Change of mind on minimum wage

[Nickman]

The following video is a quick interview with Ted Cruz. Although I am not a fan, this helped me realize something. Especially from the comments section. My YouTube name is Nickoliatan. See my comments there as well.

Raising the minimum wage to $10 an hour won't change anything. The economy will adjust to make $10 unlivable. The correct way, IMO, would be to deregulate the economy and allow social pressure, supply, and demand to determine the wage of workers. Minimum wage was put in place in 1938, and only for specific minority groups. Prior to this, wages grew with the market. Once a regulation was placed on the economy, wages became stagnant and rose only slightly with more regulation. If we get rid of economic regulation, no person will work for low wages for a job that is difficult, when the public demands higher wages. The corporations will have to meet the demand by supplying higher wages, or otherwise lose productivity and thus, revenue.

In North Dakota, wages are high. Why? Because the demand for workers to work hard, tough jobs. These companies couldn't get workers to move to ND and endure long hours, and in difficult conditions, unless they pay well.

If we let the economy move freely, society will be enough regulation, on its own, to make corporations pay descent wages.

I want to hear from Darius and Winepusher here, but also anyone and everyone. I would like to hear from some of my good friends such as Danmark, Goat, and DI. Everyone's input will be valued.

To debate: minimum wage only. Not other regulations, such as environmental. I would like to debate those as well but in their own thread.

[Youtube][/YouTube]

[Goat]

The following video is a quick interview with Ted Cruz. Although I am not a fan, this helped me realize something. Especially from the comments section. My YouTube name is Nickoliatan. See my comments there as well.

Raising the minimum wage to $10 an hour won't change anything. The economy will adjust to make $10 unlivable. The correct way, IMO, would be to deregulate the economy and allow social pressure, supply, and demand to determine the wage of workers. Minimum wage was put in place in 1938, and only for specific minority groups. Prior to this, wages grew with the market. Once a regulation was placed on the economy, wages became stagnant and rose only slightly with more regulation. If we get rid of economic regulation, no person will work for low wages for a job that is difficult, when the public demands higher wages. The corporations will have to meet the demand by supplying higher wages, or otherwise lose productivity and thus, revenue.

In North Dakota, wages are high. Why? Because the demand for workers to work hard, tough jobs. These companies couldn't get workers to move to ND and endure long hours, and in difficult conditions, unless they pay well.

If we let the economy move freely, society will be enough regulation, on its own, to make corporations pay descent wages.

I want to hear from Darius and Winepusher here, but also anyone and everyone. I would like to hear from some of my good friends such as Danmark, Goat, and DI. Everyone's input will be valued.

To debate: minimum wage only. Not other regulations, such as environmental. I would like to debate those as well but in their own thread.

[Youtube][/YouTube]

Well.. let's look at 'how do we stimulate the economy.' For the last 30 years or so, the technique was to try to give tax breaks top the rich, and subsidies to corporations.. calling it 'trickle down'... The cup that was supposed to 'spill over' with the money from the top just got bigger.

HOWEVER, what happens if someone who can't make a living wage gets more money? They don't squirriil it away.. they SPEND it.. on things like food, clothes, housing, maybe a better car if they make enough.
.
Look at Australia. The minimum wage there is 15 bucks an hour, and their economy is healthier than the U.S.

Look at ti in perspective. Wall street gave itselve 26 billion dollars in bonuses last year. THat is more money than all the minum wage workers in the U.S. made all together the entire year.

[Nickman]

The following video is a quick interview with Ted Cruz. Although I am not a fan, this helped me realize something. Especially from the comments section. My YouTube name is Nickoliatan. See my comments there as well.

Raising the minimum wage to $10 an hour won't change anything. The economy will adjust to make $10 unlivable. The correct way, IMO, would be to deregulate the economy and allow social pressure, supply, and demand to determine the wage of workers. Minimum wage was put in place in 1938, and only for specific minority groups. Prior to this, wages grew with the market. Once a regulation was placed on the economy, wages became stagnant and rose only slightly with more regulation. If we get rid of economic regulation, no person will work for low wages for a job that is difficult, when the public demands higher wages. The corporations will have to meet the demand by supplying higher wages, or otherwise lose productivity and thus, revenue.

In North Dakota, wages are high. Why? Because the demand for workers to work hard, tough jobs. These companies couldn't get workers to move to ND and endure long hours, and in difficult conditions, unless they pay well.

If we let the economy move freely, society will be enough regulation, on its own, to make corporations pay descent wages.

