Wages In The US

http://www.nationalreview.com/agenda/371175/federal-minimum-wage-too-high-long-term-unemployed-reihan-salam

Wealthy suggest a training wage under minimum wage to "stimulate" hiring and training of long term unemployed...



The real issue on bottom line profits are that consumer spending is flat-lined. This leads to business growing profits on the backs of employees with lower wages, less or no benefits, and only offering part time work. If a business is suffering from a lack of business caused by a lack of consumer spending, lowering the wage to $4 (training wage) an hour won't create any more jobs because business still isn't experience any increase in consumer spending. Where is the money coming from to hire new workers ? Instead business would just exploit this, replacing good paying existing jobs with lower paying jobs to streamline their profit margin. On the flip side, if the basic cost of living is $14 an hour for a single person working a full-time job as it is in most states, raising the minimum wage to anything less than this basic cost of living will also result in only negative consequences, ie. jobs cuts, reducing of hours, higher consumer prices, because still there is no increase in consumer spending for business to afford that. It is only after wage is higher than the basic cost of living that there would be an increase in business through consumer spending which could offset such a raise in wage. To be clear .... if it costs $14 an hour working a full-time job just for the basics in cost of living, they can raise the wage to $13 an hour and the only business that will benefit from that wage increase are landlords, banks, utility companies, transportation, and the tax man. The rest of the businesses out there are SOL because consumers still won't have one penny to spend stimulating the economy. This issue at hand is not an issue of class inequality, ie. rich vs. poor, it is an issue of inequality in wage vs. cost of living. Minimum wage is as counter-productive as the cost of living and they have no problem with the cost of living rising every year. They have allowed this problem to occur and have let it get out of hand. You can't fix this with education so everyone has a college degree because the payoff on that after a person pays off the debt of that education and is actually contributing to economy growth won't have results for decades. You also can't fix this problem with subsidies and bailouts, the ONLY solution is for wage to be higher than the cost of living so the result is massive consumer spending and real economic growth.



http://www.usgovernmentspending.com/year_spending_2013USpn_13ps2n_400010



Reason for using "~" is these figures (%) change quarterly and this is for general ideal.



The US government spends (Not including Medical, since my personal belief is everyone should have medical care) ~2.6% of the ~$16 Trillion (2.1% GDP impoverish family medical welfare, to make a point) ~416 Billion/yr (2.6%) & 336 Billion/yr. (2.1%). Also which is not listed under welfare spending but rather "Agriculture" spending are the food stamp programs which amount to ~80 billion/yr. totaling ~832 Billion/yr.



http://cnsnews.com/news/article/federal-food-stamp-program-spent-record-804b-fy-2012



http://aspe.hhs.gov/poverty/13poverty.cfm



The poverty guidelines in the US. are roughly $12k/yr. Single +4k/yr. per additional household member. This is the equivalent to having a part time job(32 hours a week) with no benefits at minimum wage. Consider ~15% of the US lives in poverty, with a population of 314 Million, nearly 47 million people live in poverty which in turn creates the need and dependency of social welfare. 22% of these citizens are children who have no recourse for their situation. Leaving ~36.5 million working age Americans in the pits - dependency.The government spends nearly $17-18k/yr. per individual person in poverty. This does not include tax subsidies for programs like EIC which pays out about 1.2 Billion a year to low income families with dependent children. This is small dent in the big picture. Link for reading.



http://www.pewstates.org/projects/stateline/headlines/a-renewed-push-for-earned-income-tax-credit-in-states-85899539729



Getting to the point, if we where to take the over 22k/yr. spent in welfare services and divert them into a living wage subsidy supporting a higher base minimum wage of nearly 2x ($14.5) the current minimum wage for persons who are working age (18+) [maybe keep lower minimum wage($7.25) for ages 15-17 who are restricted to part time and often live as a dependent]. we would in turn begin to nullify the need for such large social welfare. as this wage would create independent earning as well as stimulate economic growth via increased purchasing power.



Why should this be a government subsidy? Look, the government is already paying this money out. We know we can not trust corporate America to care for the well being of their country and those who work for them. A subsidy would both benefit employees and lesson the bottom-line of the employer.



I truly feel the original intent of social welfare has long been lost to the stepping stone it was meant to be. It has become a crutch for generational poverty and a means to create social apathy and dependency in the impoverished and working class of America.



If we can start to take the right steps now on matters like this as well as clean up some other issues in our country and government we may be able to set forth a bright and lucrative future for our children.

The USA is now competing in a world economy. The purpose of business's is to seek maximum profit, that means doing whatever they deem necessary. If they need to ship jobs overseas then they will do so. The only way to keep jobs local would be to provide incentives to hire local, and forcing them to pay ridiculous wages ($10 is f*cking ridiculous for easily replaceable unskilled labor).

