Petition to increase minimum wage to 1945 levels


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petition to bring the minimum wage up to nineteen fourty five resource buying levels


Fight for $45/hr and a union!

Vive le Dingo!

The Exchange

All votes needed.


I'm not sure where you get that level of inflation. Every source I've see shows the minimum wage peaked in 1968 at $1.60, which would be ~$10.77 in today's dollars.
1945's was $0.40, which is well below today's in real dollars.

I could easily be persuaded that the standard measures of inflation understate it, but by almost 10 times?


While I don't know if it's actually feasible fiscally, $10.75 doesn't seem too unreasonable a minimum wage.


Id be cool with ten bucks an hour.

Liberty's Edge

thejeff wrote:

I'm not sure where you get that level of inflation. Every source I've see shows the minimum wage peaked in 1968 at $1.60, which would be ~$10.77 in today's dollars.

1945's was $0.40, which is well below today's in real dollars.

I could easily be persuaded that the standard measures of inflation understate it, but by almost 10 times?

String theory and mangos. Or something.


Krensky wrote:
thejeff wrote:

I'm not sure where you get that level of inflation. Every source I've see shows the minimum wage peaked in 1968 at $1.60, which would be ~$10.77 in today's dollars.

1945's was $0.40, which is well below today's in real dollars.

I could easily be persuaded that the standard measures of inflation understate it, but by almost 10 times?

String theory and mangos. Or something.

No, no, remember the source:

String theory and trillions of mangos.


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Freehold DM wrote:
Id be cool with ten bucks an hour.

Push for $15, take $11 and index it to inflation so we don't have to have this fight every decade. Not to mention the decade of workers getting poorer and poorer until it gets reset.


thejeff wrote:
Krensky wrote:
thejeff wrote:

I'm not sure where you get that level of inflation. Every source I've see shows the minimum wage peaked in 1968 at $1.60, which would be ~$10.77 in today's dollars.

1945's was $0.40, which is well below today's in real dollars.

I could easily be persuaded that the standard measures of inflation understate it, but by almost 10 times?

String theory and mangos. Or something.

No, no, remember the source:

String theory and trillions of mangos.

More like brazilians of mangos. How many zeroes are in a brazilian, anyway?

Liberty's Edge

A Sagan.

Or green.

One of the two.


A baby mango ate my dingo! Why was I studying String Theory instead of watching my poor dingo!?!


1 person marked this as a favorite.

[Sings]

Yellowdingo is the bestest!
He's better than all the restest!

[Counts the people in this thread who are less awesome than Yellowdingo]

One, two, three, four, five, six, ha ha ha, six losers who aren't as cool as Yellowdingo!

[Cues thunder and lightning]


Orfamay Quest wrote:
thejeff wrote:
Krensky wrote:
thejeff wrote:

I'm not sure where you get that level of inflation. Every source I've see shows the minimum wage peaked in 1968 at $1.60, which would be ~$10.77 in today's dollars.

1945's was $0.40, which is well below today's in real dollars.

I could easily be persuaded that the standard measures of inflation understate it, but by almost 10 times?

String theory and mangos. Or something.

No, no, remember the source:

String theory and trillions of mangos.
More like brazilians of mangos. How many zeroes are in a brazilian, anyway?

That depends upon the cup size.

RPG Superstar 2015 Top 8

1 person marked this as a favorite.

Mango mango mango mango mango mango.

There, I'm glad I could contribute something of substance.

The Exchange

Facepalm...


thejeff wrote:
index it [minimum wage] to inflation

Is there anyone who knows of a reasonable explanation as to why this wasn't done years ago?

Of course, this sounds so self-evident there's probably some book-length, econojargon answer...


Readerbreeder wrote:
thejeff wrote:
index it [minimum wage] to inflation

Is there anyone who knows of a reasonable explanation as to why this wasn't done years ago?

Of course, this sounds so self-evident there's probably some book-length, econojargon answer...

Politics.

In short, Republicans don't want it raised at all, some want it repealed.
Democrats get benefits from campaigning on raising it. Or are just too timid these days.:)


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The Minimum Wage constraint (i.e. a price floor) induces upward pressure on the Unemployment Rate. We need to get rid of Minimum Wage immediately.

.


Grand Magus wrote:

.

The Minimum Wage constraint (i.e. a price floor) induces upward pressure on the Unemployment Rate. We need to get rid of Minimum Wage immediately.

