Is minimum wage beneficial to the US economy?
With the continual outsourcing of jobs to other countries, the struggling national economy, and the unrealistic ability for everyone to earn a college degree, should minimum wage be eliminated?
Just something that I have been thinking about and I would love to get your opinions on.I have just written an article sharing my thoughts. If you need some help in developing your argument on the issue, it may help you get started:
http://roberterich.hubpages.com/hub/Doe … stroy-JobsMinimum wage is not the problem - there should be a maximum wage as well :-)
I think maybe just ship the minimum wage workers overseas, then the minimum wage may be eliminated.
Minimum wage, ultimately, does not provide a real long-term wage increase for workers. Good work.
The statists will now chime in and say that what we need to do is force businesses not to outsource, in which case, these businesses might decide that the job is not worth doing anymore.
"Aha, so we must force these businesses to hire!"
How about we go to the source of the problem and stop interfering in the voluntary interactions of citizens?There is no point trying to compete with other nations by being the cheapest and most willing to grind your populace into poverty. That is a game you lose even if you win. A person working full time must be able to live a decent life on what they earn. That is not negotiable.
What do you see as a "decent" life?
Homeowner vs renter?
young and no debt vs. older with debt responsibilities?
2 year old car vs 12 year old car?
steak vs. hamburger helper?
annual vacation vs no vacation?
home landline phone vs. iPhone 5-type smart phone?
expensive cable TV vs free broadcasting?
a basic - place to live, food to eat, and being able to pay your bills answer is too vague.
Although the above seems argumentative, your statement seems so "good" - who could argue with it without being a cold-hearted devil
but, what is a decent living to you?
typical family of 4
for example; minimum wage is well under $10/hr in most places, but use $10 for a number
that's $400 for a 40hr week
taxes around 23% (estimate of average) $92
take home $308
x 4.33 weeks = $1333 p/mth
rent/mortg ~ $850 - $1100 (not metropolitan rates)
net - $483 or $233
utilities ~ $200 p/mth
net ~ $283 - $33
see where this is going?
The numbers used are not real - just estimated representations - the point is almost any minimum wage under $18 - $20 p/hr will not be enough for a decent living
so do you propose raising it to those levels?
GAI think another question to ask is this: Is it ethical for us to look at minimum wage as a way to compete with other nations? In other words, if we keep minimum wage high, and simply expect to purchase things from other countries, that means that those in the other countries are receiving far less than minimum wage. Is it fair for me to think that Americans DESERVE a higher standard of living than people in other nations?
The question is do they deserve food, water and healthcare for 40 hours of honest labor a week--and is the minimum wage set to ensure they get it. I would answer yes to the first and no to the second. As witness the number of full time laborers in some states still getting government assistance. The minimum wage needs to go up a bit in some states.
We should not compete with nations that enslaves children in mines and sweatshops but trying to abuse our workers, but by making better products people will pay a premium for. Trying to make money by abusing people and giving them slave wages. *that* doesn't seem right to me.
And yes, I think US citizens should expect a better lifestyle than a peasant in a feudal tyranny. I have lived on the minimum wage, it is not luxurious. It is barely adequate (I did not have health insurance, but got lucky and never fell gravely ill).Yes, I certainly believe people need to be able to care for themselves. However, a question presents itself: do you avoid shopping at Wal-Mart and other stores that sell cheap products from other countries?
If you do, then you are helping people live on more than minimum wage. However, if you shop at Wal-Mart because you enjoy the cheap products, then you are doing three things: 1) supporting a business that pays Americans next to nothing, 2) causing the loss of American jobs because all of the products are made in China, and 3) supporting slave/child labor in China.
Although I do not think it is fair for anyone to live on low income, I do question, is it better for us to take care of ourselves and not have to survive by forcing others into slavery? It would mean that we have to live on less - and that's what Americans don't like.
No one can live on minimum wage. A decent middle income salary is at least $45,000.00 per annum. The average minimum wage is about $30,000.00 per annum and lower. People should be making a decent, livable wage and $30,000.00 and lower does not cut it at all. Things are quite expensive these days which include food, rent, and medical care. People are becoming increasingly impoverished because of the low wages paid on service jobs. This is quite shameful, there is a growing chasm between salaries and living standards. As a result of lower salaries, people are becoming increasingly disenfranchised.
