic from Michigan State University, found that higher minimum wage cities reduced their poverty rates.

Neumark concluded that cities where the living wage is 50 per cent higher than the federal or state minimum see poverty drop 1.8 percentage points.

There are losers, too. According to Neumark's projections, the 10 per cent of workers who earn the least in these cities would experience a seven per cent increase in unemployment.

On balance, however, "it looks like the winners win more than the losers lose," Neumark said.

http://www.ppic.org/main/publication.asp?i=147

Neumark does say that additional public policies are needed to help the 10% not helped by raising the minimum wage.

http://www.ppic.org/main/publication.asp?i=620

Posted by: Easter Lemming Liberal News on June 21, 2006 at 3:56 PM | PERMALINK

Give me your tired, your poor, your huddled masses yearning to breathe free. The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me. I lift my lamp beside the golden door.

Except for shitholes like Myron's grandparents. Send them back.

Posted by: LadyLiberty on June 21, 2006 at 4:00 PM | PERMALINK

No one (knowingly) hires someone whose labor is worth less than they are paying for it.

Hollywood excepted, of course....
Posted by: Stefan

Not to mention the Republican party.

Posted by: MeLoseBrain? on June 21, 2006 at 4:01 PM | PERMALINK

Who gives a sh*t about raising the minimum wage? I think the last Pew or Gallop Poll had this issue clocking with in less than 1% of people who thought it important. You guys are going to be very, very, very depressed come November 8th.
Posted by: Chicounsel

Really? Polls show that minimum wage increases are popular. In a Pew Research Center Poll in December, 86% supported raising the federal minimum to $6.45. That must be where you are getting your feel that this is a non-issue.

In all, 17 states and the District of Columbia covering 45% of the U.S. population have set minimums above the federal rate of $5.15. That has helped cut the number of workers earning the minimum or less (for those earning tips) from 4.8 million in 1997 to 2 million last year, or 2.7% of hourly earners, the Bureau of Labor Statistics says. States don't exceed federal standards except from popular demand.

I hope all Republicans are as deluded as you.

Posted by: Easter Lemming on June 21, 2006 at 4:03 PM | PERMALINK

bluewave,

The best opportunity to lay waste to the right wing machine in 25 years

whether or not this is the "best" opportunity is debateable, however due to recent gerrymandering the 2006 midterm elections are not a particularly good opportunity.

Posted by: Edo on June 21, 2006 at 4:03 PM | PERMALINK

For God's sake, stop hiring street corner hookers, then.
Posted by: Stefan

How's Chickenhawk gonna get laid?

Posted by: MeLoseBrain? on June 21, 2006 at 4:07 PM | PERMALINK

..due to recent gerrymandering the 2006 midterm elections are not a particularly good opportunity.
Posted by: Edo on June 21, 2006 at 4:03 PM | PERMALINK

...not to mention diebold and other republican electoral fraud (like tossing democrat voter registrations, etc.) - not to mention the massive legal and illegal bribery going on by lobbyists - not to mention the rightwing dominated corporate media.

Dems are fucked.

The only message that the Mighty Wurlitzer will let the Dems get out are the ones that make them look bad when taken out of context or framed by republican talking points.

Had they decided to run on the Impeach Bush platform, I'd say they had a chance.

I'm interested in what Chicounsel thinks the Dems platform should be though.

Probably something like; "bow towards crawford five times a day and pray."

Posted by: American Fuck on June 21, 2006 at 4:09 PM | PERMALINK

The market should drive wages and not government.

Posted by: Charles on June 21, 2006 at 4:11 PM | PERMALINK

They Might Be Giants has a great song back in the day called Minimum Wage. It has a great bullwhip crack sound effect after the chorus was bellowed. As in, back to work, wageslaves!

Posted by: Not a giant on June 21, 2006 at 4:12 PM | PERMALINK

"why must the government set the minimum wage at all?"

This is actually worth answering, believe it or not. A society based solely on selfishness would be intolerable; to be morally acceptable, society must provide economic justice for its poorest members. Indeed, the quality of a society is best measured by how it treats the poor. After all: "If you would be perfect, go, sell what you possess and give to the poor, and you will have treasure in heaven." [Matthew 19:21]


Posted by: David in NY on June 21, 2006 at 4:17 PM | PERMALINK

"The market should drive wages and not government."

Not always. Not in W.W.II, when the government kept wages down. Not now, when society would benefit from a wage increase for the poorest of the working poor. See Matthew 19:21, above.

Posted by: David in NY on June 21, 2006 at 4:20 PM | PERMALINK

Pardon me if some clever poster has mentioned this above, but this needs to be part of a three-prong attack by including data showing how tax cuts have gone overwhelmingly to people already firmly in the upper income brackets, and how repealing the inheritance tax actually hurts the 97% of Americans not affected by it.

Posted by: JeffII on June 21, 2006 at 4:20 PM | PERMALINK

Maybe the country needs a maximum wage law, setting the maximum amount in salary, bonuses, stock options, and other benefits that a company or other business entity could pay its workers, say $5 million/year. While this may be a hardship for some executives, who may be forced to take on multiple jobs to stay afloat, we know that they are all hard, hard workers and would find a way to put food on their tables.

Posted by: Alf on June 21, 2006 at 4:23 PM | PERMALINK

its a myth that demand for unskilled labor will go down if the price of that labor goes up, since the ONLY jobs being created now are unskilled.

PERIOD.

Welcome to the new world order. Where corporations and banks have the freedom to make you a slave.

Posted by: marblex on June 21, 2006 at 4:23 PM | PERMALINK

"some clever poster"

That would be me:

Two centerpieces would do:

Bush and Republicans want us to be in Iraq indefinitely.

Bush and Republicans don't care about you -- they want to give big tax breaks to families with four to ten million dollars while they refuse to raise the minimum wage to help people with the price of gas.


Posted by: David in NY on June 21, 2006 at 4:24 PM | PERMALINK

As a small business owner and one regularly employs "unskilled" labor, I have not paid minimum wage in over five years. The marketplace dictates the going wage and most of my colleagues compete for the same labor and currently we're paying $2-$3 dollars more than minimum. And that's a starting wage. If the Left wants to increase the minimum wage and force small business owners to further increase their labor costs, it will cost them at the ballot box.

