What arguments can be used against the minimum wage intrusion of govt.

November 9, 2006

[Dane]

With the sweep by large margins of the minimum wage intitives in 3 states in 2006, it is obvious that raising the minimun wage is an obvious popular electoral arrow the democrats have in their quiver.

Now I'll probably see replies of "stupid Americans", but that doesn't cut it. I would like to see replies that are concise on why the minimum wage is bad economic policy.

BTW, if you have a pro opinion about the minimum wage, they are also welcome, but such replies such as "sticking it to the man" aren't going to cut it either.

[curtish]

Raising the tide, so to speak, will eventually lift all boats. Those currently making what the new "minimum" is will rightfully feel they deserve a raise. This will force up labor costs across the board meaning that consumer prices will rise accordingly which will offset the "perceived" benefit to low wage earners. Why would someone keep a job that requires skill or talent with a pssible commute when they can make the same money slinging burgers at the local McDonalds?

Also, when the forced wage goes above what an individual can earn for a company that company will rightfully do away with the job or raise the work load. The worst effect of minimum wage laws is the actual lose of jobs as companies restructure their wage model in order to remain profitable.

Remember, if you're not pulling your own weight then someone else is pulling it for you.

[Logical me]

OK. Many entrance employment is usually in the service area. i.e. fast foods, restaurants, etc. This industry has a very low margin of profiet mainly due to competition. The most costly item is employees. Many States require not just wages, but other costly things, taxes, permits and employee benefits. When wages goes up, layoffs begin to try to remain completive in their product.

[claudiustg]

An initiative here in Montana passed overwhelmingly, compltete with an annual raise indexed to inflation!

[Busywhiskers]

There is an inverse relationship between the price for something and the amount demanded of that something. What this means is, if you raise the price of the labor of minimum wage workers, employers will hire fewer of them. If you have an individual who's productivity suggests that the value of his labor is less than the minimum wage, he is doomed to unemployment because, generally speaking, employers are not stupid people.

[Maneesh]

"Ask your opponent why we don't just make the minimum wage $50/hour, and he'll make the argument for you".

That really is the best answer. While we are at it let us legislate a 2500 sq ft house and a $20,000 car for every American. I have even said, I am more compassionate than you, I want min. wage to be $60 / hr, no stop $100 /hr. If a liberal then say that's too high, I say well then why is $8 / hr not too high, why should some liberal in DC tell you what to pay your employees ?

[kevao]

Yes, with the stroke of a pen, we could eliminate poverty once and for all by making everyone a millionaire.

[bill1952]

you said it all.

Small businesses are the engine of America, period.

I remember when Hillary was touting the universal health care, and all paid for by employers. (who was she anyway?)

I had about 10 or so employees come in to my office to ask details about it as if it was a done deal.
Who gets to tell me how I have to structure healthcare? Is that why I worked my butt off and started a business?

"If that passes your jobs are all eliminated and you will have the choice to go 1099 or go on unemployment."

A priceless moment. Minimum wage, same principle.

[Maneesh]

"Yes, with the stroke of a pen, we could eliminate poverty once and for all by making everyone a millionaire."

There we go, the ultimate compassionate conservative on FR.
All we need is for the govt to take more of your money for the greater good but I know that us compassionate conservatives in the new spirit of bipartisanship will full support that.

[MarineBrat]

I say we raise MW to a billion dollars an hour. Everyone could go to work for a few minutes (long enough to quit) and then retire! Woohoo!

[mak5]

And, unfortunately, it was passed as a Constitutional amendment, so that future legislatures could never repeal the annual increases.

[elc]

We were discussing this (the myths of minimum wage) on a thread yesterday. Waging the minimum wage doesn't hurt as much as people say it will (it won't mean less jobs) and it doesn't help as much as people say it will (it doesn't lift people out of poverty).

[elc]

i'm having serious deja vu

[DaveTesla]

It has to do with the gap between what minimum wage is and
what an employer pays.
If minimum wage is ( hypothetically ) $6.00 an hour
and I pay $12.00 then the difference is $6.00.

Raise the minimum to $8.00 and the employee is only making
$4.00 and hour above minimum wage instead of $6.00.

You have just reduced their wage gap by $2.00.


Since ALLMOST NOBODY pays minimum wage, wage rates are
comparative between the minimum and the rate paid.

The employer will be pressured to increase his wages
another $2.00 an hour to make up the gap difference.

For those that don't get an increase it will eventually
reduce the amount that they make.

Thats right, it will REDUCE the value if the middle
($12- $20 hr) income wage after inflation sets in.

ANYBODYS (above minimum wage) wages that don't go up
in direct proportion will be making less money.

This is just another sneaky way to cause inflation,
raise payroll tax revenue and move some personnel into higher tax brackets.

[spikeytx86]

I really don't see how inflation indexing would do damage. All it means is that in dollar terms the business will be paying the same dollar amount from year to year.

[HEY4QDEMS]

In theory this is a valid argument, but considering how few people are making minimum wage the price increase due to the increase in payroll would be seen in very few places.

As I posted earlier, the amount of employees facing payroll cost increases because of this will be about 1%.

Think about it and be honest with yourself, of all the people that you know personally that are in the workforce, what percentage of them is making the minimum.

I can't think of any personally.

[spikeytx86]

Tell me about it :) or maybe you have already? ;)

[DaveTesla]

You missed the point!

Employees gage their pay rate by the GAP between minimum wage and what they earn.

Either the entire non exempt (Hourly) wage earners
go up in direct proportion or they will perceive
themselves to be making less.

Please re-read my post.
You start out making $6.00 an hour above minimum
wage and when the crappers are done you are only making
$4.00 and hour above minimum wage.

[dfwgator]

IMO the minimum wage hike will probably benefit about two or three percent of workers

It benefits millions of union workers since the wages are pegged to the minimum wage.

[dfwgator]

Jobs are not social programs!!!

[ClaireSolt]

Who ever heard of a 30% raise? That's the nonsense that happens when you have a bunch of lawyers pretending that they know how to run businesses.