Time for a fact check. The poverty level is not $18K per year. For a single individual, the poverty level is $9800. If a person works full time at $5.15 an hour (40 hours per week 50 weeks per year) they will earn $10,300 per year. Not great, but above the poverty line.

Now, for a family of three, the poverty level is $16,600--much closer to your figure (although still lower). I think we can all agree that nobody can expect to support a family of three on $5.15 an hour. But if both parents work, their income is $20,600: above the poverty level.



Looking at the statistics, $7.50 an hour would not be below the poverty level. In fact, it would almost be sufficient to provide for 3 people.

Of course, anecdotal evidence is always used. "I pay $600 for rent!! How can I do this on minimum wage?" But the fact of the matter is that you are not entitled to a $600 apartment. A minimum wage earner would do well to live with others--parents or siblings for example. I have two brothers that live on less than $200 per week. They live at home. They have no car. They seem relatively happy. Just anecdotal, however.

BecomingHuman has done a good job with the economic theory behind the minimum wage. The reason that the current minimum wage is only a very slight drag on employment is that it is close to or lower than the prevailing wage for even entry level jobs. Telemarketers hire at $8 an hour or more.. Talk about unskilled and boring work.

Should the Minimum Wage Be Abolished?


We've had this debate before: A Long Dry Spell for the Minimum Wage . For many, this is an issue where no agreement is ever possible.

The disincentive is created because of the fact that no skills are needed to get the benefit. Now, if the argument is that minimum wage should be raised to get people to work at all, there might be some merit to that. However, that has its own flaws...in that it is creating a benefit for people who have no desire to work at all.



My, my...aren't we a bit reactionary here???? Where in here have I, or anyone, argued that people should work for nothing? We are advocating that they should acquire a skill, and put it to use for their own, and society's benefit. Please indicate how that equates to urinating and defecating on people.



Why wouldn't it be better to include acquiring a marketable job skill?



BOOTSTRAPS rah rah speech? ??? ????? Please reference.

As to your analogy, finding a 'decent' job, and the minimum wage discussion have no correlation, unless your argument is that ALL jobs should be 'decent' jobs, which is discussed in the sections below.



But aren't people a lot more dignified in a Rolls Royce than in a Yugo? Isn't it more dignified to travel in a limousine rather than take the bus? This is exactly why this argument comes up...because once artificial floors are created, the question of exactly where to set them comes in. Your argument, given the caps, is that it needs to be a level that creates dignity. My statement then comes into play....in that you get a lot more dignity in a Rolls than in a Yugo. So, why not set wages at that level? How much dignity is enough dignity? Wouldn't it be more dignified to acquire a marketable skill, and put it to good use?



I believe you have answered your own question here.



Ah, and there you would be mistaken! See, this position (you are inferring both that I have a stance, and that you know what it is, which I doubt, but that's beside the point) does indeed have an answer. In allowing the market to set wages, it is the worker who is in control, not the company. If we had NO minimum wages, most people would be completely unaffected. Tell me exactly how people setting their own wages (which is what would happen in a full market economy, with no minimum wage) equates to slavery at all? I don't recall slaves setting the market for their skills, and getting paid accordingly. In fact, I don't recall them getting paid at all. There is a logic abyss here, and the leap into slave rhetoric fails to cover it, leaving the argument to fall to the ground.

Red, I feel your passion here, and I do understand your basic argument. I'm not even necessarily against it. As I stated in my previous post, there is a way bridge this gap. There is a philosophic difference here, and neither of us is going to convince the other to change their philosophy. However, as I stated in my earlier post, there is a way to convince a fiscal conservative that raising the minimum wage is a good thing, and that is by describing the economic benefits of doing so. Tell us the economic benefits to be obtained from a minimum wage, and you would get more support. Shouting useless rhetoric doesn't do it.

That contradicts what you said at #31:


Would you be interested in clarifying?

I didn't see where min wages or wages at all were mentioned. From what you have shown, you have proven previous posters correct, there is an IDEAL number of workers that a company must have to remain productive.

Why would a company have less workers if that hurt productivity?

I think you're ASSUMING that output would be decreasing or increasing? Is that it?



Why is that? You really haven't proven that. What if by increasing wages, like Henry Ford did, you actually increased DEMAND? Then the offset of wages would be covered by new income.




I see, and the CATO institute is a bastion of unbiasedness? Give me a break. Most think tanks have their own motivations.



Uh, that's not what a strawman is. A strawman is when you build a fantasy and present it as reality, so you can tear it down to prove a point. Like saying "when min wages are increased, every min wage job will be eliminated, people will will be starving in the streets, so that's why we can't raise wages".

But regardless, you sound like a college kid, wait until you get into the real world and find out about what you are "willing" to do. If the choice is work or die generally people will do the work as in your China example. Does that mean it's OK to let these people suffer? NO. Using this "they're willing" nonsense is an excuse to commit attrocities.

Just because people work min wage jobs doesn't mean it's either fair or "right".




Exactly. The only problem is, when you have a CEO making $400 million there's NO JUSTIFICATION for making someone make this choice.

