Double The Minimum Wage

[MikeMangum]

We's agree massah!

If you don't like the wage a prospective employer is offering, find another job offer with a more attractive wage.

 

[sarge]

Someone else mentioned it, but check on a state-by-state basis. It's not easy to find that data per state. THe raw data is available, but it's generally separated by job categories, and trying to go through a few thousand options and pick out the degree-requiring form non is more time than I want to invest

But for a personal example, I attended the major state two-year college in Arkansas. My salary, upon finding a job after graduation, was about $36k. At that, I was the highest paid graduate they'd had in quite some time (on my side, I had two years experience in a work-study program working in my field, as well as years of military experience under my belt). The average 4-year salary here is probably about $40k.

The state-by-state data is important, because the states with lower average incomes will be affected the most radically by something like this.

And as I said, the $15 an hour wage is probably close to the high end for a two-year degree here (perhaps closer to average elsewhere), with $20 an hour being the low end for a 4 year degree (which seems reasonable with a $23 per hour average).

But I definitely agree with your final paragraph. I don't know what it should be, either...but $15 seems a bit high to me. There are a lot of "ripple effects" from increasing minimum wage; a lot of people seem to think it just magically makes everyone able to afford more. While it does increase buying power for lower-end jobs to some degree, it can also inadvertently tighten the job market (as companies hire fewer employees to cut costs), reduce incentive for college education (if I can make $15 an hour without, and $23 an hour by going $30k in debt for a four year degree, is it really worth it?), and have all sorts of other effects that rarely seem to be accounted for.

I want better data, myself

Sounds reasonable, but I have zero experience to back up my hunches on this subject.

I've worked in or for the Army my entire adult life. That influences how I think about income, benefits, etc. $15 an hour full time is a good deal less than a recruit in basic training makes. That "feels" low to me.....but then, I'm not sure our minimum wage should necessarily be a living wage. Do a significant number of adults not in school have minimum wage jobs as a career?

I'm still not entirely sure what the goal of minimum wage is.

 

[sarge]

If you don't like the wage a prospective employer is offering, find another job offer with a more attractive wage.

Does that mean you'd support eliminating the minimum wage altogether? Do you believe the market would take care of itself?

 

[MikeMangum]

Does that mean you'd support eliminating the minimum wage altogether? Do you believe the market would take care of itself?

When left alone, aside from issues of externalities, the market seems to handle these sorts of issues far, far better than even the smartest amongst us.

 

[aggle-rithm]

The highest hourly wage I have ever earned is $12/hour.

 

[sarge]

When left alone, aside from issues of externalities, the market seems to handle these sorts of issues far, far better than even the smartest amongst us.

I'm not sure exactly what that means. It sounds a little like an equivocation.

Absent regulations to the contrary, business will seek to drive wages down. Whether the methods they employ to do so are fair is a subject for spirited debate. I tend to believe that some guaranteed minimum wage is desirable, and I believe that setting that minimum too high would be detrimental. I have only the vaguest notion where the balance point lies.

 

[sarge]

The highest hourly wage I have ever earned is $12/hour.

Mine was around $2.25 an hour, if I recall correctly. I have been a salaried worker since I was 17.

 

[MikeMangum]

I'm not sure exactly what that means. It sounds a little like an equivocation.

Absent regulations to the contrary, business will seek to drive wages down. Whether the methods they employ to do so are fair is a subject for spirited debate. I tend to believe that some guaranteed minimum wage is desirable, and I believe that setting that minimum too high would be detrimental. I have only the vaguest notion where the balance point lies.

An Externality^WP is when costs are not born by those making the economic decisions.

Yes, without minimum wage regulations, businesses will indeed seek to drive wages down. I recommend keeping mind the concept of Supply_and_demand^WP.

 

[sarge]

An Externality^WP is when costs are not born by those making the economic decisions.

Yes, without minimum wage regulations, businesses will indeed seek to drive wages down. I recommend keeping mind the concept of Supply_and_demand^WP.

