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Hey, Young Voters!

You voted for Obama in overwhelming numbers, didn't ya? How's that working out for you?

When Congress was getting ready to raise the minimum wage, a lot of us said that this would kill the job market for youth. Because, quite frankly, young workers aren't worth $7.25 an hour. The businesses that traditionally take on the newest members of the work force have very low expectations and, usually, very low profit margins. When the minimum wage shot up, most of them they didn't just bump their payroll proportionately -- they simply made do with fewer workers.

Further, when the economy started tanking, a lot of us noted that this would result in workers taking lower-paying jobs. This had the effect of shifting the workforce down the pay scale -- and the people at the bottom would just get shoved off. Teenagers seeking out the traditional jobs find themselves now competing with applicants in their 20s, 30s, even 40s and up.

And when given a choice between an 18-year-old rookie and someone older, with more experience, maturity, and skills, employers more often than not do the smart thing.

So, kids, can't get a job flipping burgers because Uncle Bob beat you to it? Landscapers ain't interested in someone who hasn't been doing it for several years? Movie theaters choosing Mom and Dad instead of you to sweep the aisles?

That's what you voted for, kids. Elections have consequences.

Now go and fetch me some pudding.


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Comments (63)

Stuck between grandpa and i... (Below threshold)
tomg51:

Stuck between grandpa and illegals.

Well they can alway's sell ... (Below threshold)
914:

Well they can alway's sell grit.

Sometimes the glare of 'goo... (Below threshold)
JLawson:

Sometimes the glare of 'good ideas' blind people to the big holes in reality that result when they're implemented.

The law of unintended consequences pretty much ALWAYS applies - and ignoring the OBVIOUS and immediate consequences of something you want simply because it seems like a good idea at the time or because it'll get you votes isn't going to make them go away.

Well they can a... (Below threshold)
Well they can alway's sell grit.
I didn't go to Vietnam but after reading that 914, I think I might have the beginnings of an idea what a Vietnam flashback must be like.

{{{shudder}}}

Repeal amendment XXVI. If ... (Below threshold)
Burt:

Repeal amendment XXVI. If you can't trust them with a beer, how can you trust them to vote.

Question: If the old minimu... (Below threshold)
Rance:

Question: If the old minimum wage were still in effect, wouldn't "Uncle Bob" be worse off than he is now?

$7.25 is actually very low ... (Below threshold)
Paul Hooson:

$7.25 is actually very low considering the cost of living and recent inflation these days. I like to pay my workers at least $10 an hour no matter the job. That's not a perfect wage, but better for them. And it shows respect for them.

I like to pay my ... (Below threshold)
SCSIwuzzy:
I like to pay my workers at least $10 an hour no matter the job.

Is not the same as saying you do pay everyone at least $10/hr.

What do union grocery store workers get in Oregon?

I'm impressed. With that l... (Below threshold)
boqueronman:

I'm impressed. With that loose grasp of micro-economics, it's amazing you still have a viable business. I just grabbed the Barron's Economics text off the shelf. Here's the first paragraph on The Minimum Wage. "In Chapter 3, we saw that the effect of a minimum wage, like that of any other price floor, is to creat a surplus of workers. Studies have shown that for every 10 percent increase in the real minimum wage, teenage employment falls between 1 and 3 percent... [T]he mimum wage (because it prevents lower wages) discourages firms from offering better working conditions." This is really straight forward supply and demand analysis: raising the price of a good [labor] reduces demand, in this case beginning with the least experienced and skilled teenage workers. Therefore, my request to you is to please explain how federal government mandates raising wages, thus consequentially raising unemployment, shows respect for "them." Also, what prevents you from showing even more "respect" at your own business by raising your worker's salaries even higher? Inquiring minds want to know.

Well, the true irony is tha... (Below threshold)
Tsar Nicholas II:

Well, the true irony is that Generation Y is so incredibly stupid they'll vote for Obama in 2012 even by larger margins.

Tsar,By 2012 the eco... (Below threshold)
SCSIwuzzy:

Tsar,
By 2012 the economy may have educated Gen Y in ways that will surprise you.

The kids thought it would b... (Below threshold)
Jim Addison:

The kids thought it would be "cool" (or whatever the current slang word is) to elect a black President, and after have been subjected to at least 12 brain-numbing years of government indoctrination, I mean "public education," empty rhetorical terms like "hope and change" carried some eerie allure for them.

Also, the fact that Obama was utterly lacking in any relevant experience, had never shown any leadership or noteworthy success in his career, and was noticeably unqualified was attractive to the young voters. They are tired of hearing they aren't qualified for this job or that and need to spend years getting experience. Who has time for that? Besides, their basic fantasy is that they could do the manager's job without any time spent learning the menial, less glamorous jobs beneath him, so why not Obama?

Now they are finding out, in spades, so to speak.

