The Minimum Wage is No Friend to the Poor

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The debate over raising the federal minimum wage to $10.10 an hour from the current $7.25 heated up last week with the publication of a Congressional Budget Office study, which estimated that total employment would likely be reduced by “500,000 workers” if the hike were implemented.

While the CBO’s scenario made sense, a truly substantive debate about the minimum wage would start with the merits of abolishing it altogether, while seeking to help poor people through more direct means. Instead of decreeing that the unskilled can’t accept certain low-wage offers, thereby condemning many to joblessness, allow them to consider all of the potential options. But to the extent that low-paid workers are part of poor families—and many are not—help them in other ways.

Ironically, Nobel laureate economist Joseph Stiglitz, an advocate of hiking the minimum wage and critic of the CBO report, sensibly opined in his textbook Economics that “the minimum wage is not a good way of trying to deal with problems of poverty.” His point: Since many minimum-wage workers aren’t poor, this is yet another case of the government trying to solve a problem with a blunt instrument. The same CBO study he criticized bears him out, estimating minimum-wage workers’ median family incomes at $30,000, which shows that most live in families well above the poverty line, given that many have multiple workers.

BECAUSE ON-THE-JOB TRAINING is the most effective kind, the best way for people to better themselves materially is through working. A National Bureau of Economic Research study, “Minimum Wage Effects in the Longer Run,” concluded that the “longer-run effects” of “diminished training and skill acquisition” are “likely more significant” than the harm done by the minimum wage in the short run through reduced employment.

Jobs that provide even little or no wage—like unpaid internships—sometimes offer the best on-the-job training. A Wall Street Journal story early last year pointed out that Democratic politicians like Minnesota Sen. Al Franken “advocate…a higher wage floor,” except in their congressional offices, where all the internships are unpaid. Franken is quoted as pointing out that “interns will receive unique career development opportunities”—wise words, although honored in the breach when it comes to Franken’s support of wage floors for others.

Critics will respond that abolition of wage minimums will cause rampant exploitation. All-powerful employers will set the wages of the low-skilled at subsistence, while the prices they charge customers will be as high as ever. However, the critics might be surprised to learn that the share of hourly workers earning the federal minimum wage or less has fallen significantly over the long term. While the inflation-adjusted federal minimum in 1980 was about the same as in 2010, Bureau of Labor Statistics data show that the share of workers at the federal minimum or less has plummeted, from 15.1% in 1980 to 6% by 2010, and to 4.7% by 2012—a trend that tends to belie the idea of employer omnipotence.

Moreover, the proposed hike of nearly 40%, to $10.10 from $7.25, implies a current 40% exploitation rate. But if such huge margins really are being made from minimum-wage labor, one can only wonder why there’s no evidence that businesses paying the minimum are any more profitable than those paying much more. So maybe the conventional explanations do apply: Most businesses are price-takers, and most of us get paid according to the approximate value of our marketable skills.

Some workers have difficulty boosting those skills, however, even after years in the workplace. While BLS data show that about half of those earning the minimum or less are under 25, the other half includes people with “minimum-wage careers.” But the case for helping them is very different from saying that the government should continue to micromanage the labor markets.

A recent University of California, Berkeley, Labor Center study, “Fast Food, Poverty Wages,” shows that low-wage workers already get substantial government subsidies, such as food stamps and the earned income tax credit. The authors propose supplementing those programs with government-mandated wage hikes. But as conventional economics says, that would only worsen the poor’s plight.

Source: Gene Epstien

RELATED ARTICLESMORE FROM AUTHOR

86 COMMENTS

  1. “Please void” yourself of all of you and your family’s wealth, accept minimum wage or lower as your sole source of revenue, and void yourself of any government “hand outs” before you cast your first stone on this issue!!!!!!

        • We all walked in “that fellas” footsteps long ago.
          Back when we studied hard & applied ourselves instead of slacking off.
          Back when we invested in ourselves by buying tools to perform certain jobs knowing we will use them in one way or another the rest of our lives.
          Back when we made so many other choices such as obeying the law, going to bed early enough so we get up & show up on time every day, working every minute of overtime available to better ourselves, etc., etc.
          Anyone working an unskilled job for minimum wage doesn’t stay on minimum wage very long if they perform as good as / better than expected. They are given raises to keep them from moving on.
          If someone gives minimal effort or does only what is expected with no desire to succeed then they are –
          and should be- stuck at minimum wage.
          It’s all about choices, preparation & attitude.

          • There is a company in Evansville that I have much knowledge of that staffs up in manufacturing roughly 50 people at a time. In order to hire 50 people who meet the job qualifications they have to go through 1,000 applications. There are two requirements for these jobs. The first is to prove a high school education or equivalent (GED) and the second is to pass a drug test. Of the 50 (5%) that get through those filters a full half are gone before their 90 day probationary period for poor work habits. These are jobs that start at over $10 an hour and quickly migrate upward to $15 an hour for those who develop their manual skills and show up on time. As stated before the success rate is 2.5% of applications.

