Higher Minimum Wage No Longer Seen as Sure-Fire U.S. Job Killer

[cal04]

Prominent economists of all ideological persuasions long believed that raising the U.S. minimum wage would retard job growth, creating unintended hardship for those at the bottom of the ladder.

Today, that consensus is eroding, and a vigorous debate has developed as some argue that boosting the wage would pull millions out of poverty.

A moderate increase in the minimum wage won't raise unemployment among low-skilled workers, according to recent studies, many economists say. They are joined by some business executives who say they can live with that, especially if it's coupled with tax relief.

``My thinking on this has changed dramatically,'' says Alan Blinder, a former Federal Reserve vice chairman who teaches economics at Princeton University in Princeton, New Jersey. ``The evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss.''

http://www.bloomberg.com/apps/news?pid=20601070&sid=atp2MiOAZ3Xc&refer=home

[ginnyinWI]

1. it's a job creator

The states and/or cities which have enacted higher minimum wage laws have seen jobs increase.

[Journeyman]

2. I thought Bill Clinton put the lie to this a decade ago? . . .

F'n morons. . .

[Bark Bark Bark]

4. BUTBUTBUT...

"...Clinton's one of THEMMMMMM!"
--Liberals talking about Neocons, or Neocons talking about Liberals

And don't forget: he lied about sex, too, so you can't trust him on anything. If he said the sky was blue, there'd be threads at DU AND Freeperville squawling that is just is not so.

[papau]

10. So true! - Brits min wage is $10 an hour and economy booms but US

must screw the poor.

[Chulanowa]

3. The way I presented it to my Libertarian friends

was that while unemployment may spike in the short term with a minimum wage increase, it would increase employment in the long run as the higher wages create more investment and job opportunities.

Strangely the Libertarians pride themselves on their economic stance, which always seems to be Reaganomics with a new shade of lipstick.

Another way of explaining it to them is "If you make more money, you can buy more weed"

[underpants]

9. LOL

What a great line! or at least better weed.

[ovidsen]

14. Priorities!!

I sooooo like that argument!!

[Rex]

5. And of course they are all wrong. These people believed in Reaganomics.

The more money you offer, the more enticing it is to work. Simple stuff for a 5 year old.

[Canuckistanian]

40. Somebody explained it to me this way

Give a 10% increase to a wealthy person and what will they do with it? Probably sock it away or invest in some company that doesn't employ Americans (Cayman Islands, multinationals or foreign companies). Or they'll buy the latest car (a Mercedes or a BMW - the best stuff always comes from Europe).

But, give a 10% increase to a poor person and they'll always spend it locally. The local grocery store, a used American car, a vacation in their local state.

And that 10% will be going directly and immediately to a local economy.

[tritsofme]

6. With minimum wage so low right now

Its as if no minimum wage exists because there is bascially no labor that the market demands less than $5.15/hr.

It could be raised substantially without killing any jobs or raising inflationary pressures.

[Warren Stupidity]

7. Consensus theory, no actual supporting data.

"Prominent economists of all ideological persuasions long believed" - that in a textbook theoritical situation where the only variable changed is the minimum wage that there would be an equivalent cost in employment. Of course economic systems are composed of many interrelated variables, are not closed systems, and changing on variable alone never actually happens.

Henry Ford figured out a long time ago that if he paid his workers more he sold more product.

[krkaufman]

27. "make more, buy more" ... exactly. Think of raising the minimum wage ...

... as increasing the circulation of blood. It's a good thing. Otherwise, the blood pools and clots, killing the patient.

[Barkley]

8. KY, OH, MA, CA

Kentucky’s minimum wage is $5.15
Kentucky’s unemployment rate is 6% (March 2006)

Ohio’s minimum wage is $5.15
Ohio’s unemployment rate is 6.1%


California’s minimum wage is $6.75*
California’s unemployment rate is 4.8%

Massachusetts minimum wage is $6.75
Massachusetts unemployment rate is 4.9%

http://www.dol.gov/esa/minwage/america.htm http://www.dol.state.nm.us/dol_surr.html

*California's minimum wage certainly has not
retarded the growth of minimum wage jobs in
L.A. County.

[papau]

11. Brit's min wage = $10 / hour n/t

n/t

[Viva_La_Revolution]

12. Oregon's minimum wage is $7.50*

Unemployment is 5.4%

*adjusted annually for inflation, the way it should be.

