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Minimum wage/Livable Wage

Discussion in 'Tilted Philosophy, Politics, and Economics' started by Aceventura, Jan 2, 2014.

  1. rogue49

    rogue49 Tech Kung Fu Artist Staff Member Donor

    Location:
    Baltimore/DC
    Actually, more than a minimum wage context...it brings into question as to why people are paying so much for rent?
    Why? Is it too high?
    Or is it simply market value?

    I'd say a baseline for living would be simply
    Rent/Home
    Food
    Utilities

    Problem is....Utilities have gone up, Food has gone up, Rent/Home has gone up.
    But wages haven't...nor the stability of the jobs themselves. (it's more mercenary or "at will" now)

    Now I don't expect corporations to solve everything.
    But what I am suspicious about is that I think some businesses might be taking advantage...both on the source side and the target (bill) side.
     
    • Like Like x 1
  2. Baraka_Guru

    Baraka_Guru Möderätor Staff Member Donor

    Location:
    Toronto
    The really expensive areas notwithstanding, the rent prices indices in the U.S. are generally pretty modest compared to other developed nations. But you have to account for the fact that health care isn't free, and the social safety net isn't as good there compared to other countries where rents may be relatively higher.

    Food tends to be pretty cheap in the U.S. as well. Government subsidies at work (but misapplied).

    I'm not sure about electricity and gas though. Is it as cheap as your gasoline in relative terms?

    The rising cost is not as bad in the U.S. as it is elsewhere, mainly because, again, of relative values.

    The problem in this context is that minimum wage (or close to it) only have so much they can afford, and the cheapest of the cheap aren't really ideal (especially with housing & food). This is why you have poor people in the U.S. eating like shit.
     
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  3. ASU2003

    ASU2003 Very Tilted Donor

    Location:
    Where ever I roam
    That is a good map, but there are 4 weeks in a month on average to make enough money to pay for rent. Then again, you have to buy food and other things too.

    And even though I live in one of the cheap states, I still think rents are more of the problem compared to minimum wage. It is also the fact that you never get to stop paying rent, and the guy who is making passive income off of you and others is doing well in this economy which is what I think needs to change.

    But, with the amount of people there are, the desire for new houses, bad inexpensive house designs, and a bunch of other factors, cheap houses that have great neighborhoods are a hard thing to come by.
     
  4. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Jesse Ventura, as only he could, speaks out on the minimum wage:

     
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  5. snowy

    snowy so kawaii Staff Member Donor

    Wow, that's actually a pretty good explanation of how raising the minimum wage benefits the economy in plain English.
     
  6. ASU2003

    ASU2003 Very Tilted Donor

    Location:
    Where ever I roam
    It still doesn't help those who want to retire and have very little saved... I worry about inflation reducing the purchasing power of money and then people will need to work for more years to make sure they have enough saved.

    And I think it will help accelerate the push to automate a lot of jobs, or it will just reduce the number of people doing the basic jobs. I worry that there won't be the next 'bubble' like there has been with dot.coms, housing, and health care to absorb those people back into the workforce. And periods of unemployment can wreck havoc on your savings/retirement accounts if you don't plan for those long periods without a steady paycheck.

    And it isn't just the rich vs poor anymore, it is the coasts vs the middle and North & West vs the South when it comes to wages and wooing companies to move to where they get the best tax breaks. If I do the same job in San Francisco or Miami, I would need to get paid twice as much to live a similar lifestyle. But, the city is more interesting. The dating options are better (but with more competition from other guys). However home prices are way too high. But the car prices are exactly the same as here. Same with anything you buy over the Internet.

    This is a much more complicated issue than they are trying to make it seem.
     
  7. redravin

    redravin Cynical Optimist Donor

    Location:
    North
    The presidents latest speech was about raising the minimum wage and one of his points was about how a Republican said it would only help young people.
    He said that wasn't such a bad thing considering that it would give them a chance to save for college but the fact is most of the people on minimum wage anymore aren't kids.
    It was a good speech if anyone gets a chance to see it.
     
