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Offline admin

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Minimum Wage
« on: Tue Aug 15, 2006 - 11:41:10 »
The U.S. House of Representatives has voted 230 to 180 to approve an increase in the minimum wage. The measure would increase the minimum wage in three steps. The minimum wage would increase to $5.85 per hour in January 2007, $6.55 per hour in June 2008, and $7.25 per hour in June 2009. The last increase in the federal minimum wage came in 1997, when it rose to $5.15 per hour.

This isn’t a done deal yet ¯ but nonetheless, it gets a lot of talk and media coverage. Frankly, I don’t know of many real situations where the minimum wage is an issue. Where I live here in Tennessee you would never be able to get someone to work for minimum wage. You have to pay what the market demands. It doesn’t matter what the minimum is, you will not find a fast food worker or someone to wash your windows or take out the trash for $5.15 an hour, or for $7.25 for that matter.

I believe the market should determine wages, not the bureaucrats in Washington. If a company is forced to pay more than the job is worth, they simply will add the increase onto the product or service they are providing, thus, artificially adding to inflation.

Less than 2% of the working population is at minimum wage now. Our House of Representatives would serve us better by spending their time helping minimum wage earners learn more marketable work skills.

-by Dan Miller

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Minimum Wage
« on: Tue Aug 15, 2006 - 11:41:10 »

Offline Jimbob

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Re: Minimum Wage
« Reply #1 on: Tue Aug 15, 2006 - 11:44:42 »
I wonder how high it will go here.  NY sets its own MW above the Feds.

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NY Dept. of Labor:
The New York State minimum wage is $6.75 per hour as of January 1, 2006. It will increase to $7.15 per hour as of January 1, 2007. Any increase in the federal wage above the state rate will result in an increase in the state's minimum wage.

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Re: Minimum Wage
« Reply #1 on: Tue Aug 15, 2006 - 11:44:42 »

Offline tidbit

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Re: Minimum Wage
« Reply #2 on: Tue Aug 15, 2006 - 11:50:40 »
Not too many people work for MW now.  However, it will have an inflationary effect on wages, because people like to measure their wages against MW.  So the guy making $10/hr (twice MW) will want to make $14/hr. after MW goes to $7.25.

I am dumbfounded as to why a Republican-controlled congress and White House would pass this MW increase.  The only rationale I can think of is that they are trying to preempt the issue; i.e., take the fodder away from the Dems.

Offline spurly

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Re: Minimum Wage
« Reply #3 on: Tue Aug 15, 2006 - 11:59:08 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.

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Re: Minimum Wage
« Reply #3 on: Tue Aug 15, 2006 - 11:59:08 »
Pinterest: GraceCentered.com

Offline normfromga

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Re: Minimum Wage
« Reply #4 on: Tue Aug 15, 2006 - 12:33:52 »
This the case where there is always a dispute on the effect of the economy.  One side will often use the stats for those who only get the current minimum wage, while the other will use the stats for those who receive the current minimum wage plus those who receive wages not quite up the proposed MW.  Of course, to find out the entire effect on the economy, you must take the latter number of those affected.

Quote
I am dumbfounded as to why a Republican-controlled congress and White House would pass this MW increase.  The only rationale I can think of is that they are trying to preempt the issue; i.e., take the fodder away from the Dems.
Playing politics with the economy?  Shame on you for thinking it!

It's compassionate conservatism... ::eek::

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Re: Minimum Wage
« Reply #4 on: Tue Aug 15, 2006 - 12:33:52 »



boringoldguy

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Re: Minimum Wage
« Reply #5 on: Tue Aug 15, 2006 - 13:05:03 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.

How do you figure this?   I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)

Offline spurly

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Re: Minimum Wage
« Reply #6 on: Tue Aug 15, 2006 - 13:11:28 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.

How do you figure this?   I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)

Because all of the minimum wage earners in our area will get a boost of 2.00 or so an hour.  That is an increase of about 35-40%.  Since so many workers here make minimum wage that will be a big boost in our area.

It looks rather obvious to me, please let me know if I am missing something you are trying to point out.

Offline Bon Voyage

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Re: Minimum Wage
« Reply #7 on: Tue Aug 15, 2006 - 13:15:31 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.

How do you figure this?   I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)

Because all of the minimum wage earners in our area will get a boost of 2.00 or so an hour.  That is an increase of about 35-40%.  Since so many workers here make minimum wage that will be a big boost in our area.

It looks rather obvious to me, please let me know if I am missing something you are trying to point out.

And if prices go up the same percentage?  aka inflation?

If inflation occurs at the same rate as the minimum wage goes up, then the lower wages will be in the same position they were, and those in the lower middle class will be worse off, if their wages are not also raised.

boringoldguy

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Re: Minimum Wage
« Reply #8 on: Tue Aug 15, 2006 - 13:21:40 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.