[theophilus]

13. Raise MW AND give good single payer heath care to all and

watch the economy boom and blossom like never before in the history of this country. Why can't the rich be happy getting richer while everyone prospers? They obviously hate poor people and don't want them to benefit even if they, the rich, get richer and richer. Evil.

[IronLionZion]

18. Just detaching health insurance from employers

would kickstart the economy. Single-payer insurance is pro-business and pro-worker. It helps everyone except the insurance industry.

[IronLionZion]

15. Oh good grief, it's one of the biggest job creators there is!

Wal-mart and other retailers want this even though they hire min. wage workers. Why? Because when poor people get some money, they go to Wal-mart and spend it on things they need! The big retailers can afford to pay a bit more, as long as lots of customers are bring them more business! Same thing with restaurants and many other small businesses. The only ones that might be hurt are the big corporate factories like Tyson Chicken, but they hire illegal immigrants anyway...and donate to Republicans.

Higher minimum wage is good for business, good for workers, good for America.

[Bill McBlueState]

16. that may be true

But it's not *truthy* so don't expect Republicans to buy it. They only like facts that mesh with their existing worldview.

[Jacobin]

17. $5.25 is a meaningless minimum

Its like saying there is a 10 cent an hour miniumu wage.

Its a joke

[UrbScotty]

26. Actually, it's $5.15 (nt)

[Shipwack]

19. Where do they get these people?

From the article...

``The law of demand says simply that the higher the price of anything, the lower the quantity that will be taken,'' says William Dunkelberg, chief economist of the Washington-based National Federation of Independent Business. ``This law has never been incorrect in predicting market behavior.''

"Never been incorrect?" When gasoline prices jumped 50% in the past year, there wasn't a 50% drop in sales. Heck, I seem to recall that Florida is getting the same number of people driving down for vacation this year...

I just got into an argument over this with people in my business class. This story wouldn't have helped me though, because they knew what they knew, and had anecdotal evidence to back them up ( a company in their town went out of business and blamed it on the minimum wage increase.)

::edited for grammar::

[Gormy Cuss]

32. Dunkelberg and you could both be right.

A higher price can always lead to a lower demand but not necessary in a 1:1 ratio. Dunkelberg's statement ignores elasticity.

[Maven]

20. Well, super.

I guess now that some Ivy econ. douche has put his seal of approval on it, we can start TREATING PEOPLE DECENTLY.

Thanks, Al.

[mopinko]

21. who gave these bozos degrees?

can you really get a degree in economics with such a simple fucking mind? can't get past "well, the law of supply and demand....", can't even factor in anything beyond +$1=fewer jobs. can't even do the math of- most people will still eat hamburgers if they cost $.10 more + workers who get a raise will eat one more burger a week.
to say nothing of being able to read a simple fucking bar graph showing what happens when you raise that min. it has ALWAYS, ALWAYS led to growth. as mentioned up thread- henry fucking ford you fucking morons.
oh, i forgot, they are not stupid, just paid to lie.

[Megahurtz]

29. They're just fucking idiots. n/t

[PinkyisBlue]

22. Ahem, now they know it's not true.

Job growth is retarded just by the presence of selfish, greedy Republicans in positions of power. Cut the work force in the US, relocate the company out of the country, slash taxes for the wealthy and corporations, reduce benefits for the working and middle classes; this is all they know how to do.

""Workers' wages need to at least keep pace with inflation," says Andrew Puzder, chief executive officer of Carpinteria..."

DUH........

[zara]

23. That's 'cause even after a raise, it'll be set artificially low

[54anickel]

24. They are just willing to retire this ancient talking point. It has served

them well for the past decade, but was getting old and difficult to defend. They almost managed to get a helluvalot of tax-cut mileage out it's demise though. Now they need to somehow reconcile their sudden, new found support and votes for raising the minimum wage. "It had nothing to do with the tax-cuts - it just makes good economic sense". :eyes:

[UrbScotty]

25. From the Research Forum: Check it out!

http://www.democraticunderground.com/discuss/duboard.php?az=view_oet&address=358x4153

[usregimechange]

28. kick

[johnlal]

30. All minimum wage is meaningless

unless you have a corresponding "Maximum income". What good does it do to raise a guy to $7.00 per hour if Bill Gates or Ross Perot are allowed to make a Billion Gajillion dollars. How much does a guy need to be paid in any given year?

