Minimum Wage

[kelpdiver 2]

So did you doing any fact checking on your graphic's claim that Big Macs in Denmark only cost 56 cents more?

I did.

Per Wiki's entry on the big mac index, it is $5.37 in 2012, nearly $2 more than here. 6th most expensive nation in the world, in fact. Norway, Sweden, and Finland were 1,2,5 on that list.
http://en.wikipedia.org/wiki/Big_Mac_Index

Per an alternate reference on the cost of living in Denmark, a combo meal is $11.94.
http://www.numbeo.com/cost-of-living/country_result.jsp?country=Denmark&displayCurrency=USD

Conclusion - whoever created that graphic lied....grossly.

[StreetScooby 5]

Quote

You tend to get what you pay for.

That is becoming a common experience, from what I hear.

Quote

One night at the Saloon, I confided in an old wise man from Merrill Lynch...I told him about my dilemma...he said, "you can't get so emotional...you can't care about these people...none of them. The minute you start thinking that you're gonna be some type of savior of the community, then you're done...you're just done..."

At some point in time, everyone needs to realize they have to take care of themselves and their family first and foremost, IMO. Everything else comes after that. If we all did that, we wouldn't have the problems in our societies that we do today. I personally have become convinced that begins first in the family, second in the education system. We seem to be failing broadly on both fronts. Even worse, we're going the wrong direction these days.

We are all engines of karma

[StreetScooby 5]

Quote

I like the plan of lowering/fixing the tax code and scrapping unneeded regulations that raise the cost of doing business in the U.S to get some of these jobs to come back. It would do a lot to fix the economy.

Once people realize that government can only get its money by taxing corporate profits and employee payroll, it makes no sense for government to make it too difficult to start companies and hire people.

Quote

I place it in the same pile as Keynesian Economics, a failed experiment.

I bought Keyne's General Theory of Unemployment. I agreed with everything he said in the first chapter. The rest of the book went over my head. He dives directly into a rigorous critique of classical economics as practiced in the 1920s. He is an incredibly precise writer, probably one of the most precise writers I've ever encountered. I have the impression that what our government calls Keynesian today is not something he would recognize. He advocated government spending from reserves built up by the government during good times. He did not advocate printing money. That's my understanding. Either way, our government is making a huge mess today, and it's going to be a long time before it gets sorted out, if ever.

We are all engines of karma

[JerryBaumchen 1,046]

Hi Stumpy,

Quote

Here - you need consent to do major alterations, and if you do any serious plumbing/electrical you need someone to sign it off (The sign off and code of compliance stuff only really becomes a problem when you want to sell) - but I do loads of stuff on my own house, and the state certainly doesn't own it.

Here in the USA it can vary from state to state. I live in Oregon and almost all of the work I have done on my current house has been done with a Building Permit that is req'd ( I have enlarged my current house from 1200 sq ft to over 2100 sq ft ). Also here, when you sell a house you must state in writing that all work has been completed via a Building Permit, or other wordage to that effect ( the exact wordage I am not current with ).

As my brother once said, 'A Building Permit is not to protect the home owner, it is to protect the next home owner.'

JerryBaumchen

PS) If you ever want to hear some scary stories, just spend some time with a building inspector; they've seen it all.

[kallend 1,620]

Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

...

The only sure way to survive a canopy collision is not to have one.

[kawisixer01 0]

This makes for some very good reading. http://bastiat.mises.org/?s=minimum+wage.

I can say that from my work experience building automation is that there are very fine lines. A fine line between automating a job and not automating it, and it always comes down to return on that investment, in my company it's typically calculated by the IRR method. I will assure you that these conversations happen more and more as talks of wages for unskilled labor go up, especially when you start considering rising healthcare costs, abseneeism, , rising transportation costs, and injury claims. I can make a robot build motors, inspect parts with laser precision, paint cars,weld ships, and grade and stack mint leaves. You don't think we can make one that builds burgers after you enter your order at a kiosk? A basic programmable processor that cost $600 or more ten years ago that required $1,000 software to talk to it can now be had for under $100 with free software. Automating mundane tasks that are repeatable has become insanely easy and cheap.

[kallend 1,620]

kawisixer01

This makes for some very good reading. http://bastiat.mises.org/?s=minimum+wage.

Lots of theory and opinion but still no DATA and nothing that could get published in a reputable journal.

...

The only sure way to survive a canopy collision is not to have one.

[quade 3]

kallend

Lots of theory and opinion but still no DATA and nothing that could get published in a reputable journal.

Some people here simply do not seem to understand the difference between facts and opinion.

quade -
The World's Most Boring Skydiver

[jgoose71 0]

StreetScooby

I bought Keyne's General Theory of Unemployment. I agreed with everything he said in the first chapter. The rest of the book went over my head. He dives directly into a rigorous critique of classical economics as practiced in the 1920s.

And that is the fatal flaw of Keynesian economics. It was written for the 20's. It only works on small scale local economies, not global. And while demand does drive an economy, it's equal demand, not a one way street. A good or service for a good or service. And yes, even though we are on the Fiat money system, a dollar still represents a piece of a good or service. That is what it is supposed to represent. People forget that.

Right now, because so much of our manufacturing is done overseas, the people with jobs in the U.S. are trading with people with jobs in China. Our stimulus did wonders for the Chinese Economy, not so much for our own. We didn't increase production in U.S. plants, well, because we don't have any (Why I say it would have worked in the 20's).

Until we start making real moves to bring some of these jobs back to the U.S., the rich will get richer and the poor will get poorer. That is the legacy Obama will leave with all of his regulations that keep making the choice easier to build factories overseas.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[kelpdiver 2]

kallend

Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

Don't believe we've had any past events where a near 50% increase was enacted.

In any event, isn't the burden of proof in the other direction? Shouldn't the SIEU prove that this won't fall under basic supply/demand graphs?

[Stumpy 256]

JerryBaumchen

Hi Stumpy,

Quote

Here - you need consent to do major alterations, and if you do any serious plumbing/electrical you need someone to sign it off (The sign off and code of compliance stuff only really becomes a problem when you want to sell) - but I do loads of stuff on my own house, and the state certainly doesn't own it.

Here in the USA it can vary from state to state. I live in Oregon and almost all of the work I have done on my current house has been done with a Building Permit that is req'd ( I have enlarged my current house from 1200 sq ft to over 2100 sq ft ). Also here, when you sell a house you must state in writing that all work has been completed via a Building Permit, or other wordage to that effect ( the exact wordage I am not current with ).

As my brother once said, 'A Building Permit is not to protect the home owner, it is to protect the next home owner.'

JerryBaumchen

PS) If you ever want to hear some scary stories, just spend some time with a building inspector; they've seen it all.

yep - agreed Jerry.

Now as for what that had to do with the original post I am not quite sure - Turtle??

Never try to eat more than you can lift

[kallend 1,620]

kelpdiver

***
Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

Don't believe we've had any past events where a near 50% increase was enacted.

In any event, isn't the burden of proof in the other direction? Shouldn't the SIEU prove that this won't fall under basic supply/demand graphs?

NO, the burden of proof is on those who make the claim.

And right now the claim is from the right that raising the minimum wage will destroy jobs.

Where's the data to support that claim?

...

The only sure way to survive a canopy collision is not to have one.

[kawisixer01 0]

CONCLUSION

This study examined the impact of state-level minimum wage rates on unemployment rates, focusing on the long term unemployed over the 1984-89 period. The emphasis on long term unemployment extends minimum wage research by considering how unemployment durations for attached low skilled workers are affected. By examining the 1984-89 period, we took advantage of the large cross-sectional variation that occurred when many states raised their minimum wage above the federal minimum rate of $3.35.

We consistently found that the minimum wage is positively related to long term unemployment rates after a lag. However, it was often the case that the sum of the contemporaneous and lag minimum wage coefficients was of only modest statistical significance (i.e. at the 10-20% level). Yet, the reduced form results without the production worker wages suggested a statistically significant minimum wage result at the 5% level. Regarding minimum wage coverage, we found that greater coverage increases long term unemployment, where the statistical significance was stronger than for the minimum wage rate results. One possible factor that influenced the minimum wage rate results was measurement error in estimating the long term unemployment rates. In fact, further analysis using aggregate labour market measures yielded results strongly consistent with long term unemployment patterns. This increased our confidence in the long term unemployment results.

These results suggest that policy makers at the federal and state level should weigh additional total unemployment, as well as the possibility of longer durations of unemployment, in contemplating future minimum wage increases. In particular, state policy makers should consider the prospect of firm and household relocation in their decision making. Likewise, in an era of welfare reform, these results suggest that some low-skilled welfare recipients may experience long job searches, suggesting that minimum wage hikes may run counter to the work requirement goals of welfare reform. One possible policy alternative is expanding the earned income tax credit. To be sure, this does not mean that policy makers should forego minimum wage increases, just that they should fully weigh the costs and benefits.

The findings tend to support the standard prediction that there are negative consequences from raising the minimum wage, at least at the state level. Foremost, this was the case even after adjusting for the empirical concerns raised by CARD et al., 1994; and CARD and KRUEGER, 1995. None the less, more research should be conducted to explore if these results apply to other periods besides the 1980s. However, a challenge facing such research is that, unlike the late 1980s, there has been considerably less cross-state variation in minimum wage rates in the 1990s. Another complication is that the Federal Government no long publishes state-level minimum wage coverage estimates.

Reference
Partridge, M. D., & Partridge, J. S. (1999). Do minimum wage hikes raise US long term unemployment? evidence using state minimum wage rates. Regional Studies, 33(8), 713-726. Retrieved from http://search.proquest.com/docview/208878912?accountid=38569

[kawisixer01 0]

IV. Conclusion
Card and Krueger (1994) excepted, it is difficult to find economists who argue that
increasing the minimum wage will increase employment among those workers directly
affected. 4 Most economists accept the implications of downward sloping demand
curves and upward sloping supply curves and accept the view that increasing the min-
imum wage above the market wage will reduce employment and increase unemploy-
ment, at least to some degree. But some economists support minimum wage legislation
as an effective way to help low-paid workers. Advocates of the minimum wage point
to studies that indicate the unemployment effect is small (as many studies do), so the
benefit from the higher wage received by those who keep their jobs is seen as greater
than the costs to those who become unemployed.
This argument for the minimum wage can be challenged on general efficiency
grounds by extending consideration beyond those workers directly affected. But in this
paper I have challenged the case for the minimum wage by concentrating on the wel-
fare of workers and by recognizing that their compensation includes fringe benefits
that can be reduced in response to minimum wage increases. The implication is that
increasing the minimum wage harms even those workers who keep their jobs precisely
because the unemployment effect is small -- the employer reduces fringe benefits to
offset the cost of the higher wage even though the lost benefits are worth more to work-
ers than the additional wage. Furthermore, because there is commonly some lumpiness
in the provision of fringe benefits, increasing the minimum wage may decrease unem-
ployment. But this can hardly be considered an advantage of the minimum wage, since
workers are harmed the most by a minimum wage increase when it does reduce unem-
ployment, because that is when it is also causing the largest loss in fringe benefits.

Reference
Lee, D. R. (2004). The minimum wage can harm workers by reducing unemployment. Journal of Labor Research, 25(4), 657-666. doi:http://dx.doi.org/10.1007/s12122-004-1016-7

Both peer reviewed articles retrieved from ProQuest database.

[Amazon 7]

Quote

Furthermore, because there is commonly some lumpiness
in the provision of fringe benefits, increasing the minimum wage may decrease unem-
ployment. But this can hardly be considered an advantage of the minimum wage, since
workers are harmed the most by a minimum wage increase when it does reduce unem-
ployment, because that is when it is also causing the largest loss in fringe benefits.

So increasing the minimum wage harms workers because they will get LESS fringe benefits???

DUUUUUDE.. most minimum wage workers do not get any fringe benefits... no work no pay... but hey we will teach you how to mooch off of taxpayers to get benefits from them..

Sorry but that is what is so seriouslyt fucked up and just another taxpayer bonus to the Waltons and all the other owners of these huge corporations that extort taxes from the American people with this crap...et al... because they are not paying their workers squat, or providing any benefits at all.

[billvon 2,380]

>>in general a company that spends more on labor it needs to rapidly goes out of
>>business.

>Well, that's not reasonable.

Well, reasonable or not that's capitalism.

>I've basically said that Mcdonalds could solve it's problem by firing 30% of it's
>workers and then giving the rest of it's employees more hours with a more
>consistent schedule to boost income and morale, thus making their employees
>happier and less likely to strike/protest.

Solves the franchise's owner's problem, but sorta sucks for that other 30%.

>What do you think about this idea of "social capitalism?"

No easy answers. In general I prefer to err on the side of "more jobs for less money" because a lot of these people are unemployable outside minimum wage jobs. Lower minimum wages help accomplish that. It sucks for the father of 2 kids to have to work a (low) minimum wage job but it sucks even more for him to be fired and have no income at all just so someone else can make more money.

[Coreece 189]

kelpdiver

***
Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

Don't believe we've had any past events where a near 50% increase was enacted.

I found this to be helpful:
http://www.irle.berkeley.edu/workingpapers/157-07.pdf

Quote

THE minimum wage literature in the United States can
be characterized by two different methodological
approaches. Traditional national-level studies use all cross-
state variation in minimum wages over time to estimate
effects (Neumark & Wascher, 1992, 2007). In contrast, case
studies typically compare adjoining local areas with differ-
ent minimum wages around the time of a policy change.
Examples of such case studies include comparisons of New
Jersey and Pennsylvania (Card & Krueger, 1994, 2000) and
San Francisco and neighboring areas (Dube, Naidu, &
Reich, 2007). On balance, case studies have tended to find
small or no disemployment effects. Traditional national-
level studies, however, have produced a more mixed ver-
dict, with a greater propensity to find negative results.

This paper assesses the differing identifying assumptions
of the two approaches within a common framework and
shows that both approaches may generate misleading
results...

More to the point:

Quote

Several factors warrant caution in applying these results.
First, although the differences in minimum wages across
the United States (and in our local subsamples) are sizable,
our conclusion is limited by the scope of the actual varia-
tion in policy; our results cannot be extrapolated to predict
the impact of a minimum wage increase that is much larger
than what we have experienced over the period under study.
A second caveat concerns the impact on hours. The rough
estimates presented here suggest that the impact on hours is
not likely to be large; however, our estimates in this regard
are only suggestive. Third, our data do not permit us to test
whether restaurants respond to minimum wage increases by
hiring more skilled workers and fewer less skilled ones.
The estimates in this paper are more about the impact of
minimum wage on low-wage jobs than low-wage workers.

These caveats notwithstanding, our results explain the
sometimes conflicting results in the existing minimum wage
literature. For the range of minimum wage increases over
the past several decades, methodologies using local com-
parisons provide more reliable estimates by controlling for
heterogeneity in employment growth. These estimates sug-
gest no detectable employment losses from the kind of min-
imum wage increases we have seen in the United States.
Our analysis highlights the importance of accounting for
such heterogeneity in future work on this topic.

Your secrets are the true reflection of who you really are...

[Coreece 189]

billvon

>I've basically said that Mcdonalds could solve it's problem by firing 30% of it's
>workers and then giving the rest of it's employees more hours with a more
>consistent schedule to boost income and morale, thus making their employees
>happier and less likely to strike/protest.

Solves the franchise's owner's problem, but sorta sucks for that other 30%.

Yep, sure does...

Another question that came to mind is if Mcdonalds could even function efficiently without the help of that 30% during peek business hours?

I still think an increase to 9-10/hr will take a large chunk of the profits, but believe that owners/managers are smart enough to find creative ways to make up the difference. Perhaps putting an extreme emphasis on "up-selling" could make up the difference alone? (which IMO, they should be doing already)

Your secrets are the true reflection of who you really are...

[quade 3]

Iago

That is a very good point and a very interesting problem for an employer. I can pay fewer people more, or more people less.

Don't forget another option MANY companies have chosen since the mid-80s, which is to cut staff AND freeze wages (which is effectively paying them less).

http://www.cbpp.org/cms/?fa=view&id=3151

quade -
The World's Most Boring Skydiver

[billvon 2,380]

>I still think an increase to 9-10/hr will take a large chunk of the profits, but believe
>that owners/managers are smart enough to find creative ways to make up the
>difference.

Well, that assumes that for the past 70 years no owners/managers have been smart enough to use those creative methods in the past to undercut Burger King and make even more money, but now somehow they will. That is possible but unlikely IMO.

That being said, an across the board minimum wage increase will not harm McDonald's in comparison to Burger King (since the 'penalty' will be the same.) However, the rate of inflation will rise a bit. In addition people who currently live on McDonald's will:

- buy food at a market instead (thus penalizing McDonald's)
- go to upscale restaurants slightly more often (since they will be affected less and will become more competitive)
- spend less at other local businesses (hits the local economy a bit.)

>Perhaps putting an extreme emphasis on "up-selling" could make up the difference
>alone? (which IMO, they should be doing already)

Better fast food places who already "up-sell" and who pay their employees more already have that niche pretty well staked out.

[Gravitymaster 0]

kallend

******
Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

Don't believe we've had any past events where a near 50% increase was enacted.

In any event, isn't the burden of proof in the other direction? Shouldn't the SIEU prove that this won't fall under basic supply/demand graphs?

NO, the burden of proof is on those who make the claim.

And right now the claim is from the right that raising the minimum wage will destroy jobs.

Where's the data to support that claim?

Let just raise the minimum wage to $100 per hour since that won't destroy jobs. Then we can rid ourselves of all the government poverty programs you left wingers cherish so much.

[turtlespeed 212]

Gravitymaster

*********
Can anyone point me to a peer reviewed article in an economics journal that provides evidence (data) showing that raising the minimum wage will result in a loss of jobs. Not theory or opinion, but DATA.

Don't believe we've had any past events where a near 50% increase was enacted.

In any event, isn't the burden of proof in the other direction? Shouldn't the SIEU prove that this won't fall under basic supply/demand graphs?

NO, the burden of proof is on those who make the claim.

And right now the claim is from the right that raising the minimum wage will destroy jobs.

Where's the data to support that claim?

Let just raise the minimum wage to $100 per hour since that won't destroy jobs. Then we can rid ourselves of all the government poverty programs you left wingers cherish so much.

Nope.

Simplest answer is to make everyone work for a commission.

No minimum wage paid. Only when there is production and recompense to the company is there compensation to the worker.

I'm not usually into the whole 3-way thing, but you got me a little excited with that. - Skymama
BTR #1 / OTB^5 Official #2 / Hellfish #408 / VSCR #108/Tortuga/Orfun

[Coreece 189]

Quote

Simplest answer is to make everyone work for a commission.

How much commission for selling a McRib?

Your secrets are the true reflection of who you really are...

[turtlespeed 212]

Coreece

Quote

Simplest answer is to make everyone work for a commission.

How much commission for selling a McRib?

Some.

I'm not usually into the whole 3-way thing, but you got me a little excited with that. - Skymama
BTR #1 / OTB^5 Official #2 / Hellfish #408 / VSCR #108/Tortuga/Orfun

[Gravitymaster 0]

Commissions will never work. Liberals hate anything that requires competition because the people who are better at something don't deserve to make more money. They think everyone should be paid the same regardless of job skills. The better you are at something, the more they want taken from you to support those who are not.