            That is not particularly flattering of the local available work force.

          • Joe, I don’t think that’s isolated to Evansville. When I was in Baltimore a few years ago, I was looking to hire a warehouse person. I didn’t care about experience. I just wanted someone presentable & courteous. I was offering a starting pay of $15/hr and it took several interviews before I settled for the eventual hire. Our younger adults are not being taught how to interview or job hunt. No one has ever told them, “Dress for the job you want…” I just had a kid come in my job a couple of weeks ago in everyday streetwear and his clothes were hanging off of him and he asked, “Are y’all hiring?”. He did not show any enthusiasm or nothing that would make you want to talk to him any further. I quickly told him no even though I am looking to hire someone soon.

        • OK, then you need to make a payroll before you and walk a mile in those shoes before you tell employers what they must pay.

          I have been self employed all of my life and know what it is like to do without after making a payroll. Maybe I would be more supportive of minimum wage if there were minimum profit laws. The government does not care if I have anything left after paying them.

          • My dad said, “You can’t tell a man how to run his business. If you’re so smart, start your own.”

            That being said, there is a national pharmacy chain we all know locally that projects its’ stocks to go through the roof because of the implementation of ObamaCare and the explosive sales of pharmaceuticals it will create.

            At the same time, an individual I know that works there part time informed me they had a meeting with the company stating because of ObamaCare, more employees were going to be cut back to 29 hours (which the CCO correctly stated a few months ago was going to happen.)

            I look at it as a pendulum and the pendulum has definitely swung too far one way.

            I would bet tommiromo’s doll collection you always paid your employees more than the minimum wage enoch.

            What say?

          • Even as a kid and heard about minimum wage laws it smacked my sensibilities, it just didn’t then make any sense and it still remains in that category. The only benefit a person has is that null time before the additional business expenses catch up with higher prices.

            Those activating a minimum wage are clueless about its overall effect. It does nothing but keep those at the lower end of wage earners at the low end of wage earners. How many decades of data do the advocates need to show them their liberal and socialistic non-sense is non-sense. I will try but they will ignore as it does not fit their pony land utopia;

            http://www.epi.org/publication/wage-workers-experienced-wage-erosion-state/

            • Notice the biggest losers are Obama voting states in 2008 until you get 8 deep to AZ and all the winners voted against Obama until you get 7 deep to Connecticut that equals Kentucky. Which policies are hurting the poor the most?

          • I think it’s great that there are so many diverse and divergent opinions on the value of setting a minimum wage. It must be great so many of my fellow human beings are in an economic situation not to have to worry about living at or below poverty level.

            However, I grew up in the Mississippi Delta during the 50s and 60s, so I remember plantation owners paying field hands $2.00 a day to chop cotton and a penny a pound to pick it. When the field workers had to pay some redneck bastard cousin of the plantation owner 25 cents for a ride to and from town in a ramshackle school bus or broke down flatbed, that didn’t leave a whole lot for the niceties of life.

            I think it was about 1963 or ’64 that the New Society Congress set a minimum wage for farm workers, and I remember when plantation owners refused to pay it, or who went solely to the use of herbicides and mechanical cotton picking to avoid paying field workers.

            At the present time, corporate America is beginning to remind me of a plantation. God save us.

          • @Yoda;

            Well North Dakota gotz dem selves a orily boom goings on which equalz jobz growth. No clue with the goings onz with Mississippi and West Virgina.

          • I have been fortunate not have to make payroll. I have see what owners are up against with the ever increasing paper work, ect just to do business in the field of work that I do. I am a owners representative on projects that I had done. The way I seen it, if the owner doesn’t make money, I don’t make money.

          • Same here as far as always having been self employed except for part time work in college. And yes there were many times as we grew our business that we took home nothing or close to it. But we also had workers for the most part who were psychologically our “partners” in making the business work. We had and still have wonderful people who work with us and who cared about us because we helped them in any way we could. We have a “people”-type business and the only way to make a go of that type of business is to have people-oriented employees. So when you get that skill in place from your staff you do anything you have to to hold that team together. At times it doesn’t work, but long term employees are great for us, their salary and our bottom line.

  2. Would it be acceptable that any and all investments that possibly could be made would only produce the same paltry (minimum wage) rate that a bank pays for a saving account?

    One group has capitol, and should get a decent return on investment

    The other has to work for wages, and should also receive a decent return.

    I’m talking of most people in general. Granted, their is a small group of people that are useless and can not be employed.

    • I agree. And many of those “useless” people who are unemployable are those who inherited wealth or accepted political patronage positions and don’t know what a day’s work even is. They are lifelong sufferers of affluenz, using their daddies crony buddies to get jobs they aren’t qualified for. And I didn’t even mention Russ Lloyd Jr by name, oops.

      • Isn’t Mr. Lloyd a CPA, at minimum he got his accounting degree. To accomplish either, took some time and effort.