These guys get rich by getting money from the minimum wage guys. If the lower pay people suddenly get more money, the upper end people will just raise their prices. If Congress is going to seriously regulate incomes, they will need to set maximums as well as minimums.

[sutz12]

31. There's a trojan horse in there.....

especially if it's coupled with tax relief

That one worries me.

BTW, an increase in MW also boosts such things as SocSecurity revenues, some income tax revenues, Medicare tax revenues, anything based on a percentage of income that isn't somehow offset by a credit, including many state and local tax revenues.

[krkaufman]

33. Yet another Right Wing/Reaganomics myth being revealed ...

... for the idealogical claptrap that it is.

[daleo]

34. Now that increased minimum wage is coupled with tax cuts for the rich

It suddenly seems less threatening to the rich.

[NMMNG]

35. Why is it always people who make large (or obscenely large) salaries

who insist that raising poverty level wages will hurt the economy? :crazy:

[mkb]

36. Start With the Basics

     Trying to understand concepts in order to participate in
making society better, even the best it can be, I think is as
much about getting the fundamentals and simple things
understood as well as possible as it is being overly
complicated.
     The Englishman Carlyle coined the phrase "the dismal
science" referring to economics.  I think that he very
well understood the manipulation and confusion, as well as the
central importance in life, that economics holds for people. 
My intent is to state reasons why much of formal economic
rhetoric is deceptive and/or specious designed to favor
primarily those who have money and privilege and the greatest
influence over the debate as it exists.
     There are general, more vague ideas that are important to
discuss, and there are also specific arguments that can be
stated as well.
     I believe that the common citizen who is just trying to
be a good person, but who can understand the importance of
being fairly compensated for work or effort, should consider
that Marx or Engels or Friedman or Whomever did not in my
opinion find a formula or equation that could figure out in
any reasonably accurate way how much money a worker in a given
occupation was worth.  Much of the most difficult and
dangerous work is also the most fundamentally necessary for
the well being of our complex society.  Yet there is very
little acknowledgment of this reality, and also less and less
relative monetary compensation for those in these positions. 
I want those who do the drudgery and difficult tasks, and
their allies, to realize how important your work is and how
important it is for you to struggle for your rightful
compensation and position of respect and influence in society.
 Don't worry or feel inferior if you never end up being a
rocket scientist, or less so able to comprehend the various
and often conflicting economic theories.  Your contribution is
very important and valuable to society.
     The ancient poet Theognis said "the best are found
defective, and the rest, for common use, are equal to the
best."  Everyone, experts included, make mistakes,
sometimes on purpose to deceive, and you should in my opinion
feel good about effort as much as achievement.  To the extent
that money is power, you that are of a sentient and benevolent
nature, that is, trying to make life as positive and painless
experience as possible, should try to fight for your share to
influence life more relatively than those who promote negative
concepts.
     An argument I believe is releveant as it pertains to the
minimum wage debate, has to do with what owners or management
say costs jobs.  The argument seems to be largely a function
of owners and management having to raise prices to offset wage
increases.  But why should they have to raise prices?  This
really means to me that they are unwilling to be compensated
less so that the workers who get a raise can receive more. 
It's still just cutting up the pie, which is finite.
     Given the fact that the owners and management have been
receiving a greater and greater share of the finite pie, it is
only just and right in my opinion to say we should begin
reversing the process, and that the prices would not
NECESSARILY have to rise or the economy suffer.  I'm all for
everybody being well informed and educated, but not confused
and deceived by sophisticated rhetoric.  Be smart about how
you participate, but be prepared to fight for what you
deserve.

[timontheleft]

37. Let's see . . .

Workers wages go up

Workers have more money to buy stuff

Workers spend more money buying stuff

Seller has to increase inventory to meet increased demand

Manufacturer has to step up production to meet increased demand

Manufacturer has to hire more workers to support increased production

Therefore, increasing wages creates MORE jobs.

Am I missing something?



:shrug:

[pt176900]

38. you've all missed the point

First of all, what kind of moron earns minimum wage as an adult? Seriously, even gas station jobs pay above min. wage. If you haven't learned the type of skills you can market to make more than minimum wage by the time you're an adult, you're a waste. Don't start with the garbage about mothers having to support their children yadda yadda yadda... if you can't afford to raise children, don't have them (isn't it funny how the poorest in america have the most children).

Second, minimum wage is not supposed to be an attractive option. If it were, there would be little motivation to go out and actually do something with your life other than menial jobs that pay min. wage.