Another example of the left just not gettin it.

Posted by: Jay on June 21, 2006 at 4:30 PM | PERMALINK

David is a great example of one on the left who just doesn't get it:

His posts imply that all republicans are religious, hence the Matthew references. Keep thinking that way though it will serve you well this fall.

btw, how's that platform coming along and please keep us posted on your developing Iraq position. We're all anxious to hear what it is.

Posted by: Jay on June 21, 2006 at 4:36 PM | PERMALINK

The market should drive wages and not government.
Posted by: Charles on June 21, 2006 at 4:11 PM | PERMALINK

So you're saying we should dissolve the border between Mexico and the US, and allow all Mexicans to come into the country and work for whatever they can get?

Because the Government controls the border, and defines who is a legal citizen.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 4:38 PM | PERMALINK

They can't be serious. Raising the minimum wage is an incredible stupid "centerpiece" for the 2006 elections. It's almost as if Democrats want to frame the debate in a way maximally beneficial to Republicans. Had enough of the war, corruption, incompetence, and do nothing rubber stamp? But no, the minimum wage! Genius. No wonder I didn't think of it.

Posted by: decon on June 21, 2006 at 4:40 PM | PERMALINK

Jay: currently we're paying $2-$3 dollars more than minimum ... increase the minimum wage and force small business owners to further increase their labor costs

Oh, never mind. The obvious is, well, obvious.

Posted by: alex on June 21, 2006 at 4:40 PM | PERMALINK

OSB, your analogy doesn't even make sense (of course, liberalism doesn't make sense either so....)

Gov't currently doesn't control the border, at least very well, and the voting public determines citizenship. Just FYI.

Posted by: Jay on June 21, 2006 at 4:41 PM | PERMALINK

decon, you're maing a lot of sense. Please refrain from talking to other liberals.

Posted by: Jay on June 21, 2006 at 4:42 PM | PERMALINK

Actually raising the minumum wage puts more money in people's pockets which they spend which drives economic growth. And buck for buck it causes much more economic growth than giving it all to the wealthy and "hoping" that it trickles down. Here in Oregon we have the second highest minimum wage in the nation and next door in Washington is the highest. Meanwhile the economy in both states is doing well. There's more inflation from high gasoline prices than there is from paying a decent wage.

Posted by: Where's osama on June 21, 2006 at 4:43 PM | PERMALINK

Jay,
Do you mind explaining how exactly it's going to affect employers who are already paying more than the proposed new minimum wage, such as yourself?
Maybe now you'll be paying minimum, instead of more.

I mean, really.

Posted by: kenga on June 21, 2006 at 4:45 PM | PERMALINK

Gov't currently doesn't control the border, at least very well, and the voting public determines citizenship. Just FYI.
Posted by: Jay on June 21, 2006 at 4:41 PM | PERMALINK

Please tell me where a foreigner can go to get on the ballot for citizenship.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 4:45 PM | PERMALINK

OK, Jay, I give. Republican are actually selfish pagans who pretend to be Christians to get votes.

The point is, our society is one based on certain moral principles, one of which is that helping the poor is important, because we should do to others as we would have them do to us, if our positions were reversed. So Republicans want to be immoral? Run on that platform, I can't wait.

Posted by: David in NY on June 21, 2006 at 4:46 PM | PERMALINK

When will the public wake up to these facts:

1- With a low or no minimum wage law, the least caring of employers can pay workers well below the norm without sanction.
2- In so doing, they are paying those workers at levels which do not provide sufficient funds for even moderately decent housing or health care.
3- As a result, those workers often wind up working more than one job which in turn means children left at home alone and without parental support and educational encouragement.
4- As a result, those workers often use emergency rooms as their health care providers...coming in well after they should and much sicker and costing the system (and you and me) much more in costs which are added to our insurance premiums and hospital charges.)
5- As a result, too many of these workers need food stamps and welfare to survive.

If we actually required that all employers play on a level starting playing field and paid a wage level (adjusted for region) which would provide the basics of a decent life, we would have much less need for the welfare and support programs with their layers of bureacracy and inefficiency which lead to still more problems.

When a Wal-Mart fails to pay a decent wage, many of its workers turn to welfare for assistance. There is a high price to "low cost" and we wind up paying it one way or the other.

Would you rather pay a little bit more when you buy so employers pay adequate wages without welfare system supplements, or would you rather pay less and then pay added taxes to support welfare?

Turns out, you all seem to prefer the latter.

Posted by: dweb on June 21, 2006 at 4:48 PM | PERMALINK

The marketplace dictates the going wage and most of my colleagues compete for the same labor and currently we're paying $2-$3 dollars more than minimum. And that's a starting wage. If the Left wants to increase the minimum wage and force small business owners to further increase their labor costs, it will cost them at the ballot box.

Uh...so, Jay...if businesses are already paying more than the minimum wage, why will it increase labor costs to raise the minimum wage? Or, if many businesses aren't paying over minimum wage, why do you stick in this irrelevant info about how you are paying $2-3 more than minimum? Who cares what you're paying?

Posted by: brooksfoe on June 21, 2006 at 4:48 PM | PERMALINK

I bet Jay is not an employer. He is, as kenga notes, not sufficiently intelligent. Furthermore, he's reading blogs during working hours.
Just another fake troll.

Posted by: David in NY on June 21, 2006 at 4:51 PM | PERMALINK

OBF & Edo:

Since you asked, I believe that illegal immigration, Iraq and the condition of the overall economy are going to be the top issues in November.

Therefore, the Dems should make stopping the flow of illegals into the country and border security the centerpiece of their campaign. This would place them with the majority of voters and force the GOP incumbent to either agree with them or be against Bush's position for guest workers and citizenship for illegals.

Also, the Dems do need to figure out a coherent position on Iraq and the overall War on Terrorism. If they truly believe that going into Iraq was a mistake and we should leave immediately then they say so clearly and proudly. Likewise, if they truly believe that terrorism is primarily a law enforcement issue, rather than a national security issue, i.e, no wartime powers for the President. Again, this would offer a clear choice to voters and allow the Dems to claim a mandate if they gain the majority

Finally, calling for increased domestic energy production by allowing exploration in ANWAR and offshore would be helpful in wooing voters who are sick of $3 a gallon gasoline.