Certainly I will consider supply and demand. I'll also consider that, absent regulation, industry has the means and has demonstrated an absolute willingness to manipulate one side or the other of the S&D equation - something individual workers do not have the ability to do.

it is not in society's best interests to eliminate minimum wage requirements without simultaneously creating some other protections that would essentially accomplish the same thing. Simpler to figure out the desired goal for minimum wage, then set the wage to achieve that goal.

 

[MikeMangum]

Certainly I will consider supply and demand. I'll also consider that, absent regulation, industry has the means and has demonstrated an absolute willingness to manipulate one side or the other of the S&D equation - something individual workers do not have the ability to do.

it is not in society's best interests to eliminate minimum wage requirements without simultaneously creating some other protections that would essentially accomplish the same thing. Simpler to figure out the desired goal for minimum wage, then set the wage to achieve that goal.

YOu assert that industry has the means to manipulate supply and demand. I'm curious what those means are. If workers are not available (with the required skills) for the price the employer wants to pay, they have 2 choices 1) don't hire anyone, or 2) increase the offered pay.

If the expected output of the employee is greater in value than the cost of hiring that employee (wages, benefits, taxes, etc.) then the company is going to offer higher wages, or more flexible hours, or something to attract those employees. Having worked in the software industry for many years, I can attest that has been a noticeable change in the balance of power between employer and employee due to change in supply of qualified labor. Prima dona developers aren't quite as pampered as they used to be. The flip side to that is when there is a shortage of qualified labor. Workers in the Bakken oil fields are paid well, even for what is unskilled drudge work.

http://finance.yahoo.com/blogs/daniel-gross/north-dakota-spurred-energy-ag-boom-3-2-122815061.html

North Dakota, which is one of the smallest states by population (about 670,000) and one of the largest geographically, has .7 unemployed persons for every job opening. In the U.S., the labor force participation rate is an anemic 64.2 percent. In North Dakota, it stands at 74 percent.

...

The state's workforce directly employed in the oil industry has risen from 4,500 in 2005 to about 35,000 today. "On any given Monday, we've got 1,700 job openings directly related to the oil industry," Ness said. But since oil production requires a great deal of support, the boom has created demand for a range for workers: truckers, accountants, cooks, HR managers. In Williston, gas stations, convenience stores and McDonald's are offering $12.50 to $15.00 an hour for entry-level jobs.

Considering the cost of living in ND, $12.50 is not bad at all.

Employers are *not* going to offer wages higher than the expected output of the employee, which is why a minimum wage increases unemployment.

If they can make a profit off the labor of someone, they will hire them, regardless of the wage demanded. If they can't make a profit off of the labor at a given wage, they won't hire them.

EDIT:

http://www.twincities.com/business/ci_23192483/minneapolis-fed-sees-wage-growth-rippling-from-north

The Bakken oil field boom isn't just a North Dakota phenomenon.

"Places even hundreds of miles away appear to benefit from the wave of oil activity," says a new study from researchers at the Federal Reserve Bank of Minneapolis.

In average weekly wages and unemployment rates, counties even up to 100 miles away from the Bakken's 12-county core in western North Dakota still saw a significant benefit.

The study found that the strongest wage growth was indeed in the oil patch area -- with average wages up 140 percent since 2001. Wage growth in the Bakken started outperforming other counties in 2004. But the ripple effect on wages in counties farther away has been a more recent trend.

 

[Ryokan]

Norway is the most expensive country in the world to live (of those surveyed at least) at 123.52.

And we don't have a minimum wage.. Agreements between labour and employer unions set a sort of standard, but you're free to accept any salary any employer offer you.

 

[Aepervius]

YOu assert that industry has the means to manipulate supply and demand. I'm curious what those means are.

There are various depending on the industry. One well known is to hire on part time or limited contract, and when the persons ask for too much, hire another one. Another , when there are work visa programs, is to pretend one cannot find locally the persons, and need to hire somebody from another country on work visa, with a depressed salary compared to the average for the same skill set. Naturally when building the job offer you make sure you can find nobody locally. (that's for example the case for probably a sizeable part of the H1B in the US). Another is to close a local shop and reopen somewhere else, if your shop is not too much reliant on localization.

And then there is the scam of using illegals for construction and vegetable picking, and pretend you find nobody else.... Unsaid is "for that price". Naturally fruit/legumes/construction price would sky rocket, but they would represent the TRUE labor cost, rather than artificially depress it.

