Is the proposed minimum wage hike a good idea?

Question

I'd like to hear what both sides have to say on the issue. And please, let's just have an intelligent, thoughtful, civil debate for once. :) Most convincing answer gets ten points.

Hermes- I would say bad for minimum wage workers. If prices go up, it hurts them all over again.

Anyonymous- BINGO!

Deeplydemented- A very thoughtful answer. Don't feel you can't contribute to the debate. :)

Bubblingbroo- Not bitter are we? *sigh*

Answer 1

In theory, when an employer hires an employee, the employer should be able to decide the salary. Free market economics says if the employee is not satisfied with the salary, the employee can and should find another job that pays more.

But, in practice, people get stuck in ruts. They get a job they can't afford to quit, because they would be broke. They don't have time to train for a better job, or even look for one, because their existing job takes too much of their time.

Minimum wage laws are like usury laws. Such laws violate the theory of free market economics, but can do enough social good to make up for it.

For those reasons, liberals/Democrats tend to favor minimum wage laws and usury laws, while conservatives/Republicans tend to oppose them.

It might actually be more important for such laws to remain consistent. If one theory pulls the law in one direction, increasing the minimum wage or decreasing the usury level, and the other theory pulls it the other way, such that the laws change back and forth with the political seasons, that constant change might do more harm than the laws themselves.

There are also more complicated theories. If the minimum wage were artificially high, employers might be forced to develop advanced technology to replace workers. But that kind of advance would be favored by those who oppose minimum wage laws. And vice versa. A seeming contradiction.

In actual practice, the laws tend to evolve into workable compromises, and the details tend to gradually move towards an equilibrium, where the various contradictions in the details partly balance each other out.

Being able to work with such laws and adapt to their changes is part of what it takes to succeed in business in our kind of society.

Another theory is that if the law hurts your business, it hurts your competition too, so it doesn't necessarily have much impact on your ability to compete and succeed.

On the other hand, the cost of compliance and enforcement adds a drain to the overall economy, and the higher wages add some inflation. There might also be a net loss of jobs as the economy cools from the impact. So the workers might not actually be helped at all, on average.

But helping the average worker is not what minimum wage laws are about. The average worker might come out behind, but those at the bottom rung might be helped just enough to enable them to advance and have a better future.

Buit even that's not definite. Economics is so complicated, it's almost impossible to predict the exact results well enough to know for sure if any particular change in the law will help or hurt any particular group affected by it.

So, the answer to the question, of whether the hike is a good idea, should probably be that it's not an overwhelmingly good idea, nor an overwhelmingly bad idea, but is a complicated idea.

In any case, such changes in such laws happen not because they're a good or bad idea, but because of a lot of complicated political processes. Our society is like a living organism. It survives and thrives, not from always doing the best thing, but from a constant slow inefficient adaptation to the changing realities of a complicated world.

Answer 2

All right, I'm 18 so bare with me but here's my view:

The proposed minimum wage has great intentions. Where I live, a lot of my teen friends have young babies. They try to take care of them, as best as they can with their GED. They work at jobs where they get minimum wage and it's hard to envision anyone being able to live off the measly amount.

But, yes, there's a but, the increase is simply not enough. $290 per week if you are lucky enough to find a full time job? Bringing in a mere $1160 per month will not cover rent, light, gas, food and clothing. Rent in NYC alone starts at around $1200! I think it should be increased a bit more.

However, when you increase the wage, employers higher less people. Simple economics here and common sense. They won't be able to afford as many employees as before. The result is that those who get jobs have a slightly better living and you have a lot more people without jobs. So the trade off is a higher income for some employees with higher unemployment.

They should instead focus on educational and experiential opportunities so that people can make more rather than increasing the wage and, in result, unemployment.

Answer 3

You have the arguement that would say that increasing the minimum wage will help people making minimum wage make ends meet by increasing thier income. I would not doubt that it is hard to sustain yourself if you are making a mere $5.15/hr. which works out to about $200/week before taxes. If you had to live on about $700 / month, about what you would make after taxes on minimum wage for 40 hours per week, it would be difficult to make ends meet.

However, I view it this way. An increase to the minimum wage will result in increased labor costs for any business which has employees below the new proposed minimum wage. In order to offset the cost of increased labor costs, prices must go up, basiclly accounting 101 there. This would equate to most of the increase in pay for these people making minimum wage will be absorbed by increased prices on consumer goods.

Now there is going to be the argument that prices go up when the minimum wage doesn't increase through inflation, which is entirely correct. Other costs like fuel, transportation, and production costs factor into the price of products we buy and use. Since the cost of fuel has risen dramitcally over the last five years, you have seen slightly higher inflation over that period. Increased labor cost will have the same effect. While a minimum wage earners buying power may increase slightly for a short period of time, that difference will not result in any measurable change to thier quality of life.

Also, you have to consider the number of workers that are actually working for minimum wage. I worked for a pizza chain restaurant a few years ago and only two types of employees even made minimum wage, delivery drivers and servers. People with both of these jobs recieve tips on top of thier wage (in fact most servers earn in tips about one and a half times what they earn in wages) and delivery drivers also recieve compensation for miles driven, so in essence these employees are making more money than minimum wage. When Minnesota increased its minimum wage $1/hr it resulted in a 10% increase in labor costs resulting in a 5% across the board price increase. In the state that I am from (Minnesota) it is estimate that only 2% of the wage earners in the labor force makes minimum wage. In most locations, market forces have already pushed entry level wages well above minimum. Even Wal-Mart, the cheapest of all corporations, pays its starting employees $8/hr.

I think the increase in minimum wage will have little or no effect on the quality of life for those trying to make a living on a minimum wage job as the prices of consumer goods and services will increase with wage increases.

Answer 4

No, I don't think so. It will probably result in the firing of a whole bunch of people as well as an increase in prices. I'm no economist though. Maybe a wage increase is overdue. But $2 (or whatever it is, I don't remember exactly) seems like a lot. I think the Democrats are fishing for votes from poor people who think they're being done a favor. Good night!

Answer 5

I honestly don't know, however......could YOU live on $5.15, (Five DOLLARS and 15 CENTS an hour???) I know I couldn't. That is $41.20/day at $206/per week and $824 per month and $9,888 PER YEAR!!! Who COULD live on that?!?! I do not live extravagantly and pay less than $700/month for my mortgage when most apartments are at least as much in my area. There are NO apartments for less than $400/month in my area. How could someone on minimum wage afford a place to live, utilities, car payment, food, gas, and other living expenses on minimum wage?!?!!?!?!? It is not attainable or acceptable.
I say Howard Stern gives up some of his $500 million dollar Syrius contract + his $83 million dollar BONUS to the minimum wage workers of America!!!!!!! GO HOWARD STERN!!!!!! Get all those people on minimum wage to call his radio station and tell him to give it up!!!! Oh, right, they probably can't afford it now that he is Syrius!!!!
Maybe just ask good old George W. to live on minimum wage for a month or two....

Answer 6

Good for people on minimum wage, bad for me.
If minimum wage gets boosted, so does the cost of consumer products, because now it costs more to make them. Not to mention ship them. So basically i am paying more for things without getting a raise myself. its called squeezing the middle class.

In response to details:
very true it does hurt them again.. but at least for a little bit they are ahead of the curve

Answer 7

It wont really help its not enough besides once minimum wage goes up so does everything else.....

Answer 8

hell yea for the simple fact that your gonna get more money, but its not really gonna make a difference if the economic value goes up, so it basically gotta rise

Answer 9

Where is this taking place?

I'm sure it is a good idea though.