Young people will still vote for Obama again, because young people are basically foolish and refuse to learn from mistakes until they've suffered the consequences several times (it's called, "experience"). But they won't turn out in the numbers they did in '08: it will no longer be historic and unprecedented, and for even the thickest skulls among them at least some of the bloom will have gone off the rose and they will begin to realize that unicorn poop still stinks.

Forgive them their foolhardiness, and chalk it up to Churchill's formulation: "A man who at twenty is not a liberal has no heart; a man who at forty is not a conservative has no brain."

Jay,I have an enti... (Below threshold)
Tina S:

Jay,

I have an entirely different take on this than you do. I believe upper level management likes to keep the payroll of everyone under them low so that the company can afford to pay upper level management more. Instead of laying off or hiring fewer workers due to a mimimum wage increase, companies would be better off making up for it by decreasing the salaries(or the next annual pay increase) of upper level management by a few cents an hour.

Tina:Ins... (Below threshold)
_Mike_:

Tina:

Instead of laying off or hiring fewer workers due to a mimimum wage increase, companies would be better off....

Well then. If the company would be better off doing that, surely you can simply go into competition with said company and beat them by doing just that.

I'm in college and it's sad... (Below threshold)
mike:

I'm in college and it's sad during election time when you try to talk about the issues with people and they just don't have a clue. Usually it seems they vote for whoever the celebrities are endorsing- at least, that's how it seems. This video pretty much sums up the general density of the population of a college campus (sorry in advance if linking isn't allowed): http://www.youtube.com/watch?v=Ofgaa1_lk8I

Jay Tea, you're wasting you... (Below threshold)
OLDPUPPYMAX:

Jay Tea, you're wasting your time. You'd have better luck striking home if you had made this argument to a mentally deficient aardvark. These ubiquitously lazy, brain dead kids will simply continue living with their parents, watching MSNBC and waiting for Obama to share his "stash." Minimum wage after all is only for the little people, not the important, educated sensitive, deeply caring left wing thinkers who frequent 7-11 parking lots and SEIU rallies.

Tina S wrote:<blockqu... (Below threshold)
iwogisdead:

Tina S wrote:

I have an entirely different take on this than you do. I believe upper level management likes to keep the payroll of everyone under them low so that the company can afford to pay upper level management more. Instead of laying off or hiring fewer workers due to a mimimum wage increase, companies would be better off making up for it by decreasing the salaries(or the next annual pay increase) of upper level management by a few cents an hour.

In which case, raising the minimum wage would still have exactly the same effect, wouldn't it? It doesn't matter why businesses want to set wages where they do, or why they want to allocate a certain amount of money for those jobs, by forcing those businesses to raise wages, the result will inevitably be fewer jobs.

Unless you're advocating that the government start running every business and dictating everyone's wage . . .

Sorry, tovarichka Tina S... (Below threshold)
DJ Drummond:

Sorry, tovarichka Tina S, but the numbers won't work that way. Let's use a simple example:

Take Random Corporation, which sells retail products (keep it real simple, leave out manufacturing and supply chain dynamics for here). They have a store with 150 employees, which consist of the following categories in ascemding levels of skill:


General workers (unskilled) - janitors, clean-up and stock help, 20 aisles means 3 janitors plus 5 general workers = 8 low or unskilled workers

Supply clerks - dock plus 20 aisles, 4 aisles per clerk, 2 shifts a day, means 10 clerks plus 3 floaters = 13 supply clerks

Cashiers - 4 registers, 2 shifts a day, means 8 cashiers plus 2 floaters = 10 cashiers

Department Managers - 5 departments, plus back-office manager and store manager, plus assistants to cover downtime shifts, = 13 managerial employees

Back office staff, and professional positions - 5 professionals

Total headcount: 49 people needed

Each worker is recruited according to skill and quantity need (cashiers, for example, must have cash-handling experience and be available for the necessary shifts). Obviously, you want to get the best people you can afford, so your business will succeed.

Let's say you want to increase the amount you are paying your lowest ranks by $2 an hour, so they have an additional take-home of about $4,000 in a year (assume no part-timers for simplicity). Since employees who have greater experience will demand comparable increases, everyone but the managers and professionals will expect the same extra 4k a year, so you have to spend an additional $124,000 a year in payroll.

Going to take that from your professionals and managers? You'd have to chop their salaries by an average of nearly $6,000 a year each. And if you do that, your professionals will quit and go to work for someone who pays what they are worth. The extra education, experience and professional standards are nivestments in the results your company needs. Start replacing high-paid pros with someone you can get cheap, and you will soon see major problems in your inventory, bookkeeping and sales analysis. Those things don't do themselves, and the people willing to work for less money are by definition less skilled.

So, you back off and decide just to whack the managers, right?

Wrong.

Most effective companies promote from within, but if the managers take the hit then each of them is getting $10,000 less than the salary they got before. No one is stupid enough to take on the crappy hours and ulcer-causing pressure of management, just to get about the same money they got as a regular employee. You're living in Never-Never Land to even imagine it.

