The Minimum Wage and Unemployment, or, Bye Bye, Miss American Pie (No such thing as a Free Lunch)

grey_whiskers ^ | 07-26-2009 | grey_whiskers

[grey_whiskers]

Cheers!

[grey_whiskers]

Fresh birdcage liner for a Sunday Evening!

[RebelYell1990]

Peter Schiff and the Austrian School fundamentalists make claims without regard for the actual facts.

http://www.miseryindex.us/urbymonth.asp

As a case study, lets go from the beginning of 1950, where the minimum wage was 75 cents, to October of 1997 where minimum wage was 5.15. Unemployment went down from 6.5% to 4.7%. And the places in between where unemployment above above the 6.5% figure were not correlated to a minimum wage increase, but to other economic events.

[alloysteel]

What the heck, make it $20 per hour.

At that level, I would go back to work.

There was a time when I would have KILLED to have gotten $7.25 an hour.

Back when I was getting $1.25 an hour.

[FastCoyote]

It is simply a fact of physics that if a product costs more, there will be downward pressure on the demand for that product, no matter what it is. If you argue this isn’t the case for labor, then you have to argue the possibility that nothing in the economy makes sense. Hopefully you aren’t arguing that there is zero correlation between the minimum wage and the employment of teenagers, are you? Because that would be ludicrous.

[LucyT]

Thanks, grey_whiskers.

Now that the credit bubble has burst, there is nobody with money to purchase at the higher prices, and there has been no true large-scale middle class in the developing countries which could take up the slack.

The Left wanted their Free Lunch of endless entitlements, on the back of the middle classes of the developed world. But demographics and offshoring together are putting an end to that.

The real solution is not that of turning on the printing presses, as Obama wants to do, but of forgetting the principle of the Free Lunch altogether. The only way to make sure both the poor and rich have enough, is not to quibble over how to divide the pie, but to *bake more pie*.

[RebelYell1990]

Look, you can keep spouting your nonsense, but it simply doesn’t correlate to unemployment numbers of the last half century. I have two good friends working for minimum wage right now, I have been employed for more than minimum wage, so you are wrong on a second count as well. A business should always be able to pay a decent wage to employees.

[PapaBear3625]

What creates a sustainable increase in low-skill wages is a continuing increase in technology.

It is not worthwhile to pay somebody $5/hr to produce $4.50 worth of product, but it IS viable to pay somebody $8/hr to babysit a machine that cranks out $20 worth of product.

[AceMineral]

What do you do if you are a cake man?

[MHGinTN]

That pie looks so good, I think I’ll bake an apple pie and have it with vanilla ice cream!

[TBP]

Teh increase in unemployment is precisely what tehy intend. Taht makes for more dependent people, thus more "need" for government programs, thus more power for them. And mor epower is the ONLY thing these people care about. They're totalitarians at heart.

[Marie2]

I think one perhaps unintended consequence of this increasing minimum wage will be an increase in under the table or “private contractor” work. Which would of course decrease the amount of taxes the government collects.

[thecodont]

Homemade pie can't be beat. In my neighborhood wild blackberries, free for the taking, are just now getting ripe. They make an outstanding pie.

I never knew how good fresh peach pie could be until I made one myself. I try to use 3 lbs. of fresh fruit per pie (10" deep dish).

[Marie2]

“A business should always be able to pay a decent wage to employees.”

I hear you, but a man should be able to work for what he is willing to accept. He should not be forbidden to get a job for less than $7.25 per hour or what have you. I want that freedom.

My teenage sons want that freedom! My 18 year old had a terrible time getting a min wage job, and he has a good work history and no problems! He finally had to move out of town to get, for real, a job grilling hamburgers at McD’s.

[FastCoyote]

[Look, you can keep spouting your nonsense,]

Okay, you tell us EXACTLY what the minimum wage should be, the exact clearing prce, since you are so smart. And then tell us how you calculated that exact point.

[LucyT]

Yes! You can have cake!

[RebelYell1990]

The minimum wage should be what an illegal makes and double it. The fact is, you have abandoned your absurd claim that minimum wage causes unemployment, and are trying to shift topic stop what I think minimum wage should be, which has nothing to do with the premise of your OP.

[QBFimi]

>> A business should always be able to pay a decent wage to employees.

Yeah, what the hell - I made $150 a flight hour as an airline captain. Why not pay everybody that? ANSWER: The marketplace will only pay you $150 or $7.50 or whatever an hour IF you can generate MORE than that amount of goods and services. For that kind of money, I had to make life and death decisions for the 254 people I had strapped to my a$$. The net result of minimum wage laws is that they restrict entry of young and/or unskilled workers into the marketplace. The unions love it!

[snoringbear]

“My teenage sons want that freedom! My 18 year old had a terrible time getting a min wage job, and he has a good work history and no problems! He finally had to move out of town to get, for real, a job grilling hamburgers at McD’s.”

I agree with you. In fact, I don’t believe that a minimum wage is even necessary. Here in the Dallas metroplex the market minimum wage is around $8 or $9. I too have teenage kids who have part time jobs and as do their friends. None of them have started their jobs at less than what I stated above.

[duckman]

“Back when I was getting $1.25 an hour.”
Back in the late 50’s early 60’s, $10K a year was big money for the average guy.