Democrats hold 50/49 advantage in Senate.

[ClimbingPanther]

To declare martial law, it's usually best to have the support of the military first.

 

Silly chucK, hasn't Bush taught you anything by now? You don't have to have support to have control!

[Mr_Phil]

Jay,

 

Is there the implicit assumption in your arguments that increasing the minimum wage will significantly increase unemployment?

[JayB]

The loss of employment will be proportional to the increase. I don't think anyone would argue that when an employer has to pay an employee $15 an hour for work that only generates $10 worth of value per hour, the employer will have to find a way to increase the value of the said person's output to a level that yields a profit, or fire the worker. The higher the wage, the more education and training is required to generate value that exceeds it. If anyone were to mandate a minimum wage for computer programmers of $200,000 per year, Microsoft would probably get rid of all but the most brilliant, highly educated, highly trained folks and source the work to people living somewhere where their pay reflected the true economic value of their contributions.

 

For someone that's marginally literate and has no marketable skills, the hourly wages that most people are positing as "living wages" might as well be $200,000 per year, because under these circumstance the odds that that the cost of their labor will exceed its economic value are quite high. For folks at the very bottom of the economic ladder this is often true already.

 

People who have been filling their gas tanks lately are probably also no strangers to the notion that as the price of something increases, so does the incentive to find ways to use less of it. Increasing the cost of labor and de-linking it from its real economic value will have this effect, and it will increase in direct proportion to the gap between what their forced to pay and what the labor-input is worth.

 

Of the two alternatives, I like the subsizided wages better than a mandatory minimum wage because the costs become clear, and are no longer concentrated amongst the least employable people and small business owners. If the costs are clear and are at least partly coming out of the activist class's wallet, they'd have to ask some hard, concrete questions instead of thinking about these issues in terms of quasi-moral nebulosities like "economic justice." We'd have to ask who should get the benefit of a minimum income. Everyone, or just those with dependents under the age of 18? Is it really an economic injustice if the kid working at McDonald's to save up for an iPod is not paid an hourly-wage sufficient to sustain a family of four? What about the person who is working part time at a retail shop in order to keep busy and get out of the house, but is married to someone making $90K? I think if people had to think about these questions, and knew that they'd be footing the bill, they'd think mighty hard about who they wanted to extend this benefit to, just what constituted an acceptable minimum income, and how to increase real wages for the folks at the bottom.

[Skisports]

For any of you Montanans out there thinking of a visit to Seattle, there's a fridge full of free beer waiting for you at my house.

 

I am going to have to call you on that when I get back to seattle for the summer guiding season.

 

Dave

[tvashtarkatena]

You're on, dude. Name your brand or I'll just stock a variety pack.

[Mr_Phil]

To quote Winter:

 

The picture you paint is far too simplistic.

 

The $200k Microsoft programmer argument is a strawman, so I'm not going to bite.

 

The gas pump jockey is a better analogy. When the price of gas doubled from $1.50 to $3.00 recently, did people cut their fuel usage in half? I don't think so. If the minimum wage is bumped up, then the gas station will simply bump up the cost of gasoline a few cents and customers will pay. Since a number of customers are minimum wage folks, they can afford it. $200k programmers at Microsoft won't notice. The pump jockey can't be off shored, since he is in the service industry. This doesn't target a single company, since all gas stations will have to pay higher wages.

 

I still don't understand why your hybrid system (minimum wage + Gov't subsidy = living income) is a better solution.

 

As Phelps said:

 

To earn one's own way - to meet a decent living standard, afford children, and share in community life - is essential to one's sense of self-worth. To know the satisfactions of employment - its challenges and learning experiences, and the personal development that comes with mastering jobs - is also one of life's basic goods.

 

We should not deny this to the large number of folks who pick our crops, pump our gas, or clean our toilets.

[JayB]

I'd encourage you to learn why Phelps and others of his standing oppose minimum wage laws and think that there are better mechanisms for achieving the same goal. My "plan" was more of a thought experiment to get people to think about who actually bears the brunt of the costs imposed by this policy.

 

Swap Microsoft programmers getting a minimum of $200K for burger flippers getting $15 an hour if you like, the key problem remains the same - forcing employers to pay wages that exceed the economic value generated by their employees will not benefit the employer or the employee. Not so sure this is a strawman. Just ask the guys working for GM.

