Minimum Wage

[champu 1]

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Very few schools -- colleges included -- teach things like PHP, Web-based Java, UNIX-based environments, Javascript, even CSS/HTML.

I interviewed several people over the course of last month and I can tell you this is true. I don't know what my applicants are studying in college but it doesn't apply in the real world. Unless a college student takes it upon themselves to educate themselves, what they are learning in college will be of no use upon graduation.

One thing I will recommend to engineers out there: Even if you don't plan on being a software developer, you owe it to yourself to develop a working knowledge of C, matlab, vb, maybe pick an interpreted language like php/ruby/perl to get to know, and at least understand what's going on in an SQL database.

Being the person who understands a system architecture and can write a graduate level paper showing why something should work is great, but also being able to use that knowledge to throw together a tool in C or perl in an hour or two to parse through captured data and explain what's going on when something isn't working is indistinguishable from magic to most people.

[billvon 2,396]

>However, it does suggest it should be tied to something quantifiable

I think it should be tied directly to whatever salary an employer and an employee agree on.

> and opinion of what may or may not be appropriate as a "starter" wage for teenagers
>and retirees.

I don't really care whether it's appropriate for teenagers, retirees, millionaires, one armed pirates or poor struggling Hollywood starlets. The only person whose opinion counts is the person receiving the salary. They can decide it's enough, in which case they take the job - or they can decide it's not, in which case they don't.

[SkydiveJonathan 0]

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>However, it does suggest it should be tied to something quantifiable

I think it should be tied directly to whatever salary an employer and an employee agree on.

> and opinion of what may or may not be appropriate as a "starter" wage for teenagers
>and retirees.

I don't really care whether it's appropriate for teenagers, retirees, millionaires, one armed pirates or poor struggling Hollywood starlets. The only person whose opinion counts is the person receiving the salary. They can decide it's enough, in which case they take the job - or they can decide it's not, in which case they don't.

And there we have it - take what I say you deserve or starve.

[SkydiveJonathan 0]

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>The article you cite mentions minimum wage originally being set at 86% of poverty level . . .

Hmm. That would suggest it has never been meant as a way to support all of one's life needs.

However, it does suggest it should be tied to something quantifiable as opposed to left to capricious whim and opinion of what may or may not be appropriate as a "starter" wage for teenagers and retirees.

In the United States, the minimum wage promulgated by the Fair Labor Standards Act of 1938 was intentionally set at a high, national level to render low-technology, low-wage factories in the South obsolete.

[Lefty 0]

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And there we have it - take what I say you deserve or starve.

Nah, I wouldn't work for you on principle alone. Which is another factor to consider apart from money.

Provoking a reaction isn't the same thing as saying something meaningful.
-Calvin

[billvon 2,396]

>And there we have it - take what I say you deserve or starve.

Or alternatively - "pay me what I'm worth or pound sand."

[SkydiveJonathan 0]

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>And there we have it - take what I say you deserve or starve.

Or alternatively - "pay me what I'm worth or pound sand."

And lo and behold the evolutionary niche for unions arises.

[emmiwy 0]

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Very few schools -- colleges included -- teach things like PHP, Web-based Java, UNIX-based environments, Javascript, even CSS/HTML.

I interviewed several people over the course of last month and I can tell you this is true. I don't know what my applicants are studying in college but it doesn't apply in the real world. Unless a college student takes it upon themselves to educate themselves, what they are learning in college will be of no use upon graduation.

[billvon 2,396]

>Now that I'm finally done with school and "formalized" methods of learning, I
>regret not having done any internship during the summers in between school years to
>really gain experience within industry and the necessary skillsets needed to succeed
>outside of what we think or are taught is practical in the real world work setting.

Agreed. When I'm hiring new grads I look for things like "amateur radio license" "built electric go kart" "created astronomy website" etc etc. That's good evidence that they have some practical skills outside what they learned in the classroom.

[emmiwy 0]

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Agreed. When I'm hiring new grads I look for things like "amateur radio license" "built electric go kart" "created astronomy website" etc etc. That's good evidence that they have some practical skills outside what they learned in the classroom.

All of a sudden I'm feeling like all my years in school was a waste of time. :)

[emmiwy 0]

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One thing I will recommend to engineers out there: Even if you don't plan on being a software developer, you owe it to yourself to develop a working knowledge of C, matlab, vb, maybe pick an interpreted language like php/ruby/perl to get to know, and at least understand what's going on in an SQL database.

Being the person who understands a system architecture and can write a graduate level paper showing why something should work is great, but also being able to use that knowledge to throw together a tool in C or perl in an hour or two to parse through captured data and explain what's going on when something isn't working is indistinguishable from magic to most people.

+1

While I emphatically support pursuing the necessary real world skills to build tools and deliverables, I do see an advantage of higher education and obtaining graduate degrees. In my experience, it is not so much the technical skills you may (or may not, to some) gain in the end, but the ability to solve problems, organize, and be self-reliant, endure. But I suppose what skills you apply depends on who you're working for; the professional success of an individual can be based on doing exactly what you're told or thinking taking an idea and running with it. I'm not sure which one I'm better suited for yet...

