$9 minimum wage: Poverty reducer or job killer?

The Week ^ | February 13, 2013 | Harold Maass

[ExxonPatrolUs]

In perhaps the "most controversial proposal" in Tuesday night's State of the Union address, President Obama called for raising the federal minimum wage from $7.25 to $9 an hour. "Even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That

[Little Pig]

This has absolutely zero to do with helping “poor” families, and everything to do with helping his union cronies. Union wages are tied to the minwage, so an increase bumps the income of all the union parasites.

[RC one]

The last time they raised the minimum wage, from $6.55/hr to $7.25/hr- back in 2008-09, the economy crashed, unemployment skyrocketed, and we're still not recovered from it. Just sayin'.

[jdirt]

Job creator—

for ilegal immigrants

[poobear]

DING, DING, DING...
BINGO!!!!!

[dalereed]

“That next week we raised the price on everything in the store and so did every other store in town.”

The grocery store isn’t in business to provide anyone with groceries, they are in business to make a profit.

[Gen.Blather]

“They don’t do it for economics, low information voters like it.”

Actually, they do it because pay in union contracts is calculated in multiples of the minimum wage. Raise the minimum wage and every union employee gets a raise. Sometimes, a substantial raise. This puts more money in the union coffers.

[Venturer]

This argument to raise the minimum wage only appeals to total idiots.

If you raise the minimum wage the price of whatever the minimum wage worker works at goes up.

When that goes up everything goes up ,everyone seeks more money and it just starts the cycle of inflation again.

Within a couple of weeks the figure for the p[overty level has moved up and the same poor bastids who were on it before are right back on it.

[driftdiver]

Why does someone with no skills, education or work history deserve $9 an hour?

[ConservativeInPA]

"Even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong," Obama said.

Can't feed 'em, don't breed 'em. I mean the breed part literally, since the bastard pResident knows from personal experience that a father's role is only to be a sperm donor. A family with two kids, has a fat lazy ass mom, two thug rats and two sperm donors. That's Obama's America.

[ConservativeInPA]

"Even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong," Obama said.

Can't feed 'em, don't breed 'em. I mean the breed part literally, since the bastard pResident knows from personal experience that a father's role is only to be a sperm donor. A family with two kids, has a fat lazy ass mom, two thug rats and two sperm donors. That's Obama's America.

[central_va]

The lefties know that they have raised entitlements too fast. They are scared. The increase in minimum wage is their solution, Reducing benefits would never occur to them.

[central_va]

[Steven Tyler]

Why do the prog’s get weak kneed and stop at $9.00.

Why not Really help people and set the minimum wage at $100.00 per hour

[Bernard]

Many Union contracts have a clause that says if the minimum wage is increase by $1.50 (pick a number) then all the workers covered by the contract get a $1.50 per hour raise. That is good politics and easy to understand, even for politicians.

[trebb]

The taxpayers are being billed over $30.00/hour for welfare benefits - how can they be taken serious if they don’t insist on at least $35.00/hour for a minimum wage?

[SamAdams76]

Why not make it $100 an hour ?

Why not? We could double or triple the minimum wage, or make it $1000 an hour, and nothing will change. Low skill workers will still struggle to make ends meet.

Here's why...

Let's take a supermarket as a case study and pretend you are the owner of a supermarket. Now your average supermarket might have about two hundred employees from baggers, cashiers, shelf stockers, deli workers, produce workers, etc. About half of them are at or around the minimum wage.

You are now mandated by law to double the minimum wage.

Now mind you, it would not be enough to simply ensure that everybody in the store is taken to the new minimum wage. You would have to also raise the wages of everybody else in the store because you would have a revolt on your hands if you suddenly elevated entry level workers to the same pay level as experienced people who had been working there for years.

So if the minimum wage doubled from $7.25 to $14.50 an hour, you would have to raise pretty much everybody in the store by $7.25 an hour. So that means that journeyman meat cutter in the meat department you were paying $16 an hour would need to get raised to around $23.50 an hour, otherwise you would be paying him almost the same as some 17-year-old kid up front bagging groceries.

Repeat this process for every employee in the store, including management. Everybody's salary would need to be right-sized to accomodate the new mandated minimum wage.

So what do you think that would do to the prices in the store?

You got it. They would effectively double. That gallon of milk that used to cost you $4 will now cost you $8. And so on.

Don't forget that the doubling of the minimum wage will have a cascading effect on all the vendors that supply the supermarket. Their labor costs will double as well and they will pass those costs on to you. So if you were paying your produce supplier $15,000 a week to keep your produce bins full of lettuce, tomatoes, and apples, etc., you can count on paying much more than that because that produce vendor had their labor costs double as well.

The net result is that the initial euphoria that your low level employees will feel over having their wages raised across the board will quickly dampen when they find out that their cost of living has increased by almost the exact same amount as their wages. They will quickly be clamoring that they cannot make ends meet on their paltry $14.50 an hour and that something must be done.

And then the vicious cycle starts all over again.

[Shimmer1]

Sure! Just deny it will hurt businesses and *poof!* that becomes “the truth”!!!

[bert]

To pay off the debt there must be inflation. Inflating the minimum wage is necessary to inflate all wages.

A rising tide raises all boats.

In a rising tide, inflation is not felt. The lag of wages behind prices might be felt but catchup lessens the severity to acceptable.

The other arm of this full envelopment is union wages. The hue and cry for increase in union wages began in December ‘12. That hue and cry in the face of unemployment will increase.

In spite of unemployment and job competition, the artificial raises must take place because compounded inflation is the only way to reduce the debt in a substantial fashion.

[bert]

Of course....... that is the goal. General inflation compounded is the desired result.

Borrow $100 today, inflate the economy 7%, pay off $93 next year. Compounded, the pay off is halved in 10 years.

[BitWielder1]

It's a job killer because it makes the entry step into the job market so much higher.
A shop owner may hire a kid from the street to sweep floors for $4/hour but not $10. Hence the kid goes unemployed when he could have gotten a foot in the job market.
A year later he could easily have worked himself up to more than $10, doing other things around the store.

If he had found employment at a high minimum wage, he'd be stuck there for a long time because the employer is forced to pay three other punks more than their worth.

In short, costly regulations stymies upward mobility.