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> Furthermore, the idea that people become richer because the number on the bottom of their check goes up, rather than the buying power of that number, is easil

> Furthermore, the idea that people become richer because the number on the bottom of their check goes up, rather than the buying power of that number, is easily debunked by looking at the entire history of inflation. I'm easily making more money, in nominal dollars, than an average CEO in 1919, but I'm not running wild in Saint-Tropez every summer either. This argument makes no sense. Raising the minimum wage doesn't affect everyone equally like inflation does. It affects only those with the lowest income, with maybe a trickle-up effect to those making somewhat more.

defertoreptar 8y ago
It affects everyone equally who would get minimum wage. If when Ford increased their minimum, every other company Ford competed for workers against also raised their minimum, then it wouldn't have the same retention effect.
- ashelmire 8y ago
  Disagree. The alternative is people leaving the company, industry, or workforce as laborers entirely. If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work and instead steal from and destroy businesses. And you can't look at economics in a vacuum; economics are intimately related to politics. An angry, poor population is a violent population, and fear of reprisal can only contain them for so long. Our minimum wage being so low puts great strain on our social services (and if they didn't exist, the situation would be even worse - it would just be a reversion to what we saw before and during the great depression). Noone should be fully employed and still require food stamps and public housing vouchers, but that's the reality of today.
  - defertoreptar 8y ago
    > If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work Yes, this seems obvious. > And you can't look at economics in a vacuum Agreed, as long as we acknowledge that we shouldn't use this truism as an excuse to sweep away every argument about economics. Overall, I don't see how you've contradicted my point, which was that when Ford increased bottom wages, it worked as long as other competitors for its labor market did not increase their bottom wage in kind. It seems like you're just making a case against low minimum wage in general.
    - lovich 8y ago
      You responded to his first point about people electing to not work at all if the wage is too low. That's the contradiction to your point. If everyone getting minimum wage had their wage increased it would decrease the number of people who left the workforce entirely. The same effect would happen in for a case if all his competitors increased their wage too
      - defertoreptar 8y ago
        > You responded to his first point about people electing to not work at all if the wage is too low. That's the contradiction to your point. It only works as a contradiction in this case if Ford employees quit and stopped working altogether. If they tended to seek employment elsewhere, which I believe to be the case, then that makes my point. Factory work was repetitive and monotonous. The Ford workers preferred to take work elsewhere, until Ford doubled wages. Had those other companies doubled wages as well, then why would they come back to Ford? > If everyone getting minimum wage had their wage increased it would decrease the number of people who left the workforce entirely. The same effect would happen in for a case if all his competitors increased their wage too This doesn't make sense to me. If employers didn't have enough staff, they would increase bottom wages in order to fill those positions rather than forgo potential profit and business health. If there is unemployment and bottom wages are low, then that says something about the labor market, not minimum wage. It means there is low demand for staff. Increasing minimum wage doesn't magically increase the number of open positions in the labor market.
        lovich 8y ago
        >If they tended to seek employment elsewhere, which I believe to be the case, then that makes my point. That is ignoring the point you actively quoted. Once wages decrease enough workers exit the workforce. There is no reason for them to continue working when the costs of living outstrip their wages. This is not even a hypothetical, you can look at modern families that decide to have a parent stay at home because daycare costs outstrip their salary to see this in effect today. You can imagine this happening of wages got so low that a person would be able to spend time growing their own food and getting more free time than if they worked and traded their paltry wages for food. Having all competitors increased wages would have pulled more workers into the workforce from the pool of people who had decided that they got better value