Points for page 3:

Quote :

"people currently making $15 are going to renegotiate with their boss for more money. Jobs that need higher qualified workers WILL pay more to get those workers"

Quote :

"McD's and similar business will just being investing more heavily in automation"

And that will create demand in some other industry. Which industry? And what kind of worker does that industry employ?

Quote :

"and that doesn't change the point that those people will be losing their jobs to more qualified people"

Everyone here agrees that higher minimum wage puts more people out of a job. However, there is still a certain "clump" where people make more than they otherwise would have. If we imagine an "ideal" wage scale of what people would make with no regulation, presumably it spans from $0/hour on up. Implement a minimum wage of $5/hour, and then perhaps people with a "natural" wage under $2.5/hour will be unemployed, but people close to the cutoff are now better off. There's still a supply-demand curve at work.

9/2/2013 2:03:55 PM

Quote :

"And that will create demand in some other industry. Which industry? And what kind of worker does that industry employ?"

Not uneducated and unskilled workers, that's for damn sure, lol. Otherwise, the people at McD's would be working in those other industries, making more than minimum wage. But they aren't, so...

Quote :

"Everyone here agrees that higher minimum wage puts more people out of a job. However, there is still a certain "clump" where people make more than they otherwise would have. If we imagine an "ideal" wage scale of what people would make with no regulation, presumably it spans from $0/hour on up. Implement a minimum wage of $5/hour, and then perhaps people with a "natural" wage under $2.5/hour will be unemployed, but people close to the cutoff are now better off. There's still a supply-demand curve at work."

So you think it's preferable that some people make $0/hr just so some people will make $5/hr? I guess I'd have to ask how many people have to be made "better off" in your eyes to negate the number of people who are now unemployable.

9/2/2013 3:29:31 PM

Quote :

"Everyone here agrees that higher minimum wage puts more people out of a job. However, there is still a certain "clump"... "

and again, you are missing the point and missing why its not the fallacy you posted a link to

the claim is not that it will put more people out of a job, the claim is that it would change who held the jobs. the point is that these people are striking to give their job to someone else.

9/2/2013 3:59:35 PM

I love how corporations have convinced people in American to fight tooth and nail for their interests.

Meanwhile in other countries:

-People get paid more per hour
-Get guaranteed leave up to months worth
-Get guaranteed maternity leave
-Paid healthcare
-Paid benefits

It's like we just love fucking ourselves over in this country at our own expense to benefit the rich.



Congrats. We treat mothers works than Pakistan.

[Edited on September 2, 2013 at 9:23 PM. Reason : ]

9/2/2013 9:22:44 PM

lol

9/2/2013 9:44:47 PM

Quote :

"the claim is not that it will put more people out of a job, the claim is that it would change who held the jobs. the point is that these people are striking to give their job to someone else."

I guess we have yet to establish whether political view are inherently self-interested or not.

It seems like everyone who uses TWW would be in favor of higher McD wages, if their views were built out of pure self interest. There is a low-wage cohort who will face more unemployment, and I don't think any of us fit that. There is also a high-wage cohort who will not see sufficient benefit to wage bargaining to offset the inflation that comes with higher minimum wage. I doubt that anyone here falls into either of those two extremes. But maybe your political views are focused on compassion toward the hyper low-wage cohort. That would favor a larger social safety net and possibly a lower minimum wage.

It's not often that we hear that a higher minimum wage hurts the poor. But that's exactly what the quoted text here argues. It can be founded, but there is a lot unsaid about the safety net.

9/2/2013 10:40:40 PM

eh...

There are other factors, which are the non-ideal factors in resolution of the McD conflict. Unions also harm the customer of whatever industry they focus on. If you have industry-wide power, then higher wages can be propagated back to the consumer. If you only have power over the workforce in a single company, then that company may be forced to take the hit themselves (and also reduce plans for expansion).

So maybe you hate fast food. Then you would be in favor of the whole shebam getting unionized. What do you care if fast food prices go up? Again, assuming self-interest. I'm sure we have plenty of libertarians who hate fast food but will fight against coercive union power anyway.

Can we even separate the fast food workers from the customers? Do they live in completely different social classes? I know a lot of joints give free meals for a certain number of hours worked (low marginal cost for a limited part of the menu).

[Edited on September 2, 2013 at 10:48 PM. Reason : ]

9/2/2013 10:48:17 PM

If its not often said, ill go ahead and say it: Minimum wage hurts the poor.

9/3/2013 9:35:53 AM

Who else could it possibly hurt more? If the market value for your labor is minimum wage or less, and minimum wage is increased, then we should expect it to be harder for you to find a job; the difference between your actual labor value and the price floor on wages is now greater.