Third, what of the people that are paid above minimum wage now? If someone is making 25% above minimum wage now they're still going to want that extra 25% after the increase, thus raising the cost of doing business which will drive prices up, defeating the marginal increases in income.

And if the democrats gain power and institute such wage increases, you can bet they'll also institute more social programs (ie a socialist healthcare system) which will.... RAISE TAXES!

To those of you who have said that the UK's min. wage is $10 an hour, you also neglected to mention the rampant taxation they face - they HAVE to get paid that much to fund their monstrous health care system.



Use your brains people, I know it hurts but come on...

[pt176900]

39. oh and the estate tax

is an attrocity. We pay taxes all our lives on our income. If I am successful enough to make it big and have multi millions in the bank when I die, how is it right that the government should take a big chunk of my money (THAT I'VE EARNED) - that they've already taxed anyway.

Success should be rewarded, not punished.


COME ON PEOPLE, IT'S JUST COMMON SENSE.

[timontheleft]

43. "it's just common sense"

Those words make any statement that precedes them dubious at best.

If it is "common sense", then why are you having to TELL everyone about it.

If it is "common sense" then wouldn't it be "common" thought?

If it is "common sense" then why isn't it "common"?

[Anakin Skywalker]

50. You Sound Exactly Like

Rush Limbawl.

[rasputin1952]

41. If this were true:

"To those of you who have said that the UK's min. wage is $10 an hour, you also neglected to mention the rampant taxation they face - they HAVE to get paid that much to fund their monstrous health care
system."


The in the US, the minimum wage should be $35 an hour to support the monstrous war in Iraq that bush got us in to.

[timontheleft]

42. If there aren't any people making minimum wage . . .

. . . then how is increasing it going to affect the cost of doing business?

If everyone already makes more than that amount, then businesses won't have to lay out any more cash.

If what you say is true - then there is no basis for your argument.

Just using my brain.

[timontheleft]

44. "what kind of moron earns minimum wage as an adult?"

What IQ does one have to have in order to live above the poverty level?

I didn't realize the US had instituted an IQ requirement for humane treatment.

[timontheleft]

45. "if you can't afford to raise children, don't have them"

That is good advice.

However, it ignores the children that are already in existence.

Are you going to punish the children for a mistake that their parents made?

[timontheleft]

46. "minimum wage is not supposed to be an attractive option"

The proposed rate is $7.25 per hour.

That's $290 per week.

That's $1256 per month.

That's $15600 per year.

You think that's attractive?

[Yavin4]

47. The Less You Pay People, The More Government Services They Need

Thus, your taxes go up.

When jobs don't pay enough to feed people, then they will get help from the govt. Thus, your taxes go up.

When jobs don't offer health insurance, then the govt. has to provide it when people get sick. Thus, your health insurance premiums and taxes go up.

When regular jobs don't pay enough to keep people from going into crime, then your taxes go up to pay for the police officers and prisons systems.

[emmadoggy]

48. Wow. What great "points" you have there.

Only adults who are morons or "a waste" work for minimum wage. Women shouldn't have children if they can't afford to raise them. Those are real gems.

The "point" is that raising the minimum wage doesn't JUST help people who make right at minimum wage - it helps all those millions who work for a wage BETWEEN minimum and the proposed new minimum. That's about 7.5 million people right now. If someone is making 25% more than minimum wage right now, they are making $6.44/hour. If they got an instant .81/hour raise I think it's safe to say most would be thrilled about that. In my local region of this state, raising the minimum wage to $7.25 would affect over 21% of the workforce! 75% of that group are people over the age of 20. In small towns and rural areas, jobs paying $5-$7 are common.

My mom is turning 62 next month. She is planning to retire, but feels she needs a supplement to her retirement income for a few more years. She just took a new job working at the local school as a teacher aid in a Level II special education classroom. The job pays $6.50 per hour. Now for my mom, that's just fine because she just wants a supplement to her income (it's about half what she was making at her previous job). But if a 29 year old with one child took that job, even if she was married and had a working spouse, that is still pretty paltry pay to live on and paltry pay for that type of work. Is my mom a "moron" or "a waste"??? Is working with special needs kids a job only for brainless slugs??

I don't think the rest of us here are the ones not using our brains.

[Anakin Skywalker]

49. I Never Thought It Was

in the first place! It was those freeptards and predatory corporatists who flung around that view.

[DemCapitalist]

51. The minimum wage is an matter that should be handled at

the state or local level.