I know most people here don't follow the finer details of world economics but I do. Manufacturing is finally coming back to the USA, plants are being built in the USA (in non-union states btw). This is because the rising middle class in China has raised the cost of production to a point where an advanced automated facility in the USA can produce the product at the same cost or cheaper then a less advanced manual labor driven facility in China.

A federal minimum wage as high as $10 USD would be giving an advantage to China and delay the return of the manufacturing jobs stateside.

So congrats you would score a "victory" that would cost your economy jobs and business in the long run at the expense of unskilled workers being paid more in service jobs that can't be shipped overseas.

Obviously there is a an issue of poverty. What you said make sense, but what could be done to counteract the issue if what Arziet proposed would hurt us?

The statistics behind minimum wage are actually quite staggering. I'll take some quotes directly from Forbes.com, but the story seems to be the same across all sites that I visit.

"Only .66 percent of full-time workers and 1.7 percent of full-time hourly wage employees earn the minimum. Just four percent of minimum wage earners are heads of households working full-time attempting to raise a family, less than the percentage for all workers. Most employees collecting the minimum are teens or young adults or are working part-time. As a result, a 2007 study by the Congressional Budget Office figured that just one-seventh of minimum wage increases went to employees in poor families."

"The minimum wage is no weapon against poverty. Explained Wilson: 'Since 1995, eight studies have examined the income and poverty effects of minimum wage increases, and all but one have found that past minimum wage hikes had no effect on poverty.'"

Who would be affected the most by a minimum wage hike? Not down-on-their-luck heads of households, but rather teens, young adults, and unions. Why unions? Because unions often negotiate pay based on a percentage above whatever the minimum wage happens to be.

What happens to teens when the minimum wage rises? That's right, teen umemployment rates skyrocket, especially for minorities, even in good economies.

wouldn't companies like mc.donalds would just raise prices of food then to compensate for increase in wages thus kinda degrading the value of the dollar?

Just to clarify, the actual production costs are not that cheap, the lack of international shipping and tariffs makes domestic production cheaper. If you ask me, that's a good thing. Manufacturing jobs are largely unskilled but usually carry a more competitive wage and benefits package than other unskilled work. They also offer a density of employment that most jobs don't.

True. There has also been a higher demand for quality and "Made in America/<insert state>" also.

At least in Texas it seems. More businesses sell their products as "Built in Texas" more than "Built in America."

Jobs are going to the states that don't demand more pay for less quality work, that's why you see more jobs being shipped to Texas than Michigan.Mind you, raising the minimum wage to $10 an hour is just a political ploy to satisfy people with short-term memories. Sad thing is, it was a Republican president who raised the minimum wage the last time (but he did it at the later years of his presidency though).

Shhh, don't throw facts here, people won't like it. They would just say you are lying.

And then blame Bush for it.

no

Solid argument. I'll have to look over your figures, but your reasoning is impeccable.

Google is hard

It took me 15 seconds to Google it and find an article that says the opposite of what you claimed. If you have an argument, try presenting it instead of being lazy.

The overwhelmingly majority of the data shows otherwise, I'll be as lazy as I want to be, thanks.

Found several more pages opposing your claim. On the first page of the Google search. With data. But okay, if you don't want to try harder than that, it's cool.

Not likely since the cost of their food is not determined by labor costs but rather by their competition and what their customers are willing to pay. Any increased production costs, if substantial enough, would probably be offset by changes in labor.

I think everyone is just waiting for KN to bring slavery into this thread.

Btw prices are pretty much determined by supply and demand.

inb4 the part where people *** about them replacing cashiers with touchscreens: let them.

I honestly don't know if an increase in minimum wage would increase McDonald's food prices, I was just hoping for a better argument than "Google it". Either way, basing the minimum wage argument on fast food prices is probably not the best approach.

I love your honesty. Is that what these forums have come to, though? Screw debating important issues, let's wait for a conservative to say something stupid and then jump all over it? Actually, don't answer that. I like to pretend something productive comes out of all this.

I'd like to see a few things before another minimum wage increase:

1. start to close the gap between the tax brackets of earned income and capital gains taxes.

2. outright kill some of our trade agreements to where it costs less to import ***that we can make here.

3. more safety regulations, break times on jobs, more coverage for work related injuries, more sick time (also increase regulation on it, allow disciplinary action if caught abusing, no I don't have the details on this, but obviously I'm not saying to make it a blanket "hey you can call in all year and still get a paycheck."

something slightly off on a tangent: Honestly we're going to have to start considering changing the workweek and or the amount of people we employ, or our population problem, it's not sustainable.