[Bolas 5]

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Agreed. When I'm hiring new grads I look for things like "amateur radio license" "built electric go kart" "created astronomy website" etc etc. That's good evidence that they have some practical skills outside what they learned in the classroom.

All of a sudden I'm feeling like all my years in school was a waste of time. :)

It's a very expensive check box/database filter that while doesn't necessarily qualify you for a job, may be a requirement to be considered for an interview, particularly your first, depending on how many applicants they have.

Stupidity if left untreated is self-correcting
If ya can't be good, look good, if that fails, make 'em laugh.

[SkydiveJonathan 0]

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>People aren't machines.

You are correct. Machines are all the same;

You can't pay machines and they can't spend the money. Machines are not economic agents.

[SkydiveJonathan 0]

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>Wasn't that what 'flipping' was all about?

No, flipping is buying and selling houses quickly to cash in on a real estate bubble. Investing is buying something and holding onto it as it appreciates.

Flipping was all part of the new 'economic paradigm' of endless growth.

[SkydiveJonathan 0]

Minimum-wage workers here in 2012 simply can't purchase as much with their paychecks as they could in 2011. And if you go back a few decades, today's raw deal gets even rawer. Back in 1968, minimum-wage workers took home $1.60 an hour. To make that much today, adjusting for inflation, a minimum-wage worker would have to earn $10.55 an hour.

In effect, minimum-wage workers today are taking home almost $7,000 less a year than minimum-wage workers took home in 1968.

[billvon 2,396]

>Minimum-wage workers here in 2012 simply can't purchase as much with their
>paychecks as they could in 2011.

Agreed. And why is that happening? Inflation makes the money they earn (and the money they have saved) worth less. What drives inflation? Increasing minimum wage is a huge factor.

[SkydiveJonathan 0]

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What drives inflation? Increasing minimum wage is a huge factor.

No, it's not. Have another go.

[SkyDekker 1,122]

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>Minimum-wage workers here in 2012 simply can't purchase as much with their
>paychecks as they could in 2011.

Agreed. And why is that happening? Inflation makes the money they earn (and the money they have saved) worth less. What drives inflation? Increasing minimum wage is a huge factor.

Not sure I agree with this. The Ontario minimum wage has grown from $1.30 in 1969 to the current level of $10.25.

Don't thinkour inflation has significantly out(under)performed the US.

[billvon 2,396]

>No, it's not. Have another go.

Here are two more "gos" if you want references:

WiseGeek:

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Many proponents of a raised federal minimum wage support the idea of matching the new base wage to the current rate of inflation, a process known as indexing. By doing this, proponents believe the wage-earner's real spending power will also be increased. When a wage hike does not keep up with inflation, which has been the case in recent years, the workers' paychecks may get a little larger but inflated prices of goods and services actually reduce the spending power of that raise.

So we know that inflation can have a detrimental effect on the real spending power, but does a raised minimum wage cause inflation? Yes and no. From an economic standpoint, inflation can be caused by any number of new or increased costs of production, including an increase in workers' wages. If a company must increase the amount it pays its workers by several dollars, there is obviously a new expense that must either be absorbed by the company as the cost of using human labor or passed on to customers in the form of higher prices.

Economists call this phenomenon cost-push inflation. An increase in the federal minimum wage did create an increase in production costs, which subsequently resulted in an inflated price for consumers. But critics of the cost-push inflation argument suggest that companies can always adjust their workforce to compensate for a mandated increase. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.
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Eastern Economic Journal. Vol. III, No. 3

Effect of the Minimum Wage on Inflation and Other Key Macroeconomic Variables
Introduction

The effect of minimum wage changes on wage inflation can be seen as taking place in several stages, which are at least partly over-lapping. First, there is a direct impact, caused by the legislated increase in hourly earnings of those subject workers who were previously paid less than the new minimum. Second, there may be a fairly quick adjustment in hourly wage payments to workers who already were paid in excess of the new minimum wage level prior to its enactment. This adjustment may be caused by specific contract clauses contingent on the minimum wage, or by the particular wage policy of employers designed to maintain a relative wage hierarchy (wage comparison or "ripple" effect). Third, as hourly compensation rates and, hence, unit labor costs rise, firrng will attempt to raise their product prices in the short run. Fourth, firms will begin to adjust the level and the mix of factor demands and production changes. The new factor mix, consistent with cost mini-mization subject to expected demand, may lead to an increase in output per person hour, which may mitigate the ultimate inflation outcome. Fifth, the resulting new equilibrium employment combines with the new average hourly compensation to produce a new equi-librium income level, aggregate demand and, after some lag, production. Sixth, the inflation and unemployment rates consistent with the new equilibrium levels of income, output, demand for goods, costs, factor demand and supply, may in time again influence average hourly earnings. This effect is called the "spillover" or the "pass-through" effect.