 

[sarge]

YOu assert that industry has the means to manipulate supply and demand. I'm curious what those means are. If workers are not available (with the required skills) for the price the employer wants to pay, they have 2 choices 1) don't hire anyone, or 2) increase the offered pay.

If the expected output of the employee is greater in value than the cost of hiring that employee (wages, benefits, taxes, etc.) then the company is going to offer higher wages, or more flexible hours, or something to attract those employees. Having worked in the software industry for many years, I can attest that has been a noticeable change in the balance of power between employer and employee due to change in supply of qualified labor. Prima dona developers aren't quite as pampered as they used to be. The flip side to that is when there is a shortage of qualified labor. Workers in the Bakken oil fields are paid well, even for what is unskilled drudge work.

http://finance.yahoo.com/blogs/daniel-gross/north-dakota-spurred-energy-ag-boom-3-2-122815061.html



Considering the cost of living in ND, $12.50 is not bad at all.

Employers are *not* going to offer wages higher than the expected output of the employee, which is why a minimum wage increases unemployment.

If they can make a profit off the labor of someone, they will hire them, regardless of the wage demanded. If they can't make a profit off of the labor at a given wage, they won't hire them.

EDIT:

http://www.twincities.com/business/ci_23192483/minneapolis-fed-sees-wage-growth-rippling-from-north

I assert that while most of what you posted is true, there still exists, absent regulation, an imbalance between the leverage industry has and the leverage individual workers have.

Unskilled labor seeker in urban area - lots of labor to choose from, wages drop significantly from the current minimum wage. Whether that is "good" or "bad" still depends on what goal we hope to achieve with a minimum wage. So far, no one has offered an opinion, and I don't really have one yet.

In other words, while I believe some minimum wage is probably necessary, until I know what goal we hope to accomplish with our minimum wage, any number I advocate for would be completely arbitrary.

 

[maxpower1227]

How about we require businesses to pay their employees a certain minimum percentage of the CEO's salary?

 

[WildCat]

How about we require businesses to pay their employees a certain minimum percentage of the CEO's salary?

So wages should be set by metrics unrelated to productivity, skill, and knowledge?

 

[maxpower1227]

So wages should be set by metrics unrelated to productivity, skill, and knowledge?

That seems to be the way it works now. Do you believe CEOs are objectively worth 300x what a low-level employee is worth? Do the peons get generous severance packages when they get fired?

I think my proposal is perfectly reasonable. Either executive pay should decrease or everyone else's should increase to keep pace.

 

[MikeMangum]

I assert that while most of what you posted is true, there still exists, absent regulation, an imbalance between the leverage industry has and the leverage individual workers have.

That depends entirely on the supply relative to the demand.

Unskilled labor seeker in urban area - lots of labor to choose from, wages drop significantly from the current minimum wage.

Currently. In some places, but not others. That's why so many people are moving out of places like California and New York and to places like Texas and North Dakota. People go where the jobs are. That's one of the purposes of the pricing mechanism; move resources from places where they are needed less to places where those resources are needed more. That includes labor.

Whether that is "good" or "bad" still depends on what goal we hope to achieve with a minimum wage. So far, no one has offered an opinion, and I don't really have one yet.

Hopefully world peace. But I'll settle for greater prosperity for everyone.

In other words, while I believe some minimum wage is probably necessary, until I know what goal we hope to accomplish with our minimum wage, any number I advocate for would be completely arbitrary.

Well, I don't know what goal "we" hope to accomplish with a minimum wage, but I can tell you the original impetus for minimum wages was to keep blacks and immigrants out of the labor pool (and the gene pool) and ensure those jobs went to whites.

http://www.princeton.edu/~tleonard/papers/retrospectives.pdf

American economics transformed itself during the Progressive Era. In the three to four decades after 1890, American economics became an expert policy science and academic economists played a leading role in bringing about a vastly more expansive state role in the American economy. By World War I, the U.S. government amended the Constitution to institute a personal income tax, created the Federal Reserve, applied antitrust laws, restricted immigration and began regulation of food and drug safety. State governments, where the reform impulse was stronger still, regulated working conditions, banned child labor, instituted “mothers’ pensions,” capped working hours and set minimum wages.