  8. Baraka_Guru

    Baraka_Guru Möderätor Staff Member Donor

    Location:
    Toronto
    The risk at the moment is deflationary pressure and the possibility of a deflationary spiral (an environment where companies will produce less and therefore hire less and therefore sell less—and repeat). If anything, a bump to inflation would be a good thing right now. It's about achieving a balance, and let's face it, the income of the lower classes is relatively low. If anything, raising minimum wage is a corrective measure.

    To suggest otherwise, seems to imply that the American economy cannot sustain wages on par with other developed nations. Is the American economy near the bottom in other respects too?

    Over the past several decades, increases in productivity has greatly benefited the 1% compared to any other class. As the American economy expands, as wealth is generated, is gets sucked up to the top tier of earners like a giant vacuum cleaner.

    A big reason (or is it the result?) for this is a lack of income increases amongst the lower classes.

    Another issue is that there aren't enough resources available to the lower classes regarding education, skills development, etc., that will keep them employable in an ever-changing economy. Education just keeps getting more expensive.

    People have trouble paying rent. Do you think they can take courses or go back to school?
     
    Last edited: Apr 5, 2014
  9. Street Pattern

    Street Pattern Very Tilted Donor

    I was invited, but I didn't go.

    As it turned out, the meeting that conflicted with the speech was canceled, but by then it was too late.
     
  10. redravin

    redravin Cynical Optimist Donor

    Location:
    North
    I would have so blown off that meeting.
    Getting to see the POTUS in full speech mode would be worth the consequences.
     
  11. Street Pattern

    Street Pattern Very Tilted Donor

    BTDT.
     
    • Like Like x 1
  12. Lendari

    Lendari New Member

    Every time the minimum wage is raised you hear two good arguments against it.
    • Companies cut hours worked across their workforce to ensure they aren't spending more money on labor. Basically the same number of people work fewer hours at higher wages.
    • It limits the potential opportunities of some worker demographics (first-time workers, handicapped workers, etc).
    • Ultimately the money has to come from somewhere. If you arbitrarily set the minimum wage at 100,000\yr you would simply make certain types of businesses less feasible or alter the cost\benefit of replacing humans with automation such that the jobs disappear completely.
    I guess I have to come out on the anti-regulation side. The answer that works for me is that if you give people basic freedoms like "at will employment", they will perpetually seek out what is in their own best interest. Since a living wage is in everyone's best interest, they would work towards that. Likewise, it forces companies to pay a fair market wage to retain good people - since those people can walk away at any time for more money.

    If you're happy working for $7.00\hr, then so be it. If not, then it is wholly within your power to seek other opportunities more closely aligned with your market value. If working for $7.00\hr is so unreasonable, why do so many people do it? Since the definition of a living wage varies between people, states and situations, it's not possible (note I didn't say difficult, I said impossible) to regulate. I know people who wouldn't work for $20\hr or even $100\hr, but they don't expect the federal government to raise the minimum wage to their definition of fair market value.

    By giving people freedom to choose who they work for, you create a competitive market that matches buyers and sellers of labor at competitive rates. This is the best possible system because its a system of freedom and not of restriction.

    You're also free to start your own business and earn as much as you want to.
     
    Last edited: Apr 13, 2014
  13. Baraka_Guru

    Baraka_Guru Möderätor Staff Member Donor

    Location:
    Toronto
    I see the Horatio Alger myth is alive and well.

    @Lendari , you seem to think that those who earn minimum wage (or close to it) do so because they're not interested in earning more or they aren't worth more. Is that what it is?

    You also seem to think that the labour market would be fair in its freedom from restriction. As things are now, how do the poor get the same opportunities for work as the wealthy? The short answer is: They don't, because the labour market isn't fair, nor is it free from restriction.

    Freedom doesn't necessarily mean "free from regulation."

    You may find that most of the restrictions in the labour market are not to the benefit of the poor, but the opposite.
     
    Last edited: Apr 13, 2014
    • Like Like x 3
  14. redravin

    redravin Cynical Optimist Donor

    Location:
    North
    I could try to argue your points @Lendari but Senator Warren and Robert Reich do a much better job than I ever could.

