Great post!

Ask an economics or finance professor and they will tell you why you're wrong and it'll take quite a while.

The bottom line is that businesses (like people) respond to cost /benefit analysis and that is the only equation that matters here.

Take this example: If an employer has 10 employees and they raise the minimum wage 10%, he might go and get rid of one of those jobs to keep the payroll equal to what it was. Ok, I'll buy that.

But, each of the remaining employees is now making an extra 10% above what they were getting before. Is a project that benefits 90% of the workforce bad? Maybe/maybe not - but here's where the argument against it falls apart. Those nine workers now have EXTRA money. And extra money among minimum wage earners is money that's spent. More money being pumped into the economy means more jobs being created. These things are cycles and this is a catalyst.

Not to mention that if the minimum wage got bumped up, the workers currently making the new minimum wage would start making more (and the cycle continues).

Read some of the experts talking about it. While it sounds counter-productive, it works.
http://www.businessinsider.com/why-we-should-raise-the-minimum-wage-2012-10

Jake, you are dead on. The minimum wage was never meant to provide enough to support a family. It should however provide a living wage for an individual and should be above the qualifications to receive public assistance. That is what the minimum wage should be compared to and adjusted up or down appropriately. Also, it should never be directly linked to any other indicator. It should be assessed independently on its own merit, in my opinion.

That is how it ought to work. Unfortunately it doesn't. Most money is skimmed off the top.

Thank you Jake, we're all too dumb to figure that out.

So do you feel that my teenager should be making the same minimum wage that I made as a teenager, which was $2.50 an hour?

@Jake."here's how it's supposed to work"??? According to who? YOU?. Who's policies have failed? ONLY the Dems policies?? That's kinda what you are saying huh? NO GOP policies have failed huh? They all worked and we all lived better under GOP control huh? LOL How biased can one be...Perhaps YOU should be on the rightwing talk show or radio show networks...If and when you do make it there say hello to the likes of Rush and Hannity for me....The world according to "JAKE"

Municipal salaries are not the problem. They set higher standards for workers everywhere. The problem is all of the money being skimmed off the very top.

Who is the arbiter of what constitutes: "Whom already have more then they will ever need." You?

Please explain what you mean by "skimmed off the top". I own a small business and employ some minimum wage employees and I am trying to usnderstand your comment, please.

Ridgewood Mom - Seems like YOU are the one looking to "skim it" from every hard-working, taxpayer. Socialists - Always looking to take from people who earn a living to give to those who don't. But rarely are they the ones to do any redistributing of their own wealth. They like to redistribute other people's money and to lower the bar and see more people with less so we can all be equally miserable. Nothing but a bunch of greedy takers. Can't earn their own way so they want to take it from those who can. Do you know about the sacrifice it takes to start a business and be successful? People who make an honest living deserve their money. Go improve yourself, learn a new skill, increase your worth and make your own damn money and keep your hands out of everyone else's pockets.

OK gang. How about people pulling in more then $10 million a year? How's that? :)

Better yet, how about someone who pulls in upwards of $22 million per year by breaking up companies and sending jobs overseas to China?

That would be Mitt Romney, by the way.

Of course he worked harder last year then 22 people who earned more then $1 million for the year.

He worked harder then 220 doctors, lawyers and graduate school educated professionals who brought home six figure salaries to their nice upper middle class suburbs.

He worked harder then 1458 minimum wage employees who sweated over french fries for 40 hours per week, five days a week, every weekday of the year without a single day off for vacation or illness.

Ignorant

Ridgewood Mom, One day, someone will show the math. And guess what, your going to find out those stinking rich people aren't so rich. And one of them will be looking you back in the mirror. If took everything from the 1%, it would hardly make a dent.

Polish up your resume with your new skill set and move to another company that hires people at higher than minimum wage.

That's right, XJS, only people who haven't thought to "polish up their resumes" are working for minimum wage. Many companies will even experienced workers pay the minimum because they can. Nothing forces employers to give raises, so many do not. I can see that you agree with Mitt Romney's conclusion that the "bottom" 47% are there because they refuse to accept personal responsibility.

Here's $7.25.....buy a clue.

Mark - yes, I do think that some people are on the bottom b/c they choose to be there. Others just aren't smart. Still others are handicapped and can't get out from the bottom. I don't know the breakdown for each.

What I do know is that if a person is on welfare, they shouldn't be buying cigarettes, cell phones, 52" plasma tvs and cabletelevision. But that's a discussion for a different thread.

Suffice it to say that I agree there are haves and havenots, but I don't agree that everyone can be a have.