out of doing their own thing rather than working for a company, so everyone would win. >This doesn't make sense to me. If employers didn't have enough staff, they would increase bottom wages in order to fill those positions rather than forgo potential profit and business health. If there is unemployment and bottom wages are low, then that says something about the labor market, not minimum wage You are mixing two concepts here. You see correct that if unemployment is high and bittom wages are low then the market is not valuing that labor. The government is mandating a minimum wage would still bring more workers out of the "not looking for work" section of society into the workforce by increasing the benefit of working for those workers. I feel as though you are suggesting that companies should only pay what workers are worth to them and the government should stay completely out of it. That is a logically consistent viewpoint if you are ok with people who don't currently have a valuable skill dieing in the streets from poverty. Our society,in most western European derived societies, has decided that this is not acceptable and has put in social safety nets to prevent this. When an employer pays too little to live and the government has to step in to provide enough extra for the employees, that means every taxpayer, including you and me, are now subsidising that employer. If the government wasn't there then the workforce for the employer would either leave them or die off and the employer would naturally be forced to increase wages or go out of business. As it stands I see three options for society, and only 2 ethical ones. Option 1, the government taxes everyone enough to provide ubi and employers no longer have any limitation on them concerning minimum wage or other compensation. If they want to offer 1 penny per century and someone agrees, that's fine. Option 2, minimum compensation is encoded into law and increased to the point where the government no longer has to provide any welfare Option 3, which I personally find immoral but would be logically consistent, is that we go completely laissez faire so employers can offer what they want, the government doesn't tke taxes to provide welfare, and of a citizen doesn't have a valuable skill they either learn a valuable skill or die from lack of medicine or food
- colanderman 8y ago
  No, but everyone at the bottom of the income ladder would indeed be relatively richer compared with those with higher incomes, in contradiction with the claim I quoted.
Alex63 8y ago
I think you are mistaken. Raising the minimum wage is exactly like inflation. Raising the minimum wage temporarily gives an advantage to those with the least power to set a price for their labor. This will increase demand for goods and services. In response to that increased demand, providers of goods and services will raise prices. Those with more bargaining power will set a higher price for their labor, and unskilled workers (i.e., those earning minimum wage) will find themselves back where they were.
- colanderman 8y ago
  Minimum wage is not the only variable which determines the value of money. You're forgetting the source of inflation itself: the federal reserve rate. Think: how could an increase in minimum wage cause inflation? For that to happen – for all goods and services across the board to increase in value – the amount of money in circulation would have to increase, or the economy would have to shrink. But increasing the minimum wage does not cause money to enter circulation! So if an increase in minimum wage were to cause inflation, it would only be because the economy is simultaneously shrinking. (Which could possibly be caused by too great an increase in minimum wage, but that's a separate discussion. Is this what you are arguing?)
  - Alex63 8y ago
    I'm not sure that I understand your point. I'm not arguing that increasing minimum wage is the only cause of inflation. I was saying that like inflation, increasing minimum wage affects everyone in the economy eventually. Don't you agree that if you arbitrarily increase wages for a significant segment of the population, that segment will now want more of the goods and services they could not previously afford? Increased demand will drive up prices for those goods and services unless supply increases at the same time. If prices do go up, those with more bargaining power will seek higher returns for their labor. The net effect will be that almost everyone will see their income rise to some extent, but the supply of goods and services they are chasing is going to remain essentially the same. So almost all of us will be paying more for the same stuff. The only way that won't happen is if supply could magically increase at no extra cost – but that can't happen because we've raised the wages of all the people that supply those goods and services.