It's 2am, I've lost my phone, just had to spend 4 hours in the ER, a bit cranky. From the little bit of research I've done (going to admit, it isn't much) there hasn't been a steadily correlation much less a causation attributed to an increase in inflation by increasing the minimum wage.

oh something else for long-term economic prosperity: reenactment of the Glass-Steagall, along with some other banking reforms that should probably be implemented. (put ***like qvc's CC out of business).

It works both ways and has for a few years now.

Fair enough.

And sorry to hear about your crappy day, Jet. I do agree that there are things that can be done aside from a minimum wage increase to help fight poverty until a wage increase can be sustained. Obama and Congress need to spend more time working on other poverty-reduction measures and stop with the politically-charged sympathy ploy that is a minimum wage increase.

Don't get me wrong: I still think the wages need to increase, in relation to the wage gap, aka the ratio needs to be reduced.

There's a lot of things that need to be discussed that most wouldn't even put on the table as they're too busy arguing over things that really can't be resolved. They're trying to fight a symptom, while the disease keeps spreading.

Whether that's by design to keep the masses in check, I don't know, or really care at this point, a lot of things are going to need to change, the problem is most people are too complacent/reasonable/uneducated to do anything about it. Honestly if I walked into any other room and saw a bunch of grown adults acting the way congress does, I'd find the nearest water hose and spray them all down.

Here's an idea that I'd been toying with: how to improve projects to the point to where they're not just breeding grounds for gang members. I don't have a problem with the concept of projects, or even with people living in them for their entire lives, or families', but I have a problem with that there's very little interaction with them to try to educate/keep positive influences in that culture there, regardless of who's in the projects, whites, blacks, Asians, Latinos.

I'll reach through the internet and slap the ***out of the first person who mentions something about weapons in regards to that, or something racist.

Now back to what I was trying to say before I accidentally double posted. Yeah, I think small and frequent increases to the minimum wage based on inflation might be a good idea. But a nearly 3-dollar increase in a struggling economy? I know Congress can be smarter than that when they actually try to help the country instead of spending all day in political limbo.

The big difference between US and Chinese manufacturing has to do with methods. In the USA we utilize highly automated production facilities with extremely high upfront capital costs but high production volume. China use's manual facilities with significantly lower automation in favor of using cheap human labor instead. Investing in China is cheaper then investing in the USA due to this difference in start-up capital. Business's aren't blind, they are constantly watching what's happening and trying to predict the short and long term future to best position themselves. They saw what union's were doing to US domestic production and chose to invest in an environment where unions couldn't hold their investment hostage. Quality issues can be factored into a cost analysis, a union manager shutting your production line down and costing you millions of USD can't.

Now that certain states have made it abundantly clear they want no part of unions, China is developing a middle class and starting to be belligerent towards foreign companies, there is an incentive to invest to exorbitant amount of capital into a high-tech automated production facility. These facilities require semi-skilled and skilled labor and often provide training programs for their workers.

The reason a national minimum-wage is such a bad idea is that it sends a message that the federal government is now going to try to legislate labor instead of allowing the states to handle it. That's a huge disincentive to companies to invest stateside where states often compete with each other to attract those business's.

Currently Texas, Georgia and Oklahoma are all growing local manufacturing base's. Arkansas, Alabama and Louisiana are all looking into altering their policies to try to attract manufacturing. Notice something all those states have in common politically.

Umm no.

The primary cost for fast food restaurants is in labor. Their supply chain is ridiculously cheap to maintain and management is constantly looking for ways to reduce costs further. It's cheap and incredibly unhealthy food, but it's available and convenient.

Fast food prices are linked with inflation and average cost of living. As costs related to per unit of labor rise they in turn raise up the cost of the product to maintain the same profit. The entire fast food industry works this way, so whatever cause's one to raise it's price also cause's the others to raise their prices. There is no nation wide burger price fixing going on. In actuality each business has an incentive to lower their price whenever possible. The primary customer is low income people who don't have that much disposable income. BK offering food 10% cheaper then McD and Wendy's would have a business advantage over them.

But hey just hate on them because you want to.

That actually isn't the purpose of a business. The purpose of a business is to provide a service or product.

Ideally, the business will want to maximize its profits for a given set of variables; but that isn't the point of the business.

This seems to be something which is forgotten or misunderstood.

Nothing you typed really contradicted me, lol. The prices are determined by the market. If it was optimal to be charging more now, they would be. Increased labor costs alone wouldn't necessarily translate to a more expensive menu because there are other ways to maintain profitability without raising prices. That is all I stated.
You so silly. Stop being so silly!