Full Version: Minimum Wage
QUOTE(Amlord @ Apr 23 2007, 06:53 AM) 
Tax breaks for lower income families? I guarantee you that if you make minimum wage, the federal government will not be knocking on your door to collect any money. Of course, Social Security and local taxes (sales tax, local income tax) hurt those on the lower end of the income spectrum a lot more than federal or state taxes do.
Only 2-3% of workers make the minimum wage. The unemployment rate is at a historically low rate. This means businesses are hiring and if you settle for the minimum wage you are doing just that--settling. Honolulu jobs--No experience
I completely agree with you on your points here about the two bedroom "average" house on minimum wage. Obviously, you should be able to get by and that's about it with Minimum Wage. However, I don't think you can get by on minimum wage in an urban area. If you take a look at Morgan Spurlock's first episode of 30 Days, he and his wife attempt to live in a Chicago suburb with entry level jobs. They start with zero cash , in a bare minimum apartment for two people and they both get jobs(Morgan's actually pays more than minimum.) The series of events that follows is brutally realistic, and demonstrates just how hard it is to currently live off the current minimum wage level. When you're living week to week on a check that barely covers your expenses... Something always happens that's going to set you back and either put you in debt or force you to make drastic life changes.
I'm also not really sure where you get that people paying minimum wage aren't paying federal taxes. I worked several minimum wage jobs while working at college and they took the same amount out then as they do now (30% or so including state and the rest), my returns would be higher on a percentage basis, but it would still be a good chunk of change at the end of the year. They take the taxes right out of your check if you work for any moderately sized business, so its not like your going to be able to just not file at the end of the year.
I think Spurlock's take adequately demonstrates that in a metropolitan area $5.15 is not enough to survive off of even with working overtime. He can't even scrape by with the $7/hour he ends up getting. Honestly, I don't think the solution is at the federal level. It should be determined (As it is here) based on the cost of living in the state, perhaps even by the city. I do think that in the rural areas/smaller city areas I have lived $5.15 may in fact be enough.
In LA, due to the fact that you're either going to pay a lot on your rent or you're going to need a car $10 or perhaps even more should be the minimum wage. I know that when I first moved out here $10/hour was just about enough, but now 6 years later, I can't even imagine how I'd get by on that amount. I also think that incentive for a business to be located within LA County would be enough to accommodate the moderate cost of an increase to businesses.
I can, however, see how a $10 minimum would severely damage a business running in rural Texas, which is basically why I would conclude that an all-encompassing Federal Minimum Wage increase to say Los Angeles Levels would not be the best solution.
All that said, I am much more concerned about the plight of the poor than businesses, and I honestly don't buy the arguments that paying the lowest income people more eventually hurts them worse.
QUOTE
I worked several minimum wage jobs while working at college and they took the same amount out then as they do now (30% or so including state and the rest), my returns would be higher on a percentage basis, but it would still be a good chunk of change at the end of the year
I think you effective tax rate would be (at most) 4% for a minimum wage job.
I think Spurlock's take adequately demonstrates that in a metropolitan area $5.15 is not enough to survive off of even with working overtime. He can't even scrape by with the $7/hour he ends up getting. Honestly, I don't think the solution is at the federal level. It should be determined (As it is here) based on the cost of living in the state, perhaps even by the city. I do think that in the rural areas/smaller city areas I have lived $5.15 may in fact be enough.
I think you effective tax rate would be (at most) 4% for a minimum wage job.
I think Spurlock's take adequately demonstrates that in a metropolitan area $5.15 is not enough to survive off of even with working overtime. He can't even scrape by with the $7/hour he ends up getting. Honestly, I don't think the solution is at the federal level. It should be determined (As it is here) based on the cost of living in the state, perhaps even by the city. I do think that in the rural areas/smaller city areas I have lived $5.15 may in fact be enough.
This is how “real” wages are determined. Supply and demand in most areas sets wages well above the minimum wage. Of course the problem in LA and other areas esp. west and south is illegal immigration. Any place where employers can pay far less to an illegal alien and not fear getting caught them wages will be lower across the board – and this gets worse as the minimum wage rises. Needless to say in “sanctuary cities” like NYC and SF the illegal aliens will have most of the jobs that would have been minimum wage or higher.
Thank idiots like Ted Kennedy and the Mayor of SF for that.
1. Is a minimum wage a good or Bad thing? I get that it is basicly "unwise", cuz of the mechanics of markets. Having a minimum wage just distorts the "free market system" (if you believe in its reality; or, even if you don't, something similar to the following seems to always happen), and ajusts all prices to effectivey wipe out any minimum wage "gains".
2. What are the economic effects of having a minimum wage? Apparently "helpful for a while", then back to essentially the orriginal Cost of Living "steady state in terms of goods and services actually gotten" which then goes to another higher min wage, etc., ad infinitum. Side result is inflationary penalty on all of us!!
.
3. What should the minimum wage be set at in america right now? Afraid zero $$$'s. Better solution to so-called "bad luck/misfortune safety nets" is the flat tax types of fixes, at least for me and my calculations!
2. What are the economic effects of having a minimum wage? Apparently "helpful for a while", then back to essentially the orriginal Cost of Living "steady state in terms of goods and services actually gotten" which then goes to another higher min wage, etc., ad infinitum. Side result is inflationary penalty on all of us!!
.3. What should the minimum wage be set at in america right now? Afraid zero $$$'s. Better solution to so-called "bad luck/misfortune safety nets" is the flat tax types of fixes, at least for me and my calculations!
This is a simplified version of our main content. To view the full version with more information, formatting and images, please click here.