Even though there are some people adventurous enough to be entrepeneurs and/or some have a marketable skill such as engineering, computers, math and/or technical knowledge, and computer expertise, there are many people who do not possess such skills and this includes those who major in the humanities and liberal arts. These people since they do not have an advanced level of scientific, mathematical, and computer/technical expertise, many have to take McJobs at minimum wages. These jobs pay on the average $30,000.00 and lower per annum. It is EXTREMELY difficult to live on such a salary in the 21st century. There is going to be a widening chasm between those with advanced math/technical/scientific/computer skills and knowledge who will be wealthy and those without or a rudimentary amount of such skills who will become the new poor.I agree with this completely! It is incredibly difficult to survive on minimum wage. We need to find ways to satisfy ourselves with less.
However, the reason math/science/etc jobs pay better is because people NEED the products that these people produce. If you stop buying computers and cellphones, none of these people will have jobs and the English and history people will have a shot at higher pay.
However, as long as you get on a computer, use the internet, and skype with your friends, you are agreeing that you think what they do is valuable.
We need to make sure we avoid this, however. If you and I are complaining that the computer, math, and science people are getting paid too much, who do we expect to change that? Sadly, I think we want the science, math, and computer people to change that.
See, if there is a problem you have two options, to resolve it yourself, or to expect someone else to solve it. I like to believe that America is a place where you can shape your own destiny. I feel that many people like to think of America as a place that shapes your destiny for you - which is unconstitutional.No matter how much you budget, you cannot live in the US or Canada if you earn $2 an hour.
In Oklahoma, if a business has less than 10 employees, the minimum wage is $2/hour.
Perhaps you can in Oklahoma...
Less wages is more profit for the individual owners, and less profit for the community where the wages are spent.
You need to check into the profit margin of most small businesses.
A decent life is food, shelter and medical care--and that is what the minimum wage and full time benefits make possible.
We could argue about it setting it somewhere else, but abolishing it means you think a full time worker deserves to freeze, starve or die of preventable disease. Or that you think the government should provide these things not the 40 hour a week employer.
Seriously, we already have full time workers on food stamps to keep from starving (thank you Disney). We don't need to sink any lower.I'm sorry psychskinner, living on minimum wage is impossible. You try to live on a little over $20k a year! I will be living in a tent in a campground starting next week as I can't make it. Yes, I'll be homeless in the winter in Nebraska and I'm 50 years old AND have a broken ankle.
I propose a challenge: Give up your job and live on minimum wage for one year and see where you are. You'll be living in a tent as well or on the street. You'd be crying and begging.
That's what pisses me off the most about people who don't know what reality is. You can't live on minimum wage and have a roof over your head. Most help with utilities state you ahve to be living 135% BELOW poverty level in order to get assistance. Uh, you'd be homeless right?
However, if you are an illegal alien you get all the perks the government has no questions asked AND you get a tax free check of $30,000 to start a business as long as you keep 5 employees (which is usually a family member) Illegals live up to 15 in a home times that by $30k. Gee ever notice illegals driving around in brand new cars?
Yes, I'm pissed. I am 50, white and single and have to sell all of my household goods and live in a tent. But you know what? I'll survive and you wouldn't. Reality is harsh and you wouldn't make it one night in a tent in the cold with Mt. Lions, Bobcats and coyotes peeing on your tent. Try eating squirrel for dinner - acltually they are quite tasty when you are hungary.
Try getting into a shelter on a cold winters night. Oh yeah, you are homeless and have no job thus no money so try going to Goodwill and purchasing a warm winter coat. Uh, you can't. So, without the help of generous good people handing out coats, blankets and sleeping bags you'd freeze to death. Try going to a soup kitchen for a warm meal and then be turned away at the door because they ran out of food.....what are you going to do?
