A Problem With Minimum Wage Laws

[AJT]

The former governor of South Carolina, Carroll Campbell, said it:

"The trouble with the left is they don't understand dynamics."

Raising the minimum wage will begin such a dynamic. When they are forced by law to pay more wages to their employees, employers, being the businessmen that they are,whose main concern is maximizing profits, will not sit idly by and watch those profits dwindle away.They will pass the increased cost of doing business along to consumers by raising their prices. The process is called "inflation."

Yes, some people will be taking home more money, but they and everyone else will be paying more for the things they buy. What economists call "real disposable income" will hardly go up at all.


The concept is part of classical Economic Theory:

Biz/ed - Wage-price spiral | Biz/ed

 

[Jomama]

There is a wage/price spiral but you've overstated it. When 100% of people subsidize a wage increase for the bottom 10%, that 10% undoubtedly enjoys an increase in real disposable income. The other 90% goes down minimally.

I dont like social engineering much but I would much prefer to see minimum wage offering a significant incentive to work compared to sitting at home on the dole. As a conservative I'd like to see work rewarded over sloth.

 

[EdwardBaiamonte]

There is a wage/price spiral but you've overstated it. When 100% of people subsidize a wage increase for the bottom 10%, that 10% undoubtedly enjoys an increase in real disposable income. The other 90% goes down minimally.

I dont like social engineering much but I would much prefer to see minimum wage offering a significant incentive to work compared to sitting at home on the dole. As a conservative I'd like to see work rewarded over sloth.

except the higher the wage or price the fewer employees are affordable.

 

[AdvancingTime]

While I'm strongly against raising the minimum wage because it will make America less competitive and slow job growth, I concede the debate is destined to continue until it is raised. I hereby state without a doubt, the minimum wage will go up! Polls show a majority of Americans support this idea. It is my feeling that many people believe the myth this will put more money into the consumers pocket and create economic growth. They fail to recognize it will also spark inflation while reducing opportunity.

New twist and wrinkles are being added by the White House and supporters of this increase every week. Expanding the number of workers eligible for overtime pay is another attempt to push this along. Unfortunately much of the impact and pain will directly fall upon small business the real creator of jobs. The following article explores some of the negatives that come from arbitrarily raising wages.

http://brucewilds.blogspot.com/2014/03/the-minimum-wage-will-go-up-right-or.html

 

[Jomama]

OMG, a reasoned response. You must be new here.

 

[fbj]

They also fail to realize that it will reduce the hours of fast food workers LOL

 

[EdwardBaiamonte]

They also fail to realize that it will reduce the hours of fast food workers LOL

exactly, when a price or wage goes up we purchase less of it, in this case we purchase less labor.

 

[EdwardBaiamonte]

prefer to see minimum wage offering a significant incentive to work compared to sitting at home on the dole..

all agree but the real choice is not minimum wage or dole but rather do you put an able bodied adult on the dole or not and do you put them on minimum wage dole or not if they have a job.

don't forget minimum wage is just 1 of a 1000 interventions in the free market that libcommies want.

 

[fbj]

They also fail to realize that it will reduce the hours of fast food workers LOL

exactly, when a price or wage goes up we purchase less of it, in this case we purchase less labor.

Yes all those retarded ass fast food workers screaming for $15 an hour and don't realize they will only be on the schedule for 10 to 15 hours a week

 

[Dont Taz Me Bro]

A Problem With Minimum Wage Laws

Aside from the fact they exist?

 

[EdwardBaiamonte]

being the businessmen that they are,whose main concern is maximizing profits,

If their main concern is maximizing profits why not get rid of them as too greedy or too inhumane? In reality, their concern is for their customers who would object to the higher prices by buying less or by buying elsewhere. If customers didn't object to prices that resulted from paying workers $15 or $100/hr business would be happy to pass on the higher prices to them. After all, at $15 or $100/hr the quality of their workers would go way up.

It seems its really the greedy customer who objects to the $15 or $100/hour minimum wage.

 

[my2¢]

 

[Moonglow]

The former governor of South Carolina, Carroll Campbell, said it:

"The trouble with the left is they don't understand dynamics."

Raising the minimum wage will begin such a dynamic. When they are forced by law to pay more wages to their employees, employers, being the businessmen that they are,whose main concern is maximizing profits, will not sit idly by and watch those profits dwindle away.They will pass the increased cost of doing business along to consumers by raising their prices. The process is called "inflation."

Yes, some people will be taking home more money, but they and everyone else will be paying more for the things they buy. What economists call "real disposable income" will hardly go up at all.


The concept is part of classical Economic Theory:

Biz/ed - Wage-price spiral | Biz/ed

Yet the CEO's make a dynamic 300% more than an average workers.....

 

[CultureCitizen]

There is a wage/price spiral but you've overstated it. When 100% of people subsidize a wage increase for the bottom 10%, that 10% undoubtedly enjoys an increase in real disposable income. The other 90% goes down minimally.

I dont like social engineering much but I would much prefer to see minimum wage offering a significant incentive to work compared to sitting at home on the dole. As a conservative I'd like to see work rewarded over sloth.

except the higher the wage or price the fewer employees are affordable.

Would you mind explaning me then how was it that 11 million illegals found their way into US jobs ?

There's something about this minimum wage rant I don't quite get.
A) There seems to be really few people willing to work for the actual minimum wage
B) There seems to be a rather large crowd of SA willing to work for the same wage ( or less ) .

Rising the minimum will probably increase the supply on both sides and decrease the demand.
If there had been an oversupply of labour at that level (minimum wage level ) illegal immigration would never have happened.

 

[SharpArrowhead]

Don't forget about job cuts too. Each employee will be doing more so the added stress may not be worth the increase in salary. Another aspect to think about.

 

[EdwardBaiamonte]

Would you mind explaning me then how was it that 11 million illegals found their way into US jobs ?
.

its more like 20-30 million. They found there way via the open border with Mexico, then they worked harder, with more respect, and for less money than their American liberal counterparts.

 

[EdwardBaiamonte]

A) There seems to be really few people willing to work for the actual minimum wage
.

4.7% or 3.6 million at or below fed minimum and???

 

[EdwardBaiamonte]

B) There seems to be a rather large crowd of SA willing to work for the same wage ( or less ) .
.

in my town they get $10/hour no taxes or deductions as opposed to $7.25 Fed. minimum wage

 

[EdwardBaiamonte]

If there had been an oversupply of labour at that level (minimum wage level ) illegal immigration would never have happened.

dear, who knows?? one huge advantage illegals have is that they work on a temporary basis for cash with no paperwork required. Also, they work harder and show great respect. The are not entitled spoiled victimized lazy American liberals.

 

[OnePercenter]

The former governor of South Carolina, Carroll Campbell, said it:

"The trouble with the left is they don't understand dynamics."

Raising the minimum wage will begin such a dynamic. When they are forced by law to pay more wages to their employees, employers, being the businessmen that they are,whose main concern is maximizing profits, will not sit idly by and watch those profits dwindle away.They will pass the increased cost of doing business along to consumers by raising their prices. The process is called "inflation."

Yes, some people will be taking home more money, but they and everyone else will be paying more for the things they buy. What economists call "real disposable income" will hardly go up at all.


The concept is part of classical Economic Theory:

Biz/ed - Wage-price spiral | Biz/ed

Why would you expect a whore for big business to say anything else?