It's called DECENCY. We have the wealth in this nation to pay those people a decent wage. We're not fighting over scraps of food. People shouldn't "just be surving" when you have a fat pig walking away with $400 million clams.

And like Henry Ford found out, you increase DEMAND for goods and services when you put money into the hands of people THAT SPEND IT. And then create MORE EMPLOYMENT and a larger middle class, which is very good for a stable and healthy country.



The caveat is that they have an increased min wage. That is the assumption I was making.

Why don't they quit now? Because the min wage is too low.

If I misrepresented what I said, I am correcting it now. They are getting something back in return, if by chance, they happen to lose their job to an employer who could barely employ them on $5/hr, they are now able to get a min wage job at a higher rate.

That is the trade off. Got it?



The vast majority of economists believe the minimum wage law costs the economy thousands of jobs.

If creating many low-paying jobs is the goal, then yes this is probably correct. You could also argue that high wages for ANY job cost the economy thousands of jobs. I mean, if you can get a doctor for $5.15/hr, we could have dozens of doctors at your beck and call.

So doctor salaries....are costing the economy 1000s of jobs...YOUR salary is costing the economy 1000s of jobs.

Teenagers, workers in training, college students, interns, and part-time workers all have their options and opportunities limited by the minimum wage.

I work part time and live off my income. Why would you conclude that part-time workers or any of these other people NEED LESS MONEY?

A low-paying job remains an entry point for those with few marketable skills.

$7.50/hr is STILL a low-paying job.

Abolishing the minimum wage will allow businesses to achieve greater efficiency and lower prices.

Woohoo! And so does moving your factory to Mexico or China!! BTW, another great job killer.

When you force American companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign workers, where labor is much cheaper.

LMAO!!! Yeah...they're not doing that now. {rolleyes}

Non-profit charitable organizations are hurt by the minimum wage.

But what if those that make MORE money now can volunteer time instead of working extra hours? What if they can also donate money?

Oh yeah, the min wage hurts tiny orphans and puppies too....{rolleyes}

The minimum wage can drive some small companies out of business.

Sure....kind of like WalMart...right? OOOOOPPPPSSS!!!

A minimum wage gives businesses an additional incentive to mechanize duties previously held by humans.

Yes, and we abhor PROGRESS. God forbid we MODERNIZE so some shmuck doesn't have to clean toilets.


What nonsense.

Benefit? Making a liveable wage is a benefit? If someone is working I think that entitles them to this "benefit". We're not giving them stock options and a company car for christs sake.

We're paying them a decent wage.



Apparently people without a "marketable skill" are less than a person to you. I don't feel the same way. If you are willing to work, you deserve a liveable wage.



Your constant harping about "getting a marketable skill". As if you just go out and purchase a "marketable skill" and all is forgiven, you no longer have to work for peanuts. As I eluded to, in the worst economy in the country a marketable skill is a FALLACY. People with plenty of experience have to do service jobs because nothing else is available. It's not quite as simple as you imply, especially for someone making $5/hr to begin with.



Yes and? And so your conclusion is that we are completely insane and will we go off the deep end....so we can't decide at all? Your conclusion is ridiculous.

Obviously we have to make a choice of what a decent wage is. Just like we decide how clean our air is and how clean our lakes and streams are. You could argue the extremes on those issues as well and say "next you'll be saying we can't drive cars, can't fly airplanes, because of the exhaust!!" SO WE MUST ABOLISH AIR QUALITY STANDARDS!

Yer reaching Hobbes, but yer not the first.



I did, how?



I have. I've shown economic evidence that the last min wage hike did not hurt the economy and even reduced welfare rolls.

By empirical evidence I have shown that we need to increase the middle class and bring lower wages higher for a stable country AND economy.

It depends on what economic news you want to hear. If you have stock in WalMart then nothing I can say will help you there, because exploitive companies like WalMart thrive on low wage workers....and the demise of our middle class.

No, being paid above market wages is a benefit...which it certainly is. You might argue, as you are, that it is a justifiable benefit, but it is a benefit, nonetheless.





Where did I draw this conclusion? I think this debate would probably go better if I were allowed to draw and state my own conclusions, without having them inferred for me. In fact, I stated in my initial post that in my experience the 'gloom and doom' scenarios generally used against setting/raising the minimum have not occurred at all.



Fine. In my initial post I stated that I suspected such evidence existed, but was seldom stated. My personal experience tends to corroborate this. I was working in high school when the first minimum wages came out, and I remember all the gloom and doom arguments against it. I didn't see any of it..and I recall the company line (this was at McDonald's) was that they expected to make up for any increased expenses through enhanced sales, as rising wages should increase demand for their product.

I would add, just for argument's sake, that my experience there did also point out how this was indeed a benefit. There were various people in the store who had, through their hard work and initiative, been given raises. The new minimum wage essentially brought everyone up to about that same level...essentially giving everyone the raise, even though many there hadn't 'earned' it yet. I don't really see how that couldn't be construed as a benefit.