Posted by: Chicounsel on June 21, 2006 at 4:51 PM | PERMALINK

Uh...so, Jay...if businesses are already paying more....
Posted by: brooksfoe on June 21, 2006 at 4:48 PM | PERMALINK

Never mind Jay.

He's busy working out the details of his new immigration reform plan, whereby the citizens vote to elect immigrants who are candidates for citizenship.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 4:54 PM | PERMALINK

How can immigration be the big issue when the Republicans in control of Congress have done nothing about it? Except try to make lots of immigrants felons and then chicken out on that. Are the Republicans going to run against themselves?

Posted by: David in NY on June 21, 2006 at 4:55 PM | PERMALINK

Jay had to go back to whipping his "employees," I think.

Posted by: David in NY on June 21, 2006 at 4:57 PM | PERMALINK

Minimum wage laws don't only protect low wage earners. They also protect good employers from bad ones. The employer who wants to pay a living wage is, without a decent minimum wage law, at a competive disadvantage to those who don't.

Posted by: buckets on June 21, 2006 at 5:02 PM | PERMALINK
relatively few people get paid minimum wage--the uneducated and those that lack experience. it seems like a misguided strategy to fight for an issue that applies to few people who actually vote.

The minimum wage doesn't just affect people that make the minimum wage; it has an effect on shaping expectations that pushes wages up for those working for more than the minimum wage (an effect which gets more attenuated the farther above the minimum wage you start); it also puts more money in the hands of people with a higher propensity to spend additional income than the average throughout the economy, which stimulates the economy generally, and affects everyone working in the industries that experience greater demand.

Posted by: cmdicely on June 21, 2006 at 5:05 PM | PERMALINK

That sounds right to me. I'll change my mind if minimum wage opponents can point to a serious recent literature review suggesting a consensus that the minimum wage hurts more than it helps, but until then count me as a supporter.

Since you're proposing to increase the minimum wage, I think the burden is on you to show a consensus that an increase would help more than it hurts, if you think consensus is the appropriate standard for action on this policy. I don't see that you've done that. In fact, as far as I can tell, you haven't even shown that there's a consensus that increasing the minimum wage would not raise unemployment. And of course, the potential adverse effects of a minimum wage hike include not only raising unemployment, but increasing inflation by increasing the cost of labor.

If your basic goal is to help the working poor, the minimum wage is a very blunt instrument for achieving that goal. Alternatives methods of providing income support for the working poor, such as the EITC, can be better targetted to the people you're trying to help. Why should employers be forced to pay higher wages (and thus, consumers forced to pay higher prices) so millions of middle-class high-school kids working minimum wage jobs at fast-food outlets and the like can afford a nicer car, nicer clothes, etc.?

Posted by: GOP on June 21, 2006 at 5:06 PM | PERMALINK

Does anyone here want to live in any of the countries that have no minimum wage?

That's what I thought. The rest is academic squawking.

Posted by: craigie on June 21, 2006 at 5:07 PM | PERMALINK

Why not just take the honest approach and raise taxes and institute payments to workers making, lets say, $10K/year or less so that a minimum wage is guaranteed by the government? The minimum wage is basically an unfunded mandate on businesses with razor thin margins of profit.

Posted by: Karl Rove on June 21, 2006 at 5:10 PM | PERMALINK

Easter Lemming:

Does not the fact that 17 states have their minimum wage higher than the feds mean that the issue of raising the federal wage will not be important enough of an issue to voters to justify making it the centerpiece of the Dems campaign to try and retake the Congress? Even if the polling data you cited is correct, how many people are going to base their vote on a candidate's position on raising the minimum wage. My guess is that no one will.

Bluewave in his 3:39 pm post seems to agree with me.

Posted by: Chicounsel on June 21, 2006 at 5:11 PM | PERMALINK

MF'ers in Congress allowed their yearly Cost of Living increase to pass/be approved without any hesitation just the other day!

Posted by: Wk on June 21, 2006 at 5:13 PM | PERMALINK

I should add that it is also an unfunded mandate on businesses that employ low value labor inputs as well.

Posted by: Karl Rove on June 21, 2006 at 5:13 PM | PERMALINK
Why should employers be forced to pay higher wages (and thus, consumers forced to pay higher prices) so millions of middle-class high-school kids working minimum wage jobs at fast-food outlets and the like can afford a nicer car, nicer clothes, etc.?

Because the people working in jobs whose wages are likely to be most directly affected by changes to the minimum wage -- whether poor adults or middle class teens -- have a high marginal propensity to spend additional income, so that putting more money in their pockets (in the short term) drives lots of money through the engine of the economy.

Posted by: cmdicely on June 21, 2006 at 5:17 PM | PERMALINK

if you think consensus is the appropriate standard for action on this policy.

Works for you on Torture, right?

Didn't y'all argue yesterday that since a majority of Americans think that there's some cases where torture is justified, that torture both works, and is justified, and those who oppose torture hate america because they think that the majority are immoral?

So - since a majority of Americans think that the minimum wage should be hiked, and it's a moral imperative, and you disagree with that, ergo you hate America.

Why should employers be forced to pay higher wages (and thus, consumers forced to pay higher prices) .....
Posted by: GOP on June 21, 2006 at 5:06 PM | PERMALINK

If consumers are paying higher prices, then the employers are not paying higher wages. The employers have passed the cost along to their customers, in that case.

...so millions of middle-class high-school kids working minimum wage jobs at fast-food outlets and the like can afford a nicer car, nicer clothes, etc.?

The minimum wage doesn't have a fine-print footnote that says: "*only applies to middle-class high-school kids working at fast-food outlets and the like"

Stop being a lying bastard.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 5:18 PM | PERMALINK

Don't forget that without a minimum wage, you'd get a lot more illegal immigration because you can always use the threat of deportation to keep wages down.

The idea that it's unneeded government interfearance to set the minimum wage would be accurate, if the planet were a zero-sum game.

But it ain't.

Besides, they affects a lot of teenagers and we know that teens generally have a LOT of disposable income vis-a-vis the rest of us. Ergo, economic boost as you sell more Aeropostale shirts and movie tickets and used cars.