.

Because obviously we will be better off when people who can't survive on the current minimum wage are paid even less.

But actually, there's some evidence that that isn't true. Or at least isn't true for some values of the minimum wage. People are paid more, poor people have more money to spend, being poor they spend almost all of it, which recycles money through the economy improving it and thus generating jobs faster than the increased costs destroy them. That's the theory and at least some evidence from areas that have raised the minimum wage backs it up.
Even the Economist, hardly a socialist rag, has come around the idea that relatively low minimum wages do no harm and may be helpful.


.

HOW MINIMUM WAGE CAUSES UNEMPLOYMENT:

A minimum wage is considered a Price Floor. In other words, it is a
level below which the price of something is not allowed to fall.
(fyi and conversely, a Price Ceiling is a level above which the price of something is not
allowed to rise. Think of rent-control as a price ceiling.)

OK, HERE WE GO ... Take a look at >this< graph of a labor market. AND DON'T FREAK OUT!

First:
♦ The Price of Labor (shown on the y-axis, P) is of course, the wage rate.
♦ The Number of Jobs (shown on the x-axis, is called Q for quantity.)
♦ The point where the two black lines cross is called equilibrium. At this point,
the "quantity of labor supplied by individuals is equal to the quantity
of labor demanded by firms" -- that is, everybody is happy. For this example,
let's say it's 6 mil jobs at a rate of $15 per hour.

Second:
Think of the Supply Curve [the one going up from lower-left to upper-
right, labeled S] from your own personal perspective. It slopes upward
because at higher wage rates you'll choose to work more, right? The
Demand Curve [the one labeled D, going down] can be thought of from the
point of view of a firm. It slopes downward because the firm hires more
workers at lower wage rates and less at higher wages.

(All we've done so far is define what we are looking at. NEXT, we'll
use it.)

So it seems like a happy situation - no one is unemployed and the
company has enough workers to meet product demand. Again, the point
were the lines cross tells us at what Price level the labor force is
willing to wake up in the morning and goto work for the man.

Now let's assume that legislation (a minimum wage law) is passed
that requires firms to pay workers $20/hour. (remember the equilibrium
is $15) At this wage rate, the Demand Curve tells us the company (where
you work) only demands about 4 mil workers. However, the Supply curve
(You) shows that 8 mil people are interested in working (because they
will get $20/hour instead of $15/hour). There is a Gap!

So, we have demand for labor equal to 4 mil and supply of labor equal
to 8 mil. What do you think happens to the 4 mil extra people who can't
get jobs at the company? They are unemployed.

But if minimum wage causes unemployment then why do minimum wage laws
exist? The answer has to do with many things but politics probably
plays the biggest role. Politicians would never get elected if they
said, "Let's get rid of minimum wage!"

.


Grand Magus wrote:

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The Minimum Wage constraint (i.e. a price floor) induces upward pressure on the Unemployment Rate. We need to get rid of Minimum Wage immediately.

.

While interesting in theory, it also would dramatically increase the number of people on public assistance, which would require an increase in taxes.

If you could also force companies to reduce prices based on the lower wages...

The ACA is going to do the same thing, as companies begin to reduce hours employees get. Those people will make less money and go on public assistance.

The unFair Tax Plan does the same thing, except that it assumes that companies will reduce prices because they no longer are paying taxes.

I am still waiting for the "left" to propose pre-employment benefits. Effectively unemployment benefits before you get a job.


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Grand Magus wrote:

.

HOW MINIMUM WAGE CAUSES UNEMPLOYMENT:

A minimum wage is considered a Price Floor. In other words, it is a
level below which the price of something is not allowed to fall.

And that concisely summarizes the difference between theory and the real world.

In the real world, "raising the minimum wage [has] no discernable effect on unemployment." Not my phrasing, a professional economist's, supported by volumes ("hundreds of studies") of empirical studies.

So either the theory is oversimplified, or simply wrong. He suggests oversimplified:

Quote:


Economists have conducted hundreds of studies of the employment impact of the minimum wage.
Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research
conducted since the early 1990s concludes that the minimum wage has little or no discernible effect
on the employment prospects of low-wage workers.