How do you figure this?   I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)

Because all of the minimum wage earners in our area will get a boost of 2.00 or so an hour.  That is an increase of about 35-40%.  Since so many workers here make minimum wage that will be a big boost in our area.

It looks rather obvious to me, please let me know if I am missing something you are trying to point out.



The extra money these employees will be getting won't just materialize out of thin air.    It will be paid to them by their employers.       So one of two things will happen:

1.   The employers will have less money;  or
2.   The employers will increase the prices on the things you buy from them,   and then you'll have less money.

(Actually, you'll probably see most employers react along a continuum between absorbing the entire increase themselves or passing the entire increase along.)

In either event,  the raise that the employees get will mean that someone else has less money.
As I said,  this won't increase the actual amount of money in circulation;  it will just put some of the money into different hands.

Add into that the fact that,  to the extent employers pass the increase along to their customers,  then the employees who got the increase will be paying the higher prices and therefore paying for their own pay raise.

I just don't see how anybody really ends up ahead from something like this.    

Offline admin

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Re: Minimum Wage
« Reply #9 on: Tue Aug 15, 2006 - 13:36:01 »
In our area minimum wage is paid a lot to the agricultural workers and to people in shops around town.  It would be a big economic boost to our area.  We are not a part of the country where the businesses and farmers willingly pay a lot over minimum wage.


How do you figure this?   I don't see how this increases to total amount of cash in circulation.
(And that doesn't even get into whether or not there is an inflationary impact.)

Because all of the minimum wage earners in our area will get a boost of 2.00 or so an hour.  That is an increase of about 35-40%.  Since so many workers here make minimum wage that will be a big boost in our area.

It looks rather obvious to me, please let me know if I am missing something you are trying to point out.

Gary already answered this one, but I will expand.

My father-in-law is CEO and president of a company (I work there). The company exists to help people, but has to make money to survive (just like everyone and every other business in the WORLD).

So whenever we hire someone else, or someone gets a raise, we have to find a way to pay for it. That means cutting expenses or raises prices. If we cut expenses, that means that another company (paper, power, computer, whatever, takes a cut). But If we raise prices, the consumer takes a hit (a cut).

So if you (spurly) and I own a grocery store and suddenly have to pay our employees more because the government says so (instead of the market naturally causing it to happen), we have to make up for the added expense in some way. So we mark up the food. That means that the people who just got the raise are paying for their own raise when they buy food--and so is everyone else.

The market naturally calls for raises and more income for work/skills that are in demand. For example, if I decide that I hate what I do for a living and that I want to massage people for $100 dollars an hour BUT I'm not that good and no one wants to pay me that much, then I don't get paid that much. So the market would naturally force me to be a contributing part of the market by doing something that people are willing to pay more for.

But if the government said that it wasn't fair that I couldn't make enough money doing what I want to do and demanded that everyone pay me $100 dollars for a massage.....well, you see how that's just not right. That's not a republic or a democracy. It's even beyond communism and socialism. It's stupid.

Here's a tried and true economic principle: If one part of the economy is forced to pay more, the other part will be forced to pay more.

EXAMPLE: If I have to pay more for my fruit (or other expenses), I have to charge more for my fruit.
If I charge more for my fruit, the consumers will pay more.
If the consumers pay more, they are able to spend less on other products.
If they spend less on other products, the other company is taking a cut.
If they take a cut, they have to find a way to make up for it and......................We are full circle and then some.

Offline tidbit

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Re: Minimum Wage
« Reply #10 on: Tue Aug 15, 2006 - 13:42:41 »
The really IRONIC thing is that a higher minimum wage would make it MORE likely that employers would hire undocumented workers.  Isn't that what we're supposed to be working against??

Offline spurly

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Re: Minimum Wage
« Reply #11 on: Tue Aug 15, 2006 - 15:59:26 »
I understand how raising the minimum wage will lead to a price increase.  However, we have had price increases yearly since 1996 (the last minimum wage hike), and yet the minimum wage has remained the same.  People who are making minimum wage don't have near the buying power they did 10 years ago.  Isn't that something we should consider in this discussion?

Offline Bon Voyage

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Re: Minimum Wage
« Reply #12 on: Tue Aug 15, 2006 - 16:00:24 »
I understand how raising the minimum wage will lead to a price increase.  However, we have had price increases yearly since 1996 (the last minimum wage hike), and yet the minimum wage has remained the same.  People who are making minimum wage don't have near the buying power they did 10 years ago.  Isn't that something we should consider in this discussion?

Are we going to fix inflation with inflation?

boringoldguy

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Re: Minimum Wage
« Reply #13 on: Tue Aug 15, 2006 - 16:01:42 »
I understand how raising the minimum wage will lead to a price increase.  However, we have had price increases yearly since 1996 (the last minimum wage hike), and yet the minimum wage has remained the same.  People who are making minimum wage don't have near the buying power they did 10 years ago.  Isn't that something we should consider in this discussion?