Posted by: MNPundit on June 21, 2006 at 5:18 PM | PERMALINK

kenga, stay with me here, I'll go slow. The current federal minimum wage of $5.65 is in part the determining factor of the going starting wage of $7-$8/hr. If the minimum is increased to say $7, the soon-to-be going wage will then climb to $9-$10, which then also increases payroll taxes. This then soon becomes the determining factor of who to employ and how many to employ. Let the market determine pay, not government, of course I telling this to all of the wrong people.

David, you're partly right, I own a small business but also work at another job. Wow, imagine that, not all small business owners are rich. Again, you guys try, but JUST DON'T GET IT.

Posted by: Jay on June 21, 2006 at 5:20 PM | PERMALINK

As a teen-ager, I was fired from a summer job because the minimum wage was raised. The owner of the small factory came and told me I wasn't worth $1.10 an hour. In retrospect, he was right. My job was virtually unnecessary make-work.

Today, the unemployment rate among African American teens remains shockingly high at 29.5%. This group will experience even higher unemployment if the minimum wage is increased.

Posted by: ex-liberal on June 21, 2006 at 5:22 PM | PERMALINK

The minimum wage is basically an unfunded mandate on businesses with razor thin margins of profit.
Posted by: Karl Rove on June 21, 2006 at 5:10 PM | PERMALINK

High oil prices are basically an unfunded mandate (imposed through our mideast policies and domestic economic policy of not regulating price gouging and collusion) on businesses with razor thin margins of profit, as well as consumers with tight budgets. In the big scheme of things, a minimum wage hike is a mouse-fart compared to the impact high energy prices have had on our economy.

Bush cut taxes so we could pay them straight to ExxonMobil.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 5:24 PM | PERMALINK

To say that minimum wage earners "have a high marginal propensity to spend additional income, so that putting more money in their pockets (in the short term) drives lots of money through the engine of the economy" as an argument makes sound like raising the minimum wage to $100/hour will grow the economy even more.

In other words, it is a ridiculous argument for the minimum wage. Even though I don't think government should be setting wage limits of any kind, there are more thoughtful arguments for the minimum wage than the claptrap quoted above.

Posted by: Karl Rove on June 21, 2006 at 5:26 PM | PERMALINK

Wait, Jay, let me get this right -- the minimum wage (which is $5.15, by the way, not $5.65) goes up $2, and all of a sudden everyone else's wage goes up $3?

Posted by: JBL on June 21, 2006 at 5:26 PM | PERMALINK

As a teen-ager, I was fired from a summer job because the minimum wage was raised. The owner of the small factory came and told me I wasn't worth $1.10 an hour. In retrospect, he was right. My job was virtually unnecessary make-work.
Today, the unemployment rate among African American teens remains shockingly high at 29.5%. This group will experience even higher unemployment if the minimum wage is increased.
Posted by: ex-liberal on June 21, 2006 at 5:22 PM | PERMALINK

Your anaecdote, and your assertion that minimum wage laws are racist, both contribute nothing to this debate. Begone, foul odor.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 5:28 PM | PERMALINK

All small business's compete for the "unskilled" labor market. The best of those workers can command $2-$3 more than the minimum because they're in demand. If the minimu goes up, so does the wage of the more desirable employees. It's called supply and demand, the liberals should read up on that someday.

Truth be know, some workers aren't even worth minimum wage.

Posted by: Jay on June 21, 2006 at 5:29 PM | PERMALINK

Osama,

You are free to encourage the government to tax oil companies a 100% of profit and send checks to all of us so we can buy gas. I wouldn't favor such a policy since I don't like waiting in lines to buy gas that may or may not be there when I reach the pump, and I don't like having the government tell me when I can buy gas and when I cannot, but I realize not all of us are freedom lovers.

Posted by: Karl Rove on June 21, 2006 at 5:30 PM | PERMALINK

Jay had to go back to whipping his "employees," I think.

Posted by: David in NY on June 21, 2006 at 4:57 PM | PERMALINK

The only thing Jay whips is his midget. Especially when Rove is on TV.

Posted by: Hank Scorpio on June 21, 2006 at 5:31 PM | PERMALINK

While I was windsurfing with my 4th Moroccan/French wife last saturday, I was telling her how I paid off the Democrats (using money funnelled through Islamic Charities) to make this their central platform.
(it's getting harder and harder to get their attention away from George Soros these days).

You see, if we increase the minimum wage, it will be like bribing tens of millions of recently laid off software engineers (now working at Starbucks) to donate money to Democratic 501c's. Hopefully, this will counteract the hundreds of billions of borrowed chinese dollars that have been laundered to the RNC, CATO, Heritage Foundation, and AEI analysts via Halliburton and FoxNews stockholders.

Posted by: Liberal Strawman on June 21, 2006 at 5:35 PM | PERMALINK

As a small business owner and one regularly employs "unskilled" labor...

While your right hand may be "unskilled", searhing the internet for porn doesn't qualify you as a SBO.

Posted by: MeLoseBrain? on June 21, 2006 at 5:39 PM | PERMALINK
Why not just take the honest approach and raise taxes and institute payments to workers making, lets say, $10K/year or less so that a minimum wage is guaranteed by the government?

Because, whether that's somehow more "honest" or not (I don't see how it makes any difference in that regard, personally), its certainly much less efficient, adding the government as an unnecessary intermediary.

Posted by: cmdicely on June 21, 2006 at 5:40 PM | PERMALINK

Why raise the minimum wage? There are plenty of Mexicans willing to work for 5.15 and hour. Politicians should stop pandering to all those greedy poor people.

Posted by: sparky on June 21, 2006 at 5:43 PM | PERMALINK

The current federal minimum wage of $5.65 is in part the determining factor of the going starting wage of $7-$8/hr.

Except that the federal minimum wage is $5.15, not $5.65. One would think, if you owned a business that employed "unskilled" workers, you would know that.

The rise in minimum wage should have no impact on what you pay your employees if you are already paying them over that amount. If you choose to, that's your cost of doing business.

Let the market determine? So we should join nations like Indonesia and open sweat shops. Hell, government has no right to tell employers how many hours an employee can work! Let the market decide! 25 hours a day, I say. Child labor? Let the market decide!

If you're an example of the typical rightard, I like our chances in November.

Posted by: MeLoseBrain? on June 21, 2006 at 5:49 PM | PERMALINK

You are free to encourage the government to tax oil companies a 100% of profit and send checks to all of us so we can buy gas. . . .
Posted by: Karl Rove on June 21, 2006 at 5:30 PM | PERMALINK

That would be an idiotic idea, Karlo, but I'd expect no better from you.