I want to hear from Darius and Winepusher here, but also anyone and everyone. I would like to hear from some of my good friends such as Danmark, Goat, and DI. Everyone's input will be valued.

To debate: minimum wage only. Not other regulations, such as environmental. I would like to debate those as well but in their own thread.

[Youtube][/YouTube]

Well.. let's look at 'how do we stimulate the economy.' For the last 30 years or so, the technique was to try to give tax breaks top the rich, and subsidies to corporations.. calling it 'trickle down'... The cup that was supposed to 'spill over' with the money from the top just got bigger.

HOWEVER, what happens if someone who can't make a living wage gets more money? They don't squirriil it away.. they SPEND it.. on things like food, clothes, housing, maybe a better car if they make enough.
.
Look at Australia. The minimum wage there is 15 bucks an hour, and their economy is healthier than the U.S.

Look at ti in perspective. Wall street gave itselve 26 billion dollars in bonuses last year. THat is more money than all the minum wage workers in the U.S. made all together the entire year.

This is why I am also against subsidies for corporations. Take away all regulation from economy. Subsidies are regulations.

The reason that workers make minimum wage is because there is a minimum wage in place. Workers are stuck in minimum wage. Get rid of minimum wage and companies will have to accommodate their employees for the work that they do. Today, workers enter into a contract with their employers that they will only get minimum wage. Minimum wage puts a cap on promotion capabilities. It also puts a cap on wage fluctuation. If cost of living goes up, these worker will make the same. The only change will be from legislation. If we keep regulating the economy, we will have to continue to revisit this problem every couple years. Let go of regulation, and society will determine what is a proper wage, and companies will have to compete with each other on wages. Right now there is no competition, because everyone makes the same amount, i.e. minimum wage.

[Neatras]

So the suggestion is to cut tax breaks for the rich and remove the minimum wage in an attempt to manage the disparity. I would like to see this economic model put into perspective with experiments! It'd be great to see this in action, though I dunno if it'll happen in the current government administration.

[DanieltheDragon]

I think I would agree with you Nick.

We should note though. The minimum wage isn't going anywhere anytime soon. There is also numerous economic studies that show an increase in the wage won't negatively effect employment to. So long as the wage stands we need to do our due diligence and maintain it. The current wage is a bit outdated and that needs to be addressed.

[Furrowed Brow]

Cruz gives a typical political sound bite...but as any kind of analysis or argument it is vacuous. Let’s look at the full text of his response

• Ted Cruz: President Obama is wrong to try and set the minimum wage to ten dollars. Under President Obama the real minimum wage has been zero dollars because we got the lowest labor force participation in this country since 1978. Millions of people have lost their jobs. What I am more interested in is seeing more and more high paying jobs. For example in North Dakota where the energy boon is happening the aver wage is $45.90 an hour I want to see a lot more 40 and 50 and 60 dollar an hour jobs and a lot fewer people making zero dollars an hour because they are unemployed. The minimum wage is zero dollars; millions of peoples have lost their jobs.

Okay just have to point out the typical political meaningless nonsense: Under President Obama the real minimum wage has been zero dollars. As if that is not also true of every President that went before.

Cruz points out that there is unemployment and a low labour force participation and leaves us to connect the dots that a ten dollar minimum wage will make matters worse. Cruz hardly has time to go into details of why he thinks this but the basic arguments are well known and boil down to workers pricing themselves out of a job vs price themselves into a job; which means low and lower wages. Cruz the politician completely deflects away from unpacking what that means and starts talking about 40 plus dollars an hour jobs. Note the jobs he refers to are based on an energy boon. These wages do not arise because of deregulation and low minimum wages, they arise because of an “energy boon�. These aren’t the jobs that need a minimum wage set. Clearly...like any politician... he just changes the subject and gives his positive message. But what Cruz is silent on and what he has no answer for is finding high paying jobs for all those folks not in a job because the world has changed and all those lost jobs are not coming back home. He knows that.

Okay here is a 3 minute explanation by Richard Wolff why raising the minimum wage does not hurt an economy.

