$ 7.25 does seem a tad low

[GRG55]

Re: $ 7.25 does seem a tad low

I was not talking about history. I was talking about the here and now. And, I did say it is good for the rest of the world. I guess I should have said, coming from the American perspective. - I do have my location up in my profile. Your tone is unappreciated.


NAFTA, WTO... have they been good for America?
Have they been good for China? India? Asian countries that have kept their home markets and industries protected?

Perhaps you mean the idea of "Free trade"? I do not think we have that. I think we have governments in cahoots with the very wealthy strip mining the world under the banner of "free trade".

Ross Perot pointed out the giant sucking sound of jobs leaving our shores... what was that 25 years ago?

But, yes, trade is good. It just has not been that good for U.S. citizens. It has definitely been good for China, India, Japan, Germany, Korea, Taiwan, and even Canada/Australia. And, for Overall Wealth. But, it has not been good for the U.S., and for better or worse, that is where I live.

Let's do a theoretical thought exercise. Let us suppose the USA had completely closed its economy from the rest of the world in 1980. No trade of any kind. Totally self sufficient. No imports of any kind. No exports of any kind.

Do you think the standard of living across the USA would be greater, lesser or exactly the same today?

[aaron]

Re: $ 7.25 does seem a tad low

That is a very theoretical question. How about a real one? If we maintained trade barriers equal to Japan's and Germany's since 1980, how would things be now? Might we have an industrial base still? Might there be jobs for high school graduates? Might we still make computers and non-military things? Might we still take pride in "Buying American"?

There is a concept thrown around called "Fair Trade". Is it fair for an American company to compete with a company that may pay tiny wages, provide unsafe work conditions, use child labor, etc? Could an import duty have corrected some of that, yet still allowed 3rd world countries to grow? I do not know.

Anyway, let's just say you are right and America is a terrific place compared to 30 years ago. I was too little then to know if it is true or not. And, I did read in my Econ 101 text book that trade is great.

Should we increase the minimum wage? Most of those low paying jobs are in the domestic services industry. Increasing them will certainly increase prices to get stuff done. It might provide illegal immigrants with more jobs. It may cause workers in goods producing sectors to demand higher wages. That might encourage further off-shoring. It is difficult to say. Did unemployment increase a lot after the last two minimum wage hikes?

[GRG55]

Re: $ 7.25 does seem a tad low

That is a very theoretical question. How about a real one? If we maintained trade barriers equal to Japan's and Germany's since 1980, how would things be now?

Isn't this a variation of the same question I asked?

Might we have an industrial base still? Might there be jobs for high school graduates? Might we still make computers and non-military things? Might we still take pride in "Buying American"?

...

Do you seriously think that your fellow Americans started purchasing so many Toyotas and BMWs because of Japanese or German trade barriers? Your government has bailed out Chrysler twice since 1980. Was that really because of Japanese or German trade barriers?

[aaron]

Re: $ 7.25 does seem a tad low

eekend Edition February 15-17, 2013




Management and Labor are Advisories, Deal With It

Obama’s $9 Per Hour Minimum Wage

by DAVID MACARAY
Legendary comedian Mort Sahl (who’s still alive and kicking, by the way) used to tell this joke during the Nixon administration. If a man were drowning 15-feet from shore, President Nixon would throw him a 10-foot rope. Then Henry Kissinger would go on television and declare that “the President had met him more than halfway.”


In his State of the Union speech (February 12), President Obama announced with great fanfare that he wanted to raise the federal minimum wage, in stages, from its present $7.25 per hour to $9.00 per hour by 2015.


There are at least three ways to interpret this announcement: (1) The U.S. Chamber of Commerce way (i.e., as ruinous to our national economy), (2) the Jay Carney (Obama’s press secretary), and Cody Keenan (Obama’s speech writer) way (i.e., as political dynamite), and (3) the minimum-wage worker’s way (i.e., as a step in the right direction).
Consider the numbers. If you’re a full-time worker—40 hours a week, 52 weeks a year, with no days off—$9.00/hour computes to $18,720 per year, before any withholding is taken out. Yes, $18,720 is way better than the $15,080 you make at the present minimum of $7.25. But let’s be honest….you’re still very poor. No one is saying the minimum wage should propel folks into the middle-class, because, clearly, that wasn’t its intention. So Obama’s proposed bump is significant. But even at $9 per hour, you’re still poor. You’re just less poor.