I would also point out, just to clarify, that I not only have been in contact with poor people, I have been one of them, at certain points in my life. I would also point out that I am VERY pro worker, in that I have a strong belief that worker empowerment is the best way for a company to succeed, and that it is in a company's best interest to reward such workers with higher pay, better benefits, and improved working conditions. Where I suspect we differ is that I also strongly believe that it is the worker that is in control of these matters, and that if they are not happy with their situation then it is up to them to take steps to remedy it.

I spent much of my post refuting this idea that their is an ideal amount of workers, upon which no more should be hired. An employee should be hired if the amount of revenue I get from hiring that employee is greater than the cost. I argued firms will keep doing this just until the cost of hiring the employee equaled the amount of revenue gained (And I also pointed out that there is a diminishing amount of profit I can gain from hiring employees). I used much solid, text book economics to back this up. Finally, I tied this all into the minimum wage by stating that an increase in the minimum wage would diminish a workers profitably, and it would be advantageous to the employer to fire them. But I might have skipped something vital, so we'll do it again.

Output does increase or decrease, thats what marginal productivity is all about. Referring to my waiter example, the extra productivity would be more customers served. Losing the waiter would mean less customers you could potentially serve. The thing being "produced" is service of waiting tables. The more waiters you have, the more customers you can serve. For every customer you serve, you generate revenue. I will explain when a producer will stop hiring waiters, or lose some waiters, below.

Simple, because the amount of revenue generated from that employee is not worth the extra cost. In my waiter example, if you kept hiring waiters until the very last one could only serve one customer a day (as all the other waiters took care of the rest), would you keep them employed? That one waiter can only serve one customer (Which is still productivity gained), but that one customer would not cover the costs of hiring the waiter. So, even though your losing productivity, or that one customer which could have been served, your not going to fork out the dough to hire a waiter just to serve that one customer. ( I tie productivity into revenue directly, which may be a source of confusion. I can make this tie because more productivity, for business, means generating more goods and services. More goods and services means generating more revenue)

Here we see directly that the owner is willing to give up productivity (the customer), even if another waiter could have served them because the cost was greater than the revenue, which gave us negative profit. An equation might illustrate this. Remember that, for every employee I hire, I get decreasing returns to how much added productivity (and thus, revenue) I receive (Law of diminishing returns).

Profit= Revenue - costs
Profit= (1 Customer served) - (Cost of the waiter)


Now lets say your at an equilibrium (That is, you fired all the employees that were losing you money until the point that you make profit on the work of every employee), and the minimum wage increases. Because every employee you have costs more, you lose profit (revenue - costs). An employee that just barely earned you profit ($.01 = 5.00 - 4.99) now loses you profit (-$1 = 5.00 - 6.00).

You would be correct in assuming that if there could be a minimum wage increase and the employee still generated profit, they would keep their jobs. However, because employers have incentives to hire right up to the point were added revenue = added cost (More profit is better than none), there will always be employees on the margin that will suffer as a result of a minimum wage increase. A waiter that just barely served enough customer to cover the cost of their wage would be fired by a minimum wage increase.

To Quote myself:


You mean Henry Ford gained money by giving it away? Lets take a look at this.

From the companies perspective, giving more money away is clearly a bad thing (whether it be by minimum wage, etc.) I understand your argument is that an employee who earns more money can buy more, increasing demand. For companies, in order for this to be worthwhile, the employee would have to spend all of the money they received, actually, more, at their stores. Obviously, they would have to spend all the money at company stores just to get back the money they lost. And furthermore, they would have to spend more than that because now companies are giving away merchandise for money they they would have otherwise just kept.

On a Gross level, I would agree that a minimum wage would increase demand if :
A. No one lost their Job as a result (No money = No goods purchase)
B. Prices did not increase (As a result of increased costs)

Those are both pretty big what ifs. And this doesn't even bring up the issue of deadweight loss, which would actually serve to decrease demand further! I will get into that later. I will respond to your other points later as well.

Edit: I swapped revenue for profit in some some instances so as to not confuse the idea of profit generated from selling things without adding costs (Which, indeed, is called revenue) and total profit, or Profit = (amount of $ I generate from extra goods/services) - (Amount adding those extra goods and services costs)

RedCedar, your logic is all over the place.

On one hand you decry the outsourcing of jobs to China or India. The reason they go there is because the cost of labor is less there. Your solution? Raise wages in the US. What effect do you think that will have on the pressure to go with cheaper labor?

I've told this story before: I quit my first job over the minimum wage. I was a lowly fry boy at Burger King when I was in high school (circa 1989). I started at the minimum wage ($3.35 an hour). After about 9 months on the job, I got a few raises (one for simply showing up on time) and was humming along at $3.86 an hour. Along comes an increase in the minimum wage. The minimum went up to $3.80 per hour. All of a sudden I was making only 6 cents per hour more than the slub who just walked in the door.

I went to my manager and asked if they would be bumping up experienced workers to a higher wage. "Of course not" came the reply. I explained how I had already received the promised 3 month and 6 month raises and would now need to wait 6 more months for another wage review. Meanwhile, the guy starting today would be reviewed in 3 months and in all likelihood be making more than me.

"I should quit and re-apply." "Sorry, you'd still have a work history here and wouldn't be eligible for automatic wage reviews."

"I quit."

They offered me a 25 cent raise to stay, but I refused.