Ah, but you said "upper-level management", didn't you? Sorry, you're still wrong. First off, relative to the floor staff there's almost no such people. Even if you made them work for free, the money saved would not make a dent in the increased cost to raise minimum wages unilaterally. And class hatred aside, those upper-level managers got there because of long experience and exceptional skills. You can hate on them for making their careers successful, but if you punish them with lousy pay, they will go where they are compensated and the people willing to work for less money will either be less capable, inclined to steal from the company to get the money they think they deserve, or both.

Anyone who's actually run a business knows this fact. Too bad so few politicians have ever had to make a payroll or project a department budget, let alone a business plan or financial statements.


Sorry, forget the spelling ... (Below threshold)
DJ Forgetsky Drummond:

Sorry, forget the spelling and the part about "150" employees ... gotta check my work before I post. Let's just say that with 150 employees the effect is actually tripled from what you would get with 49 employees.

hooson - "I like to p... (Below threshold)
Marc:

hooson - "I like to pay my workers at least $10 an hour no matter the job. That's not a perfect wage, but better for them. And it shows respect for them. "

Funny you should say that...

....instead of... I have paid workers at least $10 an hour no matter the job. That's not a perfect wage, but better for them. And it shows respect for them.

You showing them respect?

Buwawahahaha.

In which case, raising t... (Below threshold)
Tina S:

In which case, raising the minimum wage would still have exactly the same effect, wouldn't it? It doesn't matter why businesses want to set wages where they do, or why they want to allocate a certain amount of money for those jobs, by forcing those businesses to raise wages, the result will inevitably be fewer jobs.

Unless you're advocating that the government start running every business and dictating everyone's wage . . .

The point I'm making is that it would not result in fewer jobs. Instead it would result in upper management to make slightly less money.

I'm definitely not in favor of the government dictating everyone wage. The market will do that. I think it makes more fiscal sense for a company to slighly reduce the salaries of upper management than layoff workers. It is the demand of a companies products/services that determine the optimum number of employees to hire. Companies that try to make up for the minimum wage increase by hiring fewer than there optimum number of employees will see a reduction in there profits. Companies that make up for the mimimum wage hike by reducing salaries of upper management will maintain there optimum number of employees and profit the most.

tina s - "Instead of ... (Below threshold)
Marc:

tina s - "Instead of laying off or hiring fewer workers due to a mimimum wage increase, companies would be better off making up for it by decreasing the salaries(or the next annual pay increase) of upper level management by a few cents an hour."

Lemme correct that fer ya; "From each according to his ability, to each according to his need."

I have to say you're the perfect obamabot.

TinaS, like every liberal, ... (Below threshold)
Drago:

TinaS, like every liberal, never takes into account what VALUE is being delivered by a worker.

Generally speaking, the value a worker can deliver determines their wage.

If a company, for what ever reason, like say, nepotism at the New York Times (yes, I'm looking at you Pinch), a company pays individuals wages in excess (or far in excess) of the true value that individuals can deliver, that company will not stay competitive very long.

Of course, TinaS doesn't understand this. Why should? Treating people according to their ability to deliver value probably isn't "fair" to those who can't deliver as much as others.

So hey! Here's a great idea! Let's just "level" everyone! That will work great! After all, that's the philosophy that led the Soviet Union to it's spot atop the all time economic powerhouses!!!..........whassat you say?...gone?....uh huh?....not around anymore?.....hard to believe.....

Tina S wrote:<blockqu... (Below threshold)
iwogisdead:

Tina S wrote:

The point I'm making is that it would not result in fewer jobs.

It seems you're wrong in that, according to the story linked in Jay's article.

I think it makes more fiscal sense for a company to slighly reduce the salaries of upper management than layoff workers.

Well, that's for the businesses to decide in a free market. When the cost of labor is artificially increased, as by the minimum wage, the normal business response is going to be hold labor costs down by hiring fewer employees.

Tina S,So what wou... (Below threshold)
jim m:

Tina S,

So what would you ask of a small businssman whose small business profit is his income? Are you suggesting that small business owners all reduce their incomes to assuage your feelings?

Not every company is IBM or Walmart. In fact most employers are small businesses. It is arrogant to assume that it is easy for them to absorb a pay cut for all of their employees. Small employers can only afford to employ so many people. By increasing the minimum wage you force them to reduce head count.

Why is it that libs see every business as being as large as GE and GM? Why can they not see that the flower shop and the vet clinic are all small employers with these issues. Not every book store is Barnes and Noble.

This is not like asking some international conglomerate to reduce profits by 0.001% it is like asking a business owner to consider foregoing his child's college savings or maybe asking him to skip a few meals every week.

The arrogance and ignorance is staggering.

That's quite commendable of... (Below threshold)

That's quite commendable of you, Paul. Now make the case for making your sense of morality and principle a binding law on everyone else. Tell us why we should legislate YOUR morality over everyone else's.

Tina S, I've tried to be kind before, but that is one of the most stupid things I've ever seen written. Let's run some numbers.