  3. It is true that adjusted inflation rate for minimum wage now does equal the 1980 rate.

    Question is, does the basic food and shelter cost today equal that 185% increase, based off of 1980 cost?

    • The Chost of the Murderer does not like facts that undercuts his hatred, especially from liberal sources, eh?

      • Last time it was raised the same gloom and doom rhetoric was used, none of their bs happened. Liberal source?

        • The last time it was raised was before the 2008 collapse of our economy. I know that most of the focus was on housing, but I wonder how much the minimum wage increase factored into the overall state of the economy. I’m not an economist, but I would think that it had some impact.

  5. Minimum wage only serves to raise the price tag of being poor. No one “lives” on minimum wage. If by some chance one is trying to raise a family on minimum wage, there is government aid to assist the person. The problem is that this aid often traps the person in that income level.

    The left needs to begin walking away from failed policies so more progressive solutions can be found for an age old problem.

  6. Income level at any rate, above or below minimum wage is trapped if one can not survive with basic food and shelter without government assistance.

    Question would be, is it fair to pay low wages and expect the government to bailout that wage earner, all awhile that employer complaining about governments handouts and paying its so called high taxes?

    Life was easier when we produced our own needs with better then minimum wages, which in general for the high school age kids.

    Is there really a good solution?

    • Before the last raise there were only 500,000 being paid minimum wage. We raised it, and everything else raised around it. So now we have millions on minimum wage with fewer jobs and no change in purchasing power.

      That is what the CBO is saying. Raising the minimum wage is not going to get anyone off aid.

      So what does it take for the left to start thinking out of the box that has not delivered what it promised?

      • The minimum wage whatever it may be will always buy minimal work and provide minimal purchasing power. Raise it and prices will follow. It is an exercise in futility to assign more than minimum value to people who bring nothing to the workforce but minimal skills.

  7. 5 A sub minimum wage — $4.25 an hour — is established for employees under 20 years of age during their first 90 consecutive calendar days of employment with an employer.

    This was added to the raising of the minimum wage in 1997 to $5.15 an hour.

    Evidently at one time in this country people were willing to compromise.

    I to remember during the Clinton years the scowls and howls of the sky going to fall when Clinton hiked not only the minimum wage but also the marginal tax rate on the wealthiest.

    23 million jobs created during his tenure.

    Must have been a fluke.

    • Not a fluke at all. Clinton was in office during very good economic times some of which he cultivated and some of which is attributable to Reagan. That is when taxes can be raised without compromising lifestyles. Times as they are right now, tax increases make even the rich feel poor and investment slows to a trickle. Investment abhors uncertainty and under Obama uncertainty has been the rule of the day. Clinton understood the economic realities of taxation and the value of having clarity of policy. He lead from the top. That is why compromise worked for everyone in the 90’s. We have not had a handle on things since and we sure as hell don’t now.

      • To add to the previous post, Reagan realized that taxation and uncertainty had damaged the economy during the 70’s. He proceeded to cut the dickens out of both taxes and interest rates. It worked very well. It also created the decade of prosperity that made it possible for Clinton to raise taxes a bit and run the government at a surplus. Can you imagine what would have happened in the 80’s if Reagan had increased taxes on an economy that was already flat on its back? It would have been like it is now.

        • Reagan raised taxes 11 times after initially cutting them.

          But yes, he was compromising each time he raised them in order to make it all come together.

          BTW, if Clinton’s success was a direct result of Reagan’s policies, shouldn’t ObamaNation be given just a little bit of slack after inheriting Bus’s disaster?

          • Reagan and Clinton both managed the American economy very well. Compromise, competence, and a willingness to lead were good attributes that both of them exhibited. That is why things were pretty darn good from about 1984 until 2000.

            I think everyone realizes that President Obama inherited a mess. The mess Obama inherited was not as bad as the mess that Reagan inherited though. He has enjoyed much slack but as time moves forward the static economy becomes more and more his. What Obama is missing is a big visible impact and the feeling among Americans that things are getting better. The stimulus was lots of visible foul-ups but a series of wins too. Overall it was probably a slight positive. In retrospect it should have been more about infrastructure and less cronyism. It should have been larger and focused on things that really stimulate prosperity.

            The ACA is a monument to management failure thus far. Countries the size of Rhode Island have been able to do this but the United States can’t. Long term we shall see, but right now it is a burden on a shaky economy and does nothing to lend faith that government is functional. Above all what President Obama has needed and still needs are people who are implementation professionals. Reagan and Clinton had these kinds of people but Obama does not. If he does not staff up with people who can execute, his legacy will be more like Don Quixote’s than FDR’s.

  8. The 500,000 jobs to which the CBO refers represents 0.3% bump in unemployment. Whoopty doo. Think of 2013, in terms of stock market performance relative to unemployment rate of 7.3% – not a bad year. So $10.10 will bump unemployment back up into 2013 range. Wow. Could be another bull year for the 1%ers, right, what with all that infusion of cash into the economy. Meanwhile, Obama needs to institute that long awaited infrastructure improvement program to provide 500,000 (minimum) prevailing wage jobs. Next.