The most likely reason for this outcome is that the cost shock of the minimum wage is small relative
to most firms' overall costs and only modest relative to the wages paid to low-wage workers. In the
traditional discussion of the minimum wage, economists have focused on how these costs affect
employment outcomes, but employers have many other channels of adjustment. Employers can
reduce hours, non-wage benefits, or training. Employers can also shift the composition toward
higher skilled workers, cut pay to more highly paid workers, take action to increase worker
productivity (from reorganizing production to increasing training), increase prices to consumers, or
simply accept a smaller profit margin. Workers may also respond to the higher wage by working
harder on the job. But, probably the most important channel of adjustment is through reductions in
labor turnover, which yield significant cost savings to employers.

Basically, the oversimplification is that there are other ways to cut costs than by simply reducing demand. It costs you more to replace a new worker than it does to pay the new worker enough money to keep them. Your simple supply/demand curves don't take into effect that kind of fixed costs.


Vod Canockers wrote:
Grand Magus wrote:

.

The Minimum Wage constraint (i.e. a price floor) induces upward pressure on the Unemployment Rate. We need to get rid of Minimum Wage immediately.

.

While interesting in theory, it also would dramatically increase the number of people on public assistance, which would require an increase in taxes.

If you could also force companies to reduce prices based on the lower wages...

The ACA is going to do the same thing, as companies begin to reduce hours employees get. Those people will make less money and go on public assistance.

The unFair Tax Plan does the same thing, except that it assumes that companies will reduce prices because they no longer are paying taxes.

I am still waiting for the "left" to propose pre-employment benefits. Effectively unemployment benefits before you get a job.

.

This would be a "Transistional Effect" starting when we turn the faucet off.
But, in the long-run after the change is absorbed, we will have less Unemployment.

.


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Grand Magus wrote:

This would be a "Transistional Effect" starting when we turn the faucet off.
But, in the long-run after the change is absorbed, we will have less Unemployment.

Or, possibly, not. Because the basic theory upon which you base this statement has been empirically discredited.


Orfamay Quest wrote:
Not my phrasing ...

.

Yep. You have no idea what you are talking about. I too can post
paper after paper with "empirical evidence" to support my point -- this is called politics.

You need to learn to think for yourself.

.


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Grand Magus wrote:


Yep. You have no idea what you are talking about. I too can post
paper after paper with "empirical evidence" to support my point -- this is called politics.

You need to learn to think for yourself.

Physician, heal thyself. I have a number of nobel laureates on my side, most notably Paul Krugman. You have a discredited economic theory and righteous indignation on yours.

Perhaps more important than that -- I understand and can articulate what's wrong with your argument. Basically, you're not considering the fact that labor, like any other commodity, has a certain degree of price elasticity, and because of the factors I cited above, it has a very low elasticity. (That's not so surprising -- lots of goods have low elasticisty. Some examples include salt, natural gas, and automobiles.)

What are the factors that cause low elasticity? One of the major factors is a lack of variable demand; another is a lack of cheap and available substitutes. Cars are inelastic because the average family isn't going to go out and buy another car just because they're cheap, and they're not going to sell their car just because they can get a good price for it; a one-car family basically needs one car and doesn't really want two. Salt is inelastic because nothing really substitutes for it, and natural gas is inelastic because it's cheaper just to pay for natural gas than it is to have my entire house renovated to use coal heat.

The (in)elasticity of the demand for labor is an empirical question, not a political one. We can run the numbers and determine what it is. Fortunately, we don't need to run those numbers ourselves, as they're widely available. And the answer is that it's a much lower degree of elasticity than you apparently realize.


Grand Magus wrote:
Vod Canockers wrote:

While interesting in theory, it also would dramatically increase the number of people on public assistance, which would require an increase in taxes.

If you could also force companies to reduce prices based on the lower wages...

The ACA is going to do the same thing, as companies begin to reduce hours employees get. Those people will make less money and go on public assistance.

The unFair Tax Plan does the same thing, except that it assumes that companies will reduce prices because they no longer are paying taxes.

I am still waiting for the "left" to propose pre-employment benefits. Effectively unemployment benefits before you get a job.

.

This would be a "Transistional Effect" starting when we turn the faucet off.
But, in the long-run after the change is absorbed, we will have less Unemployment.

.

Let's see. Lower wages => less income => less spending => more stock => lower production => layoffs => more unemployment.


Grand Magus wrote:

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The Minimum Wage constraint (i.e. a price floor) induces upward pressure on the Unemployment Rate. We need to get rid of Minimum Wage immediately.