Company X decides to cut its top people's pay ten cents an hour. Say that's 100 people, who average 50 hours a week. (Not too out there, I'd say.) That's five dollars a week per management, for a total of $500 per week or $26,000 a year. Divide that by the current minimum wage, and that's enough for two minimum-wage workers getting about 34.5 hours a week.

NOT a significant savings, I have to say.

J.

** sigh ** OK, let... (Below threshold)
DJ Drummond:

** sigh **

OK, let's make it real simple, Tina. You say "a few cents less per hour". Let's call it a dollar less per executive for easy figuring, or $2,000 less per year per exec.

If you have 12 senior execs you apply this to, you get a savings of $24,000. Now, divide that by 2,000 hours a year and you can now give 12 employees each, one dollar more an hour. But a business which has 12 execs will have several hundred hourly employees at least, so if you have 240 hourly employees, that $24,000 from the execs will give each ... five cents more an hour.

Wishing just doesn't make it work.

Tina: "I'm definitely n... (Below threshold)
DJ Drummond:

Tina: "I'm definitely not in favor of the government dictating everyone wage. The market will do that"

Great, let's examine that. The market works because the rules apply to everyone, and are actually pretty simple. Why, do you suppose, are some people paid more than others? Old boy network? Deal with Satan? Or something else? I agree that in any one company all kinds of things are possible, but in a national economy, or even an industry, efficiency drives the numbers. Would you pay $200 for a suit you could get, same quality, for $150? Would you buy a Hyundai for the same price demanded for a Lexus?

No?

Then why do you assume that a company pays more than it has to, to get the services of an executive? Attack ads aside, in most companies the top guys are responsible for making the business plan work. They put in long hours and produce the specific strategy and tactics needed to make the company succeed. What that means in employment terms, is that a good executive knows howmany people you need, and in what skill areas, and how to grow the company, and by the way, growth means new jobs. NOBODY hires employees just to give away money, companies hire new help to produce the goods and services that will make profits for the company.

That's how a market works, people seek jobs and find work at their skill and ability level. They are not paid out of pity or foolishness, but according to what they promise and deliver.

Here's a serious question, ... (Below threshold)
James H:

Here's a serious question, though ... shouldn't executive pay be re-examined in some form, preferably by shareholders? We seem to be in a situation where executive pay is largely set by other executives (who serve on the boards of each other's corporations).

And while I'm not one to argue that government should intervene heavily in the marketplace, from a certain viewpoint I am troubled by what appears to be a growing wealth gap in the United States.

"shouldn't executive pay be... (Below threshold)
jim m:

"shouldn't executive pay be re-examined in some form, preferably by shareholders?"

James H
Yes exactly. The problem you get is that there are some executives that are overcompensated and their companies still do well so the overcompensation is not a problem. However, when it does become a problem because the company is in trouble the obama administration wants to step in and save the company because it is "Too big to fail". That's a bunch of crap.

The mechanism to prevent companies from overpaying their execs is to let them fail when that is part of the cause. By bailing companies out for hiring bad management and overpaying them is stupid in the extreme. The market would create pressure to keep salaries in check but by removing the penalty of failure from the equation there is no reason to keep salaries in check.

You are right that often the boards are incestuous with other corporate execs. There needs to be enough strength in the stockholders to be able to demand a higher return on their investments by keeping all salaries in check. In that way the market for exec salaries will function effidciently because there needs to be a tension between investor payout and executive value.

James H:The boards... (Below threshold)
iwogisdead:

James H:

The boards of directors are elected by the shareholders. The board appoints the officers.

If the shareholders don't like what's going on, they can fire the old directors and hire new ones. In certain situations they can sue the directors and/or the officers.

It's the shareholders who decide if the officers or directors are being paid too much.

Tina,I have a real... (Below threshold)
Conservachef:

Tina,

I have a real-life example for you. Over the last 3 years, while the minimum wage was going up, the management at three local restaurants received no raises. Raising the minimum wage definitely hurt the company- management has suffered, prices have gone up, and the number of employees has gone down.

The last min. wage increase was $0.70. Given a regular 40hr/week job, that's a raise of just over $1450/year. Per person. For a small businesses (let's say 20 employees & 5 mgt.), that's an automatic increase of nearly thirty thousand dollars if those 20 employees all make minimum wage. Are the five management positions expected to take a six thousand dollar decrease each?? Where does that thirty thou come from?

JamesH: "shouldn't execu... (Below threshold)
DJ Drummond:

JamesH: "shouldn't executive pay be re-examined in some form"

Maybe. I'd like to see Congress' pay and federal appointees' pay be examined first, and again, ahem, we the "shareholders" should make the decision. In a corporation, the directors and CEO answer to the shareholders, who have more power now than ever before in memory. Government big-shots, on the other hand, don't seem to consider themselves accountable to anyone, especially the people they promise to serve.