Here's a better idea:
Sue ExxonMobilBPAmocoChevronTexacoHalliburtonWhiteHouse for antitrust violations, force them to divest into smaller companies, and sell off the gas stations and supply chains to independent owners who will actually be forced compete with eachother in an open market.

Send every oil company a BILL for drilling on state-owned land.

Send every oil company a BILL for their share of the cost of the Iraq war.

Eliminate all subsidies and tax breaks for the entire oil industry, so they will be forced to be competitive globally, instead of just another fat, lazy, state-subsidized industrial behemoth.

Change how inflation is calculated to include energy prices, since they ARE a valid input. Are they volotile? yes. (so what's your point?). Measure inflation honestly.

Criminalize public officials who cut deals with dictators (like Saddam Hussein. Like the Saudi royal family) on behalf of oil companies. Oil companies can do business - PRIVATELY, with whomever they like (including Fidel Castro or Hugo Chavez).
Public officials should not be working for oil companies. It's a clear conflict of interest.

Posted by: Osama_Been_Forgotten on June 21, 2006 at 5:50 PM | PERMALINK

cmdicely,

Because the people working in jobs whose wages are likely to be most directly affected by changes to the minimum wage -- whether poor adults or middle class teens -- have a high marginal propensity to spend additional income, so that putting more money in their pockets (in the short term) drives lots of money through the engine of the economy.

So your primary goal for the minimum wage is to stimulate consumer spending rather than improve the standard of living of the working poor, is it?

You offer no evidence that a minimum wage increase actually would stimulate consumer spending (higher labor costs would likely increase prices and thereby suppress consumer spending), and if that is your goal then again, there are other ways of doing it that could be better targetted to your purpose.

Posted by: GOP on June 21, 2006 at 5:51 PM | PERMALINK

Let's see.

2% of workers are on the minumum wage.

80% of those are from not-poor families (mainly teenagers with working parents).

0.4% of the workforce. Big issue, that.

Posted by: am on June 21, 2006 at 5:54 PM | PERMALINK

Hell, government has no right to tell employers how many hours an employee can work! Let the market decide! 25 hours a day, I say. Child labor? Let the market decide!
Posted by: MeLoseBrain? on June 21, 2006 at 5:49 PM | PERMALINK

Why stop there? The government has no right to prevent illegals from getting jobs here too! Open the floodgates!
(hey, I could get rich shipping Yemenis here. I could use retired oil tankers, just stack them into the tanks by the tens of thousands. The ones who survive the trip were the strongest, and will make the best employeees.

Then they could work for my temp agency for free for the next 10 years to pay off their passage).

Posted by: Osama_Been_Forgotten on June 21, 2006 at 5:55 PM | PERMALINK
So your primary goal for the minimum wage is to stimulate consumer spending rather than improve the standard of living of the working poor, is it?

I neither said it was the "primary goal" nor that it was an alternative to improving the standard of living of the working poor; they are complementary functions, each of which is good for its own reasons, and each of which also has instrumental utility in acheiving the other goal.

Nor, for that matter, do they exhaust the reasons to support a minimum wage increase.

You offer no evidence that a minimum wage increase actually would stimulate consumer spending

Nor did I claim to have offered evidence. I have, in this thread, offered the economic logic. You can, of course, rebut it or offer evidence that the theory doesn't work in practice, if you'd like.

(higher labor costs would likely increase prices and thereby suppress consumer spending)

Certainly, you'd expect nominal prices of some products (particularly those where unskilled labor was the main cost) to increase somewhat, though why you'd think that higher prices would decrease consumer spending I don't know.

You'd expect ceteris paribus -- particularly, without any increase in buying power -- that an increase in the general price level would increase the quantity of goods exchanged, not the level of spending, but even that assumption isn't warranted with a minimum wage increase.

Posted by: cmdicely on June 21, 2006 at 6:06 PM | PERMALINK

Actually, we're partly wrong in talking about "raising" the minimum wage. If it goes to $7.25 an hour, its buying power will still be about $.50 less than it was in 1968. Right now it's at its lowest level since 1955.

Pays to go read the link in Kevin's post.

Posted by: David in NY on June 21, 2006 at 6:08 PM | PERMALINK

(c) are paid for by the customers of low-wage industries, which means the cost is broadly dispersed among all of us.

Same as with the increases in the cost of gasoline. So the next question: What is it that "all of us" are buying less of in order to support the higher wages of the workers who produce what we buy? When "all of us" buy less of all that diverse stuff, are fewer people employed to meet the reduced demand? Do "all of us" borrow more or reduce savings to avoid reductions in the amount of stuff that we buy?

Posted by: republicrat on June 21, 2006 at 6:09 PM | PERMALINK

The GOP believes in a minimum wage - ZERO!

If they had their way, slavery would still be legal...

Posted by: Stephen Kriz on June 21, 2006 at 6:12 PM | PERMALINK

osama,

Didn't y'all argue yesterday that since a majority of Americans think that there's some cases where torture is justified, that torture both works, and is justified, and those who oppose torture hate america because they think that the majority are immoral?

No, I didn't argue any of those things.

If consumers are paying higher prices, then the employers are not paying higher wages.

Huh? This claim is utter nonsense. If employers increase their wages, then they are paying higher wages regardless of what prices consumers are paying.

The minimum wage doesn't have a fine-print footnote that says: "*only applies to middle-class high-school kids working at fast-food outlets and the like"

No kidding. And your point is.....?

Stop being a lying bastard.

Stop being a stupid, lying, idiotic, dishonest, moronic dipshit.

Posted by: GOP on June 21, 2006 at 6:12 PM | PERMALINK

cmdicely,

... neither said it was the "primary goal" nor that it was an alternative to improving the standard of living of the working poor; they are complementary functions

You haven't provided any reason why the minimum wage is superior to other mechanisms such as the EITC for either goal.

Nor did I claim to have offered evidence. I have, in this thread, offered the economic logic.

No, you didn't even offer that. If and when you do have some evidence to support your economic speculations, get back to me.


Posted by: GOP on June 21, 2006 at 6:19 PM | PERMALINK

And the feds have no right to say a girl has to be sixteen before you can have sex with her,If I want to nail her at 12 oh well.