  9. Could the reason the 80’s -90’s worked because it was a time of long time companies buying each other out and selling off the assets and or shipping the jobs overseas? Selling off the wealth created a so called “meth” high, but the results of that is the reason we are now where we are?

    Globalization has hurt the U.S. economy, not helped it.
    Trade deficit is half a trillion out of our economy every year. Throw in the compound interest yearly and we are talking big money over these last generation or two!

    • Bingo!! Carter got slammed by the Arab Oil Embargo and when the embargo was broken the economy and Reagan benefitted mightly.

      That combined with a savings rate that went from 10% down to 1-2% and massive defecits sent the economy soaring.

      The massive productivity increases from computers and softward helped a lot too.

      • The Arab Oil Embargo, of which you obviously know nothing, was in 1973-74. Former liberal emperor Jimmy “Ethnic Purity” Carter’s reign of failure did not begin until 1977.

        Even your god-emperor No-Hopey’s State Department agrees:

        http://history.state.gov/milestones/1969-1976/oil-embargo

        The shameful ignorance of the liberals on this board never fails to amaze me. On the other hand, it is certainly amusing to see a brains-in-his-behind liberal completely discredit his own claim to graduate degrees.

          • Right you are. I remember this pretty well as I was a sophomore at UE. Gas prices ran up to over a dollar (1973 it went from 25 cents to 40 cents), anti Iranian sentiment ran high, and someone shot a hole through a door of an Iranian students apartment in the old Rotherwood Apartments between the Armory and Division Street (now the Lloyd). A whole bunch of expensive cars that the Iranian students had on campus were suddenly for sale as the monthly allowance checks of $2000 each were cut off. It was an exciting but uncomfortable time not unlike right now. It was for different reasons mind you but the uncertainty about the future was rank. President Carter came to Evansville shortly afterward. I don’t remember why but I did stand out on 41 and saw him as his motorcade went by. Lets hope the next 10 years look more like the 80’s than the 70’s or the last 13 years have.

            • I just remembered why President Carter visited. It is because this region was selected to be the synthetic fuel capital of America. The plan was to put a Sasol (coal to gas) plant over in Henderson to supply the country’s automobiles. It never materialized but people were calling this region the next Saudi Arabia for all of the coal wealth. It seems strange today to think that a Democrat President saw the Illinois basin coal fields as the best option to energy independence. I read an article in Physics Today that year about a fledgling technology called photovoltaics and became interested in solar energy. Finally in 2013 after 34 years I installed PV Solar on my own home at a very affordable cost. All of my electrical needs are met but synthetic fuels are still a far off thought and coal is under attack. Who would have ever guessed it?

          • Brains-in-his-behind said “Carter got slammed by the Arab Oil Embargo.”

            You said “Arab Oil Embargo.”

            My God! You think that Iranians are Arabs!!??

            Does your utter foolishness know no limit? You now have discredited yourself twice in a single thread. So much for the value of a degree from the Acme Graduate School of Economics, Finance, and Hair Design.

  10. So just WHAT exactly does the CCO/RW/Libertarians think will help the poor and lower classes???

    1000 to 1 says they would be against every policy recommendation except cutting taxes for corporations and the ultarich.

    ♪ And the beat goes on ♫

    • One thing we are certain of is that raising Bill Gates’ tax rate will not help Bubba and Junior unless Bubba and Junior are willing to help themselves. Throwing money at personal problems does not solve these problems but it does re-direct “smart” money into “dumb” directions. Every good dollar thrown at malfunction robs society of a better use of that money.

      What Bubba, Junior, and their fellow slackers need is a work ethic, personal pride, ambition, skills, and confidence. I do not think writing them a check solves any of these problems. I do not think a government program has been formulated to solve these problems and doubt that it ever will. In the mean time the failed beat goes on too.

      How about a policy that incents businesses to reform Bubba and Junior that only pays for success with an economic penalty for Bubba and Junior if they mess up their opportunity to break the cycle of dependence. With kids this is called tough love.

      • A) I don’t buy the narrative that Bubba and Junior are slackers. OVERALL the American workforce works the longest most productive hours than any other workforce in the developed world.

        B) One of the selling points of tax cuts is the cry “I know how to spend my money better than the government”. So when we offer a tax cut policy do we offer it across the board or to only those that know how to “spend it wisely”. Seems as though the RW narrative is that receivers of tax cuts know how to spend wisely whereas, receivers of direct government payment do not know to spend wisely.

        C) Adam Smith said each man pursuing his own self-interest served the interests of society as a whole.
        Very true if you look at the fruits of labor. What about as an asset allocator??

        Mr. Gates has indeed proven himself to be a great entreprenuer and businessman does that also make him a great asset allocator?