On the plus side, doubling the minimum wage would be excellent news for any industries involved in task automation.

9/3/2013 9:51:19 AM

^ I'd say the middle-class (at least the lower end of it) has a good chance of being hurt a ton as well. You increase the minimum wage and inflation will go up. Most of the middle-class making more than minimum wage won't get an increase in pay because of floor being raised, or if their old pay was less than the new minimum wage they would get paid as much as the minimum amount now. Thus, they are now indirectly making less compared to what everything else now costs.

9/3/2013 1:38:14 PM

Quote :

"Most of the middle-class making more than minimum wage won't get an increase in pay because of floor being raised, or if their old pay was less than the new minimum wage they would get paid as much as the minimum amount now. Thus, they are now indirectly making less compared to what everything else now costs."

I keep wondering, how can a rule result in every stratum of society being able to buy less.

It's a net zero-sum adjustment. The idea that no income class benefits is obviously wrong.

9/3/2013 3:30:43 PM

mcdonalds wage + has kids = recipe for disaster

parents, step your game up.

9/3/2013 3:37:29 PM

The automation argument is bunk. That's the fate of a vast majority of unskilled/semiskilled people anyways over the next few decades (singularity, etc). Why delay the inevitable. The fact is we will have to come up with some other system for these people soon anyways.

9/3/2013 3:54:03 PM

[Edited on September 3, 2013 at 4:04 PM. Reason : Dbl post]

9/3/2013 3:56:51 PM

Quote :

"Most of the middle-class making more than minimum wage won't get an increase in pay because of floor being raised, or if their old pay was less than the new minimum wage they would get paid as much as the minimum amount now. Thus, they are now indirectly making less compared to what everything else now costs."

Quote :

"I keep wondering, how can a rule result in every stratum of society being able to buy less. It's a net zero-sum adjustment. The idea that no income class benefits is obviously wrong."

Inflation is a bitch. Raising the minimum wage just accelerates inflation.
If everyone uses a $20 as the base, then a loaf of bread costs $20. Those $1 are only good for a pack of gum. (wait, gum is already a dollar, long gone is the $.25, $.10, or $.05 packs)

9/3/2013 4:22:37 PM

while on the subject of minimum wage, its worth noting that the majority of mcdonalds employees make above the minimum wage

9/3/2013 4:23:42 PM

Am I wrong here, I thought the workers were attempting to negotiate with management, not agitating for a higher min. Wage. Admittedly I haven't been reading many articles about it.

9/3/2013 4:43:32 PM

Quote :

"Inflation is a bitch. Raising the minimum wage just accelerates inflation. If everyone uses a $20 as the base, then a loaf of bread costs $20. Those $1 are only good for a pack of gum. (wait, gum is already a dollar, long gone is the $.25, $.10, or $.05 packs)"

Inflation due to wage increase GOES TO WAGES! The combined total of all workers will still produce the same amount of goods and services.

9/3/2013 5:04:08 PM

And then people make more, and are able to buy less, which is exactly what I was addressing in my post.

9/3/2013 5:06:11 PM

ITT people know nothing about economics.

9/3/2013 5:36:58 PM

Quote :

""Inflation is a bitch. Raising the minimum wage just accelerates inflation. If everyone uses a $20 as the base, then a loaf of bread costs $20. Those $1 are only good for a pack of gum. (wait, gum is already a dollar, long gone is the $.25, $.10, or $.05 packs)""

Not quite that simple...

http://bookoutlines.pbworks.com/w/page/14422685/Predictably%20Irrational

Quote :

"Ariely, Prelec, and Loewenstein conducted an experiment in "arbitrary coherence" at the Sloan School. Students were asked to write down the last two digits of their SSN and consider whether or not they would pay that amount for certain items. Then they bid on those items. For every product, those with a 80-99 SSN were willing to pay more than those with a 00-19 SSN...by nearly 3X. Simonsohn and Loewenstein found that people who move to a new city remain anchored to the prices they paid in their previous city. People who move from Lubbock to Pittsburgh squeeze their families into smaller houses to pay the same amount. People who move from LA to Pittsburgh don't save money, they just move into mansions. In another set of experiments, even attempts to switch anchors failed; those who started off with higher anchors always demanded a higher price than those who started off with lower anchors, even after both groups had been exposed to exactly the same prices (albeit in a different order)"

9/3/2013 5:59:10 PM

Quote :

"And then people make more, and are able to buy less, which is exactly what I was addressing in my post."

In macroeconomics, production equals consumption. If "people" are able to buy less, you are saying they are producing less.

9/4/2013 8:35:48 AM

he was talking about earnings, not production

9/4/2013 10:31:28 AM

Then the consumption got transferred to someone else.