Here are some interesting stats on the minimum wage in the US and in the EU from EUROSTAT.

Notice that Luxembourg, where the minimum wage is very high ($11.34 an hour, approximately), the largest percentage of the population makes the minimum (16.9% of full time workers). Notice that in the US, the percentage of full time workers making the minimum is 1.4%.

Keep in mind that unemployment in Europe is steady at 8.5% link: page 128 and the US has a higher minimum wage than all but 7 of the EU countries.

EDIT to add:

On the point of Henry Ford: Ford did raise the minimum wage per day to $5 in 1914--double what he was paying. The Ford Motor company's turnover rate in 1913 was 380%. He said he was creating customers. He also said is was the biggest cost cutting move he ever made. At the time, Ford was producing 267,720 cars with 13,000 employees. The other 299 American auto companies (!) produced only 286,770 cars with 66,350 workers. You can see that Ford's workers, who had greater capital behind them, deserved to be paid more. After all, each worker produced over 20 cars, while the competitors workers only produced 4 cars. You can see that Ford's employees were worth more and Ford wanted to keep them.

But that is just one part of the story. Ford increased his wages over time, and by 1929 wages had hit $7 a day. In 1932, when Ford was slumping because of the Depression and other factors (he refused to adapt to the changing auto market), Ford cut the pay rate to $4 a day--less than the industry average. In fact, when the minimum wage was first implemented in 1935 (and re-implemented in 1938) it was this same $.25 an hour or $4 a day. Everyone in America was making at least Ford wages. [I'll leave off the effects of the "Ford Sociology Department" which investigated workers with union sympathies, private problems, or other "unhealthy" behaviors.]

What if Ford's plan in 1914 had been law: everyone gets $5 a day. By 1932, Ford would have needed to lay off a good deal of his workforce and make due.

Just for argument, let's say you're right. It's a no brainer. Why can't the states and municipalities determine the local minimum or living wage, as they do now? Why do we need federal law when clearly the cost of living varies widely across the nation?


This is where I lose you. You have moved the goalposts from being able to "live" on this wage, to it being about dignity, and what a person is "worth." Who are you to say that $5.15 is a "joke" and $7.50 is "livable?"
Especially, as I've noted, people do choose those jobs, even my pampered suburban keds-wearing movie chick. Some of them even choose to work more or less than 40 hours at those jobs.


"We see some evidence of a labor market" does not mean "Carlito EXPLOITATION." It means that we see evidence that the labor market, even in the horrible conditions of a depresion, behaves like a market. You continue to say that it's not a market, there is no free market, etc. It's a market.



Again, we see the problem with this type of reason to make big economic decisions. Minimum wage jobs are entry-level. They are not permanent. When people give up welfare to take $5.50 per hour jobs, they do so understanding that they work for a while, get skills, get a raise or leverage their experience to go somewhere else. Obviously, there are exceptions, but why we should reward the exceptions (and penalize good workers as Hobbes pointed out) is a case you haven't made.


But you want to stimulate demand by putting money in people's pockets, like Henry Ford. Why can't this kid contribute? Are you going to establish a way for us to discriminate against would-be employees, based on their need? The rich need not apply? Talk about social engineering - think of the unintended consequences of this. How about we have a free labor market and let employers and employees contract with each other instead.


I abhor the use of slave labor in China, but we are not going to raise their wages by raising our wages. If we continue to buy their junk, history shows that the quality of that junk, the income generated, and the workers' quality of life will improve over time. See Japan, South Korea, etc.


Speaking as a guy who once had a factory job making exactly $5 per hour, and worked 40 hours per week on the night shift, for $200 pre-tax, um, no. I won't give you a bootstraps rah rah speech, but that's what made me go to college. I didn't like the factory floor so much.


To be clear up front no one here is saying "screw you" or treating you like crap. But, there are lots of PhD's driving trucks around this great country as we speak. When you put time and money into getting educated, you should probably consider the job market when you do so. And specific to Michigan, they have been having hard times since the 70's. Maybe you can't or won't move for personal reasons, but no one is stopping you and the job market down South has lots of jobs for you. Plus, the weather, the people are nicer , and you'll most likely be able to live better, even on $12 an hour.

As for outsourcing, can't say whether it's on or off topic, but this should make you think.



And just a reminder:

You said it yourself, so did you mean something else? If it is detrimental "as it rises" but your study in Oregon found no correlation, what do you really think? Only after $7 per hour? $10? $400? Believe me, I was a low-wage worker in a lousy economy and things detrimental to the economy hit low wage earners the hardest.

I don't think it would have any effect. The labor in Indian and China is sooo much lower than even our min wages ( I showed where ENGINEERS made less than min wages in India) that our min wages really don't influence a company to leave. If the company is going to leave....they're going to leave anyway.

Are you suggesting we compete with these countries by paying the same wages?



Oh well that's how it goes. I joined my company in 2002. The company realized a year later that they could get people for $1/hr cheaper because the economy sucked so bad. So people coming into the coming just a year later were making between $1-$2/hr less than the people just a year or less senior to them.

That's how the cookie crumbles.