As for exposing the bogus interpretation provided by the Chamber of Commerce, the National Association of Manufacturers, and various Republican fat cats, all we need do is cite actual figures from the U.S. Department of Commerce. Even with near-record unemployment, the DOC reported in November of 2010 that U.S. companies just had their best quarter ever.


Repeat: THEIR BEST QUARTER EVER! Businesses recorded profits at an annual rate of $1.66 trillion in the third quarter of 2010, which is the highest rate (in non-inflation-adjusted figures) since the government began keeping records more than 60 years ago.


The take-away from this astonishing statistic is obvious. All that talk about the recession having crippled the American business community was either an extravagant hoax or a wild exaggeration. In either case, it resulted in us witnessing the middle and lower-income class being victimized. The middle-class dwindled, the number of poor sky-rocketed, and the number of wealthy rose significantly.


Clearly, there is money to be made by working people. The hard part is finding a way to get employers to part with it. An increase in the minimum wage is one method of doing it, but because it requires government sponsorship, it’s an undependable and inadequate method. A far better way is for the workers to hire an agent to negotiate better wages, benefits and working conditions. Hire an agent whose sole job is to represent working people. In other words, a labor union.


Of all the lies told to the American worker (and there have been some whoppers), the biggest one of all is that labor and management do not have to be adversaries—that an adversarial relationship is, in fact, counterproductive. Management constantly tells workers that “they (labor and management) both want the same thing.” That is an outright lie. Those Dept. of Commerce figures prove it.


Workers want a larger slice of the pie, and management wants to prevent them from getting it. Owners want to pay their workers as little as possible. That’s the nature of business, and that’s the unvarnished crux of the relationship. Only when we admit that the management-labor dynamic is fundamentally adversarial in nature, will we begin to make progress. Save those cornball, touchy-feely slogans for Madison Avenue.

http://www.huffingtonpost.com/david-...b_2688305.html
This in an interesting point of view.

[EJ]

It is a tad low. $0.50 to be precise.

Can someone here explain how the level of a minimum wage is established? (In other words, what is the "right" level?)

EJ's reply moved to here.

[GRG55]

Re: $ 7.25 does seem a tad low

Well, the way I look at it, America for decades had a minimum wage that was about equal to Canada. Then there was the 10 years from 97 to 07 where minimum wage never went up. Now Canada has a minimum $9.75 minimum wage.

...

Labour laws in Canada are the jurisdiction of the individual Provinces and Northern Territories, not the Federal Government. Alberta is the only Province with a $9.75 minimum wage. ALL the other 11 jurisdictions in Canada are higher, with most of them between $10.00 and $11.00.

[c1ue]

Re: $ 7.25 does seem a tad low

As someone who operated an in home senior care company - the minimum wage is a big deal. In San Francisco, it was $9.50

Having this as a base wage for a service which is entirely labor based did not directly cost any job losses, however, it did make the price of the service I offered significantly higher.

The thing is, $9.50 an hour is less than $20K a year.

That really isn't very much money - especially since the providers generally need to either commute a long distance (which costs money) or live in SF (which costs even more money).

My view is - anything that anyone pays minimum wage labor for - there simply isn't any alternative. Even if robots could do the job, ultimately the capital and maintenance costs are far higher - especially since employers now have no obligation to provide health care or retirement coverage.

[don]

Re: $ 7.25 does seem a tad low

[BadJuju]

Re: $ 7.25 does seem a tad low

I don't know how people can argue against a minimum wage. No minimum wage could work in a perfect world, but in a country where businesses already hold all the cards, how do you reckon it would turn out? Everyone would have a job. And another. And another. And another on top of that because they are now making 50 cents an hour.

[ocelotl]

Re: $ 7.25 does seem a tad low

Are you sure of this?

I'm saying since mexican minimum wage is US$5.10 per day.

Well, the way I look at it, America for decades had a minimum wage that was about equal to Canada. Then there was the 10 years from 97 to 07 where minimum wage never went up. Now Canada has a minimum $9.75 minimum wage.

You can't do NAFTA and not try to make things match.

Mexico's up to $5.10.

If we're not going to raise it, I can see the US having the same minimum wage as Mexico in 5 years. Only Mexico will have universal healthcare by then. So it will still be cheaper for employers who don't have to pay health insurance to hire Mexicans that make more than Americans.

But if we're hell bent on driving down wages of the middle and working class to third world levels in this country, then we'll get there.

And it will sure as hell solve the immigration problem when you get a higher minimum wage and healthcare by going south from Arizona.

The powers that be want a banana republic. They'll probably get it.