defertoreptar 8y ago

It affects everyone equally who would get minimum wage. If when Ford increased their minimum, every other company Ford competed for workers against also raised their minimum, then it wouldn't have the same retention effect.

ashelmire 8y ago
Disagree. The alternative is people leaving the company, industry, or workforce as laborers entirely. If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work and instead steal from and destroy businesses. And you can't look at economics in a vacuum; economics are intimately related to politics. An angry, poor population is a violent population, and fear of reprisal can only contain them for so long. Our minimum wage being so low puts great strain on our social services (and if they didn't exist, the situation would be even worse - it would just be a reversion to what we saw before and during the great depression). Noone should be fully employed and still require food stamps and public housing vouchers, but that's the reality of today.
- defertoreptar 8y ago
  > If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work Yes, this seems obvious. > And you can't look at economics in a vacuum Agreed, as long as we acknowledge that we shouldn't use this truism as an excuse to sweep away every argument about economics. Overall, I don't see how you've contradicted my point, which was that when Ford increased bottom wages, it worked as long as other competitors for its labor market did not increase their bottom wage in kind. It seems like you're just making a case against low minimum wage in general.
  - lovich 8y ago
    You responded to his first point about people electing to not work at all if the wage is too low. That's the contradiction to your point. If everyone getting minimum wage had their wage increased it would decrease the number of people who left the workforce entirely. The same effect would happen in for a case if all his competitors increased their wage too
    - defertoreptar 8y ago
      > You responded to his first point about people electing to not work at all if the wage is too low. That's the contradiction to your point. It only works as a contradiction in this case if Ford employees quit and stopped working altogether. If they tended to seek employment elsewhere, which I believe to be the case, then that makes my point. Factory work was repetitive and monotonous. The Ford workers preferred to take work elsewhere, until Ford doubled wages. Had those other companies doubled wages as well, then why would they come back to Ford? > If everyone getting minimum wage had their wage increased it would decrease the number of people who left the workforce entirely. The same effect would happen in for a case if all his competitors increased their wage too This doesn't make sense to me. If employers didn't have enough staff, they would increase bottom wages in order to fill those positions rather than forgo potential profit and business health. If there is unemployment and bottom wages are low, then that says something about the labor market, not minimum wage. It means there is low demand for staff. Increasing minimum wage doesn't magically increase the number of open positions in the labor market.
      - lovich 8y ago
        >If they tended to seek employment elsewhere, which I believe to be the case, then that makes my point. That is ignoring the point you actively quoted. Once wages decrease enough workers exit the workforce. There is no reason for them to continue working when the costs of living outstrip their wages. This is not even a hypothetical, you can look at modern families that decide to have a parent stay at home because daycare costs outstrip their salary to see this in effect today. You can imagine this happening of wages got so low that a person would be able to spend time growing their own food and getting more free time than if they worked and traded their paltry wages for food. Having all competitors increased wages would have pulled more workers into the workforce from the pool of people who had decided that they got better value out of doing their own thing rather than working for a company, so everyone would win. >This doesn't make sense to me. If employers didn't have enough staff, they would increase bottom wages in order to fill those positions rather than forgo potential profit and business health. If there is unemployment and bottom wages are low, then that says something about the labor market, not minimum wage You are mixing two concepts here. You see correct that if unemployment is high and bittom wages are low then the market is not valuing that labor. The government is mandating a minimum wage would still bring more workers out of the "not looking for work" section of society into the workforce by increasing the benefit of working for those workers. I feel as though you are suggesting that companies should only pay what workers are worth to them and the government should stay completely out of it. That is a logically consistent viewpoint if you are ok with people who don't currently have a valuable skill dieing in the streets from poverty. Our society,in most western European derived societies, has decided that this is not acceptable and has put in social safety nets to prevent this. When an employer pays too little to live and the government has to step in to provide enough extra for the employees, that means every taxpayer, including you and me, are now subsidising that employer. If the government wasn't there then the workforce for the employer would either leave them or die off and the employer would naturally be forced to increase wages or go out of business. As it stands I see three options for society, and only 2 ethical ones. Option 1, the government taxes everyone enough to provide ubi and employers no longer have any limitation on them concerning minimum wage or other compensation. If they want to offer 1 penny per century and someone agrees, that's fine. Option 2, minimum compensation is encoded into law and increased to the point where the government no longer has to provide any welfare Option 3, which I personally find immoral but would be logically consistent, is that we go completely laissez faire so employers can offer what they want, the government doesn't tke taxes to provide welfare, and of a citizen doesn't have a valuable skill they either learn a valuable skill or die from lack of medicine or food
colanderman 8y ago
No, but everyone at the bottom of the income ladder would indeed be relatively richer compared with those with higher incomes, in contradiction with the claim I quoted.

Alex63 8y ago

I think you are mistaken. Raising the minimum wage is exactly like inflation. Raising the minimum wage temporarily gives an advantage to those with the least power to set a price for their labor. This will increase demand for goods and services. In response to that increased demand, providers of goods and services will raise prices. Those with more bargaining power will set a higher price for their labor, and unskilled workers (i.e., those earning minimum wage) will find themselves back where they were.

colanderman 8y ago
Minimum wage is not the only variable which determines the value of money. You're forgetting the source of inflation itself: the federal reserve rate. Think: how could an increase in minimum wage cause inflation? For that to happen – for all goods and services across the board to increase in value – the amount of money in circulation would have to increase, or the economy would have to shrink. But increasing the minimum wage does not cause money to enter circulation! So if an increase in minimum wage were to cause inflation, it would only be because the economy is simultaneously shrinking. (Which could possibly be caused by too great an increase in minimum wage, but that's a separate discussion. Is this what you are arguing?)
- Alex63 8y ago
  I'm not sure that I understand your point. I'm not arguing that increasing minimum wage is the only cause of inflation. I was saying that like inflation, increasing minimum wage affects everyone in the economy eventually. Don't you agree that if you arbitrarily increase wages for a significant segment of the population, that segment will now want more of the goods and services they could not previously afford? Increased demand will drive up prices for those goods and services unless supply increases at the same time. If prices do go up, those with more bargaining power will seek higher returns for their labor. The net effect will be that almost everyone will see their income rise to some extent, but the supply of goods and services they are chasing is going to remain essentially the same. So almost all of us will be paying more for the same stuff. The only way that won't happen is if supply could magically increase at no extra cost – but that can't happen because we've raised the wages of all the people that supply those goods and services.