Well if we made our min wages only 1 cent per hour we could reduce that number even more. I'm not sure how this is significant.



Does the EU do unemployment like the US? I mean do they count people who want a job but are discouraged? You see the US doesn't. But also the US doesn't help their citizens either so similar to 3rd world nations, many people either work a low-paying job or live in extreme poverty....or both.

1. Is a minimum wage a good or Bad thing?

It's a bad thing because it distorts prices, costs and markets so we know not what is real. It makes many jobs undoable, and cuts out some income that some might want, because no one will pay the min wage for it to be done. It distorts all our "social welfare" systems and payments so again, we know not what is real.

2. What are the economic effects of having a minimum wage?

Distorted costs, prices, markets, acouting and taxation. And denial of income to those who otherwise would seek and use it.

3. What should the minimum wage be set at in america right now?

0.0

Because some things are universal, like the cost of a car, the cost of food, the cost of gas, etc.

Make a low fed min wage and let the states increase it based on their local economies. Why let any state off the hook on paying their people a decent min wage?



Who am I? I'm a citizen of this country! Why do people keep asking who I am?



I never said there was no labor market. I said create a min baseline wage and thereafter let the market take over. No, I don't think we have "Free Markets" per se. So extolling the virtues of Free Markets is a bit nonsensical. It's like christians who pretend people are angels and expect them to act accordingly.




I see. So when you work at McDonalds as a fry cook, then quit. And then go to Burger King with your new credentials, they'll give you a giant signing bonus and huge raise? Or when you're a stockboy at Market A and quit to go to Market B, they'll give you a giant raise because of your expertise in stacking cans?




Why can't they contribute? Uh, they are working aren't they? A minimum wage job doesn't GUARANTEE employment does it? I mean, if an employer thinks you suck they can still fire you. How about you give the worker some slack and let him have a min wage that he can live on and not leave him to the devices of an employer instead.



How much time are we talking about, this is about 2/3 of the planet's population in poverty you're talking about.

I've read studies about projections of globalization and most come to the same conclusion; the US population will becoome poorer because of it. Rising tides me lower tides for 1st world nations.



Too bad college is outrageously expensive and that even a college degree doesn't guarantee you a job these days. I cannot imagine how anyone making $5/hr, living on their own, could POSSIBLY afford to go to school. You can't even live on your own on $5/hr much less pay for school.

I knew this woman I worked with, just getting by with a kid and a sick husband. She enrolled in a program for medical transcription or something similar. She paid a couple grand to get through the program and couldn't find a job afterwards.

I think it's very PRESUMPTIOUS to tell people that they just need to find a skill, etc. and then tell them they aren't worth more than $5/hr. I am appalled at the apathy toward other Americans.



I've read that crap a million times over. What a bunch of junk. Gee, would WalMart be behind the NCPA? Oh wait, here we go:



Yeah, show me a union shop that has the same info and maybe I'll believe it.

Honestly, just think how this cannot NOT be true. Foreign outsourcing creates more jobs in the US? It doesn't even make sense! I even think that may be a paradox.

Think of it this way, you have what, 3 billion pepole in India and China, many poor? You have a larger middle class than the US. You have educated people there that can do just about any job Americans do.....and you think that will create more jobs in the US???? HOW?

If there's a job to be done, why would it be done here if it could be done THERE for 1/10th the cost?? Oh wait, I know, suddenly they will start making money and they can buy all the products that we manufacture.....yeah that's right, I forgot.....OH WAIT, WE DON'T MANUFACTURE ANY PRODUCTS ANY MORE!!!

LMAO. THREE Billion PEOPLE. Yeah, once each of them is brought into the middle class fold, we should be back to creating good jobs in the US.





Yeah right.



I said, like a peak curve you can find a minimum wage that is most benefitial, i.e. increase the wealth of the poor, increase demand in our economy, while having limited effects on unemployment and inflation.

That's just my assumption and it seems pretty logical to me. As you increase the min wage you get to a point where it would adversly affect the economy and as you lower it eventually you do the same.

I know that I've posted this notion more than once, but will do so again.

There are education benefits for minorities, women, the working poor, those with ailments, and/or anyone else who can read available. A search of education grants, loans, or anything else brings up literally thousands of options.



Actually, the very notion about a capitalist society would dictate that if you learned to stock faster, learned more about the inventory system while stocking, or gained skills that a Market would want while working at Market A, that either Market A or B would be more likely to pay a higher wage.

The whole idea is that if you're content to be a stocker for your whole life, please do so. No harm done. However, if you work very hard, learn the system, show promise, etc... there is a likelihood that you will be given more responsibility, learn more, and become more valuable (hence, not still a stocker) and more likely to garner a higher wage. This is how a capitalist labor market works.




Well... mostly because this negates the notions of capitalism. Frankly, as long as people perceive value in minimum wage positions or don't possess skills that would allow them to find alternative employment, I'd have to presume that $5/hr jobs will still be filled. If a community has better alternatives or deems that the work is not worth $5/hr, they will not work there. (Kinda like why my community in the DFW area has McDonald's that advertise $9/hr, and Walmart pays nearly $10).



Is this because you choose not to believe it?