 

As far as the price of gas and the gas-pump jockey is concerned, this is an interesting case. For the sake of simplicity, assume fixed gas consumption and mandatory full-service. Prices go up, people pay more, and no gas-jockeys lose their jobs. However, just because gas jockeys have a protected job, this doesn't mean that increasing prices will lead to no job losses. When non-discretionary spending goes up, discretionary spending goes down - unless real wages increase by the same amount as expenses - and people are left with the choice of either assuming more debt, putting less money away in savings, or reducing their discretionary spending. Folks who make their living in industries fueled by discretionary spending will eventually sustain job losses that are proportional to the reduction in the amount of money that people have to spend on whatever it is that they produce. And even though the gas jockey might have a protected job, most or all of the nominal increase in his salary will be wiped out by the higher prices that he'll pay for the consumer goods that he spends most of his meager income upon.

 

I actually don't support the idea of a minimum income, but it seems like this is the idea behind most people's support for minimum wage laws. I think Phelps has a better idea, and although his Nobel Prize doesn't make him infallible, I hope it will at least give him a wider audience.

[KaskadskyjKozak]

forcing employers to pay wages that exceed the economic value generated by their employees will not benefit the employer or the employee

 

they'll raise prices. that may or may not spell trouble for the affected businesses. Burger King competes with McD's et ali, and if one has to raise their prices, so will the rest. I'm not sure Joe McFatass would stop buying their burgers if a super sized mega-fat-meal cost say $7 instead of $5.50.

 

It's been years since the minimum wage was increased and certainly that means there's a lot of inflation (compounded) to catch up to in that gap. When minimum wage was last raised our economy hardly went belly up, and if we raise it to be equal (in dollars accounting for inflation) to the last hike, I doubt we'd see anything drastic happen.

 

Also, many states and local jurisdictions have increased minimum wage above the federal limit. Nothing terrible has happened in those areas.

 

I agree that it would be catastrophic to raise the minimum wage to a "living wage", but I doubt bumping it up to $6 or $7 an hour will do much damage.

 

What I would really like to see though is enforcement of minimum wage for illegal aliens with heavy fines for violations. I wonder if it would put a dent in our "illegal immigration problem" if employers had to pay $7 to Jose fruit picker plus social security and medicare taxes...

[archenemy]

What I would really like to see though is enforcement of minimum wage for illegal aliens with heavy fines for violations. I wonder if it would put a dent in our "illegal immigration problem" if employers had to pay $7 to Jose fruit picker plus social security and medicare taxes...

This is already done. All pickers receive minimum wage at least (of course, farm min wage) and SS taxes are paid on each of them. Their individual buckets are tracked everyday, and they are paid per bucket. Thus, most pickers actually make over min wage b/c they pick more buckets per hour (at about $3 a bucket)than min. wage would cover.

Of course, these are pickers who can produce a Social Security number (approximately 20-30% turn out to be fake each year). Thus, the illegals who are able to successfully make it here and get a job (farmers and orchardists don't hire people who can't produce social security cards; farms are checked with great regularity. I am not including the occasional dishonest farmer or orchardist in this discussion). The reason I know the percentage of fakes is that after every harvest season, all the pickers' SS #'s are run against the federal database, just like in every other company.

[foraker]

Why do you check them *after* the harvest? I'm sure my employers don't wait to check my SSN until *after* I quit working for them....

[tvashtarkatena]

One benefit that is seldom mentioned in 'free market' debates such as this one is the decreased social costs of bringing workers above the poverty line. This is much harder to quantify, but it is nonetheless significant. Our social services require a substantial public and private overhead. Take the criminal justice system. It's no secret that lower income neighborhoods have more crime. This requires substantial public investment in police, courts, prisons, etc..., in addition to private investments in security systems, personnel, and other preventative measures, in addition to insurance. Raising the minimum wage would reduce the need for these expenditures, an effect which would offset or outweigh the direct cost to business of raising the minimum wage, in addition to increasing the less quantifiable well-being and quality of life for society as a whole.

 

Regarding farm workers, farmers rarely hire them directly. The problems of corruption, regulatory non-compliance, and worker abuse are most frequently caused by labor contractors. A typical scam is to pay the minimum wage, but overcharge workers for transportation and housing and supplies at the 'company store'. These contractors do not have the kind of fixed assets to risk that farmers do. They are much more of a moving target for enforcement of labor and immigration laws.

[OldManRock]

All new employees where I work have SSN's checked within a weeks time - All by email - Through the loacan S.S. office