9/4/2013 11:19:53 AM

finally!

9/4/2013 11:41:31 AM

9/4/2013 12:25:10 PM

Well that productivity compensated someone.

9/4/2013 12:35:14 PM

...else

9/4/2013 12:51:08 PM

Wow, who knew people were working so much harder relative to compensation? I wonder why that graph tracked the same up to a certain time period...

It's almost as if something had been introduced that allowed productivity to increase without expending more man hours.

9/4/2013 12:55:30 PM

9/4/2013 12:57:42 PM

Quote :

"It's almost as if something had been introduced that allowed productivity to increase without expending more man hours."

Total hours worked by the entire population hasn't gone down much, and when it did, it wasn't because workers wanted that.



Hours worked per employee has gone down.



But this pales in comparison to the hours lost to people dropping out of the workforce.

[Edited on September 4, 2013 at 1:09 PM. Reason : whoop, posed star wars by mistake]

9/4/2013 1:08:36 PM

nothing about that post counters his point, God's post is more relevant to his.

9/4/2013 1:17:41 PM

God's post is somewhat relevant. It really depends on how a company does its accounting. If the cost of automation is capitalized vs. classified as an operating expense it's going to make profits look higher. In most cases I would guess it is capitalized.

[Edited on September 4, 2013 at 1:35 PM. Reason : sdfsd]

9/4/2013 1:35:04 PM

The point is that CEO pay has gone up 300% and the minimum wage has gone down -9.3%. Let me know how that makes sense. Or is it just capitalism at it's finest?

9/4/2013 2:33:13 PM

Average pay still increased.....

9/4/2013 3:05:11 PM

Quote :

"Average pay still increased....."

Average income should always increase with productivity. There are plenty of hairs to split between capital gains versus pay. But if you have a consistent accounting system average production will equal average consumption. That's because production=consumption to begin with and you're just diving that by the number of people.

9/4/2013 3:10:27 PM

^^Yeah I guess a 9% increase is an increase. Why are those poors complaining? *flies away in rocket-powered yacht*

9/4/2013 4:28:21 PM

Quote :

"Average income should always increase with productivity. There are plenty of hairs to split between capital gains versus pay. But if you have a consistent accounting system average production will equal average consumption. That's because production=consumption to begin with and you're just diving that by the number of people."

Sure, as long as consumption and production occur in the same closed system. When your consumption occurs in the US and your production occurs somewhere that labor costs are less you won't see the same kind of rise in wages in the US. Globalization is just another reason that profits and wages aren't rising at the same rate. Increased efficiency through automation/machine assist and globalization are both going to be a big boon for profits while keeping labor costs relatively low.

9/4/2013 4:35:11 PM

And that production goes to labor that is absurdly, dramatically, lower price than in the US.

That's in spite of "productivity" increasing domestically. Ultimately, that's just leveraging the increase in domestic consumption even further! It's like there's some giant consumption black hole.

9/4/2013 4:43:41 PM

Well, sort of. If you ignore the service economy and the fact that we have deficit spending among large swaths of the US population.

It's been quite a long time since we've been a net exporter. Actual physical production is important, but it's not the only type of economy that exists.

[Edited on September 4, 2013 at 4:50 PM. Reason : sdfsdf]

9/4/2013 4:50:15 PM

I'm not sure if exports matter. Some convincing arguments have been bringing me over to that side.

Say that you have Chinese people invest in US assets and US people invest in Chinese assets. Now imagine that the financial industry culture is different in both nations. So the US investments in China return more than the Chinese investments in the US.

That will lead to a sustained trade deficit for the US. The reason is that it gets an investment dividend over their Chinese counterpart. The Chinese person pays for this swap in the form of a few more manufactured goods.

If you look at Chinese purchases of US treasuries, it doesn't tell you much, but one of the few things it does tell you is that China has been putting large amounts of assets in very low yielding US holdings. It's almost certain that some counterpart US investment in China gets a better return. Thus we conclude that portfolio composition accounts for at least some of the deficit, and that can be sustained forever.

Government debt largely represents a financial transfer. Lower taxes were paid in exchange for a future obligation. The problem I have is that it mucks with the principles of a democratic tax code. No particular name is on that debt. Deficit spending still is justified in terms of stimulating consumption, but I have problems understanding the fundamentals of that beyond the economic cycle itself - and the practical use of deficits is very far beyond that.

My pet conspiracy theory right now is that QE is an interest rate swap with the government. If the government were to issue treasuries and use that money to invest in the stock market they would trivially make a killing. They could own the entire goddam thing in a generation. This isn't exactly what's happening mechanistically, but I think it boils down to that. If it were so desired, that would be a cheap inroad to de-facto socialism.