     
    • Like Like x 2
  15. Lendari

    Lendari New Member

    Well if the government tells you how much you are allowed to make or tells companies how much they have to pay you, that doesn't sound much like freedom to me. Freedom doesn't just mean social freedom. The economic freedoms (like the right to own property or start a business) is an equally important component of a free society.

    Instead of having the freedom to seek out the "right fit" for your own unique situation, instead you want the government to regulate everyone with some "one size fits all" legislation.

    The reality is that has lots of unintended consequences that I outlined above and results in less overall freedom than the market based solution.

    Why $10.10\hr... why not $11.00\hr or $20.00\hr or $7.00\hr. The fallacy is that there is a "one size fits all" number that a lawmaker can arrive at that will work universally. The world is not that simple, and making laws that assume it is that simple will have unintended consequences.
     
    Last edited: Apr 13, 2014
  16. Street Pattern

    Street Pattern Very Tilted Donor

    That's the old "Wages Fund" fallacy, which has been thoroughly debunked. Economics 101.

    The demand for low-wage workers is economically inelastic, which means the amount of labor demanded is not changed much by an increase or decrease in the cost.

    In other words, the effect of changes in the minimum wage is primarily to change the amount of money received by the lowest stratum of paid workers.

    And it does. Right now, taxpayers pay to support minimum wage workers through SNAP and other programs. Wouldn't it be better if they earned enough to support themselves without help?

    And then we have the Impossible Hypothetical! Another softball.

    If you drink too much water, you will die of water intoxication. By your logic, no one should drink any water.

    The minimum wage is not "fair market value," it is a regulated wage. It is regulated for sound policy reasons.

    That's wonderful, but very few people are cut out to be entrepreneurs. Moreover, there are millions of people who need to work to support themselves, and there are not millions of available market niches for businesses.
     
    Last edited: Apr 13, 2014
    • Like Like x 3
  17. Baraka_Guru

    Baraka_Guru Möderätor Staff Member Donor

    Location:
    Toronto
    Yes, exactly. Economic freedoms. How much freedom is afforded to those who struggle to earn more than $7.25 an hour despite how hard they work or how good they are at their jobs? Are they free to invest their savings into a business? Are they free to take on the risks inherent in starting a business? Are they free to change jobs without risking losing their health insurance (though I think "Obamacare" changes that; I'm not entirely sure)? Are they free to send their children to the post-secondary institution of their choosing (or at all, really)?

    There is a rather limited definition of freedom that floats around in these debates. What some people, yourself perhaps included, mean when they think of freedom is, simply, free from government, or free from laws. It's a narrow view of freedom that is essentially a summation of the libertarian mindset. Unfortunately, it's a rather simplistic view when you consider the realities of capitalism and its impact on the various levels of society.

    This is false. I never suggested such a thing.

    Citation please.
     
    Last edited: Apr 13, 2014
    • Like Like x 3
  18. Street Pattern

    Street Pattern Very Tilted Donor

    And having a minimum wage completely destroys those freedoms. Is that your argument?

    Ah, so starvation wages should be perfectly legal, if you find workers with no other choices?

    Absolute freedom for entrepreneurs means slavery for everybody else.
     
  19. Baraka_Guru

    Baraka_Guru Möderätor Staff Member Donor

    Location:
    Toronto
    It sounds like you support things like child labour laws and workplace safety regulations.

    What are you, some kind of socialist?
     
    • Like Like x 2
  20. Lendari

    Lendari New Member

    I don't understand how you equate a fair market wage for a common skill set to equate to forced labor. All employment in the US is at will.

    Every American citizen has the right to own and operate their own business. Individual freedom is the great equalizer.

    I'm not trying to marginalize the plight of the under-employed. If you are working a 7.25\hr job and you have (lets say in theory) a skill base that should be valued at 20.00\hr I don't see how raising the minimum wage solves your problem.

    It might eliminate some symptoms, but it's not getting at the root cause.

    The current system of "at will employment" means you can go seek the right wage. There is nothing stopping you from doing that because you are a free person operating in a free market.

    Increasing the minimum wage solves none of those issues except in a superficial way that has other unintended consequences.
     
    Last edited: Apr 13, 2014