[center][vimeo][/vimeo][/center]

• Richard Wolff:There is immense economic literature...and the literature goes like this: on the one hand there may be some jobs that are lost because an employer having to pay a higher minimum wage will not hire people, or will higher fewer. That will happen in some cases. But against that you have to weigh something else. If the 15 million (that is the estimate of the White House...if the 15 million American workers whose wages will go up if we raise the minimum wage, we have to count also that those people will have a higher income, they will spend more money, and when they spend more money on goods and services that will create more jobs for people to produce those goods and services. In order to understand the effect of raising the minimum wage you cannot only look at what will be done by some employers in the face of higher wage in lowering the employment, you have to look at the other effects. And when economists have done that, economist from a wide range of political perspectives, you know what they end up with, there is not much effect. In other words the two things net each other out, and so there is not much of a change in the employment situation over all, To which my response is OK let’s assume that is correct, at the very least we have transformed the lives of 15 million American working people and their families....so at least they are closer to a decent minimum life.

The last point in bold gives the call for raising the minimum wage its moral force. The preamble before it gives the point its logical force. If there is a counter to this it is mathematical not ethical. They counter argument has to show the logic is wrong. Proponents of deregulation have to argue that the minimum wage is self defeating. On the whole I notice they do that by ignoring the kind of point Wolff points out, and the actual balance of the literature on the matter. I've been noticing a number of anti minimum wage articles appear recently on various blogs and sites with a libertarian leaning. Some of them quite technical and taken from the work of some think tank or other. I can't help but think this is sponsored by a bunch of wealthy corporatists who don't want to see their labour costs rise because the big pile of money they stand on will be made smaller.

[center][/center]
It leaves me with a nasty taste in my mouth.

Once a regulation was placed on the economy, wages became stagnant and rose only slightly with more regulation.

Regulation? Would this be stuff like fire regulations, building regulation, health and safety, maternity pay, sick pay...and all the stuff unregulated countries do not ensure?

The underlying reasons for stagnating wages since the 1970s is not regulation it is:

• 1/ technology and an increasing emphasis on technology based industries means less people are needed in the work place.
  2/ immigration and the use of immigrant worker both legal and illegal to enlarge the labour pool.
  3/ women entering the work place enlarging the labour pool.
  4/ the rise of globalisation and jobs exported to countries where the standard of living is considerably lower than the United States and the West.

Regulation is a red herring. The reality behind the call for deregulation is that the cost of American labour needs to be competitive with the factories in China and Indonesia. What that means is $10 a day. Regulation is not the cause of the problem, the problem is the American workers expectation of what counts as a decent standard of living, and that the standards in China etc., are so very much lower. And when China and the U.S and Europe and Indonesia and Africa eventually reach an equilibrium the wages in the U.S are going to be lower than they are today. It is not going to be $40 an hour jobs as Cruz misleads. The reality is a mass of people earning less than $10 an hour.....permanently. You work really hard, take ownership of your job, put up with ongoing claw back of terms and conditions, and put in 60hrs a week all your working life...that's be less than $10 an hour then.

[center][/center]

If we let the economy move freely, society will be enough regulation, on its own, to make corporations pay descent wages

Why would you ever think that. If all regulation is removed there will be a rush to the bottom not a climb to the top. You will not work for $5 dollars an hour, we’ll get some ships and bring over tens of thousands of Bangladesh, Nepalese, Indonesians and Philippines workers who will. What is to stop us? They will be prepared to live 5 or 6 to a room with one shower and $5 dollars an hour is a fortune to them.

What is really going on here is that the West is going through a phase of restructuring to low wage economies with higher levels of unemployment. This is partly due to changing technologies and partly due to globalisation. Deregulation is just going to speed up the process.

[Nickman]

I think I would agree with you Nick.

We should note though. The minimum wage isn't going anywhere anytime soon. There is also numerous economic studies that show an increase in the wage won't negatively effect employment to. So long as the wage stands we need to do our due diligence and maintain it. The current wage is a bit outdated and that needs to be addressed.

Which is why we are in the problem we are in. Wages are locked in legislation and not free to increase with the market. Workers would not put up with poor wages, they would riot, strike, or whatever means necessary to send a message to the CEOs that wages are unfair. This type of "legislation" would be much better for our economy than revisiting minimum wage every couple years.

[Nickman]

So the suggestion is to cut tax breaks for the rich and remove the minimum wage in an attempt to manage the disparity. I would like to see this economic model put into perspective with experiments! It'd be great to see this in action, though I dunno if it'll happen in the current government administration.

It would not go over too well, that's for sure. Corporations should pay the same percentage of taxes as everyone else, especially since they bask in personhood. They want personhood so they can spend money on politics, and consumers need them to be persons to be able to sue them. If corporations are not considered persons, we couldn't sue them. So if they share that same person hood, they need to pay full taxes. Minimum wage ensures that they can grow and grow while paying the same wages to the people who actually made them grow.