        I say the rich/corporations can waster their money just as well as the working poor.

        The trillions of dollars buried overseas shows that selfish asset allocators aren’t neccessarily what is good for society as a whole.

        • I know Bubba and Junior. I grew up with them. They went to Shawneetown and I went to college. Believe me, for every Bubba and Junior who are diamonds in the rough just waiting to be trained, and there are some, there are nine pairs of slackers. They are plenty capable but choose the path of least or no resistance. Bubba and Junior are not to be confused with people who legitimately cannot do for themselves. You are correct on the OVERALL comment. For every arena full of Bubbas and Juniors looking to take the easy road, there are a Warren and a Bill making up for their slacking.

          And Bill is a better deployer of assets than the US government. Study what he does with his foundation regarding seeking out the most efficient ways to do the most good.

    • I can’t speak for all of the GOP, but I would like to see more job training opportunities. These programs should be marketed and made known in the low-income neighborhoods. The earlier that you can a person the ability to earn a decent wage, the better. Minimum wage is not intended to be a wage where you can comfortably raise a family. It would also be beneficial to have financial responsibility classes for these same groups. I hope this doesn’t sound too harsh, but if you’re 40 plus and working for minimum wage you have a “me” problem. You made choices in your life that led you to where you currently are. It is not the responsibility of a job creator to right your wrongs so you can live comfortably. Too many times we see people on sub-poverty line jobs with $150 tennis shoes and the latest smart phones. Training is the key for the problem.

      • Yes, for youth, training is huge. I refer again to a new 6 year high school program being supported and coordinated by some of America’s large corporations as written about in Time Magazine a couple of weeks ago. This program teaches kids how to work and to succeed. It also guarantees them a job on graduation. From there, their hard work must carry them forward. This program is in place in Chicago and other cities but needs to be wide-spread in my opinion. It amounts to a 4 year high school diploma plus a 2 year associate college degree.

        Everyone believes that those with no jobs or poor jobs are likely slackers. But lots of people as kids were not taught how to better themselves. So they live the cycle again and again. We must better society one individual at a time. Pick someone to try to help. It doesn’t always work but a lot of times it does.

        • The most rewarding job I ever had was running a youth employment program. Seeing those young people get positive feedback from employers and the reward of having some money in their pockets to buy better clothes and a few “extras” was great.
          We helped them shop the thrift stores for a “job interview outfit”, we helped them with resumes, and gave them tips on filling out applications.
          I’m not going to say that it was a 100% success. It wasn’t. Some of them are in prison or worse, but the most of them are working, contributing members of society. I always feel good when I run into one of them and they are proud to tell me what kind of a job they have.

    • I don’t necessarily believe it is really much of a priority, BB! There are always more answers about what NOT to do, and the ones about what to do are spoken of in vague terms that sort of describe the old “Jobs Programs” of the type their eternal idol, Ronald Reagan got rid of. Reagan is, of course, the inventor of the “Welfare Queen” fantasy as well, but the Waltons and their ilk perfected that concept and brought it to life.

  11. If those working unskilled jobs deserve right 40% increase then our elderly that worked hard their entire lives deserve at least 10% increase on social security.
    Easily funded by the extra taxes collected on the higher minimum wage.

  12. One of the reasons for the minimum wage is to prevent unscrupulous business people from bilking, the mentally retarded, naive teenagers, desparate eldery workers etc.

    For example your daughter goes to work for the local Pizza Palace. The owner offers her $7.25/hour. After working there for two weeks she gets a check that looks much smaller than even the puny $7.25/hour. After reviewing the Gross Pay vs hours you see the owner paid her $4.25/hour.

    She goes to the owner and asks him what is up. He says “I never said $7.25/hour my offer was $4.25/hour.

    Sad day for you.

    • Creating Strawmen is not a reasonable discussion of the issue.

      Before the government raised minimum wage it was nearly impossible to hire a person at minimum wage.

      Here’s the real version of the dynamics behind minimum wage, simplified for those who have never had to make a payroll.

      An business’s billable hour rate is $30 and the business has an amazing 10% margin. Therefore, the business net’s $3 in profit for every billable hour.

      The government says the business must pay $1 an hour more in direct cost by raising increasing it’s payroll. Therefore the business has just taken a %30 hit in its profit margin.

      The business has three choices.

      1: Raise the price of their widgets which makes them less competitive.

      2: Adsorb the loss and live on 6.5% margin.

      3: Cease domestic operations.

      However another dynamic kicks in when we raise minimum wage. The wages and purchasing power of employees sink also. Therefore, raising minimum wage also hurts the middle class.

      BTW, fast food places usually pay more than minimum wage.

      • #1&2

        Keep in mine your competitor also had to deal with the same circumstances. Does he/she raise the price, take a smaller profit, or combination of both. Marketing skills starts to play in. These decisions create those great business leaders!

        #3
        Unfortunate, many yellow business people has taken the slacker route in business with moving jobs and taxes over seas that took your and your competitor out of business. unless one would join them.