I like to use a source about outsourcing in general (not just foreign) that makes a good point or two, of course not with using the words "overseas".
Please read this.

I like it because it puts things in perspective as to why a business might want to outsource.

Basically put, if a business can get a job done overseas at a lower cost, they often can expand domestic operations at other levels, increase spending, and/or stay in business in a more competitive market and drive the cost of goods sold down. It's not a cut and dry scenario, and considering my nearly a decade worth of Call Center experience, I've seen both sides of the coin. GE is a great example. They enlisted a call center operation in India a few years back because they'd used a couple of US based firms that had dropped the ball terribly. The call center industry is a great example because the margins can be very low, and cost-cutting strategies can be tantamount to staying in business. GE had a hard time getting the level of customer service that they required domestically, so they hired a company that had a US/India based presence, and came out on top. This allows them to have a more international presence, allows them to expand into one of the world's most rapidly growing markets, while also maintaining profitability in a dynamic US market.

Is it always the right thing to do? Probably not, however you have to consider that each scenario is different and has to be weighed in such a manner.



The same could be said for people that get fine arts degrees or learn Greek. In both cases, if someone enrolls in a course that doesn't have a marketable skill or won't garner a liveable wage... then I hate to say that maybe they should've made a better choice.



This couldn't be more inaccurate. Cars and car insurance vary greatly based upon ability to pay, distribution costs, and emissions regulations... not to mention car insurance changes even within metro areas (ie Dallas).

Food costs change based upon locale as well. What you're asserting is that a gallon of milk costs the same in Bossier City, Louisiana as it does in Manhattan. Not true.

Finally, one of the most expensive parts of sustenance is lodging, which is of course not universal.



That's just it. Not everyone is going to be middle class. Education, ability, economic status, regionalization, and sheer luck are going to make some people more wealthy than others. Some folks, unfortunately, in a capitalist market are going to be poor. It's a version of Darwinism.... I thought liberals were believers in evolution!

I'm not going to pretend to be an expert on educational resources, but yes people have SOME resources that can help them. But a lot of them are not as HELPFUL as they may seem. Student loans often are loaded with fees and still need to be paid back. So if you make a "bad choice" as you say then you could be working $5/hr with student loans to pay back.

And grants recently have been cut.

I've looked into education assistance, albeit I'm not a minority or woman, I didn't find much to help. But this is a whole different topic. But suffice it to say, I don't think it's necessarily "do-able" for everyone even with the LIMITED gov't aide that's available.




A MUCH higher wage? It's a sweet notion and I'm sure the average person would get a little bonus for what they know. But you're right, some people can move up into management, they can find other opportunities IF THEY EXIST. But some people can't.



Then why would you have an issue of a raised min wage? Apparently companies are going to pay it anyway.



Yeah, that's great for the BUSINESS. But that wasn't what we were talking about. We were talking about how outsourcing creates jobs in the US.

This is the giant MYTH about globalization, that it relieves americans of these "menial tasks" allowing us to tackle more important jobs. Well that would be great if the menial tasks didn't happen to be ENGINEERING, ACCOUNTING, MANUFACTURING, MEDICINE, LAW, ARCHITECTURE, etc. etc.

Yahoo!, the business becomes streamline and efficient...and more importantly SAVES MONEY ON LABOR.

Uh, but what about labor? That's the issue BTW. Explain how this creates jobs in the US? Those "new areas" that the company can expand into....uh, why don't they do those with overseas labor as well?



Not really. This women thought she was getting a degree that would land her a job.




Cars vary greatly across the US? Really? Wow! Vary GREATLY? Wow, by like $1000s? So do car companies produce stickers for each state?

Show me a place in the US where $800/month will support an individual for housing, food, transportation, etc.




That's true, the world needs ditch diggers too? Right?

Yes, I believe in evolution full heartedly. Of course IMHO, you're not terribly evolved if you think a better world is one in which you have a few billionares and a giant mass of impoverished people.

A giant middle class is PREFERRED for many reasons including a stable political and economic landscape.

There's nothing wrong with a "capitalist market" but there's also nothing wrong with some regulation that includes some fairness and compassion.

Thats correct, they do...through a consenual relationship that both agree to. This is one point you do not seem to get. Nobody is forced to do anything. You don't want to work? Fine, don't work and nobody is going to force you. You don't have to accept the offer that the employer is making because you are free to go elsewhere. If an employer offers lets say $4 an hour, and the employee accepts that deal...is that not a consenual relationship free of coercion? Of course it is.



People do get respect and you have not shown in any conceivable way how they aren't. People earn what they are worth to the company because as I explained (and what you failed to even acknowledge) people with no skills have less value than those who do have skills. Jobs that have the highest income including doctors, lawyers, and accountants require some form of education in order to do the job. People without education would not be able to do the job. So they rely on jobs that do not need any education or any skills which basically means anyone can do it. If a person can be easily replaced by another person without any loss of production, are they that valuable?



I read it fine the first time. Europeans do not work for slave wages but are slaves to the system. Raising minimum wage and social welfare are basically the same thing, different means to the same end. But the economic argument that once again you fail to address is the fact that as companies are forced by the government to raise their wages that they must either cut jobs or raise the prices of their products. If the minimum wage increases and the price of products increase is there truly any benefit?