Posted by: Now on June 21, 2006 at 6:24 PM | PERMALINK

Trolls are not getting any help from Rove today are they.Have you ever heard of such shoddy excuses.

Posted by: Then on June 21, 2006 at 6:26 PM | PERMALINK

Min. and Max highway speeds what the hell is the fed doing telling me how slow or fast i can drive. And why can't i drive drunk,what biz is it of the feds anyway.What a Bush!!!

Posted by: Then on June 21, 2006 at 6:29 PM | PERMALINK
You haven't provided any reason why the minimum wage is superior to other mechanisms such as the EITC for either goal.

Nor have I argued that it is superior to (or indifferent or equivalent to) "other mechanisms such as the EITC for either goal". I've argued that its useful for those goals, and provided the logic behind that. If you want to make an argument (not a mere bald assertion) that the EITC or some other alternative means is superior for either of those goals, then, perhaps, I would address that claim.

Posted by: cmdicely on June 21, 2006 at 6:34 PM | PERMALINK

Time for a reminder:

Conservatives are people who believe that -
* in order to motivate the poor, you have to pay them less.
* in order to motivate the rich, you have to pay them more.

Posted by: craigie on June 21, 2006 at 6:42 PM | PERMALINK

"Personally, I'm more favorably disposed towards a law requiring right-wing trolls to pay $1,000,000 before they will be allowed to post anything on this site."

-----

Ahh, there's nothing like tolerant liberals who love to engage in the free exchange of ideas. Bastions of free speech and enlightenment.

Posted by: Homes on June 21, 2006 at 6:46 PM | PERMALINK

GOP,

You poor, pathetic, friendless idiot.

You'd have better success debating the turds in your toilet.

Posted by: Atheist on June 21, 2006 at 7:01 PM | PERMALINK

cmdicely,

Nor have I argued that it is superior to (or indifferent or equivalent to) "other mechanisms such as the EITC for either goal". I've argued that its useful for those goals, and provided the logic behind that.

No, you haven't argued that it's "useful" for those goals. You've argued that it can help the working poor, and you've speculated that it can stimulate consumer spending. The argument that it can help the working poor has been rebutted with the argument that there are better alternative ways of achieving that goal, such as expanding the EITC.


Posted by: GOP on June 21, 2006 at 7:13 PM | PERMALINK

You have rebutted nothing, "GOP". The EITC is a favorite target of republicans when they aren't debating the minimum wage, with a substantial effort at the IRS for "fraud" - rather than investigating the rich, where tax evasion involves serious money.

Raising the minimum wage is overwhelmingly popular, and none of the dire predictions by republicans about the consequences of raising the minimum wage have occurred any time that it has been increased. Since you think torture is based on popularity, doubtless you think the minimum wage should be decided on the same basis...

This is a rare beast - socially conscious, economically beneficial, and politically beneficial to pursue. Smell the fear in the trolls.

Posted by: Marc on June 21, 2006 at 8:02 PM | PERMALINK

Just got on. Haven't read this so don't know if this has been said. Apologies if so.

Inflation adjusted table problem:
The minimum wage was made $5.15 in 1998. That was the minimim wage THEN!!!!!!

$5.15 in 1998 is equivalent $6.44 today (US CPI).
OR
$5.15 in 1998 is worth $4.12 in 2006 in 1998 money.

The chart has an inherent bias.

Apologies again of pointed out. Now I'll read posts, etc.

Posted by: notthere on June 21, 2006 at 9:15 PM | PERMALINK

Kevin, you were too accomodating to the anti-minimumsies. Increasing the MW probably wouldn't even hurt the hiring of low-wage people anyway. Companies still need them, they'll just pay the other workers (and maybe the owners/shareholders) less. That's the real reason conservatives don't like it.

Posted by: Neil' on June 21, 2006 at 9:24 PM | PERMALINK

No one (knowingly) hires someone whose labor is worth less than they are paying for it.

Hollywood excepted, of course....
Posted by: Stefan on June 21, 2006 at 3:18 PM | PERMALINK

Well, BC has a pretty healthy film industry, based mostly on cheaper (still union) labo(u)r and a good exchange rate.

Here's a thought about restaurants, which are often minimum wage jobs. Why are we morally almost required to tip? This raises the price of your meal by about 10%. Why not raise everyone's wage by 50% and charge 15% more?

Posted by: doug r on June 21, 2006 at 9:26 PM | PERMALINK

One big fallacy I've seen here, incredibly: some refer to the tiny percent of workers actually "on" the MW - but that's irrelevant! (sic!) I heard blowhard pretend intellectual Walter Williams offer the same canard. The issue applies *at least* to everyone making the MW or more than it up to the proposed increase, obviously, or between 5.15 and around 6.00 (low end) or 7.00+ (high end), and lots of workers earn in that range.

BTW - regarding the freedom of adults to make contracts, etc.: corporations are state-created entities with special rights of personhood and limited liability. I can't prove the point for any non-corporation, but a corporation should be treated as a ward of the state and subject to rules the people see fit under the guidance of competent legislators.

PS - those of you railing about contracts, etc: since none of us now living signed the US Constitution, you shouldn't be so much into pushing the idea that we should be subject to it.

Posted by: Neil' on June 21, 2006 at 9:32 PM | PERMALINK

Oh, here's another question for market simpletons:
How do those offering a wage know *to begin with* how much it is/ought to be worth? (i.e., not as a circular definition based on what they already offered before.) That is, how do we bootstrap "value" of what we buy to begin with, in a case like that where you can't (usually) easily measure the output or your "satisfaction" like you could with an item you can buy and test separately?

Posted by: Neil' on June 21, 2006 at 9:35 PM | PERMALINK

I am a General Manager of a retail store that is on the border of the Fortune 500. My allotted payroll percentage is between 5.5% (during the holiday season) and 13% (during the slower periods) of gross revenue. I currently have 3 sales associates who would receive immediate pay raises should the minimum wage be raised to $7.15. Of course, larger raises would have to be handed out during the next period to compensate loyal and hardworking employees in order to compensate them better than my less-tenured staff that currently earns less than $7.15. If I didn't, someone else would.