Yup, I'm living in a tent in a year round campground, hauling my water with a broken ankle, eating squirrel for dinner and have my dogs to keep me warm. I dare you to try it for one night....you wouldn't last.I have lived for some time on a little under 20k. It was possible but extremely stressful. And that was when I was young, healthy and single--and also living in a rural area where many things are a lot cheaper. I don't think it was at all excessively luxurious. In fact I was constantly stressed out and I was completely unable to do things like save for retirement. If the car broke down (which I needed to get to the farm where I worked) I would donate blood to pay for the repairs. Sometimes I had no food for days.
Keeping people on that wage ultimately means getting the government to pay for things that their employer should cover. Like their ruined health from stress and poor standard of living, and their retirement. Either than or letting them suffer and not giving a damn -- and I hope the US doesn't want to be that kind of nation.
- Mtbailzposted 12 years ago
0It's interesting because I was thinkin about this somewhat recently. I was reading an article about MA and how they wanted to raise their minimum wage to $10 an hour. This would be far more than the federal minimum and a normal move for the highly democratic legislature. There were studies done to see what would happen to businesses and unemployment in the state and both were deemed to have a potentially positive reaction. Many businesses would actually see rises in sales because there is now more money to go around, and businesses would be hiring more people to handle the new demand. This was only a study but the real test would be to put it in place. Kind of curious to see if any state would do this and what difference it would make.
- HowIConqueredposted 12 years ago0
If everyone were paid a high level of money the economy we know good or bad would completely change and not for the better. Diversity in income ranges is a good thing. I don't see how you can get rid of minimum wage. Maybe I'm missing something here.
I agree that diversity in wages is necessary. I suppose my question is, does minimum wage actually help the US economy? More so than that, does minimum wage help the world as a whole?
I have a neighbor on welfare. He received $600 a month from the government. The thing is, he wants to work. He comes over to my house asking for work, he fills out applications, etc. But he has three problems: 1) little education, 2) no experience, 3) a poor command of the English language (but he is American). Therefore, there is no job that he can find because, essentially, the only job that he could really do is manual labor or factory work - the latter of which is all being outsourced.
So here is what I have discovered, this poor guy wants to work (remember, work is also about pride and purpose, not only a pay check), but he has no strengths to give him a step up against other applicants. No company is confident that he is worth minimum wage! (which is very sad).
So this is what I have realized: We have essentially determined the following equation about the cost of an American worker:
The cost of 1 American worker > 1 Asian worker, shipping across the Pacific, $600 unemployment to the American worker.
See how ridiculous that is? We have discovered that it is more financially lucrative to pay someone to do nothing than to higher them for under minimum wage. That does not seem right to me.
NO! Otherwise, there will be businesses employing people for $2 an hour or worse. Other countries have minimum salaries/wages. You raise your cost if your product or service has immense value to the consumer. You really think hiring people for $2 or less will give a dam about your service or product IF they are dissatisfied with the wages. Have you seen chicken manufacturer plants in China?
There are already businesses employing people for pennies an hour. It's just done in China instead of here.
Is it better to have a job for $2/hour or not have a job at all? Minimum wage simply sends jobs to other countries where people are forced to work for slave labor while we lose jobs here.
What if we started living on less and expecting less from others? It wouldn't be fun, but I think it might be better for American and the world as a whole.Is it better to be a slave who isn't beaten or a slave that is beaten?
It doesn't matter. This is a first world country and every full time worker should be able to eat decent food, sleep warm and go to the doctor. Thus, $2 an hour is not acceptable. We won't condone economic slavery and abuse because the lesser evil is still evil.While I admire your passion for justice, I question your knowledge of how minimum wage works and why it is as low as it is.
If you haven't already, when you have a minute, read this article that I have written about it:
Does Minimum Wage Law Hurt the US Economy and Destroy Jobs? http://roberterich.hubpages.com/hub/Doe … stroy-Jobs
I agree with you completely - no one should be forced into any kind of slave labor. I think the question to ask is, do you believe that it is something that you can change, or is it something you expect someone else to change for you?
Minimum wage makes entry level jobs go away. Most small businesses cannot afford to pay a 16 year old $10/ hour to sweep the floor. The owner or his wife does it himself.