[lektrode]

Re: $ 7.25 does seem a tad low

http://www.huffingtonpost.com/david-...b_2688305.html

Workers want a larger slice of the pie, and management wants to prevent them from getting it. Owners want to pay their workers as little as possible. That’s the nature of business, and that’s the unvarnished crux of the relationship. Only when we admit that the management-labor dynamic is fundamentally adversarial in nature, will we begin to make progress. Save those cornball, touchy-feely slogans for Madison Avenue.

management's job is, by definition - to get the worker to do as much as possible, for as little as possible = why they play all these BS head games with 'employee (sucker) of the month' and give ya little strokes like 'you are such a great team player' (read: give yer all, so the manager gets the credit and you get an extra dime/hour) - and - if ya do A REAL GOOD JOB (of sucking up to the boss) we'll give you a 'promotion' (which usually means you lose yer hourly status (and overtime) and then get to work twice as hard, for an extra 10% more than the rest of the slugs on the line, to be a 'supervisor' or 'team leader' (lead sucker/ass kisser)

retail is famous for this tactic...

This in an interesting point of view

yes it is - its also precisely why i decided back in the mid80's that the only way to ever make more than just enough to survive, is to work for oneself (and spend less than ya make - for slow months as, by definition, the only diff tween the self employed and the UN-employed??? is a bank/savings account....)

[GRG55]

Re: $ 7.25 does seem a tad low

I don't know how people can argue against a minimum wage. No minimum wage could work in a perfect world, but in a country where businesses already hold all the cards, how do you reckon it would turn out? Everyone would have a job. And another. And another. And another on top of that because they are now making 50 cents an hour.

Are you sure that is what would happen? If that is the way things really work, and "businesses already hold all the cards", then right now today "everyone" should be earning no more than the minimum wage, because no employer actually needs to pay more than that.

So why is it that the overwhelming majority of people that "sell their time" in the economy (and that's almost all of us) get paid more than the minimum wage?

[lektrode]

Re: $ 7.25 does seem a tad low

....So why is it that the overwhelming majority of people that "sell their time" in the economy (and that's almost all of us) get paid more than the minimum wage?

because of the 'law of 90/10' ?

(90% of anything is usually accomplished by the 10% who excel at it - or use their positions of influence to game the political system)

[GRG55]

Re: $ 7.25 does seem a tad low

because of the 'law of 90/10' ?

(90% of anything is usually accomplished by the 10% who excel at it - or use their positions of influence to game the political system)

But in this case it would seem more like 10/90 does it not? "90%" of us get paid more than the minimum wage...not just the 10% that are in positions of influence. If businesses (employers) have so much power, why is it that the vast majority of the 90% of us that are not in a position of influence are being paid more than the minimum wage?

By asking my seemingly dumb questions I am trying to get iTulipers to think critically about the minimum wage.

Let's assume that a minimum wage is a good thing.

Now, how do we decide what is the correct level for that minimum wage? Is the inflation adjusted $7.75 that EJ charted in another post on this thread the "right number"? How about the $9.00 proposed by the President? If $9.00 is "better" than $7.25 (or $7.75), then why isn't $12 even better still? How about $18.00?

Let's take another approach. Most Federal Governments, including that of the USA, publish poverty guidelines. Let's suppose we use those statistics and make a law that the minimum wage in each jurisdiction ensures that the income of every family is above the poverty line. Isn't that what the minimum wage is trying to do? Would that eliminate poverty, or the need to measure it forever?

[lektrode]

Re: $ 7.25 does seem a tad low

But in this case it would seem more like 10/90 does it not? "90%" of us get paid more than the minimum wage...not just the 10% that are in positions of influence. If businesses (employers) have so much power, why is it that the 90% of us that are not in a position of influence are being paid more than the minimum wage?

By asking my seemingly dumb questions I am trying to get iTulipers to think critically about the minimum wage.

Let's assume that a minimum wage is a "good thing".

Now, how do we decide what is the correct level for that minimum wage? Is the inflation adjusted $7.75 that EJ charted in another post on this thread the "right number"? How about the $9.00 proposed by the President? If $9.00 is "better" than $7.25 (or $7.75), then why isn't $12 even better still? How about $18.00?

oh i get yer point grg - am in 100% agreement - same could be said about the bailout of the banksters, the auto/municipal unions and the rest of the 'stimulous' programs tho - couldnt it? - esp from krugmans POV - if gov spending was the answer to our problems - why not just print up a few more trillion and cut everybody a check for 100grand or so - that should make for INSTANT ACROSS THE BOARD PROSPERITY, right?

;)