A CEO making a few million does not bother me any more than an athlete making money or a rock star or anyone else making money for a clear service or contract. A politician who becomes a millionaire in office and thinks people with real jobs don't pay enough taxes? Yeah, he/she/it bothers me a lot more.

DJ you make a good point. ... (Below threshold)
jim m:

DJ you make a good point. As a tax payer and voter I am a "shareholder" in the government. It is overdue that we place government compensation at all levels under the hot lights for examination. With federal employees makeing something like 40% more than their private industry counterparts and some elected and appointed officials making insane wages these should come first and then look to private industry.

One other thing working aga... (Below threshold)
Anon Y. Mous:

One other thing working against young workers: Obama's crackdown on unpaid internships. Now, they won't even be able to build their resume if they are willing to work for free.

Federal-employee compensati... (Below threshold)
James H:

Federal-employee compensation is a bit dicey. One thing to think about there: Part of the deal for federal employees is that while they receive paycheck security during downturns, they don't necessarily receive large paychecks during times the economy is booming.

That said, a few small books could be written on revamping the federal employment system. I would start by tossing out some of the more ridiculous aspects, like KSAs (which Obama has already done). I would also get rid of the step increases that federal employees automatically get each year ... those step increases come with whatever COLA Congress chooses to grant each year.

Those step increases, IMO, should go only to employees who are worth it.

James H,The news i... (Below threshold)
jim m:

James H,

The news is repleat today with stories of nurses in government hospitals earning 6 figure salaries. Endless overtime being paid so employees earn huge paychecks. Last minute raises to juice employee pension plans. Little or none of this happens in the private sector.

Overtime is scrutinized like crazy. We had to go to the executive suite to get our overtime approved in advance for a project. No employer is going to let you game the system to get a better pension plan. Hell most of them put you into a 401K so it isn't their responsibility in the first place.

Insane union contracts where employees are paid for doing nothing or (yes I know I keep citing it but it is too good) like the Boston Fire Dept, paying employees a bonus for showing up sober.

Controling federal pay is not difficult it is simply a matter of will. Gov Cristie in NJ is not having any problems in keeping wages under control. I'm sure he would do even more if he could and might if he gets the time.

Paul Hooson, good to hear f... (Below threshold)
WildWillie:

Paul Hooson, good to hear from you. Although it is nice to offer a higher wage for unskilled workers, in businesses that employ many people cannot afford to have morality dictate wages.

Tina S. the only thing you said I agree with is that the ratio of staff to a business is usually set for maximum production/productivity and probably lean to start with. But that includes management.

I believe the minimum wage is set to NOT satisfy the worker to a point where they initiate seeking a skill set that is marketable. Anyone entering the work force on minimum wage and is content to stay there get what they deserve.

As a manager, I reward motivated, diciplined staff. I always look to week out the unproductive, slacker. ww

Now that I think about it, ... (Below threshold)
James H:

Now that I think about it, I really would like to see a study that breaks down executive pay year to year vs. average pay year to year for other workers in a company.

Obviously, you can't expect the CEO of Bigco to take home the same salary as the Bigco janitor. But if Bigco convinces employees to forgo salary increases or to accept pay cuts for the good of Bigco, there's osmething rotten if Bigco execs see increased compensation over the same period.

Again, I wouldn't dream of government intervention in such a case. But it would stink to high heaven.

Tina SLets try to ... (Below threshold)
retired military:

Tina S

Lets try to have a civil conversation this time shall we

" Instead of laying off or hiring fewer workers due to a mimimum wage increase, companies would be better off making up for it by decreasing the salaries(or the next annual pay increase) of upper level management by a few cents an hour."

Why? Because you say it is so? Please explain your reasoning with some type of facts or common sense to back it up. I will be glad to listen to your line of thinking.

After you do that then let me ask you this.
How would you feel if upper management decides to cut everyone's pay at your level to add some more workers. And not just by a few cents but say by 20% of your hourly wage since others have shown that the few cents just doesnt work. How would you feel? I mean you seem to have had no problem cutting their wages how do you feel about them cutting yours?

Also please answer this question.

Are businesses in busines to

a. provide jobs
b. Make money.

Now I am sure that you would agree that it is probably B.

So now why do you assume that businesses dont take the path to achieve goal B? I mean if they could make more money but cutting CEOs pay and employing minimum wage workers dont you think they would probably do it? After all if the company makes more money doesnt the CEOs usually make more money?

I await you answers to my questions.


"I like to pay my workers a... (Below threshold)
jim m:

"I like to pay my workers at least $10 an hour no matter the job. That's not a perfect wage, but better for them. And it shows respect for them."

I've got a better idea Paul: Take the revenues of your business subtract the expenses excepting labor and then divide by the number of employees in your company. That would show them even more respect and would be good for them and their families too.

Not so high minded now are your? It's easy to look high minded when you can say that you are paying employees more than the minimum and that you can say that you are doing them such a favor.