You want to know the reason that corporations have so much influence over the creation of laws? Because government tried to interfere with govenment in the first place. The example i usually tout is that of the creation of the ICC which was used on its inception to monopolize the transportation of goods in this country in favor of the railroad industry. They didn't want competition to occur in the form of the trucking industry so they used the ICC as a tool to maintain their dominance. If the government chose not to get involved in regulation, then the railroad industry probably would have been hurt by the competition of the trucking industry and the consumers would have benefited with lower prices for the transportation of goods.

Economic justice and economic freedom? That is what free market capitalism advocates. It advocates that government does not interfere in the PRIVATE transactions of the populace. The only time government should get involved is when one of the parties is guilty of fraud. Other than that, a consenual transaction between two adults should not be regulated.



Your hypothetical lacks any logic whatsoever. If something is needed to be done and someone wants to pay for it to be done, than what difference does it make if that job is necessary? I could very well mow my own lawn but if i want to pay someone else to do it for a low wage then it should be my right to make the offer and the worker's right to accept the offer. And again, your analogy to a worker being paid "slave wages" is downright ridiculous WHEN THE WORKER CONSENTS TO THE RELATIONSHIP. Slaves DO NOT CONSENT to their relationship as a servant to the master.




Corporations do not determine my value. Both the employer and employee determine that. Thats the point I and others have been making this entire topic. If the worker accepts the offer to work for the said wage, then they accept it. If they thought that they were being undervalued, they would not accept the job! A lawyer would not accept a job as a bus driver because he would believe that his skills exceed that of the bus driver.

I agree that government does positive things...but government also does negative things. And if you give the government the power to do positive things, then you also give it the power to do evil things. Thats why I advocate limitations on the power the government has.

Lastly, if you want to compare the historical growth rates of the economies of countries that advocate capitalism and those that advocate socialism, please bring it on.

1. Is a minimum wage a good or Bad thing?Bad. Who are you to tell me what i must pay people or to run my business? I will pay what I determine is the best wage. Don't like what i am offering? Don't take the job. I am not responsible for your life or the level of comfort you believe YOU should get at MY expense.
Businesses exist to make a profit and nothing more. Want to feel all civic--start a group and volunteer.

2. What are the economic effects of having a minimum wage?
Personally i will find a way to offset the cost if forced to do so at government gunpoint.
find me a nice mechanical or robotic solution.
Minimum wage jobs are ones that while needing to be done take no skill at all to do.
Want better find a marketable skill. Go to college to be an english major--don't whine when you are stuck as a swing shift manager at a McDonalds. You have a useless degree in the business world.
I hated the low paying jobs i got out of high school and went to school and learned to drive a truck and made great money. i got tired of actually working physically and got into computer.
Couldn't afford a big school so i did community college which is dirt cheap. Found a company which would cover my expenses at a bigger school and got even more training. More money and life is good.
Quite simply how you do in life is up to you and you have no excuses unless you are suddenly struck ill or injured. Company i work for is loaded with people who grew up with hard times and disadvantages. Harder for them--yes. they are also fairly fierce in not buying into the "Its not fair " whine.

3. What should the minimum wage be set at in america right now? Whatever the employer decides upon.





weak

Thank you for (at long last) making your position clearer. It's still highly questionable, at best, though. BecomingHuman was quite right when he said that there's no such thing as an "ideal" level of employment for a particular company, and made the very astute observation employment goes up and down all the time in response to business cycles. Therefore, any government-mandated increase in the operating costs of a business is almost certain to adversely affect employment levels. Maybe a marginal increase in the minimum wage will only have a marginal effect on employment, but it will also have only a marginal effect on the income of the workers, which probably won't be worth the price (namely, being out of a job altogether).

That's just the way it is with price controls (of which wage controls are a type). And there's a more insidious effect on top of that. The market is usually able to adapt to almost any set of conditions, regulatory or otherwise, that's imposed on it. I say "almost", because it has one Achilles heel: the pricing mechanism. That's the mechanism which enables the market to adapt to these other changes in conditions. If you mess with that via regulation, you inhibit it's ability to adapt to changing conditions (and market conditions are always changing), and that hurts everyone, most of all those at the bottom rung of the ladder. Your proverbial $400 million-a-year executive will still be doing fine if the minimum wage is raised and disrupts the economy. It's the rest of us who'll have to suffer for it.

I'm still a bit confused at what he posted. But it showed that when outputs are static and technology is static, there is an ideal amount of labor that is the most productive. If you go less, it's not as productive, if you go more it's less productive. It makes sense empirically as well. If you have a job to do, too few labor will not do the job and too many cooks spoil the stew.



I don't think you can conclude anything about increasing min wages, economically. There are too many variables and outcomes. It's obvious to me that simply raising the min wage to say $7.50 is not going to be catastrophic.

The question you have to ask is, what will happen to employment, to demand, to inflation, to standards of living, etc.

If we wanted to increase the min wage to say $50/hr then we would know for certain it would throw everything into a tailspin.