I disagree XJS, I think just about anyone who doesn't suffer from some sort of disability can be a have if they make choices in life that put them on that path in life. It is that dream that brought so many people to this country and it is that dream that even now keeps them coming here.

Maybe Rojo . . . If everyone is a have, then who cleans the dishes at my favorite restaurant? Teenagers? But the kiddies need to be in 15 clubs to broaden their resume for colleges.

XJS, I have no intention of promoting a system that seeks to land everyone in society in the HAVE strata. That, of course, is not what I said or meant. I do however think that a minimum wage stipulation should be designed so as to be sufficient to elevate people in the lowest strata up to the HAVE (BREAKFAST FOR THEIR KIDS) level. Not possible working 40 hours at $7.25. Unlikely at $8.50, but maybe.

Even Rick Santorum acknowledged that upward mobility is now more difficult in the USA than in Canada or Western Europe.

Mark McCollough- I submit that if you're working for minimum wage you should not be procreating. You cannot afford children.

Considering Republicans would outlaw abortions and many forms of birth control they wouldn't have much of a choice but to have those children. Plus if you're making minimum wage you'd have to work about 2 hours to earn enough take home pay to buy condoms.

No companies want to keep people ONLY at minimum wage. If the person comes to work on time, tries to learn the job, is reliable, deals with the customers in a positive manner and is honest, that person cannot be kept at a "minimum wage" for long because the person becomes too valuable to the employer to risk losing him/her to another company.

I am proChoice, Bellair. You seem to throw in facts whether or not they're true or relevant.
Birth Control prescriptions are covered by insurance. Uninsured: Well, condoms are $18.21 for 36 count at WalMart online (don't know what they are in store, but let's guess not too much more).

So you work a little over 2 hours a month for enough condoms to screw around daily + a couple of bonus days.

I see a lot of minimum wage employees smoking -cigarettes are $7 or more a pack. A pack lasts 2 days at most for the average smoker. If smokers can afford cigs, people having sex can afford condoms.

If you are working minimum wage chances are that you do not have insurance. Employers cut hours so they don't have to pay that.

Bellair - If you are working minimum wage without insurance, maybe you're married or a teen or covered by someone else's insurance (domestic partner, parent, spouse, etc).
If you are working minimum wage & are without insurance, I've shown you how inexpensive condoms are. What's your point?

Doesn't Obamacare cover these people anyway?

And Bellair- if they're not covered by insurance, and they're living on minimum wage, maybe they qualify for medicaid?

XJS, look into who is eligible for Medicaid in NJ. No male is. Women are if they are pregnant and children are.

Bellair- "You must also be either pregnant, have a child(ren) with a disability, or be responsible for children under 19 years of age" would include men.

Regardless, you need a kid for medicaid, yuck.

So back to the original point -condoms are affordable. yes or no? So you can avoid to have children for less than $1 per condom.

XJS if you are a single male under the age of 65 you are not eligible for Medicaid. But are you now deciding how someone should spend their money? I'm surprised at you! If you are working 3 hours, according to your calculations, to pay for condoms, no, it is not very affordable.

Bellair- 65 is when medicare kicks in. Medicaid is available for anyone with a child at home under 19 that is consider low or very low income. I posted this already.

Working 3 hours for a month (or more) worth of something makes fiscal sense. Especially in light of the fact that not using one could result in child support that leaves you with 50% of your earnings going out the door monthly.

Also, they don't have to spend their money on condoms - they could not have sex. HA HA HA HA HA HA. They can also pull out. That works out REAL well, I'm sure.

So, in essence if you are a minimum wage worker about the only way you can get medical insurance is if you have a child. Pretty much encourages you to. Even a Libertarian like you should realize it would be better to pay them a living wage and health insurance regardless.

No. Bellair. While I agree the medicaid benefits are perplexing, I disagree that minimum wage should be raised because of it. Furthermore, I stand by my assertion that if you're making minimum wage you shouldn't have children. Your point was that they can't afford birth control. I pointed out the fallacy of that argument and now rather than admit that less than $1 for a condom is worth it, you want to say we need to give everyone healthcare and a "living wage."

No. No we don't. We need to pay people based on skill and productivity. That's how an economy flourishes. Just throwing money at people regardless as to their contribution to the bottom line is a good way to bankrupt a company.

People are really bad predictors of whether things are good ideas - if we weren't, we'd have far fewer people playing the lotto.

The minimum wage should be raised and here's why:

The bottom line is that businesses (like people) respond to cost /benefit analysis and that is the only equation that matters here.