The more mandates government puts on small businesses the less likely they are to grow, because they can't to afford to hire anybody. The unemployment rate in the US proves this. Minimum wage used to be low enough that good employers could give raises after the employee was trained, when they proved they were good workers, when they began to learn more about the business. Minimum wage is so high that small businesses can't pay it and so low people can't live on it. The point is nobody should aspire to earn only minimum wages. If you start at the bottom expect to gain knowledge and shoot for the top.- JaxsonRaineposted 12 years ago0
1 - Minimum wage laws increase unemployment. Most of this is unemployment for young people, 16-24. The unemployment rate for 18-19 year-olds is 23%.
2 - Increasing minimum wage causes inflation. It increases the cost of the goods, which is passed on to the consumer. Do you think you would be able to get a $1 burger at McDonalds if they were paying everyone in the kitchen $20/hr?
3 - Minimum wage had more usefulness in the past, when information and competition for workers was more localized. The best way to increase wages isn't to create wage floors, it is to reduce unemployment. At around 5% unemployment and lower, businesses have to start competing for workers, rather than workers competing for businesses. That drives up wages.JaxsonRaine - Your third point is brilliant! I have never thought of that before. With low unemployment employers actually have to compete for the talent (or workers in general). If we develop more jobs than people, we will all be fighting for the people by increasing our pay to employees.
Competition for the worker, especially the good worker, will always drive the level of wage in a system which has some freedome and flexibility. Certainly an employer who has no competition could resort to such methods if there was no competition for the worker in the market. Wages, matching withholding tax, and worker benefits all add up to something beyond the scope of just the considerations of minimum wage. The process is also circular in nature. It is no wonder that one cannot live on miminum wage in the USA or Canada when we look at what the labor force has demanded in those markets. As wages climb higher so goes the cost of goods and services, especially at the retail level. It is a circular relationship and we have pushed it about as far as it will go and still support some businesses. In many ways, it has reached its limit in the manufacturing sector. Consider GM....their payroll, benefits and the weight of their retirement and associated benefits come very close to exceeding the companies ability to pay as the baby-boomers retire. For years, that company has said "yes" without weighing the downstream consequences. Just like the federal government....they simply kicked the can down the road. As for your friend who needs work, someone has to either invest in him or he must find ways to invest in himself. Just finding a reasonable paying job is not going to work in the long run. He has to add to his skillset to get his head above water. Surely with all the government money that is thrown around in our countries there must be some form of assistance to help him get there. I have worked in the corporate world on both sides of the desk and I have run a small business. Companies like to see employees who are willing to invest in themselves and recognize that when they company sustains, everyone benefits even if it means just keeping your job for the time being. ~WB
Very well thought out comment and response Wayne. And you are absolutely right about my friend. He needs someone to invest in him (and some personal investment in himself) in order to succeed.
I was steadily employed living a nice middle class lifestyle until around 2004, I have been laid off, downsized, and whenever I can land a decent job, the job usually comes thru a temporary service meaning a couple of years of experiencing a nice job nice pay then its out the door. Truth be known JOBS are obsolete in this new economy. The average person now will have twenty different jobs by the time they are 40 now.After the great recession I ended up working parttime in a restaurant making 200 bucks a week at 25 hours a week. I have seen two guys with masters degrees working parttime in the restaurant I work and mostly everyone in the restaraunt is working two jobs, just to survive. The US economy is booming look at the stock market.Numbers don't lie. Minninum wage? I laugh at that. 401 k secure and dependable job? I laugh at that. The truth is this is a dog eat dog world now. As a result of this recession, which has made me stronger, I have started a junk and debris business which pulls in over 700 bucks a week. And that is parttime. As the weeks past my business gets stronger, I get stronger. The future of this economy is going back to FAMILY owned businesses. Where family and friends will have to unite and create opportunities for each other.
What YOU have stated is so succinctly true. The old job system is indeed becoming obsolete. There is going to many paradigms regarding jobs. There is going to be an elite class of technocrats who are math, engineering, science, and computer specialists. In additon to that, there are also going to be healthocrats which include medical and health specialists which include specialized doctors, general doctors, and nursing staff.