The "problem" is ostensibly that people either refuse to spend or refuse to save, and that's unstable no matter how you cut it. I'm sure that the minimum wage wouldn't be necessary if not for that reality, but I also don't know if there's a way to escape from that reality.

9/4/2013 5:46:59 PM

9/18/2013 1:37:41 PM

If the minimum wage had stayed up with inflation, it would be around $33/hour. I think $22/hr is a far more reasonable minimum wage, as Elizabeth Warren has mentioned.

10/2/2013 1:43:01 PM

you think minimum wage should be almost $46,000 per year? jesus dude.

10/2/2013 6:09:17 PM

Honestly, I wish they would just make the minimum wage 20, 30, 40 dollars an hour, whatever people are saying it needs to be, to prove how devastating it would be to the economy.

10/2/2013 6:49:06 PM

Well, prices adjust to allocate scarce resources. Imposed slowly over time, the economy would survive a $40/hour minimum wage just fine. It is the millions thrown into unemployment that would be devastated.

10/6/2013 3:44:24 PM

Quote :

"if employees are still showing up, then you are paying them enough."

Quote :

"But if they can find plenty of people willing to work for the current pay, how is $15/hr justified? "

Quote :

"the emotional appeal is compelling, but it doesn't change anything about my point. if you pay fast food workers $15/hr, most of the people working the job today will no longer have a job."

You are making two assumptions that are based on your limited world view.

First one is that the corporation's purpose should be to create maximum profi or to provide maximum value to shareholders. This has been a notion since 70's, but that;s not what corporations originally strived for. This article give you a brief rundown on the history of this change, using IBM as an example: http://www.washingtonpost.com/business/economy/maximizing-shareholder-value-the-goal-that-changed-corporate-america/2013/08/26/26e9ca8e-ed74-11e2-9008-61e94a7ea20d_story.html

Second assumption that is wrong: according to your train of thought, given two jobs with an identical level of compensation that require different level of skill or knowledge, that everyone will take the job that requires lower qualification. I guarantee you that even if teachers' compensation will drop below fast food worker's compensation, you won't see teachers massively leaving schools to work in fast food joints. I've seen teachers that will work for free, but I haven't seen any fast food employees that will do so. Same goes for many other professions. My wife holds a professional position in a non-profit with a good cause, and honestly she could make as much as an entry-level employee in sales (minus the benefits, maybe). She is not going to apply to Macy's anytime soon.

And to all of you saying that McDonalds won't able to make the ends meet if they paid a living wage - please check their balance sheet as well as distribution of wealth in this country, and you will see that it's simply not true.

10/7/2013 5:59:07 PM

Quote :

"you think minimum wage should be almost $46,000 per year? jesus dude. "

LOL why so shocked?

The only reason it's shocking that an adult working 40 hours would actually be able to live a stable financial life is because we've grown up in an era of unprecedented economic division between classes.

Back in the days, if someone gave their life to a store or company, they were taken care of.

Not only does this ideal not exist today, conservatives also believe the average person should be destitute.

10/7/2013 7:06:20 PM

Where are you going to get that 46k to give them? Fast food/grocery store/retail economies just don't hold up to that kind of cash.

You start paying these people 46k per year, and your collegiate academic base starts to dwindle, because whats the point of paying for college when a good majority of the college majors you love so much pay that type of salary or less.

10/7/2013 7:16:10 PM

Quote :

" because whats the point of paying for college when a good majority of the college majors you love so much pay that type of salary or less. "

Because you want to learn new things and do more with your life than flip burgers?

If you went to college just because you're afraid of being poor, you're doing life wrong.

Society would be much better off if people could do what they were passionate about, and if you weren't passionate about anything, you could still be happy flipping burgers, because all you'd have to do is work your 9-5, then go home and get drunk and play Xbox. At least in this ideal world, this passionless burger flipper's child wouldn't be punished.

Quote :

"Where are you going to get that 46k to give them? Fast food/grocery store/retail economies just don't hold up to that kind of cash. "

I also don't think this is true as much as people would like to believe. You'd need less part-time employees, because your full-time professionals would do a better job (just as Costco). Would you have to pay CEOs less? Yes, but executive pay is way out of control as it is.

I'm not explicitly arguing for raising the min wage to this level (companies still need to option to pay idiot high schoolers crap wages), but the way we view compensation is completely screwed up.

The corporate overlords have won the propaganda war when people believe we don't NEED good people in unskilled positions as much as we need everyone else.


[Edited on October 7, 2013 at 8:06 PM. Reason : ]

10/7/2013 8:02:55 PM