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Should the US minimum wage be raised?

post #1 of 29
Thread Starter 

There are many who seek to raise the US minimum wage. My opinion on this is that the minimum wage should be increased in many places on a local level, as for example the cost of living in Queens NYC is 80% higher than in Omaha. Should both of these places have the same minimum wage? I have a feeling that on average those places which have the lowest cost of living also probably tend to have higher than average unemployment, and fewer job opportunities. Perhaps in a number of the lowest cost of living places that have weak economies $7.25 an hour is a reasonable minimum wage, and any higher will greatly increase unemployment. On the other hand, the NYC area should imo have a minimum wage that is at least $10 an hour, and the LA area should probably have a minimum wage that is at least $9 an hour. What do you think?


 

http://www.infoplease.com/business/economy/cost-living-index-us-cities.html


Edited by JK1 - 8/3/12 at 1:40pm
post #2 of 29

Most states have their own minimum wage requirement, so yeah that's exactly how it works already.

post #3 of 29

I really don't know what to think, considering that the United States already have amongst the lowest costs of living in first World countries. With the economy as bad as it is, would increasing minimum wage really encourage employers to hand out more positions?

post #4 of 29

Increasing the minimum wage directly impacts the small business that is unable to absorb the increased cost and unable to increase prices because of pressure from large national chains and the internet.  IMHO, a large number of minimum wage jobs are not intended to be the primary careers for adults - skilled workers already make considerably more than minimum wage, and I think an adult attempting to live on minimum wage should be working very hard to obtain skills and/or education to get out of that job role.  It *can* be done - many, many people do it every year and there are already many tax-funded programs to assist people who want to use them.  If this sounds harsh - I'm sorry - but I do not think every job in the world needs to provide an adult a good standard of living - some jobs are simply worth only what the employer & employee agree they are worth.

post #5 of 29

I agree completely, the goal of minimum wage is to prevent worker exploitation, not to create a living-wage standard.

post #6 of 29

Who cares? I can't find work anyway. confused.gif

post #7 of 29
Quote:
Originally Posted by logwed View Post

Most states have their own minimum wage requirement, so yeah that's exactly how it works already.

This.

Also employers; gov't/military jobs on a scheduled payscale will have regional adjustments built-in, and most private employers get that you can't live on the same money everywhere. Expensive cities usually mean higher average wages.

Quote:
Originally Posted by logwed View Post

I agree completely, the goal of minimum wage is to prevent worker exploitation, not to create a living-wage standard.

This.
Minimum wage sets a bottom end for the economy, it doesn't tell manufacturers what to pay their workers - chumps who want to get by with the bare minimum are chumps, and it doesn't matter what you set the minimum at, they'll just ride that. It will always be "not enough" on some level.

billybob,

+1 to that too. I think the most recent calculation is something like $22.50/hr for full-time for being "above water" in the US these days. It isn't sustainable for someone in their 30s or 40s to be working the counter at Burger King or what have you - but an auto-worker or steel-worker or some other skilled labor job that will cash out at $30-$50/hr, or professionals that can approach $1000/hr very realistically - that's sustainable. I'm reminded of a great American Dad episode.
Edited by obobskivich - 8/4/12 at 5:34pm
post #8 of 29
Thread Starter 
Quote:
Originally Posted by logwed View Post

Most states have their own minimum wage requirement, so yeah that's exactly how it works already.

Not really. Most are still at or very close to the federal minimum level of $7.25. Having minimum wage set on a statewide basis doesn't seem right to me, as NY and California both have high cost of living urban areas, and low cost of living rural areas. It makes no sense for the low cost of living and high cost of living areas to have the same minimum wage.

 

http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages

post #9 of 29
I'm not saying that their own minimum wage is higher than the federal mandate, simply that the state has their own written law regarding minimum wage. Irrefutably most states have their own minimum wage laws. (http://www.dol.gov/whd/minwage/america.htm)

Regarding the difference in cost of living for different states, consider my other point that minimum wage is not intended to provide a living wage (nor should it be). Minimum wage establishes a point where workers are not exploited. Therefore, minimum wage is not tied to cost of living and need not necessarily be higher where cost of living is higher.

Thinking about your point of rural v. urban areas, I am not sure of the rights of municipalities (which varies state by state obviously) to set their own labor laws. As you can see it gets quite complicated by this level, and I am no lawyer.
post #10 of 29
Thread Starter 

"Regarding the difference in cost of living for different states, consider my other point that minimum wage is not intended to provide a living wage (nor should it be). Minimum wage establishes a point where workers are not exploited. Therefore, minimum wage is not tied to cost of living and need not necessarily be higher where cost of living is higher."