Businesscrats will be the middle, they will include accountants, statisticians, and general business specialists. Those who have humanities, liberal arts, and social science backgrounds had better have a comajor and/or workable computer and/or technical knowledge if they want a semblance of middle class life. Those liberal arts majors who have only an elementary knowledge of computers and other technologies are the ones who will fall through the cracks to become the new poor. If one has only a high school education, better go to a technical college for a workable and marketable skill. Those who have no skills of any kind will be resigned to permanent McJobs at a barely surviving minimal wage. The new work world is going to be test- those who pass will either have a thriving middle class life or if savvy enough, will be the elite. Those who fail will become the new poor and fall through the socioeconomic cracks. Sad to say!I agree with you for the most part except what you said about the liberal arts majors, while I agree your average liberal arts major is not into math and tech, but liberal arts majors a very creative,we tend to think outside the box.You see I might not be able to program a computer or build a rocket ship but I can create something out of nothing and I can hire smart people to do the things I cannot. This new economy is going to be built by the creative, the ones that know how to get started and follow thru and build companies from the ground up.Math and science is great the technical field and the medical field are great careers to have but everyone is not going to be able thrive in these fields that means people are going to have to get creative.Either way you look at it for me, I am 42 years old, the economy is dead. I do not have the patience or more importantly the TIME to sit back and wait on the powers that be to grow a heart and start hiring and offering good jobs like I grew up with.No. That time is over and even if it comes back I will be in my early to late fifties so I see small business as my only option. Right now in this country there is a revolution going on. This is a silent revolution it is not televised and no one is talking about it, Just as I have been forced to start a business to supplement the income I have lost, so have others. Many others, entreupreneurs all across this country young and old are going for the gusto because in all reality we have no choice. Incompotent leaders, fools on both sides playing games with MY economic future? No. I don't think so.
I agree completely Bill. A generation ago people depended on large corporations for employment and retirement. We cannot do that anymore. When communities start working together - accepting higher prices for items made by local people, helping each other out, and working together, our communities will be able to thrive in this new world. I appreciate your thoughts on the matter.
In North Dakota, fast food workers can make over 20 bucks an hour.
Where I'm at, good jobs go begging because applicants cannot pass a drug test. Maybe Lance Armstrong can give them some pointers!
Federal Minimum wage, adjusted to inflation, has remained about the same (give or take a few cents) since 1980. I don't know about the American economy as a whole, but here is what I have noticed here in Washington state.
-We have the highest minimum wage in the country at $9.19/hour beginning January 2013
-Before the recession, in 2006, it was $7.63/hour
-The economical 'dollar value' has barely gone up in that time span, at about 3%.
-Unemployment has gone up.
So what does this say? Companies are spending more on workers, who they can afford less of in total because of the recession.
This does not cause pay cuts to CEOs or other levels of management. They cannot cut a skilled (highly desired, high-in-demand, and rare) person's pay and expect them to stay. You cannot hire someone on for the same position and pay them less than the guy before them.
This causes pay cuts to entry level positions. These workers are low-demand, replaceable and plentiful. Firms in Washington State are hiring for positions that require college degrees at $10-$13/hour (my personal experience looking for a job this past Spring) and entry-level positions have all gone down in average pay. There is always a desperate unemployed college grad looking for work, even if it's just $1/hour more than minimum wage.
Increasing minimum wage has not helped WA. From my observations, it has fueled unemployment, and driven wages down in entry level positions. Back in '06, a college grad could expect to start out making 30-35k/year in WA with a 4-year degree. They can now expect 25-30k, and even less with programs like Americorps and Teach for America stipening pay at 13k/year (poverty level) for jobs that require college degrees.
Anyway, that's just my $0.02...er, $9.19.National minimum wages are because the checks and balances in regard to labour have been destroyed by corrupt unions and draconian labour laws. Corporate employers have no regard for workers and wages - either in their own country or for their suppliers, any concern is only in response to customer 'feelings' driven by news stories (usually generated by their competition)
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