        • #1&2. Not all my competitors. China is not subject to our minimum wage laws. Marketing skills has notihng to do with it. They were already in play. It’s the cost of getting the widget to market that has increased. Are you willing to take a 10% hit in your retirement investments to cover a minimum wage increase?

          #3 So what you’re saying is that other countries are creating a more favorable atmosphere for business than this country.

          #4 A business can only recover a loss at the rate of it’s profit margin. So if a company running a 10% margin must recoup a $1 increase, they must first earn $9. So in reality your $1 increase just cost the business $10 to keep the same margin. So where is that $10 going come from, marketing? Minimum wage kills jobs and increases the cost of everything.

          • For the record, #1&2 was my first interpretation was “domestic made” based from your “3rd” cease domestic operation.
            * yes, my retirement investment had taken a hit in 07-08*

            Correct on 3rd. minimum regulation and almost no wage ($70-month)

            #4 How many widgets per hour? 1,5,10,25+ ?
            So for that dollar is it dollar per widget per hour, 20 cents per 5, 10 cents per 10 4 cents per 25? Then is there something on the administration side that can be done that could easily increase production logistics?

            $10 cost to the business is over 10 hours not one hour as appear. also divide the number of wedges into that $1 an hour increase for a per widget cost.

            Armstrongres

  13. It is instructive about the current state of the GOP to watch their contorted machinations as they try to make people believe that paying a little more than a paltry minimum wage is bad for the wage earner. Somehow makes them dependent, somehow a little extra money isn’t good for them. Same discredited arguments that they’ve been using for years (on minimum wage, food stamps, and just about any assistance for the underclass). Some of the folks who like to weigh in on this are the very last people you’d want to take economic advice from.

    Many states have laws that set the minimum wage higher than the federal level. Many municipalities do too. Businesses that are so greedy as to try to get by paying a pittance get what they deserve. They should shutter their doors. The greedy job creator’s family will be fine, they can go knock on the church door for a handout. They can get rid of their 60″ plasma TV, the fancy wheels for their two-payments behind pick-up truck and, being probably judgment proof at that point can jettison their phone data plans. A Jitterbug Phone will be more than adequate until Daddy Ebenezer gets a real job and they get back on their feet. If they never make it back, well…you’ll sometimes have that. Keep trying, keep trying, that’s what those bootstraps are for.

    • I love how the CBO is the GOP’s new best friend! The Party of NO has always been very leery of CBO pronouncements until two reports have come out that can be open to interpretation, and it’s suddenly LOVE! The CBO according to the GOP is now as infallible as the Pope and holy as the King James version.
      Watching the Republican Party implode is quite a sight. It may take it until 2016 to do so. I’m not ruling out a “last rally” before it goes down. A lot of patients get better for awhile right before the end. I’m not sure they can even hold death at bay in 2014 with this dispute on the table, along with immigration, and women and LGBT people being given second-class status.

      • The opposite is also true. The Obama Administration touted the CBO report as their saving grace back when ObamaCare was passed without a singular Republican vote. Now they spend 8 hours a day trying to discredit it. Can we just agree that both parties are self serving numbskulls?

  14. I say jack it up to $20/hr. After all, I’ve heard for years about how difficult it is to raise a family on the minimum wage. Besides, the skill set deserves at least that. Just how many children does the average McDonald’s 16 year old doublestackerstacker have? The Libs shouldn’t mind paying $12 for a thousand calorie heartattackmac, should they? I’m all for at least $20!

    • I say pay all CCO commenters a living wage based on their thoughtful and intelligent comments. You’d starve to death with posts like yours.

      • My Dad always told me,”Sometimes the truth hurts, son.” He also told me, “The world doesn’t owe you a living.” He was a union member,worked hard for his wages, and he had a skill set that few in Evansville could match. Entry level jobs in hamburger joints do not merit family supporting wages. There is no law against unskilled workers holding two jobs. That was the norm for years.

          • Absolutely. Many of my friends are Italian-Americans and Sicilian-Americans. Spaghetti and meatballs are not free. Vinnie’s wine is expensive. He needs his union dues income. Go Unions.

        • Look, I worked two jobs from the time I was in my early twenties until I retired, except for the last 12 years of my career, during which I made enough to not work two jobs. And I’ve worked in fast food joints, and owned food and beverage businesses as well.

          I don’t like or appreciate comments that drag every conversation about minimum wage down to “McDonalds” or “hamburger joint” cliché, because that is over-simplifying economics, as well as purposely relegating food industry workers to some sort of “undesirable caste” second class citizenry.

          Yes, you purposefully are prejudging and unfairly categorizing food industry workers as some sort of minimally talented, low skilled, poorly motivated and by inference lazy or inept in comparison to other low wage workers.

