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[Graknorke]

I kind of wonder about the people that keep spreading this bs though: If you think they have it so easy why don't you go and do it? Enter medical/law/flight school and afterwards live the life loca. Isn't that how it works?

Because those things are hard? wierd never said that they "have it so easy." Quite the opposite.

[wierd]

Indeed, I said that they are among the groups most likely to backlash against a rise in the minimum wage, and stated why. (They endure a lot of shit to "get ahead", and having the floor rise up behind them is demoralizing, and cheapens their sense of accomplishment, even if just on a subconscious level. I chose those professions specifically because of thier qualities as high stress, high work, high investment careers-- people have to work very hard to get there, and a rise in the min wage without a subsequent rise in their own pay drags them lower, cheapening their accomplishments. Everything else was something made of straw that you brought up. Also, i now work in healthcare, doing grunt work. I personally know how not-fun healthcare work is, thank you very much.)

[BlindKitty]

*grumbles vaguely* Problem with the milk example is that wages aren't a one-way street. The only variable involved isn't the price of the metaphorical milk. If setting the minimum price on milk subsequently caused everyone involved to be able to afford $1.25* milk, purchases would almost certainly increase. Certainly for stuff like that, demand isn't really going to change that much -- milk prices have something like freaking doubled in my lifetime, from what I recall**, and consumption damn sure hasn't halved. You could -- and do -- have demand shifts into other resources, but that's generally not (even remotely) a net economic loss. Money spent on water is still money spent, and whatever the price difference is between the water and milk gets spent on other things (like hey, maybe healthcare or education or personal business investments or housing or, y'know, stuff like that).

Work isn't really a resource that functions like a perishable item, though. Very different dynamics going on with it.

*Incidentally, that's hella' cheaper than actual milk is selling here in the states, but that's neither here nor there.
**Though that recall could definitely be spotty considering how volatile milk prices are on a monthly/seasonal basis. Also don't ask me about inflation adjustments, it's 3 in the morning and I haven't slept since yesterday.
---

Last I checked, pegging the minimum wage in the states to inflation (i.e. it would skyrocket) would almost certainly not cause a significant GDP drop -- there would be a little instability (followed almost certainly by a notable increase, as demand shifts upward and in to less marginal items), and maybe the jackasses on top would have to stop raking it in quite so hard (on a per-worker basis, anyway), but the economy can frankly afford to double or better the minimum wage. Might not be able to double or better everything else, but shit, most of the everything else is already managing a living wage so m'personally less than concerned about that.

Sounds like it'd be a nice thing, to me. Min-wage folks might actually be able to live, and invest themselves in to doing something besides min-wage stuff, without breaking themselves in half in the process.

Well, the milk example was only for (very) rough illustration, but the basic idea stands. Of course, milk and labor have very different details going on (like, demand for milk is not all that flexible, because there is no direct substitute for milk, with all the calcium and stuff; also, milk might be subsidized/regulated - it is in the EU, which skews the prices, etc., etc.). But generally, if the demand shifts from milk to something else, there _is_ net economic loss. Because people buying water now would rather buy milk, and they are worse off than before minimum price for milk. And isn't it more important than keeping tax dollars flowing?
With minimum wage set higher, there will be more thing that just won't be done. Less people will use some of the services, as they will become more expensive, and workers who granted those services will be laid off; there is no going around that, plain and simple.

Than again, pegging minimum wage to inflation would be relatively reasonable design choice. That would dip into the discussion of what inflation is, but that's for another time.

Seems to me this kind of logic makes a lot of sense to people but doesn't stack up if you look at the real world. I live in a country where minimum wage is much higher than in the US and yet the unemployment rates are roughly the same. In my experience businesses will employ the minimum number of staff they can to get the job done. The minimum no. of workers doesn't actually change whether you're paying them $5, $10 or $50/hr. As long as it's not so high that the business can't actually turn a profit the number of workers employed tends to stay the same.

And I live in a country where minimum wage is trivial compared to the US, and yet we have unemployment rates of about 15%; that doesn't actually mean anything, since there are so, so many other things that have to do with unemployment rates. The minimum numbers of workers change, obviously. If the fast-food joint needs one worker and earns, say, 30$ an hour above the cost of resources, than as soon as minimum wage is above 30$, the joint closes and there is now 0 workers needed.

Frankly, the fact that the minimum wage is not a living wage is just fucked. Anyone working full time should be making enough to support themselves without resorting to government aid. Minimum wage should be set at a local level to be enough to live on reasonably without working over 40 hours to do it.

While this sounds great in theory, there is still the same problem; some of the jobs that would normally pay below what is now minimum wage will be just unavailable. And this is the problem if, for example, there is a pair of people living together (so lower expenses than two separately living single people), who would do good if both had the below-minimum wages, but who are not earning anything because neither of them has a job.

[Frumple]

demand for milk is not all that flexible, because there is no direct substitute for milk, with all the calcium and stuff; also, milk might be subsidized/regulated - it is in the EU, which skews the prices, etc., etc.).

There's many substitutes for milk, actually. Beyond direct stuff like soy milk, pretty much any other liquid counts, and calcium requirements shift into other substances. Remember that the majority of the human race is still lactose intolerant. Milk's not a very vital substance, really.