However, Given that retail management's percentage of total payroll is usually between 60 and 75%, the actual effect on raising minimum wage would be relatively small on my books. It would perhaps make me schedule 3 less hours per week than I currently do, should gross sales remain stagnant.

At my company, sales associates spend between 5 and 10% of their earned income from the company at the store. If wages were increased for associates across the board, expendible income on their part would also be increased. Therefore, they would spend more money at the store, which just may compensate for the increase in payroll dollars.

(Apologies if any of this appears incoherent, as all GMs of retail stores sound pretty insane after 14 cups of coffee)

Posted by: Christopher on June 21, 2006 at 10:20 PM | PERMALINK

marc,

The EITC is a favorite target of republicans

That claim is irrelevant to the issue. The EITC, and other targetted subsidies or benefits, are a much better way of providing income support for the working poor than increasing the minimum wage. A large proportion of the increased income from a minimum wage hike would go to buy expensive toys for middle-class high-school kids--cars, clothes, music, partying--instead of to the working poor.

Raising the minimum wage is overwhelmingly popular,

So is creationism. That doesn't mean it makes sense.

Posted by: GOP on June 21, 2006 at 10:27 PM | PERMALINK

From: American Progress Action
(Artcle on site has linked text to claims below) see:
http://www.americanprogressaction.org/site/apps/nl/newsletter2.asp?c=klLWJcP7H&b=700005
====
Raising the Minimum Wage

June 21, 2006

The buying power of the federal minimum wage is currently at its lowest level in 51 years. Eighty-three percent of Americans favor an increase in the minimum wage (nearly half "strongly support" it). Yet, the House conservative leadership hasn't allowed a full floor vote on the minimum wage since the last increase went into effect, in 1997. In the years since, Congress has managed to give itself plenty of raises. The Senate votes today on an amendment offered by Sen. Ted Kennedy (D-MA) to raise the federal minimum wage, in three gradual installments over two years, from $5.15 to $7.25 an hour. No doubt conservatives will try hard as they can to stop it.

* Conservatives are playing politics with millions of Americans livelihoods. The Senate conservative leadership is rallying opposition to Sen. Kennedy's minimum wage amendment by offering a "poison pill" measure that is meant to deter any debate on the issue. The alternative amendment, sponsored by Sen. Mike Enzi (R-WY), would raise the minimum wage to $6.25, but would couple that raise with unpalatable "reductions in overtime pay and tax cuts for businesses." And this isnt the first time Senate conservatives played politics with peoples wages. Earlier, the Senate leadership, led by Sen. Bill Frist (R-TN), floated the idea of trying to "sink the minimum-wage increase by linking it to an unrelated measure that would make it a crime to transport a minor across state lines to get an abortion.

* It is a myth that increasing the minimum wage will hurt job growth. The right is furiously spreading the myth that raising the minimum wage hurts small businesses and job growth, increases poverty, and only benefits teenagers. The truth is, small businesses benefit from a higher wage. A report by the Center for American Progress and Policy Matters Ohio found that the "11 states with a minimum wage above the federal minimum of $5.15 per hour had higher rates of small business growth between 1997 and 2003." A 1998 Economic Policy Institute report found that unemployment and poverty rates fell after the 1997 increase in the federal minimum wage, and economists David Card and Alan Krueger noted that increases in the minimum wage in various states in the late 1980s and early 1990s did not result in increased unemployment.

* It is a myth that increasing the minimum wage only helps teenagers and increases overall poverty. The right is peddling the myth that poverty rates increase as the minimum wage increases. Historical evidence proves that wrong: Since President Bush took office, the number of Americans living in poverty has increased by 5.4 million, and evidence shows that increases in the minimum wage, by increasing the earnings of low-income workers without diminishing their employment opportunities, have historically helped to lower poverty rates. The conservative myth that raising the minimum wage only benefits teenagers is easily disproved. Thirty-five percent of minimum wage workers are their family's sole earner, and 61 percent of these workers are women.

Posted by: Madam Hatter on June 21, 2006 at 10:50 PM | PERMALINK

Christopher,
Yes, it was incoherent.
If your labor costs go from 6 to 7 dollars per hour and sales stay constant... drumroll... you'd have to cut employee hours by 1/6th to keep labor costs equal.

No way around it.
So stop trying to say you'd only have to cut three hours from your employee hours unless you currently only have 18 hours of this type of work.

Posted by: Birkel on June 21, 2006 at 10:52 PM | PERMALINK

Madam Hatter,

faithfully following that rabbit down the memory hole.

Posted by: Birkel on June 21, 2006 at 10:58 PM | PERMALINK

Neil, just to shed some light here. It's called productivity. People's productivity can be measured and that measurement can be translated to value.

The market is primarily responsible for wages, both skilled and unskilled. The people with the highest productivity in the unskilled labor market can command $2-$10 above minimum wage in a minimum wage enviroment. The lawyers with the highest productivity can command the highest retainers. That's how value on labor is determined.

Posted by: Jay on June 21, 2006 at 11:00 PM | PERMALINK

An old hag is making the same statement on PBS that I heard a senator make while driving home: those who are making minimum wages should seek higher paying jobs.

Wow! Great argument.

Posted by: nut on June 21, 2006 at 11:01 PM | PERMALINK

Some of you have posted that there are workers who are not "worth" a minimum wage. My question to you is this: if you have a job which needs to be done, and you need someone working 40 hours a week to do this job, and that person is performing adequately, how can that person be "worth" less than a minimum wage? It is true that for any job, a person just starting has to learn that job. This is true regardless of the level of the job to be performed, and in fact, the greater the education, training and previous experience required, the longer it takes for the person to become truly competent at the job.

If you have a worker who is not performing to your standards, you either make sure the worker is trained and understands the job, or if the worker is screwing off and makes no attempt to improve, you fire the worker.

But how is a competent full-time worker ever worth less than minimum wage?

And spare me the glib Econ 101. I want a serious answer.

BTW, the "market" does a lousy job of determing wages in a fair way. How is it at all possible for CEO's to be "worth" billions of dollars? We all know that they get these kinds of bucks even when the companies are going down the tubes. Something is wrong with this picture.

And are entertainers and sports figures "worth" millions of dollars? By what objective criteria? Previous experience needed? Worth to society?

One of the professions most underpaid in relation to the workload, education/training required, and value to society, is nursing. And the shortage of nurses reflects that.