I'd like to know what your competitors are paying for the same job. Are you really that much more than the market wage? If you are paying that much more do you not benefit from higher employee loyalty and lower turnover? So those benefits to you are valueless and you pay more than their worth out of the goodness of your saintly heart.

Spare me.

Well, at least the youngste... (Below threshold)
LiberalNitemare:

Well, at least the youngsters get to pay taxes on whatever money they do make (and what ever they spend at the tanning salon) in order to fund my free health care.

Thanks kids, now get off my lawn!

Tina S: "companies woul... (Below threshold)
P. Bunyan:

Tina S: "companies would be better off making up for it by decreasing the salaries(or the next annual pay increase) of upper level management by a few cents an hour"

Let's think about how that would work...

They gather up all those "few cents" and pile them on a desk. Then Obama's magic unicorn comes in and touches the pile with its sparkling horn and it grows into a huge dollar tree that just sheds money all over the desk.

Or perhaps that really doesn't work at all. Perhaps those "upper level management" guys just don't really deserve their standard of living. Yeah, that would at least explain your math.

Your Marx is showing.

Jim: "By increasing the... (Below threshold)
P. Bunyan:

Jim: "By increasing the minimum wage you force them to reduce head count."

Not to mention fears of having to pay unemployment insurance for the rest of their lives if you can't keep them on.

Not to mention the fears what the healthcare bill and "authorized nationalization of any business that does 'financial' things" bill.

Not to mention fears of "necessarily" skyrocketing energy costs.

Good help is pretty easy to find right now, but everyone is scared to hire.

Jay, There's no my... (Below threshold)
KenD:

Jay,

There's no mystery to the last election. Those with the least qualifications in the job market voted for someone who has never held a private sector job of any consequence and rarely voted in the public sector jobs he has held. Many may have felt that Obama's leanings toward a nation of "entitlement" would help them in some obscure way. The problem is you have to first get a job before you can collect unemployment. And unless you find a do nothing job with the government, the private sector still decides who and when to hire. Welcome to reality.

Tina: "I'm definitely no... (Below threshold)
P. Bunyan:

Tina: "I'm definitely not in favor of the government dictating everyone wage."

No, you've already said you only want government control directy over the bottom wage earners. The top and middle will be controled by a "market"--but not a free market mind you, one that is indirectly constrained by the goverment regulation. Oh, I see. Yeah that's not Marxism, what was I thinking, it's only kinda like Marxism.

Tina: "Companies that make up for the mimimum wage hike by reducing salaries of upper management will maintain there optimum number of employees and profit the most."

Except intelligent managers, but who needs those right? Hell I say let's go for it-- it's worked everywhere else it's been tried. Just look at the Soviet Union, Cuba, North Korea--oh, wait...

Jim: "However, when it d... (Below threshold)
P. Bunyan:

Jim: "However, when it does become a problem because the company is in trouble the obama administration wants to step in and save the company because it is 'Too big to fail'."

I think we're gonna find out soon that the new bill signed yesterday is about something totally different then stepping in and saving. I hope I'm wrong, but remember we're living in a fundamentally transformed America where they have to pass the bills for us to find out whats in them.

James H: "I am troubled... (Below threshold)
P. Bunyan:

James H: "I am troubled by what appears to be a growing wealth gap in the United States"

What it really boils down to for me, is that I'm o.k. with a few million Americans being outrageously wealthy so that hundreds of millions of Americans can have a pretty damn nice lifestyle and damn nice retirements to boot.

And the poor--well, a very wise man once said a simple, universal truth: "the poor you will have with you always". Yet, even with that horrible "wealth gap", the poor in America are better off than the majority of the people in the world. How many poor people in America have homes, cars, flat screen cable TV, and are overweight?

When people have tried things your way the results are very different. Doing it your way you always end up with a small but wealthy ruling class, a somewhat larger but still small and not so wealthy but comfortable enforcer class, and a large lower class. It happens every time.

I know, I know. You're just gonna do it a little bit this time and still the let the
"market" operate "freely". It's not really communism if everybody just sits back and lets you do it. Yuppers. I think thats the new argument.

So how's that little bit of Marxism been workin' out for ya anyway?

P.S. Sorry for all the late... (Below threshold)
P. Bunyan:

P.S. Sorry for all the late posts-- if anyone's still reading--but I was unable to post all afternoon while reading this interesting discussion so by the time I was finally able to post I had such a blog-on I had to type madly to keep blue fingers from setting in.

Well, PB, a lot of the poor... (Below threshold)
epador:

Well, PB, a lot of the poor I know don't have much but a mildewed shack and if they're well off a bicycle, but they'v
made their choices and painted themselves into their own corners.

James H: - "I am troub... (Below threshold)
Marc:

James H: - "I am troubled by what appears to be a growing wealth gap in the United States"

Me, not so much. There will always be poor.

Bottomline in America is the so-called poor by all accounts own DVRs, have cable, microwaves at least one used car etc...

Sure there are same that are truely desparate and destitute, those need societies help, the rest not so much.