Less well known is that a crude eugenic sorting of groups into deserving and undeserving classes crucially informed the labor and immigration reform that is the hallmark of the Progressive Era (Leonard, 2003). Reform-minded economists of the Progressive Era defended exclusionary labor and immigration legislation on grounds that the labor force should be rid of unfit workers, whom they labeled “parasites,” “the unemployable,” “low-wage races” and the “industrial residuum.” Removing the unfit, went the argument, would uplift superior, deserving workers.

...

Columbia’s Henry Rogers Seager, a leading progressive economist who served as president of the AEA in 1922, provides an example. Worthy wage-earners, Seager (1913a, p. 12) argued, need protection from the “wearing competition of the casual worker and the drifter” and from the other “unemployable” who unfairly drag down the wages of more deserving workers (1913b, pp. 82–83). The minimum wage protects deserving workers from the competition of the unfit by making it illegal to work for less. Seager (1913a, p. 9) wrote: “The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.” Seager (p. 10) made clear what should happen to those who, even after remedial training, could not earn the legal minimum: “If we are to maintain a race that is to be made of up of capable, efficient and independent individuals and family groups we must courageously cut off lines of heredity that have been proved to be undesirable by isolation or sterilization . . . .”

At least at one point in time Progressives understood that a minimum wage led to unemployment. Of course, at that time, unemployment of the "undesirables" was the goal.

Whether that is "good" or "bad" still depends on what goal we hope to achieve with a minimum wage. So far, no one has offered an opinion, and I don't really have one yet.

Absent substantial cheap immigrant labor, getting rid of the minimum would instantly make it worthwhile to hire tens or possibly even hundreds of thousands of people who are currently unemployed because the equilibrium wage for those workers is below the minimum wage, often because they do not yet have work experience. It is difficult for new workers to enter the workforce when a minimum wage raises the cost of hiring them too high - how many teenagers do you see in fast food restaurants, working as cashiers in clothing stores, or doing any of the traditional jobs that teens used to get to that allowed them to demonstrate the basic skills required of a worker?

As far as the economic effects, well, that's a book.

 

[MikeMangum]

That seems to be the way it works now. Do you believe CEOs are objectively worth 300x what a low-level employee is worth? Do the peons get generous severance packages when they get fired?

I think my proposal is perfectly reasonable. Either executive pay should decrease or everyone else's should increase to keep pace.

Why do you care what a CEO makes if you aren't the one paying it? Other than simple jealousy.

If you really think that a good CEO isn't worth 300x what a front line worker makes (at a large company, at any rate) then you haven't been paying attention.

Case in point: Steve Jobs. When Jobs came back to Apple, the company had one foot in the grave. Jobs completely changed Apple. Changed what it made, changed how it made it, changed what its focus and identity would be. The result is that Apple Computers, a company that was about to go bankrupt, turned into Apple Inc, one of the largest and most profitable companies in the world. Apple had revenues of $46.3 billion and posted a $9.5 billion profit for the second quarter of fiscal 2013. Are you seriously going to tell me that taking a company from "just shy of bankrupt" to 30-40 billion in profit per year isn't worth millions (with an 'M', not a 'B') per year? That's one hell of a ROI.

A CEO can absolutely make or break a company, so it behooves companies to pay for the best candidate they can get (and to choose wisely). Those companies that choose poorly, and waste large amounts of money on crappy CEOs, pay for it. The waste of the high salary to the CEO is the least of the concerns; driving the company into the ground is the primary concern.

 

[Tony]

All minimum wage laws should be abolished.

Translation: Slavery should be legal.

 

[Tony]

That seems to be the way it works now. Do you believe CEOs are objectively worth 300x what a low-level employee is worth? Do the peons get generous severance packages when they get fired?

I think my proposal is perfectly reasonable. Either executive pay should decrease or everyone else's should increase to keep pace.

Productivity, skills and knowledge only matter when it comes to normal jobs. When it comes to executives and politicians, they have free reign to mooch as much as they can get because "freemarket", or something. Whatever the reason, a lot of people have drank the kool-aid.