 

Huh? What is defined to be exploitation needs to be put in the context of the cost of living. In a country where the average wage is $5 a day, a salary of $25 a day would be considered great. The number of dollars or whatever currency a person is paid in only has meaning when the purchasing power of it is factored in. Without purchasing power, these units of currency would be worthless.  Discussion of wages is usually expressed in terms of purchasing power parity, ie. what one hour of work will actually buy after taxes. Since Queens NYC has a cost of living that is 80% higher than Omaha, someone earning $7.25 in NYC is earning the equivalent of $4.03 an hour  in Omaha. I never mentioned the living wage concept, as many who are paid minimum wage are young people living with their parents, or those receiving social security and/or a pension. It would be very hard to live on minimum wage alone even in a low cost of living city, and almost impossible in a high cost of living city. I guess some would say a living wage in Queens NYC should be at least $20 an hour. I don't think the minimum wage should be that high, however it clearly makes sense to have it higher than $7.25. Should the minimum wage be higher than $7.25 an hour in Omaha and other low cost of living cities? Perhaps not.


Edited by JK1 - 8/6/12 at 8:20am
post #11 of 29
Quote:
Originally Posted by JK1 View Post

"Regarding the difference in cost of living for different states, consider my other point that minimum wage is not intended to provide a living wage (nor should it be). Minimum wage establishes a point where workers are not exploited. Therefore, minimum wage is not tied to cost of living and need not necessarily be higher where cost of living is higher."

Huh? What is defined to be exploitation needs to be put in the context of the cost of living. In a country where the average wage is $5 a day, a salary of $25 a day would be considered great. The number of dollars or whatever currency a person is paid in only has meaning when the purchasing power of it is factored in. Without purchasing power, these units of currency would be worthless.  Discussion of wages is usually expressed in terms of purchasing power parity, ie. what one hour of work will actually buy after taxes. Since Queens NYC has a cost of living that is 80% higher than Omaha, someone earning $7.25 in NYC is earning the equivalent of $4.03 an hour  in Omaha. I never mentioned the living wage concept, as many who are paid minimum wage are young people living with their parents, or those receiving social security and/or a pension. It would be very hard to live on minimum wage alone even in a low cost of living city, and almost impossible in a high cost of living city. I guess some would say a living wage in Queens NYC should be at least $20 an hour. I don't think the minimum wage should be that high, highever it clearly makes sense to have it higher than $7.25. Should the minimum wage be higher than $7.25 an hour in Omaha and other low cost of living cities? Perhaps not.

Your PPP comparison isn't 100% accurate though - some goods in Omaha are lower, but others are equivalent throughout the US. But that won't compare 1:1 with other parts in the world. Make sense?

Also, the point about exploitation isn't to accomplish what you want (because to be honest, the economy doesn't care about your point there - it's irrelevant) - what it prevents is rentiers and captalist-class types from offering jobs at $0.01/day and ebay style bidding them up until someone takes the job. It becomes exploitative because you can push the hourly wage very far down, and encourage even further disparity and lack of ownership. When you set a bottom-end on it, it changes the scope of the discussion. Bringing that wage up won't accomplish what you want - as people have more money, they tend to spend it, and you run into another problem.
post #12 of 29

fyi, the marginal propensity to save in the USA is actually negative right now ;) 

 

Quote:
Originally Posted by obobskivich View Post


Your second point is rational though - if we made the minimum wage $150,000/yr (just go with it, I'm too lazy to figure that out in per/hr) we'd see a massive increase in expensive crap for people to buy, because the propensity to save is only like what? 4%?
post #13 of 29
Quote:
Originally Posted by El_Doug View Post

fyi, the marginal propensity to save in the USA is actually negative right now wink.gif 

Oh it's still negative? I know like 3-4 years ago it was like -20% or something insane, but had heard/assumed it was recovering due to the Clark Griswold philosophy of money management failing.

So basically based on this, my point is not only true, we'd get there faster. popcorn.gif
post #14 of 29

Wouldn't Adam Smith say that in a true free economy, there is no such thing as "worker exploitation"?  In the long run, the market simply wouldn't allow it, or the position would be eliminated because it could be replaced at lower cost by a machine or a trained golden retriever.

post #15 of 29
Quote:
Originally Posted by billybob_jcv View Post

Wouldn't Adam Smith say that in a true free economy, there is no such thing as "worker exploitation"?  In the long run, the market simply wouldn't allow it, or the position would be eliminated because it could be replaced at lower cost by a machine or a trained golden retriever.


 

It really depends on how you look at it. If you look at most other first world countries minimum wages they are significantly higher than ours (Australia's is $15.00 minimum for an adult) yet their costs of living (taxes, etc) are similar if not cheaper in some instances (besides gas). This is even more so extreme is parts of the country that are expensive to live in (Hawaii is around $7.50 and I'd say is more expensive to live than even Australia). So in that I do see exploitation happening. When living costs go up and the wages do not that is exploitation.


Edited by lee730 - 8/6/12 at 7:27pm
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