          That is not universally the case, my friend. I had many employees who were working second and third jobs in fast food joints or mom and pop taverns, etc., only because their main occupation didn’t pay a high enough wage to support their family. I paid well over minimum wage because in Indiana, restaurants only have to pay waitresses and bartenders $2.45 per hour (at the time I owned a tavern), and there’s just too many cheapskates that either don’t tip or manufacture a reason not to tip by badgering or nitpicking the wait staff.

          Yes McDonalds and other fast food joints provide entry level opportunities for youth. But if you’d take the time and the empathy to really look into the who, what, and why of food industry employees, you would discover a greater depth of economic reality.

          Bully for your father and his philosophy, but I think you misrepresent what he was trying to covey. And if it weren’t for unions and how they lifted us from under the yoke of the ruling class, very few of us would be making enough to live a decent life. But now that the 1%ers have brainwashed a radical segment of the working class into sloganeering for corporate America, it’s left to the rest of us to champion the working class and go to bat for them when minimum wage and reduced working hours are depriving workers of a living wage and full benefits – relegating them to the public dole which only places them in the position of further ridicule by self-serving politicians and the insensitive dolts that vote for them.

          • You make a lot of good points. My parents owned a tavern for a number of years that my husband and I ran, in addition to our “real jobs.” It was a really, really hard job, by far the hardest one I ever did. My hat is off to you!
            All of my five kids worked in food service when they were in school. Three worked in fine dining establishments as servers while they were in college. It was a great way to supplement a student’s income. To have to support a family that way though, is a tough way to make it, and then, when they retire, the Social Security that they draw is often neglible.
            Some of the brightest and hardest working people I know did food service work for most of their lives. The same jerks who denigrate them are the ones who are the most demanding customers and try to find a reason to “stiff” their servers.

  15. Energy crises, high gas prices, how to help the poor, global warming, dirty coal, high unemployment, free market vs keyenesian economics, problems problems problems.

    I gonna through this throw this out there.

    The Space program overall was a smashing success, Solydra was a dud. Both were government programs. One offered a subsidy, the other held contests for private contractors to participate in.

    So why not have an alternative energy NASA style
    contest(s). The company that can build the most effective, most effiecient solar cell, solar panel, storage devices etc. in the next 3-5 years would win the prize money. Have similar contests for other alternative energies.

    The winner(s) gets government contracts to install solar panels on every government building, school, post office, hospital, police station fire house etc in the whole country. That would have to be in the Trillions of dollars, but don’t freak out the US economy is over $14T, it would take that kind of investment to move the needle very far.

    Minority contractors would get 10% of the $ value of the contracts as long as they came within a certain percentage of the price of the general contractor.

    This kind of undertaking would require all kinds of material and a vast plethora of labor, skilled and unskilled.

    The only people that wouldn’t like it would be the fossil fuel industry so we would have to co-opt them some how. Of course the republicans would hate because it wasn’t their idea and government is involved. But I’ve always said republicans will start believing in global warming the minute they figure out they can make a buck from it.
    When that worm turns it will be as unamerican as Joseph Stalin and the Red menace to not believe in global warming.

    • You mean like this DOE sponsored Solar Decathlon? http://www.solardecathlon.gov/contests.html

      or the Rooftop Solar Challenge: http://www.eere.energy.gov/solarchallenge/

      or the SunShot initiative: http://news.discovery.com/tech/alternative-power-sources/doe-contest-solar-panels-120614.htm

      I could go on for at least an hour with things I know about.

      My favorite is actually a contest that was just announced but doesn’t have a website up yet. It is a challenge to get rooftop solar under $2 per Watt installed. I just put a rooftop system in so I know the material costs very well. Here is the approximate breakdown for a 10 kW system that was quoted at $37,600. Materials are about $14,000 (1.40 per Watt); Labor is about $16,000 ($1.60 per Watt) with the balance being made up of $4,000 ($.40 per Watt) for permits and the balance of $3,600 was profit.

      The obvious targets to reduce the costs are labor and permits. The Germans by the way have the permit problem well in hand with rapid permitting that is under $300. The labor content was 2 union electricians for most of a week that only works out to $200 per hour.

      I eventually did a 20 year prepaid lease for $18,900 and broke the $2 barrier but only by negotiating like a diamond merchant and interrogating the contractor like a Spanish inquisitor. Most people just get hosed.

      • Good for you Joe. There are no lease arrangements for solar in Evansville that I am aware of so we own ours. Ours is a 9KW system, stand alone, so I have respect for your negotiating prowess.

        But even at that we trenched the line ourselves to save money and to avoid their crew “accidentally” ripping up parts of our garden and chewing tree roots that needed to stay.

        No regrets though. Love watching that meter spin especially in summer. I will admit the gas portion of the Vectren bill is getting out of hand now though with this very cold winter. With the savings aside, there is great satisfaction in doing a little bit to help the environment.

  16. howler says:

    February 25, 2014 at 3:00 pm

    Brains-in-his-behind said “Carter got slammed by the Arab Oil Embargo.”

    You said “Arab Oil Embargo.”