Take this example: If an employer has 10 employees and they raise the minimum wage 10%, he might go and get rid of one of those jobs to keep the payroll equal to what it was. Ok, I'll buy that.

But, each of the remaining employees is now making an extra 10% above what they were getting before. Is a project that benefits 90% of the workforce bad? Maybe/maybe not - but here's where the argument against it falls apart. Those nine workers now have EXTRA money. And extra money among minimum wage earners is money that's spent. More money being pumped into the economy means more jobs being created. These things are cycles and this is a catalyst.

Not to mention that if the minimum wage got bumped up, the workers currently making the new minimum wage would start making more (and the cycle continues).

Read some of the experts talking about it. While it sounds counter-productive, it works.
http://www.businessinsider.com/why-we-should-raise-the-minimum-wage-2012-10

One dollar from someone taking home five is much more than someone taking home one hundred. Just as you claim your charitable giving in relation to salary is much more then Springsteen's. To be honest, I have never seen anything charitable in any of your posts, so I doubt your claim.

Three points Kaplan -
Your article only looks at the increase in wages from the earners point of view. What about:
With more discretionary income in the system, will that result in inflationary pressure/price increases?

What will happen to the cost of goods being sold on the market if employers have additional labor costs (b/c currently efficient employers won't be able to cut an employee thus creating a greater overhead cost)?

My thoughts:
#1 - inflation will increase b/c there will be more demand for goods than supply initially.
By the time that stabilizes, the cost of goods will have permanently been increased b/c #2 employers are passing on the costs to customers.

If you have insight into why my thoughts are wrong, I'd be interested to discuss them.

Keith, your hypothetical example is actually quite astute and it completely illustrates how raising the minimum wage will inevitably end up making it harder for people w/ no skills, no experience or some form of disability to find a job. Perhaps you should consider more closely how screwed that 10th person in your example will be now that they are out of a job.

BTW, there is no extra money being cycled through the economy in your example so no incremental economic activity being created by that cash. The 9 people that got raises only got them b/c the 10th guy lost his job and his income. Your example is kind of a zero sum example. But I found it interesting, nice job.

@Rojo- wouldn't places that are already running at skeletal staff levels have to retain all employees and absorb the cost? If so, wouldn't that put some extra money into the system?

Also, While you're 100% right about the same $$ being put in if 1 person is laid off and the other 9 split his salary, their individual discretionary income would increase, right? And that's what they're putting into the system. So it could still put inflationary pressures on the cost of goods, yes?

As for the 10th guy - you're right. Every 10th guy will be out of a job and no one will be creating a work place for him/them.

Ojo,
First off, it's not a given that the employer would let anyone go. Most businesses typically hire when needed to produce more product and reduce staff when not enough is moving. While there are plenty of times that it's worth keeping people because you know things will rebound, mostly managers keep the necessary number of employees. For instance, a restaurant owner / manager is going to keep enough cooks and wait staff to make and deliver to food to customers.

As anyone that's ever been to a restaurant without enough people can attest - it's a disincentive to return.

So, while the 10th person is going to be having a tough time of it initially, the overall growth of the system will more than make up for it.

XJS,
It is not a given that inflation will occur because people have more discretionary income. And considering that currently the Dow and Gold markets are BOTH rising due to QE3, I don't think it can be argued that a little inflation could hurt either.

If inflation DOES increase, the question then becomes whether that inflationary effect is greater than the increase to the minimum wage. Since each worker in the hypothetical is making an extra 10% (and as I said, not every employer is getting rid of workers), as long as inflationary actions are held below 10%, it's a net win.

Employers might try passing off costs to consumers - but, the question is, are they doing that NOW? Many are, because the result of depressed wages are increased numbers of people relying on the social safety nets, which in turn increase taxes, etc...

They are paying it from a different pocket in the same pair of pants.

XJS the tenth person would have polished up their resume with their new skill set and moved to another company that hires people at higher than minimum wage.

XJS,

If you make less money then I do would it be fair of me to assume that you are lazy and stupid? Would it be fair of me to say that you shouldn't have children?

My thought is that rich people who are also lousy and uninvolved parents shouldn't have children.

Bellair- When you artificially increase raises, it's hard to get companies to hire people. No?

RM- learn the difference between "then" vs "than" (you've done this a few times that I recall)- additionally, I think that part of being a good parent is being able to afford the child. The other part of being a good parent is being around for the child.

To "afford" the child would mean pay for the child's expenses and needs without looking to the gov't (aka other taxpayers) to pay for your child.