.

I'm confused then...

Unemployment rate

Magically falling despite a minimum wage being in effect.


thejeff wrote:
Freehold DM wrote:
Id be cool with ten bucks an hour.
Push for $15, take $11 and index it to inflation so we don't have to have this fight every decade. Not to mention the decade of workers getting poorer and poorer until it gets reset.

Don't index it to inflation, inflation doesn't account for important costs of goods and services like gasoline or groceries. It should be indexed to the average cost of living within a 5 mile radius of the place of business.

It should be set variably as well. $8.00/hr in the backwoods of Mississippi and adjusted up for everywhere else.

Liberty's Edge

BigDTBone wrote:
thejeff wrote:
Freehold DM wrote:
Id be cool with ten bucks an hour.
Push for $15, take $11 and index it to inflation so we don't have to have this fight every decade. Not to mention the decade of workers getting poorer and poorer until it gets reset.

Don't index it to inflation, inflation doesn't account for important costs of goods and services like gasoline or groceries. It should be indexed to the average cost of living within a 5 mile radius of the place of business.

It should be set variably as well. $8.00/hr in the backwoods of Mississippi and adjusted up for everywhere else.

When people say "index it to inflation" they almost always mean (although they don't realize it) to index it to the CPI W or U which both include energy and food. The Core CPI which excluded energy and for was only ever used by the Fed for interest rates, not for figuring cost of living adjustments.


Can't help myself, just have to throw in some numbers from across the pond, that is: Norway.

Effective minimum wage(*) depends on work category, but the lowest I can find (fruit pickers) for adults is around 17 USD(**) (construction workers, cleaners etc are around 25 USD). Unemployment(***) is at 3.3%

(*) No minimum wage per law, but negotiated by the main unions. Source for numbers here. Similar systems in all of Scandinavia and Germany.
Since most workers are union members, union conditions become 'default' for everyone and anyone offered less will simply join an union. There are occasional scandals with employers that employ only (non-union) foreigners that don't understand the system in order to pay them less. Employers trying to fire people for joining unions end up with their pant sued off.

(**) The buying power of that in Norway is much less than in US though. Ca 30% income tax even at minimum wage, 25% sales tax and most goods costing more

(***) Only registered job seekers (receiving unemployment benefits) are counted. Number of people not working is significantly higher.


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Fight for $45/hour and a union!

Vive le Galt!

Some fun stats:

Half of all jobs created since 2010 have been low-wage-paying say the commies at the Royal Bank of Scotland

Number of high school students working in low wage jobs hits all time low as low-wage jobs are filled with unemployed college graduates and or older workers says the crazy liberals at the Washington Times

These may be crazy liberals, I wouldn't know

Meanwhile, Corporate Profits Are At An All-Time Record Peak And Expected To Grow in 2014 say the radical Keynesians at Forbes.

But, no it can't be any of that. It must be because Americans are entitled and wimpy.


randomwalker wrote:

Can't help myself, just have to throw in some numbers from across the pond, that is: Norway.

Effective minimum wage(*) depends on work category, but the lowest I can find (fruit pickers) for adults is around 17 USD(**) (construction workers, cleaners etc are around 25 USD). Unemployment(***) is at 3.3%

(*) No minimum wage per law, but negotiated by the main unions. Source for numbers here. Similar systems in all of Scandinavia and Germany.
Since most workers are union members, union conditions become 'default' for everyone and anyone offered less will simply join an union. There are occasional scandals with employers that employ only (non-union) foreigners that don't understand the system in order to pay them less. Employers trying to fire people for joining unions end up with their pant sued off.

Obviously the picture is pretty much the same here in Denmark.

But I'll just throw in the minimum wage* of the much maligned burger flipper (which, admittedly, is at the very bottom of the wage range).
MacDonald's wage (age 18+): $21/hour (that's without evening/night/weekend bonus, extra shift bonus etc.)

*again, no politically set minimum wage exists here, it's all negotiated between the unions and the employers (or the employers union).


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Grand Magus wrote:

HOW MINIMUM WAGE CAUSES UNEMPLOYMENT:

A minimum wage is considered a Price Floor.

You err in assuming most people on these boards don't understand what a price floor is, and that we'd find you recapping day one of macroeconomics a revelation.