    My God! You think that Iranians are Arabs!!??

    Does your utter foolishness know no limit? You now have discredited yourself twice in a single thread. So much for the value of a degree from the Acme Graduate School of Economics, Finance, and Hair Design.
    =========================================

    Hey watch it, we hair designers are people too.

    So I should have used the words “Energy crises” instead of the words “Arab Oil Embargo”. There you happy now?
    If you don’t think they were interrelated you’re dreaming.
    The concept that Carter was hurt by things out of his control and Reagan benefited tremendously from the beginnings of a 20 year decline in oil prices still holds but that throws water in the face of your black and white world. Sorry, no actually I’m not sorry. Whatever.w

    http://www.history.com/this-day-in-history/opec-states-raise-oil-prices

    We get it, Carter was a total failure and Reagan was a god
    The QB gets all the credit when the team wins and all the blame when they lose.

    We ill have Edith get you a beer and you may return to your regularly scheduled Fox programming.

    • You have established clearly in this thread that, yet again, you don’t know what you are talking about. Your puerile appeals to Wikipedia and History.com as sources should be a warning even to the slacker community that the degrees of the Acme Graduate School of Economics, Finance, and Hair Design are not worth the rolling papers they are printed on.

      • Of coooooooooooooooourse.

        Your sources are dubius or wrong! I don’t see you explaining to the board how the wiki article on taxes incidence is wrong. It’s college freshman econ, pretty standard stuff.

        Your tactics are right from the playbook of the Seven habits of highly effective deniers.

        I don’t see any sources from you, only clever ad hominems, but ad hominems nonetheless.

        I will take them as a surrender on the merits. The editor/judge has already indicated a likelyhood of success in court, I think I will ask for a summary judgement.

  17. Well I guess now we’ve established that the RW posters here say that raising the minimum wage is futile as a policy prescription for helping the poor. So now we won’t here any more b@tching and complaining about the number of people on food stamps, welfare, low income housing, heating assitance etc.

    Oh wait G dammit I forgot this is conservatives and repbulicans we’re talking about.

    Nevermind, my bad.

    ♪ And the beat goes on ♫

  18. Assume a minimum wage hike is a proxy for higher taxes on the producer.

    Whether or not the tax increase/wage hike is passed on to consumers as price increases is not a black and white issue. Beleive it or not it depends on the elasticity of demand for the product along with many other factors.

    I know you conners love sitting in your black and white world, but beleive it or not, the real world is gray, very gray.

    http://en.wikipedia.org/wiki/Tax_incidence

    • The only guarantee that a minimum wage is a proxy for is more taxes for the government. That extra $2.85 an hour will generate an extra $5,928 of income to each worker that is subject to FICA from both the worker and the company putting $907 per worker per year into government coffers. 15.3% of the raise goes straight to the government just from people making $7.25 now. Lots of other people will get raises too making the big winner in this little shenanigan old Uncle Sam himself. Of course the workers will spend every dime of the money sending another 7% to the state and the state taxes are 4.4% on top of that in Vanderburgh County. 26.9% right into the hands of government. That is the real motivation to “give America a raise”.

      • Tell someone on minimum wage who gets a $40 dollar raise a week by getting $1 dollar an hour raise that the government is the greater beneficiary and see if they give a Sh!T.

        • Just my feeble attempt to point out that the government rakes 26.9% of a minimum wage earners raise and is seen as the savior of the poor, but a company with a 5% net profit margin is painted as a blood thirsty vampire. The inconsistencies are stunning. I think people on the left do not study math at all.

          You are right. The won’t give a SH!T and they probably won’t even have the presence of mind to know that they are tools for the powers that be.

          • We study math plenty. A wage hike would not all be passed along as price increases(as many hand insuated), it would be split amoung both the producer and the consumer. That was my point.

            If you are refering to Wal-Mart, yes their net income on sales has been about 5-6% for years, however their Return on Equity has been in the 20+% ranges for decades, an astonshing number and a tribute to their efficiency…. or ruthlessness depending on your POV.

          • @ Brains,

            Keep studying math. “As someone had said,” the employer either passes the increase or absorbs it. However, a $1.00 increase comes with other cost attached to it.

            You seem to know a lot about Walmart. I bet you’re employed by a union.

  19. This point may have been made above and if I missed it I apologize. There is a big difference between a job or position that is worth $X per hour and an employee who is worth $X per hour. This point seems to make the case for letting the employer determine the wage not the government. One addresses a task. The second looks at what the person brings to the table including past experiences, ability to learn, attitude, creativity, etc. As my friend Joe says, some of us bring our backs; others bring our skills; and still others bring our brains. (Actually he says it better than that, but you get the idea.)

  21. Minimum Wage is paid to those that hold a position that requires minimum responsibility, education, stress and skill. If you desire your pay level to increase you must be have the drive and focus to to build yourself above a minimum level.

    People shouldn’t wait to be paid or graded on a curve.

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