It might be,  but you said that it would it provide a big economic boost for your area,  and so that's what we were discussing.

Offline tidbit

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Re: Minimum Wage
« Reply #14 on: Tue Aug 15, 2006 - 16:08:12 »
I understand how raising the minimum wage will lead to a price increase.  However, we have had price increases yearly since 1996 (the last minimum wage hike), and yet the minimum wage has remained the same.  People who are making minimum wage don't have near the buying power they did 10 years ago.  Isn't that something we should consider in this discussion?

How many people do you know who make MW?  Have they done anything to make themselves elligible for a higher-paying job?

Offline spurly

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Re: Minimum Wage
« Reply #15 on: Tue Aug 15, 2006 - 16:10:18 »
In our area, there are a lot that make minimum wage.  We are one of the poorest counties in Oklahoma and the economic growth taking place in other parts of the country has not reached us yet.  There are not many good paying jobs in this area, thus many families have two people who both are making at or close to minimum wage.  It is really sad.

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Re: Minimum Wage
« Reply #16 on: Tue Aug 15, 2006 - 16:12:32 »
I know this will sound hard-hearted,  but why don't they move somewhere else?

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Re: Minimum Wage
« Reply #17 on: Tue Aug 15, 2006 - 16:15:47 »
Many of them are Cherokee Indians, and feel they have to stay close to tribal areas to get the tribal benefits offered to them - housing, medical care, etc.  I think that is why so many low income people in our area who are in need don't move away.

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Re: Minimum Wage
« Reply #18 on: Tue Aug 15, 2006 - 16:23:45 »
If they don't move because they're getting housing, medical care, etc.  provided to them (which is all at taxpayer expense,  even though provided through the tribe),  then it seems like they think the value of those benefits is greater than the value of the higher wages they might earn somewhere else.   

I also wonder if it's really accurate to call them "low-income" folks without considering the value of the benefits they receive.

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Re: Minimum Wage
« Reply #19 on: Tue Aug 15, 2006 - 16:30:22 »
I know a lady who, when you add up her benefits (welfare, child welfare, etc.) makes the equivalent of about $35,000/year...no kidding...all from Fed & NY programs.

How motivated is she to work for MW (which is all her skill-set would pull)?

Offline spurly

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Re: Minimum Wage
« Reply #20 on: Tue Aug 15, 2006 - 16:40:45 »

I also wonder if it's really accurate to call them "low-income" folks without considering the value of the benefits they receive.

That is a fair question.  From my limited experience here (4.5 months) I have encountered many people at the church who need food, utility bills paid, a tank of gas, etc.  We even had one family call to see if we would make a deposit on a house for them.  The number who have come to us for help is greater than the number who came to our church in OKC over a year's time.  One of the members of our church works at a bank and he was mentioning to me that the number of people in our area, even with all the tribal benefits, who need $300-$400 a month more income just to survive is growing at an alarming rate. 

By the way, many of the tribal benefits are provided from Indian gambling money as well as government funds, though I am not sure of the percentage.

Offline Bon Voyage

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Re: Minimum Wage
« Reply #21 on: Tue Aug 15, 2006 - 16:42:18 »

I also wonder if it's really accurate to call them "low-income" folks without considering the value of the benefits they receive.

That is a fair question.  From my limited experience here (4.5 months) I have encountered many people at the church who need food, utility bills paid, a tank of gas, etc.  We even had one family call to see if we would make a deposit on a house for them.  The number who have come to us for help is greater than the number who came to our church in OKC over a year's time.  One of the members of our church works at a bank and he was mentioning to me that the number of people in our area, even with all the tribal benefits, who need $300-$400 a month more income just to survive is growing at an alarming rate. 

By the way, many of the tribal benefits are provided from Indian gambling money as well as government funds, though I am not sure of the percentage.

I believe the majority of money for housing and what not is provided by HUD.

Offline OldDad

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Re: Minimum Wage
« Reply #22 on: Tue Aug 15, 2006 - 17:59:02 »
Government benefits - tribal, afdc, section 8, etc. - should be considered as income for the purposes of this discussion.  Most likely, it would push the "real" income of these folks beyond MW.

Nationwide, fewer than 1% of workers over age 25 make MW.  Most of these are low skilled workers with few other options.  Research also shows those are the ones most likely to lose their jobs if the MW is raised.

OD


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Re: Minimum Wage
« Reply #23 on: Tue Aug 15, 2006 - 18:10:03 »
Part of the problem of the poor state of American Indian tribes is the fact that the tribe owns the land on the reservations. IOW, nobody has any personal financial stake in private property.

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Re: Minimum Wage
« Reply #24 on: Wed Aug 16, 2006 - 08:38:23 »

By the way, many of the tribal benefits are provided from Indian gambling money

The tax on stupid people.