And BTW do you really think the aformentioned desparate and destitute will get in on the new health care program?

"But if Bigco convinces ... (Below threshold)
Oyster:

"But if Bigco convinces employees to forgo salary increases or to accept pay cuts for the good of Bigco, there's osmething rotten if Bigco execs see increased compensation over the same period."

Sounds kinda like the NYTimes. Only they just flat out fired people.

Ep,A mildewed shac... (Below threshold)
P. Bunyan:

Ep,

A mildewed shack is still a home and mildew can be cleaned up. As for the bike thing, well maybe that's a north vs. south thing. In the north a bike is not a useful a means of transportation most of the year so the majority of the poor up here that rely on bikes do so because they've lost their drivers license.

Anyway, my point still stands that the poor in America a better off than most of the people in the world.

Most everbodys reply to my ... (Below threshold)
Tina S:

Most everbodys reply to my comment (13) are correct. However, that does not mean my statement was incorrect. I will explain what I mean this evening, I'm at work now and things are busy.

I think that an important c... (Below threshold)
Paul Hooson:

I think that an important component of this argument here also misses the important fact that many Americans seriously lack a decent work ethic and this is also a major reason for America's decline as world economic power. Many foreign workers such as Mexicans, Russians, and others seem to seriously outwork many American-born workers. Without a serious work ethic, America will continue to decline as a world power.

Alcohol use and smoking are two key areas where many Americans lose productivity. The worse thing an employer can do is to hire a smoker because of their endless cigarette breaks and many more sick days than nonsmoker workers. Further, it's a major turn-off to customers.

The trouble with many Americans is that most want a job, but not as many really want to work. That's an important difference.

Tinas: "Most everbodys r... (Below threshold)
DJ Drummond:

Tinas: "Most everbodys reply to my comment (13) are correct. However, that does not mean my statement was incorrect. I will explain what I mean this evening"

Thank you, Tina. I will be interested to read your explanation. Math is pretty stubborn, and while Jesus could feed thousands with a couple loaves and fishes, there's really no way to pay for general wage increases with "a few cents" from upper management.

Paul Hooson: "this argum... (Below threshold)
DJ Drummond:

Paul Hooson: "this argument here also misses the important fact that many Americans seriously lack a decent work ethic and this is also a major reason for America's decline as world economic power"

Ummmmmmmmmmm ... no, I disagree, Paul. I've done a wee bit of traveling, and in my experience there are hard-working and lazy people everywhere. Americvan-bashing is not really valid when looked at from objective measures. As an example, consider the Japanese. From 1945 to 1985, Japan was astounding in terms of thrift and industry, and frankly people in Japan were building up great wealth. But by 2000, Japan was in horrible shape. Why? Turns out the kids in Japan saw all that money and figured "PARRRRRRTIIIIIIIIIIIIIES", spent it all on fun and frolic. Turns out work ethic is not genetic or national.

The US, news flash, is STILL the dominant economic power in the world, which is why a problem in Russia or China may or may not be a problem for the US, but a hard recession in America hits the whole planet. That's precsiely why the DJIA flashes on screens in Chinese TV every night - I know because I see it.

As for alcohol and smoking ... are you freaking kidding me? Paul, seriously, go visit Russia and tell me their alcohol problem doesn't make Ted Kennedy look like a Mormon. Take France, India, or China, and tell me if you don't see freaking-ten-year-old kids smoking over there. When tobacco took the lawsuit hit in the 90's here in the US, where do you think they grew their market? South America, China, Russia, the emerging markets, that's where.

I try not to be overly blunt Paul, but come on, the so-called new industrial booms come from government protectionist policies, not personal work ethic superiority, and the problems of alcohol and tobacco are worse, not better, outside the U.S.

Paul, seriously, go visi... (Below threshold)

Paul, seriously, go visit Russia and tell me their alcohol problem doesn't make Ted Kennedy look like a Mormon.

OK, DJ, I KNOW you're just provoking me here. You drop a Ted Kennedy reference in one of MY postings just four days after the 41st anniversary of Chappaquiddick?

And you accuse ME of bear-baiting?

J.

If it's a consolation, Jay,... (Below threshold)
DJ Drummond:

If it's a consolation, Jay, I'm pretty sure that right about now, ol' Ted is practicing a whole different kind of swimming and issues with spirits.

Besides, is there really a better, more obvious candidate than Ted? OK, besides Dean Martin ... or Joe Biden ... or ... screw it it's Friday, I don't use all of my brain on Fridays, sorry about bringing up Ted. I still think it could have been worse - DJ

iwogisdead,DJ Drummond, Mar... (Below threshold)
Tina S:

iwogisdead,DJ Drummond, Marc, Drago ,iwogisdead ,jim m ,Jay Tea, Conservachef, WildWillie,retired military, and P. Bunyan:

All I can say is that for the past week I've only had a few hours of sleep each night and I wasn't thinking clearly. I probably should stop writing until I can get some sleep, but here goes. I'm guilty of exageration in comment 13, management could not make up up for it by decreasing there salarys a few cents. My statement that it would not result in fewer jobs and instead it would result in upper management to make slightly less money was wrong. I likely said other things that were wrong or exagerated.