You also err in assuming that full employment is desirable if the equilibrium price of unskilled labor is $2.00/hr. That outcome might maximize output on paper, it does't allow the workers to survive, let alone thrive. People aren't machines. Such is the result of trying to solve a complex problem while looking at only two variables.


bugleyman wrote:
Grand Magus wrote:

.

HOW MINIMUM WAGE CAUSES UNEMPLOYMENT:

A minimum wage is considered a Price Floor.

You err in assuming most people on these boards don't understand what a price floor is, and that we'd find you recapping day one of macroeconomics a revelation.

GM also errs in assuming that we didn't continue attending past day one. Economics, like every other science, starts by presenting an easily understandable and completely unrealistic theory. The next ten or so years of classes, depending upon how long it takes you to finish your Ph.D., cover just how unrealistic the model you studied on day one is, and how to adjust the model to describe what actually happens.

There are people getting Ph.D.'s in the relationship between the minimum wage and unemployment.


Orfamay Quest wrote:


There are people getting Ph.D.'s in the relationship between the minimum wage and unemployment.

...who would never work for minimum wage.

Silver Crusade

Except if they had to because the economy is crap.


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randomwalker wrote:
Orfamay Quest wrote:


There are people getting Ph.D.'s in the relationship between the minimum wage and unemployment.

...who would never work for minimum wage.

You've obviously not very familiar with the incomes of Ph.D. students. Or, for that matter, of the incomes of gypsy faculty.


I dated a geologist a few years back...very smart lady. She had a PhD and nearly ten years of Postdoc research experience. She made less than I did, and I had my bachelor's at the time.


Price floors aren't wage floors. If full time workers can't cover the basics of food, rent, etc., then there's no reason to get a minimum wage job, unless you're actually in that minority of teenagers still in school. Then, it really is just some extra cash, not what you have to live on.

You'd do better making a living outside of regular employment. Slinging crack or meth is a popular choice, as is prostitution. You're worth more to the economy in prison.


Invisible Kierkegaard wrote:

Price floors aren't wage floors. If full time workers can't cover the basics of food, rent, etc., then there's no reason to get a minimum wage job, unless you're actually in that minority of teenagers still in school. Then, it really is just some extra cash, not what you have to live on.

You'd do better making a living outside of regular employment. Slinging crack or meth is a popular choice, as is prostitution. You're worth more to the economy in prison.

Or trying to juggle multiple jobs. Or getting government assistance in addition to the minimum wage job. Or living on the street or in your car while working because you can't afford rent, but the job at least buys food.

Or any one of many desperation measures people take everyday.


thejeff wrote:
Or any one of many desperation measures people take everyday.

I just double-checked my supply and demand graphs, are there is no mention of these "people" of whom you speak. Are you sure those are a thing? ;-)

Digital Products Assistant

Removed a post and reply. Do not use the word "rape" in this way.

The Exchange

Chris Lambertz wrote:
Removed a post and reply. Do not use the word "rape" in this way.

Really? I would love to know how that usage was offensive in any way. You removed an entire post that had many different aspects to it due to one word that was used in a non-offensive way? This is the type of crap moderation that is being complained about here more and more.


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Fake Healer wrote:
Really? I would love to know how that usage was offensive in any way. You removed an entire post that had many different aspects to it due to one word that was used in a non-offensive way? This is the type of crap moderation that is being complained about here more and more.

I agree the moderation here can be uneven, but as someone who has never been the victim of rape, I can't begin to imagine how I would feel about casual use of the word if I had. In my opinion, many of us -- myself included -- could use a reminder from time to time to help us avoid using certain words carelessly.

The Exchange

I could understand that if I used it in some weird slang way. I used the word PER IT'S DEFINITION; " to seize and take away by force".
And because I used "rape" per it's definition my entire post was removed. If I said "The American Indians were heartbroken by the Europeans who raped the land and left it in shambles" that would also be a correct usage per definition; "to despoil".
This type of moderation is just plain juvenile.

Digital Products Assistant

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Fake Healer wrote:
Chris Lambertz wrote:
Removed a post and reply. Do not use the word "rape" in this way.
Really? I would love to know how that usage was offensive in any way. You removed an entire post that had many different aspects to it due to one word that was used in a non-offensive way? This is the type of crap moderation that is being complained about here more and more.

We have a strict policy about the word's usage on our site. You can see Gary's post on the matter here. If you have further feedback, you can use the Website Feedback forum or email webmaster@paizo.com.

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