Bottom line, people working fulltime should be able to do so without needing foodstamps or Medicaid.

Posted by: Wolfdaughter on June 21, 2006 at 11:56 PM | PERMALINK

"why must the government set the minimum wage at all?"

=========
So the poor aren't forced to slaughter the rich to get a pay increase...


Posted by: owlbear1 on June 22, 2006 at 1:30 AM | PERMALINK

Wow, way to make the most unimportant issue in existance your centerpiece.

Posted by: aaron on June 22, 2006 at 5:06 AM | PERMALINK

AFTER they vote THEMSELVES a #%&**()@$&*(^ raise. Sick selfish psychos.

It may not be important to Aaron, but to plenty of people money is important. Even if for boring, unimportant thing like food, shelter and clothing.

Posted by: Lya Kahlo on June 22, 2006 at 7:21 AM | PERMALINK

>

This is an absurd argument. Anyone who proposes that workers have the right to contract freely for their labor is simultaneously proposing that the employer has the right to negotiate for the pay scale of the worker. Since there is obviously an imbalance in the relation to capital to wage potential (with the employer having the money, and the worker wanting the money), the employer is in an unfair position of advantage over the worker and, therefore, the worker is only being given the illusion that they are actually taking part in the negotations. A minimum wage guarantees that at least some of that advantage is taken away from the employer.

Posted by: Scott Contreras-Koterbay on June 22, 2006 at 7:53 AM | PERMALINK

0.4% of the workforce. Big issue, that.
Posted by: am on June 21, 2006 at 5:54 PM

Then all the whining by the dishonest Republicans about how raising the minimum wage will cripple business is just bull. But then, we knew that.

Posted by: Gregory on June 22, 2006 at 9:25 AM | PERMALINK

Birkel - That is EXACTLY my point (and I apologize for not making it more clearly.) In the retail world, the vast majority of non-management positions are not full time. In smaller retail stores, the lowest paid workers are generally new to a company as well as have little previous retail experience. Once this group has more experience and marketable selling experience, they receive offers from other companies (retail chains steal each other's employees through the brutal raiding of other store's staffs.) If this starting salary were to be raised, it would have very little effect on the overall payroll dollars. And yes, alot of these workers are only scheduled for 4-10 guaranteed hours per week until performance dictates more guaranteed hours.

Posted by: Christopher on June 22, 2006 at 11:54 AM | PERMALINK
Once this group has more experience and marketable selling experience, they receive offers from other companies (retail chains steal each other's employees through the brutal raiding of other store's staffs.) If this starting salary were to be raised, it would have very little effect on the overall payroll dollars.

Really? You think the starting wage has no effect on what the next step up has to be to make it worthwhile? You think that the wage at that step has no effect on the next step?

Posted by: cmdicely on June 22, 2006 at 12:27 PM | PERMALINK

Anecdotal story: my first job was flipping burgers in a fast food chain back when Jimmy Carter was prez. He instituted a plan to raise the minimum wage every January 1st for three years. Ever year, about January 3rd the company would raise prices a few cents. Not one customer every noticed the price increase, let alone complained.

It behooves as human beings to pay a little more for our burgers and produce if it means a the poorest among us can take home a few more dollars.

And what incentive there to get off welfare if the only option is $5.15 an hour?

Posted by: chieromancer on June 22, 2006 at 2:12 PM | PERMALINK

I can't believe that there are people who are actually against this. My view is quite simple and that is that I never noticed the raises in MW before so it obviously worked itself out. And if I have someone working for me who isn't worth paying the MW then, as a manager, I suck.

Posted by: tom on June 22, 2006 at 3:44 PM | PERMALINK

What a pathetic bunch of wimps you liberals have become. Raise the minimum wage to $100/hr! You pump more money through the economy, it raises consumer spending, and will make us all upper middle class at a minimum.

Posted by: angrylittledude on June 22, 2006 at 3:54 PM | PERMALINK

Jay: I realize you won't likely see this, but for the record: You didn't explain *how* to measure productivity. You talk of workers "commanding" a given amount of pay, but my whole challenge is that this is just based on a notion in employer's minds as to what they deserve. What does *that* come from? It's just a circular reinforcement with no a priori justification, unless you can get it objectively off the ground with some sort of measurement.

Posted by: Neil' on June 22, 2006 at 9:48 PM | PERMALINK

Scott C-K,

This is an absurd argument.

I think it's your argument that's absurd. Let's go through it.

Anyone who proposes that workers have the right to contract freely for their labor is simultaneously proposing that the employer has the right to negotiate for the pay scale of the worker.

Pretty much, yes.

Since there is obviously an imbalance in the relation to capital to wage potential (with the employer having the money, and the worker wanting the money), the employer is in an unfair position of advantage over the worker

Huh? Each party wants something from the other. That's how market transactions work. The worker wants wages from the employer and the employer wants labor from the worker. So they negotiate, and if they reach a mutually agreeable trade of labor for wages, the worker is hired. How is the employer in "an unfair position of advantage over the worker?"

Posted by: GOP on June 22, 2006 at 11:49 PM | PERMALINK

Some of you have posted that there are workers who are not "worth" a minimum wage. My question to you is this: if you have a job which needs to be done, and you need someone working 40 hours a week to do this job, and that person is performing adequately, how can that person be "worth" less than a minimum wage?

Through the value of their labor being less than the cost of their wage.

BTW, the "market" does a lousy job of determing wages in a fair way.

Depends on what you consider fair. I think that in the vast majority of cases, the market wage is a fair wage. It is only at the margins that the relationship unravels.

And are entertainers and sports figures "worth" millions of dollars?

People seem to think so.

By what objective criteria?

There are no objective criteria. Obviously, enough people are willing to pay enough money to certain entertainers and sports stars to make them millionaires.

Posted by: GOP on June 22, 2006 at 11:57 PM | PERMALINK

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Posted by: benefits on June 23, 2006 at 1:03 AM | PERMALINK

Of course people are "pig iron ingots". Labor is a commodity until it rebels.

Republicans, being Racists and Upper Class Elitists, want the lower classes to suffer and starve to enforce their sense of privilege.

This is very atavistic and against all scriptures.

Posted by: deejaays on June 23, 2006 at 3:52 PM | PERMALINK




 

 

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