The overall wage inflation outcome will, of course, also depend on the position of the economy in a particular stage of the business cycle and on the general policy environment. The process is represented schematically in Figure I. A positive effect on wage changes other than the direct impact on minimum wage workers is exerted by (1) the wage comparison effect, (2) the labor substitution effect, and, (3) the inflation and inflationary expectations effect, which accompanies a negative in-fluence emanating from the unemployment effect. Prior to this study, no successful effort was made to quantify the average size of the indirect economic spillover effects of a given minimum wage change on wage inflation.
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[matthewcline 0]

"But critics of the cost-push inflation argument suggest that companies can always adjust their workforce to compensate for a mandated increase."

Do they mean fire people or lay them off, because it would be more costly to keep them after a mandated raise?

Matt

An Instructors first concern is student safety.
So, start being safe, first!!!

[SkydiveJonathan 0]

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>No, it's not. Have another go.

Here are two more "gos" if you want references:

WiseGeek:

=======================
Many proponents of a raised federal minimum wage support the idea of matching the new base wage to the current rate of inflation, a process known as indexing. By doing this, proponents believe the wage-earner's real spending power will also be increased. When a wage hike does not keep up with inflation, which has been the case in recent years, the workers' paychecks may get a little larger but inflated prices of goods and services actually reduce the spending power of that raise.

So we know that inflation can have a detrimental effect on the real spending power, but does a raised minimum wage cause inflation? Yes and no. From an economic standpoint, inflation can be caused by any number of new or increased costs of production, including an increase in workers' wages. If a company must increase the amount it pays its workers by several dollars, there is obviously a new expense that must either be absorbed by the company as the cost of using human labor or passed on to customers in the form of higher prices.

Economists call this phenomenon cost-push inflation. An increase in the federal minimum wage did create an increase in production costs, which subsequently resulted in an inflated price for consumers. But critics of the cost-push inflation argument suggest that companies can always adjust their workforce to compensate for a mandated increase. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.
=======================

Eastern Economic Journal. Vol. III, No. 3

Effect of the Minimum Wage on Inflation and Other Key Macroeconomic Variables
Introduction

The effect of minimum wage changes on wage inflation can be seen as taking place in several stages, which are at least partly over-lapping. First, there is a direct impact, caused by the legislated increase in hourly earnings of those subject workers who were previously paid less than the new minimum. Second, there may be a fairly quick adjustment in hourly wage payments to workers who already were paid in excess of the new minimum wage level prior to its enactment. This adjustment may be caused by specific contract clauses contingent on the minimum wage, or by the particular wage policy of employers designed to maintain a relative wage hierarchy (wage comparison or "ripple" effect). Third, as hourly compensation rates and, hence, unit labor costs rise, firrng will attempt to raise their product prices in the short run. Fourth, firms will begin to adjust the level and the mix of factor demands and production changes. The new factor mix, consistent with cost mini-mization subject to expected demand, may lead to an increase in output per person hour, which may mitigate the ultimate inflation outcome. Fifth, the resulting new equilibrium employment combines with the new average hourly compensation to produce a new equi-librium income level, aggregate demand and, after some lag, production. Sixth, the inflation and unemployment rates consistent with the new equilibrium levels of income, output, demand for goods, costs, factor demand and supply, may in time again influence average hourly earnings. This effect is called the "spillover" or the "pass-through" effect.

The overall wage inflation outcome will, of course, also depend on the position of the economy in a particular stage of the business cycle and on the general policy environment. The process is represented schematically in Figure I. A positive effect on wage changes other than the direct impact on minimum wage workers is exerted by (1) the wage comparison effect, (2) the labor substitution effect, and, (3) the inflation and inflationary expectations effect, which accompanies a negative in-fluence emanating from the unemployment effect. Prior to this study, no successful effort was made to quantify the average size of the indirect economic spillover effects of a given minimum wage change on wage inflation.
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So no huge effect on inflation.

[billvon 2,396]

>Do they mean fire people or lay them off, because it would be more costly to keep
>them after a mandated raise?

Yep.

[SkydiveJonathan 0]

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WiseGeek:

Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

Eastern Economic Journal. Vol. III, No. 3

The overall wage inflation outcome will, of course, also depend on the position of the economy in a particular stage of the business cycle and on the general policy environment.

So no huge effect on inflation given at the moment we're using QE to fight deflation.

[matthewcline 0]

"An increase in the federal minimum wage did create an increase in production costs, which subsequently resulted in an inflated price for consumers."

And then the costs was passed on to us the consumers, making prices go up, or inflating?

Dang.
Matt

An Instructors first concern is student safety.
So, start being safe, first!!!

[SkydiveJonathan 0]

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"An increase in the federal minimum wage did create an increase in production costs, which subsequently resulted in an inflated price for consumers."

And then the costs was passed on to us the consumers, making prices go up, or inflating?

Dang.
Matt

For all the years the minimum wage didn't change inflation still happened.