Do you honestly believe that raising the minimum wage is going to be beneficial?

Question

This morning I watched a segment by Good Morning America outlining the economic effects of a minimum wage hike. Consumer prices are going to increase, Americans' buying power will decrease, and possibly 1.1 million jobs could be destroyed as businesses try to digest the financial loss that a minimum wage increase will entail. The jobs politicians are trying to improve are going to be lost as companies compensate by cutting positions. I realize it sounds counterintuitive, but raising minimum wage isn't going to help, but hurt. Please tell me if you agree or not and defend your answer. Thanks

Answer 1

I know what you mean. Profit margins of businesses don't change - people want to make the same percentage profit on sales as they did before. If the costs go up, they will either cut those costs (fire people) or raise prices. Or investment will flow elsewhere. Plus EVERYONE up the chain will want a raise. It may do more harm than good.

Interesting how one commentator said they were "making it illegal to work for less than $7-- an hour." Sounds like they are taking away a right, doesn't it?

Seems like people think there's a big pile of money out there waiting to be seized on. But what they don't realize is that changes in law change behavior! Economic conservatives believe the right incentives can create economic activity and greater prosperity. They don't believe in fighting over someone else's piece of the pie - they believe that THE PIE CAN GET BIGGER if people have the proper incentives.

We need a safety net for people in trouble, but socialism just disincentivizes achievement. Then there's "brain drain" as the more talented and ambitious people leave, and next thing you know they're building a wall to keep people in.

I got carried away there, but someone else asked about socialism and I didn't get to answer, so it was on my mind.

That's the theory.

What to do for those at the bottom? Education and training, I agree.

PS In my opinion, both Republicans and Democrats are selling out workers anyway. What is unregulated illegal immigration but an implicit repeal of the minimum wage? And these "guest workers" - if they are subject to US labor laws, won't employers just go out and hire more illegals? And if they are not subject to the laws, then we have just gutted decades of protections. More whoring for votes by our "leaders" - both parties!

I'm off my soapbox now. :)

Answer 2

I don't believe raising the min. wage will be beneficial. In fact, I think it will be harmful.

If we "raise" wages, that money has to come from somewhere. It doesn't just appear by government fiat. Hours (or jobs) will have to be reduced, or prices raised, or profits cut (slim chance of that happening). The only way to get around that trade-off is if productivity suddenly and universally increases at a pace exceeding the wage hike. I think that's about as likely as the owners paying the new, higher wages out of their profits.

That's not to say raising the min. wage will be disastrous. If the minimum wage is raised by some reasonable amount, we will recover. If it is raised to a point that is still beneath the typical starting wage for most jobs, the effects won't be too bad. But no matter what, there will be at least some bad effects.

Answer 3

I think it is more likely to hurt than help. However, we have a resilient economy and the net effect will be very small. My biggest issue is that people go on and on about raising a family on minimum wage. Adults with citizenship can make more than minimum wage. Even a underskilled undereducated person can find an $8-10 an hour job if they're over 18. If they can't find a job above minimum wage they either a) spent time in jail (actually criminals can get factory jobs) or b) are just plain lazy. Actually I'm a capitalist so I don't believe in minimum wages in general. I think that if you don't make enough money work harder, or learn new skills. I know its easy for an overeducated overskilled jerk like me to say... but I believed the same thing when I made $8 and hour back in the day.

Answer 4

Raising minimum wage would be a sign that the economy is getting better. Raising minimum wage for any other purpose would be an illusion, a cruel joke, a short lived pacifier. The reason this country is in an economic slide is that are cravings for a bargain has finally caught up to us. For example, " I saved $20 on these shoes" What if your boss said he had to get rid of you cause he could save $ 20000 a year by hiring this person over here to do the same job you do. I can get the same thing over here for $2 less. We all do it ! Supply and demand babie ! It's pretty bad when you have to use a credit card to take the Kidd's to Disney. Compeat with China?, that's a hoot. Apples and oranges..... Raising minimum wage WILL NOT heart but it won't help ether. Thank you.

Answer 5

I think the real question is whether they deserve it? If someone has gone almost a decade without getting a raise there is a fair chance that they aren’t doing anything extraordinary and they certainly aren’t standing out among their piers. In a capitalistic society, if you have skills that are valuable in the marketplace you can always go somewhere else that requires those skills. Or use this demand to negotiate a raise.

In all fairness, don’t look at this from an emotional perspective. Everyone wants to raise the minimum wage because they feel bad that someone is making $5.15 an hour. If they were able to generate twice their current revenue, as compared to their fellow minimum wage workers, then they would be making more, if not twice as much, as the currently do. It’s that simple.

In order to make more money you need to leverage your knowledge & skills as well as apply them diligently and work hard. If you do these things you WILL NOT be making minimum wage.

Answer 6

Ultimately, raising the minimum wage (and as I recall, the measure that's passed the House would have it phased in over three years) will help the economy, but we won't really see the effect for twenty years. Compare this to gas prices; it's a limited comparison, but bear with me -- any rise or fall of gas prices takes 90 days to take effect at the local pump you use. (So today's $3.14/gal I spent is the result of the supply three months ago.)

Gasoline is ONE commodity. As you rightly point out, the minimum wage increase would affect all goods and services, and the previous answerer's statement about long-term effects holds true. Short-term (I use the 20-year figure because that's how long it takes to acclimate a generation), it's going to hurt, forcing companies that provide jobs to people to become "leaner and meaner", not necessarily by laying people off because it would cost more to train a new person than help an experienced employee to specialize anew but by NOT releasing the latest model by Christmas, but perhaps by April Fool's Day.

Too many who think short-term ultimately cut their throats. If you're willing and able to adapt, this minimum wage increase will ultimately put MORE money in your pocket, not less. Hope this helps.

Answer 7

i think because of gas prices and inflation minimum wage has to go up, a lot of people are not making enough money for anything. A lot of companies that i know of already pay more then the minimum wage because they understand that employees need more money to live. As a college student I could not work for minimum wage and pay for the bare minimums. ( gas, books, phone, insurance). I think that some jobs will be lost but not enough that it will completely hurt the economy in the long run. Maybe at the beginning some jobs will be lost, but eventually people will be making more money and will be spending more money making more job available. I mean minimum wage has to go up at some point.

Answer 8

Agree. When the cost of labor goes up, less labor is used. Meaning low cost jobs are automated and eliminated. Also the unions use the minimum wage to drive their rates. Raising the minimum wage drives up union rates when they did nothing to earn such a raise. Government should stay out of business. After all if riasing the minimum wage is a good idea, why not legislate the minimum wage to be $100.00 an hour! Everyone would earn $4,000 a week and over $200,000 a year. Magic!
Except that it would completely stop the country in its tracks.

I hate feel good Liberals. Everything they do ends up backwards.

Answer 9

What you heard is propaganda. Obviously, instituting a national living wage of 9.50 per hour would do no harm to large corporations. There would be some restructuring of the job market.

Do you think McDonald's is going to go under if they pay every worker they have a few dollars more?

So the corporate fatcats are threatening us with job loss? What about the increased buying power that would be created by raising the minimum wage?

Answer 10

I think the whole idea of a minimum wage is stupid. I think employers should be able to set there own wage and if somebody is prepared to work for that, they can go for the job. Lack of minimum wage allows more jobs to be provided for people. I think its better that everyone has a bit of money, rather than some wealthy and some very poor.