[bluethread]

I think I would agree with you Nick.

We should note though. The minimum wage isn't going anywhere anytime soon. There is also numerous economic studies that show an increase in the wage won't negatively effect employment to. So long as the wage stands we need to do our due diligence and maintain it. The current wage is a bit outdated and that needs to be addressed.

Which is why we are in the problem we are in. Wages are locked in legislation and not free to increase with the market. Workers would not put up with poor wages, they would riot, strike, or whatever means necessary to send a message to the CEOs that wages are unfair. This type of "legislation" would be much better for our economy than revisiting minimum wage every couple years.

No, wages increase with the market. They just don't decrease with the market. The thing that keeps minimum wage jobs at the minimum is the fact that unions have established a wage class system. When the minimum wage goes up so do the union wages. This is especially true of government unions. With them wages and benefits go up regardless of the minimum wage and market conditions. There is no cost restraint on government wages, and benefits to those who are not working, especially in the out years, ie. retirement benefits. Promising compensation in the out years is what changed Detroit from a car manufacturing town to a care manufacturing town. Then it finally collapsed.

The problem with government is that it can just borrow the money or "tax the rich", which means anyone with a nongovernment job. In the case of the feds, they can just raise the debt limit. The upward pressures of the artificial class structure, the debt load and the taxes sucks all of the air out of the room, leaving the working poor to work two jobs to keep from suffocating. That is what keeps many jobs at minimum wage, while creating inflationary pressures at the same time. The only thing keeping us out of the stagflation of the Carter era is "quantitative easing" and the repeated redefining of the economic indicators. Those of course are illusionary solutions and will eventually collapse also.

[Nickman]

Cruz gives a typical political sound bite...but as any kind of analysis or argument it is vacuous. Let’s look at the full text of his response

• Ted Cruz: President Obama is wrong to try and set the minimum wage to ten dollars. Under President Obama the real minimum wage has been zero dollars because we got the lowest labor force participation in this country since 1978. Millions of people have lost their jobs. What I am more interested in is seeing more and more high paying jobs. For example in North Dakota where the energy boon is happening the aver wage is $45.90 an hour I want to see a lot more 40 and 50 and 60 dollar an hour jobs and a lot fewer people making zero dollars an hour because they are unemployed. The minimum wage is zero dollars; millions of peoples have lost their jobs.

Okay just have to point out the typical political meaningless nonsense: Under President Obama the real minimum wage has been zero dollars. As if that is not also true of every President that went before.

Cruz points out that there is unemployment and a low labour force participation and leaves us to connect the dots that a ten dollar minimum wage will make matters worse. Cruz hardly has time to go into details of why he thinks this but the basic arguments are well known and boil down to workers pricing themselves out of a job vs price themselves into a job; which means low and lower wages. Cruz the politician completely deflects away from unpacking what that means and starts talking about 40 plus dollars an hour jobs. Note the jobs he refers to are based on an energy boon. These wages do not arise because of deregulation and low minimum wages, they arise because of an “energy boon�. These aren’t the jobs that need a minimum wage set. Clearly...like any politician... he just changes the subject and gives his positive message. But what Cruz is silent on and what he has no answer for is finding high paying jobs for all those folks not in a job because the world has changed and all those lost jobs are not coming back home. He knows that.

I agree. I am not siding with Ted Cruz. I think he is a boob. The video I posted helped me realize the need to deregulate the economy. Minimum wage creates a lock on wage and promotion. Many Americans enter a minimum wage job because they don't have skills to apply for higher paying jobs. This locks them into a nonnegotiable wage until legislation says otherwise. If they want higher wages, the company can easily replace that individual to maintain paying that same wage.If we get rid of minimum wage completely, wages will raise with the economy. If a corporation does not raise wage with the economy, people will seek jobs that do. It is simple supply and demand.

Okay here is a 3 minute explanation by Richard Wolff why raising the minimum wage does not hurt an economy.

My tablet says I don't have the correct plug-in to play he video.

• Richard Wolff:There is immense economic literature...and the literature goes like this: on the one hand there may be some jobs that are lost because an employer having to pay a higher minimum wage will not hire people, or will higher fewer. That will happen in some cases.

Which wouldn't happen at all if we get rid of minimum wage.