But generally, if the demand shifts from milk to something else, there _is_ net economic loss.

Fulfillment of wants shifting into something else isn't a net economic loss -- a net economic loss requires the money involved to disappear into the aether or not get used (i.e. not spent or invested), which is fairly rare in an even remotely healthy economy. Less money spent on milk means more money spent on something else the person would want, not less money spent overall.

With minimum wage set higher, there will be more thing that just won't be done. Less people will use some of the services, as they will become more expensive, and workers who granted those services will be laid off; there is no going around that, plain and simple.

And, assuming something doesn't go wrong, they'll find work in the new services that come in to demand. Demand usually has significantly more effect on job availability than supply when there isn't an absolute physical bottleneck, and companies not wanting to make less profit isn't one of those. People will be laid off, but that doesn't mean the net work demand is going to decrease, because people are still going to want stuff, even if it's different stuff, and we still need people to get that done (for now).

If the fast-food joint needs one worker and earns, say, 30$ an hour above the cost of resources, than as soon as minimum wage is above 30$, the joint closes and there is now 0 workers needed.

Sometimes. Sometimes they keep going, at times for a significantly long period -- it's not uncommon for companies in the red to operate for quite a while just to mitigate the relative price of fixed expenses. More often something gets rejiggered (usually those resource costs). And the joint closing isn't necessarily a bad thing, in the long run -- something else will pop up, if it's not already there.

That said, you do generally try to rig these things where an increase in minimum wage isn't going to cause businesses to become absolutely unprofitable. Fortunately, most of them (yes, including small businesses) have pretty significant wiggle room when it comes to wages, particularly for their lowest paid workers.

[WillowLuman]

The main problem with the argument that increasing min wage would cause cause a sweeping closure of businesses is that it assumes a massive increase in minimum wage. No one's bumping the minimum wage up to $30 an hour (not without massive general inflation beforehand anyway). Just up to something people can live on, at least. It's probably worse for the economy to have people unable to pay for anything and needing constant government aid than to raise wages a little.

[Zrk2]

I supposed, ideally we would raise minimum wage to a livable point, then index it to the CPI and be done with it. But this assumes unlimited political capital and the desire to improve the lot of the working class, both of which can be hard to come by.

[scriver]

If the fast-food joint needs one worker and earns, say, 30$ an hour above the cost of resources, than as soon as minimum wage is above 30$, the joint closes and there is now 0 workers needed.

Sometimes. Sometimes they keep going, at times for a significantly long period -- it's not uncommon for companies in the red to operate for quite a while just to mitigate the relative price of fixed expenses. More often something gets rejiggered (usually those resource costs). And the joint closing isn't necessarily a bad thing, in the long run -- something else will pop up, if it's not already there.

That said, you do generally try to rig these things where an increase in minimum wage isn't going to cause businesses to become absolutely unprofitable. Fortunately, most of them (yes, including small businesses) have pretty significant wiggle room when it comes to wages, particularly for their lowest paid workers.

This also implies that the workers will just hoard their money in their bedclothes, which they won't. They'll spend it on stuff they need or want that they previously couldn't afford, which will be good for the economy and all that stuff. In fact, the fast food joint is a sort of ironic example given that a lot of that wage rise will probably buy fast food.

[Bohandas]

Raising the minimum wage is a stopgap measure. It'll fix things in the short run, a couple months or maybe a year, but in the long run it'll drive up inflation and encourage the putsourcing of jobs to foreign countries.

[Graknorke]

If the problem is that wages are too low, any solution is going to result in wages increasing, which will drive up inflation. Else the prices of goods decreasing, and then you get deflation which is not desirable at all.
I remind you that inflation increasing isn't always a bad thing

[wierd]

inflation is not necessarily bad, no--  just that if the goal is to give blue collar workers a "livable wage", then the resulting increase in prices of all products and services resulting from that inflation will make the effort moot; increased wage-- meet increased prices.

What needs to happen is for wealth disparity to move away from the 1%, and for the middle class to grow.  Really, that is what needs to happen.

[Zangi]

I'm for a minimum liveable wage.  It is a complicated moving goalpost.

[Andrew425]

I'm for stopping immigration and developing heavily into the resource and manufacturing industries instead of raising the minimum wage.

By shrinking the labour pool you make labour more valuable by increasing the rarity of it. By increasing the amounts of good paying resource and industrial jobs you further shrink the pool of available labour for businesses. McDonald's pays its employees minimum wage because they know there is another twenty people who can and will take the job of someone who left. When I was in Edmonton a few months ago the McDonald's was paying 40% higher then minimum wage because of the difficulty of finding workers. I think that is what we should be striving for rather then simply raising the minimum wage.

[Frumple]

... you might actually want to check numbers on stuff like minimum wage worker demographics and industry employment figures if you think that would actually help.

Hint: It would not.
Bigger hint: It would do far more damage -- to basically everyone, not just low-income workers -- than just raising the ruddy minimum wage.

[wobbly]

I'm for stopping immigration and developing heavily into the resource and manufacturing industries instead of raising the minimum wage.

Low immigration is also less customers -> less business -> less jobs.

[Levi]

I'm for stopping immigration and developing heavily into the resource and manufacturing industries instead of raising the minimum wage.

Low immigration is also less customers -> less business -> less jobs.

And less tasty ethnic food.