I think most of your conclusions as well as mine are pure speculation. I personally see mostly positives with increasing the min wage, you apparently don't.





Ok, I guess I have to answer yet another person who wants to know who I am....

Who am I to say that you can't murder someone?

Get the picture? It's called DEMOCRACY. I realize you're a fan of anarchy, but we're not there yet.

far from democracy, generally referred to as mob rule. It is generally how weak people force others to care for their needs. People like you use the idea of democracy to force others to live according to your personal rules and whimsy of what is ideal. More of a weapon than actual support of Liberty.

shouldn't be so hot to support the concept of allowing people to seek their lowest level or to promote the lowest standards and then rewarding that type of behavior.


Weak
Get the picture?

Eh? I went into much detail that output was never static! Otherwise marginal productivity would = zero.

If it helps, you can think of marginal productivity as marginal output. Thus, in my waiter example, customers served would be output. One waiter can only serve so many customers, two waiters can serve more, but the second waiter added can't serve as many as the first waiter, and the 20nth waiter added will barely serve anyone extra (As per the law of diminishing marginal productivity, or, if you wish, output).

Adding more waiters adds more customers served (or output). An employer will stop hiring employees when the added customers from an extra employee do not cover the costs of that extra employee. If the minimum wage increases, the amount of customers added by an employee can potentially not cover the costs of that employee, as the costs have increased. If that is so, that employee will be fired.

If you want to argue with anything I said above, go back and reread my last two posts, then argue. I hope dispelling "static" output infuses those previous posts with meaning.

But honestly, I think I'm losing just about everyone here. So, I'm just going to lay down the law.
Downward Sloping demand curve one
Downward sloping demand curve 2
Number 3
Number 4
Number 5
CHART IMAGE

The labor demand curve is downward sloping. The links are from 5 different educational websites, I chose the best picture (IMHO, they are all about the same but some add the supply curve). The higher wages are, the less labor is demanded. For all you just tuning into the debate, that means that an increase in the minimum wage decreases the amount of labor demanded. The less labor that is demanded, the less people are hired. This is fact, accept it. I would go into deadweight loss, but this is all I need to show my point, and I don't want to spend another hopeless three long posts, I'm just not articulate enough to to teach it well.

I linked the fact that EPI was liberally biased from wikipedia (which, once again, if you read the article titles doesn't take a genius to figure out). I showed the NiteGuys link was unreliable.

Really, I thought a strawman was when you argued against a point that was never articulated on the other side. For us, this would be saying "so your in favor of child labor" when I'm really arguing about the minimum wage, which has nothing to do with child labor.

But this is way off topic, if you want to debate this, start another topic.


Yes, the choice is work or die, and I will say it again, working is better than dying. At least the jobs prevent starvation, its better than having no jobs there at all. And the more you increase the minimum wage, the more starving people you will kill because the less companies will hire (A DOWNWARD SLOPING DEMAND CURVE). You destroy jobs for these people, and destroying jobs, in starvation riddled countries, destroys lives.


Image removed in accorance with forum rules.

Yes, but this is a static situation. The price is static, don't believe me? Look here:

http://william-king.www.drexel.edu/top/pri...ors/labor1.html

So if the business increased prices then your assumptions that THE min wage decreases demand is INCORRECT.

What happens when the prices change? In fact labor demand GOES DOWN.

http://william-king.www.drexel.edu/top/pri...ors/labor2.html

And if you use the labor supply curve:

IMAGE

You'll see that by increasing the min wage, you actually have more people willing to work, so you bump up the people who may refuse to work for $5.15/hr and they now are included in the work force. So you may actually increase employment.

Look at this study, even those proponents against the min wage said the study was valid:

http://www.econ.ucsb.edu/~pjkuhn/Ec150/Not...pplications.pdf

They use the labor curve as well. They found that an increase in the min wage did not decrese employment or labor demand.

Alrite, we've just jumped into economic candyland here.

The link has a picture in it that shows that, as wages increase or decrease, demand for labor increases or decreases.
IMAGE

At W1, we will demand N1 employees. At W2, we will demand N2 employees. At W3, we will demand N3 employees. Nothing in this graph is changing, nothing at all. We are simply showing different points of the labor demand curve. Note that, the the trend is, at a higher W1, we will hire (N3-N1) less employees than at W3. This graph proves what I have been saying perfectly. This website is my godsend.

The addition of your supply curve is pointless. Of course more people will be willing to work if you increase wages. If you increased the wage at burger king from $5.15 to $50, I would want a job their. But at $50, there will barely be any jobs available, because the supplier will barely demand any workers at $50. A picture, from your website, displays this concept perfectly:
IMAGE

Look at Ns carefully. As you say, When wages increase, more people are willing to work than at the equilibrium. But their are barely any jobs demanded, or ND. In total, only ND workers will be hired at the minimum wage, which is less than in the free market. We can see clearly here that there is excess supply between Ns and ND. Those are workers who want to work at the minimum wage price, but cannot find minimum wage jobs because employers aren't hiring. As I said, without market intrustion, more people will be hired at the equalibrium than at ND (The demand for workers at Wage W)

But, you won't take my word for it, so take their, the link you provided, words.

And, with power: