Minimum wage and outsourcing

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JaxsonRaineposted 11 years ago
Here are two arguments that I have heard, separately, from people on the left.

1 - Minimum wage doesn't cost jobs.
2 - Companies outsource to countries with low wages.

Let's examine that for a moment. Let's imagine the world government(imagine it exists) decides to set a global minimum wage at $10/hr. Many people argue that companies outsource because of low wages, so if the wages in China were just as high as the wages in the US, would that mean we wouldn't have as much outsourcing, and more jobs would stay in the US?
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  CHRIS57posted 11 years agoin reply to this
  Interesting question - what would happen if China had same minimum wage as the US?
  You can´t answer this by only looking at the wages. What is important is the revenue output per wage input. In other words: Those who create more output, who are more productive, get the job. And here another influence steps in: Productivity is linked to skill, to experience, to education.
  So to answer your question: If the US manages to have their workforce more skilled, more educated than the Chinese workforce, chances are very good that jobs stay in the US. If not ...
  My company does business with Chinese customers. It is not unusual to have one or two of my skilled people negotiate and deal with a group of 20 and more Chinese, some of them awake, some of them sleeping. The output of the negotions is a contract and that has the same value for us and our Chinese partners. If 2 do the work that needs more than 20 on the other side, isn´t it fair to assume that the 2 are even more productive if they earn 10 times as much?
  The whole story of outsourcing has little to do with minimum wage. It is more a matter of paying a wage which is balanced with the labour output, with the productivity.
  I am not necessarily in favour of minimum wage regulations. But i believe that too low wages inhibit progress and improvement of productivity. Bottom line is slave labour. But if a machine can do the job of 100 slaves at lower cost than cost for feeding the slaves, ... The only way out is educating the slaves.
  Is the low wage workforce of the US so far away from being uneducated slaves?
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  tammybarnetteposted 11 years agoin reply to this
  Very well said! My mother has been a suprivisor at a manufacturing company for over 20 yrs now, most of the asembly lines have been moved to China, almost always, every piece will have to be reworked, not saving a penny for giving all those jobs away! She fights this point often but it hasn't gotten her anywhere, and will probably cost her the job.
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  rhamsonposted 11 years agoin reply to this
  Your argument does not express the other ambulatory facts that have contributed to the outsourcing of American jobs. The environmental and safety regulations also cost considerably more here in the US to have just a wage war on a world economy basis argument. Have you seen the smog and water polution that is overtaking Chinas urban areas due to their lack of regulations? Birth defects are on the rise in areas where people share their water source with computer "Recycling" factories that dump PCB's into the same sources upriver.
  
  The additional costs of transportation would have to be weighed in as a trade off or wash.
  
  To try and make this a simple tit for tat argument is not possible and then trying to make it a partisan or idealogical argument based on one premise is foolish.
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psycheskinnerposted 11 years ago
Who argued that minimum wage rises can cost jobs? Of course they can. Are you perhaps making a straw man argument?
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  JaxsonRaineposted 11 years agoin reply to this
  It's pretty much a standard argument for pro-minimum wage people. Anti-minimum wage people argue that it raises costs and unemployment. Pro-minimum argue that it increases wages, doesn't cost jobs, and strengthens the middle class.
  
  PrettyPanther, for one, argued that in the other thread.
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  whoisitposted 11 years agoin reply to this
  I've got to hand it to you Jaxon, you keep going and going. I long since gave up trying to understand the liberal mind.
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  JaxsonRaineposted 11 years agoin reply to this
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psycheskinnerposted 11 years ago
I am a pro-minimum wage person and it is not my argument. In fact this is the first time I have even heard of it as an argument.

Why not focus on valid arguments instead of distractions?
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  whoisitposted 11 years agoin reply to this
  Because no valid argument has been forthcoming from the left.
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  JaxsonRaineposted 11 years agoin reply to this
  It's not your argument, fine. That doesn't make it a distraction. It is the argument of many pro-minimum wage people. I never said it was an argument everyone in favor of minimum wage uses.
  
  Why would you support something that costs Americans jobs?
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  whoisitposted 11 years agoin reply to this
  Because things need to be fair!
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  psycheskinnerposted 11 years agoin reply to this
  You could try giving the slightest bit of evidence that this is a common argument.
  
  And yes, I will support things that cause some jobs loss if there is a net benefit in the long run. E.g. everyone who is working has a living wage, more money circulates, jobs are gains back and people move from a living benefit to a living wage = win/win.
  
  I just don't accept that anyone should be expected to work full time and still not be able to afford food and shelter. This is a civilized country not an oligarchy based on exploitation.
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  JaxsonRaineposted 11 years agoin reply to this
  Listen. I don't want to argue with someone about something that they don't support. It's pointless. It's also pointless to try and argue about how many instances of an argument being made there are in existence. If you did any amount of research, you would see it argued constantly. Heck, you even argued a form of it yourself in this very post I'm quoting.
  
  Why do you think that 25% of 16-19 year olds are unemployed?
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  psycheskinnerposted 11 years agoin reply to this
  Right now it has a lot to do with slow recovery from the recession, inability/unwillingness of labor to move geographically, and the predominance of precarious non-full time jobs for that demographic. One young person I know has a job in retail but she was given zero hours for two weeks due to it being a slow time. She would be financially better of on a benefit than in this theoretical full time job.
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  JaxsonRaineposted 11 years agoin reply to this
  Why is it never even close to the national average? It has never corrected. Geographically, it's the same. Higher than geographical average.
  
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  psycheskinnerposted 11 years agoin reply to this
  Um, the tendency for youth to be under-employed relative to adults is also a completely separate issue. It mainly has to do with older people being both more qualified, more experienced and generally more reliable. If you won't stay on one topic it is pretty much impossible to have a sensible discussion. I give up.
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  whoisitposted 11 years agoin reply to this
  LOL, that's probably a very good idea!
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  JaxsonRaineposted 11 years agoin reply to this
  So, you don't think it has anything to do with making it illegal to pay an inexperienced worker less than an experienced worker, if the experienced worker is making minimum wage?
  
  Did you know that it wasn't always this way? Before minimum wage, the unemployment rate for inexperienced workers was lower. I'm not off-topic, you just don't seem to be grasping what I'm saying.
  
  Sadly, you actually touched on the topic. Older people tend to be more experienced. Our law says that, if you are paying an experienced worker $7.25/hr, then it is illegal to pay an inexperienced worker less than that. In other words, at low-wages, it is illegal to pay based on skill and experience.
  
  Imagine this. You get your first job at McDonalds. They are paying you minimum wage at $7.25/hr. You work for 1 year, always on time, always showing up, and they give you a raise up to $9/hr. Then, minimum wage is raised to $9/hr. So, they hire a new guy at $9/hr. Now they are being forced to pay someone with no experience the same as someone with a year's experience. See how that screws things up?
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  Credence2posted 11 years agoin reply to this
  Right Jaxson, yeah, the minimum wage was $1.60 an hour when I was a teen, but again gasoline was only .38 a gallon. Listening to you, we all should revert back to an early 20th century model of economics? Do you really think that pre New Deal economic dogma from the right is the current solution, can you live on $1.60 an hour today?
  There is that invisible hand of the free market again, what about inflation, Jaxson, most certainly you have heard of it? So what was an adequate rate of compensation back in the day, is not today. You and your people advocate slave labor and slavery in a new and improved form, nothing less. Although McDonalds has been around since the fifties for some reason or another taking into account their increase in costs and rising prices, I can still well afford my Quarterpounder with cheese sandwich. We have had minimum wage laws since the thirties and I have yet to give any credibilty to the rights chicken little argument as the sky has yet to fall for almost 80 years.
  ,
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  whoisitposted 11 years agoin reply to this
  Good reason for someone to strive to be better than a minimum wage job.
  
  Or did you not think of that?
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  tammybarnetteposted 11 years agoin reply to this
  Starting at minimum, gaining skills, getting raises= incentive...Do you know what the General Store Managers at PALS make(Pals is a fast food chain here in TN) They make $250,000 a year! Not a bad incentive when you start out at the window delivering milkshakes and hamburgers
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  Credence2posted 11 years agoin reply to this
  Here is somethin for you to think about, without economic fairness which you obviously deplore, who is to say that even if you are better, it is going to reflect in increased wages?. You and the right are so naive as to believe that Thurston Howell and his crew are going to do you any favors, or acknowledge an ethical set of principle. Why should they, when taking advantage is so much more cost effective?
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  whoisitposted 11 years agoin reply to this
  LOLOLOLOLOLOL
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  Credence2posted 11 years agoin reply to this
  So now it is funny? How quickly the right winger runs out of ideas, perhaps that is why they cling to their guns so much?
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  whoisitposted 11 years agoin reply to this
  I just think your ideas are funny.
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  JaxsonRaineposted 11 years agoin reply to this
  You just don't get it. If you create a competitive environment, then employers who treat their employees poorly are going to have to pay more money for lower-quality workers. Employers who treat their employees well will be flooded with resumes.
  
  You can always create your own business as well, and treat employees fairly.
  
  The way you talk, it would be impossible for anyone to survive, let alone get ahead, in the USA. Strangely, people have been doing it for quite a while now.
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  tammybarnetteposted 11 years agoin reply to this
  Would that not provide incentive to treat your employees well...
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  JaxsonRaineposted 11 years agoin reply to this
  Yes, it would.
  
  Competition means that, the more competition for workers, the more wages will rise, and the better employers will treat their employees.
  
  The best way to fix any problems in a job market is to shift competition from jobs to workers. Do that by encouraging, heck, begging if necessary, corporations to keep/shift/start operations in the US.
  
  It's sad, we could just get rid of our corporate income tax, revamp some of our hurtful regulations, and see tremendous job growth.
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  tammybarnetteposted 11 years agoin reply to this
  Then would it make since, after taxes have now been raised, to provide the incentive for Tax breaks IF you build and hire and manufacture here? As far as regulations, we have to protect the earth, but I understand going to far would be just as wrong.
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  JaxsonRaineposted 11 years agoin reply to this
  Much better to just get rid of corporate taxes altogether...
  
  Some regulations are important, but not all regulations protect the earth. There are just downright stupid ones that make doing business much more difficult than it needs to be. Paperwork and red-tape that do nothing productive.
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  tammybarnetteposted 11 years agoin reply to this
  I understand that some regulations are just going to far and impeding progress...I also think we could find a middle ground on taxes, I say we need the revenue, your fear is it hurts businesses, then we meet in the middle...That is what Washington should be doing instead of digging in their heals and effectively doing nothing...
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  JaxsonRaineposted 11 years agoin reply to this
  Corporate taxes amount to $240 billion.
  Personal taxes amount to $1,300 billion.
  
  So, if we could increase the tax base for personal income taxes by 18%, then we would completely make up for corporate taxes if we got rid of them.
  
  Personal income taxes are from 143 million returns, but we have 20 million un/underemployed. That would be a 14% increase in returns if they were all working, not to mention the increased wages everyone would enjoy from having natural employment levels again.
  
  In reality, corporate taxes are paid by consumers anyway. The costs are just passed on. The only thing you do by taking the money out of the system early is make it more costly for a corporation to do business.
  
  Which is why we should get rid of ALL income and wealth taxes, and move to a sales tax only system. We could match our revenue(exceed it actually), while becoming extremely attractive to corporations.
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  tammybarnetteposted 11 years agoin reply to this
  My point with corporate taxes is that the corps get the most of the infrastructure and should provide the most help in maintaining the infrastructure...Individuals already cover 80% I believe, of all taxes....I have to wonder how that could work, sliding scale wise....would poor people no longer be able to afford clothes or food with all taxes riding on items?
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  JaxsonRaineposted 11 years agoin reply to this
  Individuals pay 100%. Corporations don't really pay taxes. Their costs, including taxes, are priced into their goods and services... all taxes are paid by consumers.
  
  You HAVE to understand that to understand why corporate income taxes are a stupid idea.
  
  For a sales tax approach, my favorite option is to send people a prebate check for cost of living. It would be equivalent to the exemptions and deductions we already give people, but the prebate check would come every month, instead of at the end of the tax season.
  
  It's all upside, no downside.
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  tammybarnetteposted 11 years agoin reply to this
  I do understand that businesses pass on all their costs as cost of doing business, so yes I see what you mean that individuals are actually paying those costs as well
  
  So this prebate check...So, say a woman who is single and claiming her children working a low wage job was originally going to get $2000 on her income taxes, so we break this down monthly which is a bit less than $200 a month prebate...Is this what you mean?
  
  How much would items have to go up? I mean I already pay both income and sales taxes. I agree this is an interesting and creative scenario.
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  JaxsonRaineposted 11 years agoin reply to this
  I'm not sure on the exact figure, I think it would be around a 15% sales tax, but I'm really not sure.
  
  Say the sales tax federally was 10%(easy to calculate with). Then you say that nobody will pay any taxes on the first $2000/month of their spending. So then you would send everyone a $200 check every month. They would still pay sales tax, but the check would cover it for that month. Those aren't the real numbers, but it makes it easy to see how it would work.
  
  The cost of items, sales tax included, would probably go up around 15-20%.
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  tammybarnetteposted 11 years agoin reply to this
  Interesting concept...we should dig into that idea, have you read some research on it? If so would you share your resourses with me, I like the idea as a concept.
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  JaxsonRaineposted 11 years agoin reply to this
  My only research comes from looking at the IRS tax stats at a glance, and the Tax Foundation 250 page(which formats the IRS data to make it more readable).
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  tammybarnetteposted 11 years agoin reply to this
  Thanks Jax. I want to study up on that idea, we need some creative changes and I like this idea
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  tammybarnetteposted 11 years agoin reply to this
  Because they want to be!!!! You are not getting that Jax, kids have changed. They are living at home, sitting on their tales in front of faceboook, texting on their i-phones, driving their cars bought by mom and dad...I know because I just put 3 through HS who are now in College. Most of those same kids are still living at home and not working! Mine ALL work and ALL have since age 16 because it was required but us the parents!!!
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  JaxsonRaineposted 11 years agoin reply to this
  Tammy, only people who are actively looking for work are counted. If someone doesn't want a job and isn't applying, they aren't counted.
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  tammybarnetteposted 11 years agoin reply to this
  I know that is suppossed to be the case, we have talked about that before, but I also know a number of teen girls talking at my home in the back yard about how their parents believe they are looking for jobs but they just don't wanna work, it's too hard, school is too hard, but they take applications home to appease their parents and their parents believe those poor children just can't find work in this God forsaken economy even though the fast food signs say otherwise...
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  Kathryn L Hillposted 11 years agoin reply to this
  Kids today won't be caught dead working for fast food joints. It is beneath them! If you have given them plenty of money, they don't need it. They are not motivated to earn it! When they make just a little compared to what they have been given their whole lives... it just doesn't seem worth it!
  TIPS for Parents:
  Make sure you bring up your kids in a tiny house. Then when they get too big for this small house, they will look around for somewhere else to live!
  Don't waste your retirement on them... (and you are gonna need it.) They need to be motivated to earn their own money.
  Bottom Line: Stop spoiling them!
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  wildernessposted 11 years agoin reply to this
  +1
  
  Although, to be fair, it is increasingly difficult for teens to work at all. They can't handle hot kitchen appliances, they can't handle alcohol, they can't work more than a very few hours school days and kids under 16 almost can't work at all.
  
  It's not like it was when I was young and working, unfortunately. A 4-6 hour day for 2-3 weekdays and 10 hour days on the weekend operating heavy equipment or machinery was the norm, but absolutely impossible now.
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  tammybarnetteposted 11 years agoin reply to this
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psycheskinnerposted 11 years ago
I just read the entire other thread and PP never says increased minimum wage will not cause elimination of some jobs. So... I think you are making a straw man argument. (That is, reframing the opposition as more stupid than it actually is to artificially elevate your own position)
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  JaxsonRaineposted 11 years agoin reply to this
  You might have read it, but you didn't comprehend it. Here is one example.
  http://hubpages.com/forum/topic/109487? … ost2329971
  
  PP used this:http://raisetheminimumwage.org/pages/research/
  
  for all her arguments. What's the first point made on that page?
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psycheskinnerposted 11 years ago
I only read the thread and did not see it there. It would help if you opened the thread with a link to what you are rebutting rather than leaving people to search for it.

I think minimum wage increases can cause job losses in the short term. Most of the studies on that page refer to the longer term. And I agree that in the longer term these losses tend to correct due to economic growth and increased consumption activity.

So in a sense, I agree with both of you. Short and long term effects need to be separated.
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  JaxsonRaineposted 11 years agoin reply to this
  Lol. I'm not arguing with a single person. I'm arguing against a concept. No link is needed. If you agree with the sentiment, then I'm arguing with you. If you don't, I'm not. Why make such a fuss?
  
  If it corrects over the long-term, why are young, unskilled people suffering the highest unemployment rates?
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  psycheskinnerposted 11 years agoin reply to this
  I am a systematic thinker. Before addressing your counterargument I need to substantiate and properly what you are arguing against.
  
  And I have no idea why you are bringing the chronic unemployment rate into a discussion about how employment rates respond to *changes* in the minimum wage. It's a completely separate issue.
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  JaxsonRaineposted 11 years agoin reply to this
  You're not asking what I'm arguing against. You're asking who I'm arguing against. What I'm arguing against was very clearly posted in the first post.
  
  I'm bringing in the difference in the unemployment rate between experienced and inexperienced workers, because it shows some of the effects of having a minimum wage. It makes it harder for inexperienced people to find work, which is why the unemployment rate for those workers is over 10% higher than the average.
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PrettyPantherposted 11 years ago
Another over-simplified scenario offered up by Jaxson. This one has to be one of your most far-fetched, ever.

Do you have any factual response to the numerous and varied studies that show raising the minimum wage does not cause job loss?
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  JaxsonRaineposted 11 years agoin reply to this
  Yeah, the nearly 20% increase in unemployment for inexperienced workers since minimum wage was instated has absolutely nothing to do with minimum wage.
  
  You'll find studies from groups on both sides, what makes one side more correct than the other? Just go look at the unemployment rates. Why are inexperienced workers unemployed at such high rates compared to everyone else?
  
  Here's a thought experiment. Raise the minimum wage to $200/hr. How many Burger King jobs do you think there would be then?
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healthyfitnessposted 11 years ago
China would have to match the cost of living to the 10/hr minimum wage or it would be redundant
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  Wayne Brownposted 11 years agoin reply to this
  Ultimately it all comes down to the productivity margin in any business. Why would one elect to make a product that costs ten dollars and sell it for ten dollars with the outcome being only that it supplied 20 people with a job? Where is the future in that? When a product is sold in the marketplace, there is no guarantee that a profitable price can be achieved..it is a risk and a gamble....an educated one, hopefully. While the government is more than willing to mandate the low end value of labor, there is no government mandate for a guaranteed price in the market place for anyone. So if wages increase by 20% across the board, the money for those wages has to come from somewhere...normally the bottomline. That increase in costs may be enough to turn the bottomline red, shutdown the business, and cost everyone their job, or it may require that the size of the workforce be reduced so that the business can survive and still provide fewer jobs. In the end X number of people end up off the payroll and potentially on unemployment and possibly welfare assistance...so much for improving their lot. The environment can only adjust so much to compensate for those who are not willing to better themselves through some level of self-improvement which adds to their productivity margin...otherwise they are deadweight in the formula. ~WB
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  Kathryn L Hillposted 11 years agoin reply to this
  In 1974, when I first started working as a lifeguard, I worked for $3.70 an hour. At that young age I was happy to make anything in order to get experience, in order to learn the ropes; in order to make any money at all. Now, lifeguards start at almost ten dollars an hour. Is there a problem with increasing the minimum wage? It seems like it is all relative. Look at it this way: If we keep the minimum wage low, across the board, prices will stay low. And that is vital right now when EVERYONE is raising their prices. (I can't even shop anymore... prices are so ridiculous!)
  Q. What w o u l d happen if minimum wage went to $45.00 an hour?????
  
  YIKES is all I can say!!!!!
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JaxsonRaineposted 11 years ago
It's funny, I was happy to work all day Saturday for $20. The person I worked for was happy to have me too. It's weird that, we both were happy!

But, government loves to control things.
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