But against that you have to weigh something else. If the 15 million (that is the estimate of the White House...if the 15 million American workers whose wages will go up if we raise the minimum wage, we have to count also that those people will have a higher income, they will spend more money, and when they spend more money on goods and services that will create more jobs for people to produce those goods and services. In order to understand the effect of raising the minimum wage you cannot only look at what will be done by some employers in the face of higher wage in lowering the employment, you have to look at the other effects. And when economists have done that, economist from a wide range of political perspectives, you know what they end up with, there is not much effect.

Except there is much effect as I highlighted above. If corporations are forced to pay higher wages via legislation, companies will lay employees off to maintain their current profit margins. Some people will rejoice, while many will lose their job. This will also decrease productivity because their are less workers to manufacture products and thus hinder our supply and demand economy.

In other words the two things net each other out, and so there is not much of a change in the employment situation over all, To which my response is OK let’s assume that is correct, at the very least we have transformed the lives of 15 million American working people and their families....so at least they are closer to a decent minimum life.[/list]The last point in bold gives the call for raising the minimum wage its moral force. The preamble before it gives the point its logical force. If there is a counter to this it is mathematical not ethical. They counter argument has to show the logic is wrong. Proponents of deregulation have to argue that the minimum wage is self defeating. On the whole I notice they do that by ignoring the kind of point Wolff points out, and the actual balance of the literature on the matter. I've been noticing a number of anti minimum wage articles appear recently on various blogs and sites with a libertarian leaning. Some of them quite technical and taken from the work of some think tank or other. I can't help but think this is sponsored by a bunch of wealthy corporatists who don't want to see their labour costs rise because the big pile of money they stand on will be made smaller.

What is the reasoning behind a minimum wage? It is used to make corporations wealthier, while paying those who make them wealthy a very small amount of their profits. Originally it wasn't back in 1938, but today corporations have found a way to make it suit them and keep wages lower than they would be if the economy was free of regulation.

[center][/center]
It leaves me with a nasty taste in my mouth.

The minimum wage allows this. It is legislated as such. The person at the bottom of the picture should be saying, deregulate minimum wage.

Regulation? Would this be stuff like fire regulations, building regulation, health and safety, maternity pay, sick pay...and all the stuff unregulated countries do not ensure?

Minimum wage has nothing to do with health and safety standards. Those regulations should remain.

The underlying reasons for stagnating wages since the 1970s is not regulation it is:

• 1/ technology and an increasing emphasis on technology based industries means less people are needed in the work place.
  
  1/ technology and an increasing emphasis on technology based industries means less people are needed in the work place.
  2/ immigration and the use of immigrant worker both legal and illegal to enlarge the labour pool.
  3/ women entering the work place enlarging the labour pool.
  4/ the rise of globalisation and jobs exported to countries where the standard of living is considerably lower than the United States and the West.

Regulation is a red herring. The reality behind the call for deregulation is that the cost of American labour needs to be competitive with the factories in China and Indonesia. What that means is $10 a day. Regulation is not the cause of the problem, the problem is the American workers expectation of what counts as a decent standard of living, and that the standards in China etc., are so very much lower. And when China and the U.S and Europe and Indonesia and Africa eventually reach an equilibrium the wages in the U.S are going to be lower than they are today. It is not going to be $40 an hour jobs as Cruz misleads. The reality is a mass of people earning less than $10 an hour.....permanently. You work really hard, take ownership of your job, put up with ongoing claw back of terms and conditions, and put in 60hrs a week all your working life...that's be less than $10 an hour then.

That is a valid reason, but is based on supply and demand. Our desire to get more tech savy has created more technological advancements, which created more jobs in the technology field. So although jobs decreased in some areas, the demand for more technology created more jobs in that field. It balanced out. Jobs closed in one field and opened in the other.

Why would you ever think that. If all regulation is removed there will be a rush to the bottom not a climb to the top. You will not work for $5 dollars an hour, we’ll get some ships and bring over tens of thousands of Bangladesh, Nepalese, Indonesians and Philippines workers who will. What is to stop us? They will be prepared to live 5 or 6 to a room with one shower and $5 dollars an hour is a fortune to them.

Seriously? In our highly regulated immigration policies, this would never happen.

What is really going on here is that the West is going through a phase of restructuring to low wage economies with higher levels of unemployment. This is partly due to changing technologies and partly due to globalisation. Deregulation is just going to speed up the process.

Changing technologies creates jobs. Deregulation would allow the market to fluctuate on its own, wages and all. Regulation creates a stagnant market as we are seeing today and the reason why we are revisiting the minimum wage debate.