XJS, you were just advocating these people go on Medicaid. You flip flop more than Mitt Romney!

Bellair- I questioned if they could get medicaid, reading is fundamental. You still haven't answered my question as to how less than $1 per condom is unaffordable. Keep avoiding it.

XJS my friend, I did answer it. Scroll up. Not only is reading fundamental so is comprehension. A dollar may not be very much to someone like you or me, but a dollar is quite a bit when you are only bringing home 5 or 6 per hour on a 30 hour workweek. Is that clear now, pal?

Bellair - $1 when you're making 5 or 6 an hour is 20% or less of ONE HOUR's salary. To use less than that $1 for entertainment is a choice, and one that is affordable.

If someone is making $200,000 a year, assuming a 50 week year (2 weeks vacation obviously) and 40 hour work weeks (for the sake of argument), you're making 100/hour.

If you go to a "good" steakhouse (let's say a Delmonico's or Strip House), dinner will take 2 hours (at most). Your bill will be somewhere in the neighborhood of $300 for 2 people (depending on alcohol consumption and tip).

So you're paying 50% MORE than two hour's wages for your 2 hours of entertainment. Do you do it anyway? If you want to. I'm saying if you want to have sex that you should able to afford less than 20% of ONE hours wages for 15-60 minutes (depending on if you're 15 or 40) of fun.

It is not my problem if you are too cheap to leave a decent tip.

Maybe Paul Ryan and his kids could fake wash those dishes. He seems to have that skill.

I think you left out the men marrying dogs thing

So you believe in discriminating against low skill and entry level workers. You want to make it illegal for them to have a job and "conservatives" are evil? No one hires anyone unless they stand to make money too. The whole point of being in business is not to employ people, but to make a return on your investment of capital and time. It's a waste of time and money to employ someone who can't create more wealth than it costs to employ them.

Why do you hate poor people? Why don't you want to give them a chance to get ahead?

So you believe in discriminating against low skill and entry level workers. You want to make it illegal for them to have a job and "conservatives" are evil? No one hires anyone unless they stand to make money too. The whole point of being in business is not to employ people, but to make a return on your investment of capital and time. It's a waste of time and money to employ someone who can't create more wealth than it costs to employ them.

Why do you hate poor people? Why don't you want to give them a chance to get ahead?

That's gotta suck when you get caught using both your fake names Jake Sully / Ridgewood Dad.

One thing I will say about raising the minimum wage is it will make it a hell of a lot harder for a kid w/ absolutely no work experience, job history or skills to get a job out of school if you raise it.

Nice name.

Students are exactly who should be working minimum wage jobs. I did it. And when I did it the minimum wage was $3.80/hour. That meant that I could only afford so many things. It also meant that I packed my food for work b/c a pint of plain white rice at the chinese food place next door was $1 or more than 25% of one hour's salary. You know what happened? I got an education and got a better job. While I was getting that education, I managed to get promoted and switch jobs to get myself up to almost $7/hour in 3 years. It's amazing how much you can improve your situation when you try!

As for welfare - I don't know anyone on welfare currently. But a girl that graduated from my college the year before me, holding a degree in psychology, went on to deliver pizzas. After getting knocked up, she signed up for WIC and Welfare and stopped working completely. She had 3 kids on government assistance. She managed to use that money for cable tv and cigarettes (to her credit, not while pregnant). Her baby daddy was a pizza delivery guy making less than minimum wage as a tipped employee. They used their limited income for all sorts of goodies including top of the line cell phones, a 42inch tv and matching tattoos. Sure, some of the money was the money he made, but he only could spend that b/c they were using her welfare checks for other stuff. Yea, I sneer at her life choices. Incidentally, she's now a baker/cake designer.

It certainly does seem like a fair wage for a starting part time shop worker. McDonalds pays 9.00 an hour last I checked. Lowes starts semi-knowledgeable people at 12.50. So I don't know what jobs are being effected by the minimum wage going up. Since everyone I talk to is already paying over that just not to deal with the bottom of the barrel.

Right. It is important that we have really really poor people so that rich people can be a whole lot richer then them. And a government that might work otherwise shouldn't get to make things right because it has done unrelated things wrong before.

Interesting to also note an exchange of ideas between one group and another that has power over them to be referred to as a "free" one.

As I mentioned above, it's a complicated system and one that would benefit from the increase in the minimum wage.

You sound like the average voter - unfortunately, they don't know much about finance and economics. Try asking someone with a PhD in the field whether they should raise the minimum wage -- you'll get a very different idea.