What do you think of the following ?

Calculate the average minimum wage over the past say 50 years. Adjust it for inflation. Make that the minimum wage. Every year raise the minimum wage slighly, by the exact amount neccessary to keep up with inflation.

If anybody is interested in continuing this discussion, I'll continue to read and reply to the comments in this thread for the rest of the weekend.

Good Night Everyone,
Tina S

Thanks for your response, T... (Below threshold)
DJ Drummond:

Thanks for your response, Tina.

But I see a few problems in your scenario. First is functional; minimum wage has existed for some time now, not only as a federal statute but also in some states and cities. Also, the rate of inflation also varies from location to location, so it would be difficult to implement a national standard that would be politically viable.

The second problem is that the argument made for raising the minimum wage is always that people deserve a "living wage", which has whatever meaning the individual wants to put on it. The minimum wage, therefore has always been static or risen faster than inflation, precisely because of those political forces. A motion to link the minimum wage to inflation would be attacked by both sides, either because it would represent an endless escalation of payroll costs for business, or because it would never allow the poorest workers to improve their lot in real terms.

The third problem is the concept itself. Do you support the concept of a maximum wage, an amount no one is allowed to exceed, no matter how long or hard they work, how brilliant their invention or talent? The minimum wage concept has always been the obverse to that socialist contention; the idea that a person should be paid a certain amount, no matter how poor a worker or how little work they actually do. There is, consequently, the psychological resentment of business owners that they have to pay everyone a minimum amount, not because that amount is necessary to get a good employee or because no one at all will work for less than that amount (because the market itself already acts in this way), but because an outside force which in no way benefits the business is requiring this cost floor. The basics of economics teaches that any artificial price floor creates a surplus, because some demand will not accept the minimum price, and this also applies to wages - a minimum wage, by definition, creates a level of unemployment, and therefore it must be understood that raising the minimum wage will also increase the unemployment rate, all other factors remaining stable. In simpler terms, a company only has a certain amount of money available for payroll, and if costs increase the number of people who can be retained decreases. Further, higher-paid personnel are so paid not because they have some special influence, but because their skills are deemed essential and the market has created a level for which they can be hired; if less money is offered, the position will not be filled and the company will lose an essential resource. Unskilled positions are what make up the minimum-wage positions, and so if the minimum-wage rate is increased, for any reason, the UNAVOIDABLE consequence will be a reduction in the number of low and unskilled employees hired or retained.

Tina, it doesn't matter wha... (Below threshold)
P. Bunyan:

Tina, it doesn't matter what the minimum wage is the effect is the same.

You're looking at this from the wrong perspective, I think. At least the perspective I think you have is a perspective I've heard expressed by a lot of people on the left. They see a poor family and they think the problem is that the family is not making enough money. Therefore the solution you propose is that the government force their employers to pay them more.

A better perspective to take when you see a poor family who's principle wage earner or earners is/are making minimum wage is to see the problem as: why are those particular adults still working at a minimum wage jobs? The only real solutions for that family will come from that perspective.

When anything, in this case a wage, is controlled and regulated by the government shortages are created. Always. Not every person is worth the minimum wage. Not every job is worth paying someone the minimum wage to do that job. (Just ask Nancy Pelosi about the tuna fisherpersons in Samoa that work for her campaign donors.)

You think the minimum wage helps those at the bottom, but it's two greatest effects are (1) it causes an artificial shortage of low paying jobs which hurts mostly young people and devistates poor young people and often traps them in the cycle of poverly, and (2) it makes pretty much everything more expensive which hurts everyone, but again disprotionately hurts the poor.

The only ones who really benefit from minimum wage increases are union members. If you did away with the minimum wage altogether everyone would benefit. Well, everyone except extortionists, err I mean union members.

Thought experiment: minimum... (Below threshold)
iwogisdead:

Thought experiment: minimum wage next week increases to $ 50,000 per hour.

Big Macs have to increase to $ 30,000 to pay for the workers. Cokes cost $ 10,000. Fries, $ 12,500. Napkins cost $ 359 each.

Your water bill next month is $ 150,000. That's because Ed Norton now makes $ 50,000 per hour to work in the sewer. Your electric bill is $ 375,000.

Gasoline goes up to $ 60,000 per gallon because of the cost of the drillers, drivers, pumpers, refiners, station attendants, janitors, etc., etc., etc.

Titleist golf balls go up to $5,000 each. Green fees are $ 20,000 for nine holes. Blow jobs go to $ 25,000. Bread goes to $3,778 a loaf. Coors Lite is now $ 45,000 for a six pack. Hamburger costs $ 35,000 per pound. Underwear is up to $ 35,750 for six pairs.

You get the idea.




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